Hosting revenue of $4.1 million, BTC Equivalent
Mined 883
Soluna Holdings, Inc. (“SHI” or the “Company”), (NASDAQ: SLNH),
the parent company of Soluna Computing, Inc. (“SCI”), a developer
of green data centers for Bitcoin mining and other intensive
computing, announced financial results for the full year ended
December 31, 2022.
Michael Toporek, CEO of Soluna Holdings, stated, “The last 18
months have proven to be challenging for the entire sector. Our
team has risen to the occasion and repositioned the Company for
future success and to not only have innovative low-cost facilities,
but to drive to achieve the scale necessary to have meaningful
corporate level Adjusted EBITDA once Project Dorothy is
scaled.”
Toporek further added, “These accomplishments have come as we
have reduced headcount and operating costs while focusing our
resources to achieve maximum return on investment.”
Fiscal Year 2022 Financial and Recent Operational
Highlights
- Project Dorothy regulatory approval for 100MW, Energization
expected in April.
- Effectuated significant cost reductions through headcount
reductions, efficiencies, and focusing resources.
- Developed project pipeline to help more renewable energy power
plants benefit from monetizing curtailed energy.
- Fully ramped project Sophie by March of last year with an
operational capacity of 25 MW.
- Proprietary-mining produced 883 equivalent in Bitcoin for
2022.
- Cryptocurrency mining revenue of $24.4 million for 2022.
- Data hosting revenue of $4.1 million for 2022.
Fiscal Year 2022 Financial Results
Total revenue in 2022 increased by 99% to $28.5 million compared
to $14.3 million in 2021. The increase is attributable to the
significant increase in mining operations at the Project Sophie
facility following the March 2022 full energization. Adjusted
EBITDA was -$4.6 million for 2022 compared to $1.5 million in
2021.
The total cost of revenue excluding depreciation as a percentage
of revenue increased to 62% in 2022 compared to 41% in 2021
primarily driven by a decline in Bitcoin pricing and increases in
energy costs.
General and administrative expenses, exclusive of depreciation
and amortization and stock-based compensation, for the year ending
on December 31, 2022, increased by $8.2 million, or 115%, to $15.3
million from $7.1 million for the year ending on December 31, 2021.
This increase was driven by an increase in personnel costs of $4.6
million during the year ending on December 31, 2022, compared to
the year ending on December 31, 2021, driven by the acquisition and
ramp of the Soluna Computing Inc. business unit. Stock-based
compensation costs were $3.9 million for 2022 and $2.0 million for
2021 an increase of $1.9 million.
Legal fees increased by approximately $1.5 million during the
year ending on December 31, 2022, compared to the year ending on
December 31, 2021, due to legal expenses of approximately $1.2
million in relation to Project Dorothy. In addition, there was an
increase of approximately $500 thousand in relation to general
corporate matters associated with the growth of the business.
Consulting and professional services increased by $959 thousand
during the year ending on December 31, 2022, compared to the year
ending on December 31, 2021, due to required valuations of complex
transactions, advisory fees for complex accounting research
matters, and pipeline development project costs, in which the
Company involves multiple consultants to help build out future
plans.
The audited financial statements are available online.
Safe Harbor Statement
This announcement contains forward-looking statements. These
statements are made under the "safe harbor" provisions of the U.S.
Private Securities Litigation Reform Act of 1995. These
forward-looking statements can be identified by terminology such as
"will," "expects," "anticipates," "future," "intends," "plans,"
"believes," "estimates," "confident" and similar statements. Soluna
Holdings, Inc. may also make written or oral forward-looking
statements in its periodic reports to the U.S. Securities and
Exchange Commission, in its annual report to shareholders, in press
releases and other written materials, and in oral statements made
by its officers, directors, or employees to third parties.
Statements that are not historical facts, including but not limited
to statements about Soluna’s beliefs and expectations, are
forward-looking statements. Forward-looking statements involve
inherent risks and uncertainties, further information regarding
which is included in the Company's filings with the Securities and
Exchange Commission. All information provided in this press release
is as of the date of the press release, and Soluna Holdings, Inc.
undertakes no duty to update such information, except as required
under applicable law.
Non-GAAP Measures
In addition to financial measures calculated in accordance with
U.S. generally accepted accounting principles (“U.S. GAAP”), we
also use “Adjusted EBITDA.” Adjusted EBITDA is a non-GAAP financial
measure defined as net income (loss) from continuing operations
before interest, taxes, depreciation, and amortization (“EBITDA”)
adjusted to eliminate the effects of certain non-cash,
non-recurring items, that we believe do not reflect our ongoing
strategic business operations. Management believes that Adjusted
EBITDA results in a performance measurement that represents a key
indicator of the Company’s business operations of cryptocurrency
mining and hosting customers engaged in cryptocurrency mining.
We believe Adjusted EBITDA can be an important financial measure
because it allows management, investors, and the Board to evaluate
and compare our operating results, including our return on capital
and operating efficiencies, from period to period by making such
adjustments. Non-GAAP financial measures are subject to material
limitations as they are not in accordance with, or a substitute
for, measurements prepared in accordance with U.S. GAAP. For
example, we expect that stock-based compensation costs, which is
excluded from the non-GAAP financial measures, will continue to be
a significant recurring expense over the coming years and is an
important part of the compensation provided to certain employees,
officers, and directors. Similarly, we expect that depreciation and
amortization of fixed assets will continue to be a recurring
expense over the term of the useful life of the assets.
Adjusted EBITDA is provided in addition to and should not be
considered to be a substitute for, or superior to net income, the
comparable measure calculated in accordance with U.S. GAAP.
Further, Adjusted EBITDA should not be considered as an alternative
to revenue growth, net income, diluted earnings per share or any
other performance measure calculated in accordance with U.S. GAAP,
or as an alternative to cash flow from operating activities as a
measure of our liquidity. Adjusted EBITDA has limitations as an
analytical tool, and you should not consider such measures either
in isolation or as substitutes for analyzing our results as
reported under U.S. GAAP.
Reconciliations of Adjusted EBITDA to net income from continuing
operations, the most comparable U.S. GAAP financial metric, are
presented in the table following the financial statements prepared
according to U.S. GAAP.
About Soluna Holdings, Inc (SLNH)
Soluna Holdings, Inc. is the leading developer of green data
centers that convert excess renewable energy into global computing
resources. Soluna builds modular, scalable data centers for
computing intensive, batchable applications such as Bitcoin mining,
AI, and machine learning. Soluna provides a cost-effective
alternative to battery storage or transmission lines. Soluna uses
technology and intentional design to solve complex, real-world
challenges. Up to 30% of the power of renewable energy projects can
go to waste. Soluna’s data centers enable clean electricity asset
owners to ‘Sell. Every. Megawatt.’
Soluna Holdings, Inc. and
Subsidiaries
Consolidated Balance
Sheets
As of December 31, 2022 and
December 31, 2021
(Dollars in thousands, except per
share)
December 31,
December 31,
2022
2021
Assets
Current Assets:
Cash
$
1,136
$
10,258
Restricted cash
685
—
Accounts receivable
320
531
Prepaid expenses and other current
assets
1,326
977
Deposits on equipment
1,175
10,188
Current assets associated with
discontinued operations
—
3,028
Total Current Assets
4,642
24,982
Other assets
1,150
1,121
Equity investment
—
750
Property, plant and equipment,
net
42,504
44,597
Intangible assets, net
36,432
45,839
Operating lease right-of-use
assets
233
405
Total Assets
$
84,961
$
117,694
Liabilities and Stockholders’
Equity
Current Liabilities:
Accounts payable
$
3,548
$
2,958
Accrued liabilities
2,721
2,859
Line of credit
350
1,000
Convertible notes payable
11,737
7,121
Current portion of debt
10,546
—
Deferred revenue
453
316
Operating lease liability
161
184
Income taxes payable
—
2
Current liabilities associated with
discontinued operations
—
1,243
Total Current Liabilities
29,516
15,683
Other liabilities
203
509
Long term debt
—
—
Operating lease liability
84
237
Deferred tax liability, net
8,886
10,277
Total Liabilities
38,689
26,706
Commitments and Contingencies (Note
14)
Stockholders’ Equity:
9.0% Series A Cumulative Perpetual
Preferred Stock, par value $0.001 per share, $25.00 liquidation
preference; authorized 6,040,000; 3,061,245 shares issued and
outstanding as of December 31, 2022 and 1,252,299 shares issued and
outstanding as of December 31, 2021
3
1
Series B Preferred Stock, par value
$0.0001 per share, authorized 187,500; 62,500 shares issued and
outstanding as of December 31, 2022 and 0 shares issued and
outstanding as of December 31, 2021
—
—
Common stock, par value $0.001 per share,
authorized 75,000,000; 19,712,722 shares issued and 18,694,206
shares issued and outstanding as of December 31, 2022 and
14,769,699 shares issued and 13,754,206 shares issued and
outstanding as of December 31, 2021
20
15
Additional paid-in capital
277,410
227,790
Accumulated deficit
(221,769
)
(123,054
)
Common stock in treasury, at cost,
1,018,516 shares at December 31, 2022 and 1,015,493 shares at
December 31, 2021
(13,798
)
(13,764
)
Total Soluna Holdings, Inc.
Stockholders’ Equity
41,866
90,988
Non-Controlling Interest
4,406
—
Total Stockholders’ Equity
46,272
90,988
Total Liabilities and Stockholders’
Equity
$
84,961
$
117,694
Soluna Holdings, Inc. and
Subsidiaries
Consolidated Statements of
Operations
For the Years Ended December
31, 2022 and 2021
(Dollars in thousands, except per
share)
Year Ended
December 31,
2022
2021
Cryptocurrency mining revenue
$
24,409
$
10,932
Data hosting revenue
4,138
3,413
Total revenue
28,547
14,345
Operating costs:
Cost of cryptocurrency mining revenue,
exclusive of depreciation
14,281
3,504
Depreciation costs associated with
cryptocurrency mining
18,708
2,122
Total cost of cryptocurrency mining
revenue
32,989
5,626
Cost of data hosting revenue
3,517
2,444
Operating expenses:
General and administrative expenses,
exclusive of depreciation and amortization
19,203
9,170
Depreciation and amortization associated
with general and administrative expenses
9,506
1,581
Total general and administrative
expenses
28,709
10,751
Impairment on equity investment
750
-
Impairment on fixed assets
47,372
-
Operating loss
(84,790
)
(4,476
)
Interest expense
(8,375
)
(1,879
)
Loss on debt extinguishment and
revaluation, net
(11,130
)
-
Loss on sale of fixed assets
(4,089
)
-
Other income, net
22
11
Loss before income taxes from continuing
operations
(108,362
)
(6,344
)
Income tax benefit (expense) from
continuing operations
1,346
(44
)
Net loss from continuing operations
(107,016
)
(6,388
)
Income before income taxes from
discontinued operations (including gain on sale of MTI Instruments
of $7,751 for year ended December 31, 2022)
7,921
1,087
Income tax benefit from discontinued
operations
-
40
Net income from discontinued
operations
7,921
1,127
Net loss
(99,095
)
(5,261
)
(Less) Net loss attributable to
non-controlling interest
380
-
Net loss attributable to Soluna Holdings,
Inc.
$
(98,715
)
$
(5,261
)
Basic and Diluted (loss) earnings per
common share:
Net loss from continuing operations per
share (Basic & Diluted)
$
(7.42
)
$
(0.59
)
Net income from discontinued operations
per share (Basic & Diluted)
$
0.53
$
0.09
Basic & Diluted loss per share
$
(6.89
)
$
(0.50
)
Weighted average shares outstanding (Basic
and Diluted)
14,982,510
11,840,242
Soluna Holdings, Inc. and
Subsidiaries
Consolidated Statements of
Cash Flows
For the Year Ended December
31, 2022 and 2021
(Dollars in thousands)
Year Ended December
31,
2022
2021
Operating Activities
Net loss
$
(99,095
)
$
(5,261
)
Net income from discontinued operations
(including gain on sale of MTI Instruments of $7,751 for the year
ended December 31, 2022)
(7,921
)
(1,127
)
Net loss from continuing operations
(107,016
)
(6,388
)
Adjustments to reconcile net loss to net
cash (used in) provided by operating activities:
Depreciation expense
18,731
2,124
Amortization expense
9,483
1,579
Stock-based compensation
3,673
1,941
Consultant stock compensation
179
104
Deferred income taxes
(1,388
)
41
Impairment on fixed assets
47,372
-
Amortization of operating lease asset
202
169
Impairment on equity investment
750
-
Loss on debt extinguishment and
revaluation, net
11,130
-
Amortization on deferred financing costs
and discount on notes
6,538
1,876
Loss on sale of fixed assets
4,089
-
Changes in operating assets and
liabilities:
Accounts receivable
211
(471
)
Prepaid expenses and other current
assets
146
(956
)
Other long-term assets
(29
)
(812
)
Accounts payable
553
2,765
Deferred revenue
137
316
Operating lease liabilities
(197
)
(156
)
Other liabilities
(308
)
306
Accrued liabilities
(374
)
2,197
Net cash (used in) provided by operating
activities
(6,118
)
4,635
Net cash provided by operating activities-
discontinued operations
369
917
Investing Activities
Purchases of property, plant, and
equipment
(63,684
)
(45,792
)
Purchases of intangible assets
(76
)
(1,567
)
Proceeds from disposal on property, plant,
and equipment
2,605
-
Deposits of equipment, net
6,441
(9,909
)
Net cash used in investing activities
(54,714
)
(57,268
)
Net cash provided by (used in) investing
activities- discontinued operations
9,084
(37
)
Financing Activities
Proceeds from preferred offerings
16,658
27,965
Proceeds from common stock offering
2,858
17,250
Proceeds from notes and debt issuance
30,543
15,000
Costs of preferred offering
(1,910
)
(2,707
)
Costs of common stock offering
(504
)
(1,847
)
Costs of notes and short-term debt
issuance
(2,078
)
(1,338
)
Cash dividend distribution on preferred
stock
(3,852
)
(630
)
Borrowings under line of credit
-
1,000
Payments on NYDIG loans and line of
credit
(4,491
)
-
Contributions from non-controlling
interest
4,786
-
Proceeds from stock option exercises
153
102
Proceeds from common stock warrant
exercises
779
4,586
Net cash provided by financing
activities
42,942
59,381
(Decrease) increase in cash &
restricted cash-continuing operations
(17,890
)
6,748
Increase in cash & restricted cash-
discontinued operations
9,453
880
Cash & restricted cash – beginning of
period
10,258
2,630
Cash & restricted cash – end of
period
$
1,821
$
10,258
Supplemental Disclosure of Cash Flow
Information
Noncash equipment financing
4,620
-
Interest paid on NYDIG loans and line of
credit
1,311
6
Proceed receivable from sale of MTI
Instruments
295
-
Notes converted to common stock
3,295
-
Warrant consideration in relation to
promissory notes and convertible notes
14,602
-
Promissory note conversion to preferred
shares
15,236
-
Noncash proceed on sale of equipment
210
-
Purchase of miner equipment using
restricted stock
-
(207
)
Registration fees in prepaids and accounts
payable
-
(200
)
Termination shares issued in conjunction
with merger for intangible assets
-
1,917
Warrants exercised prior to year-end not
received until subsequent period
-
206
Share consideration in relation to
strategic pipeline contract
-
33,000
Deferred tax liability in relation to
strategic pipeline contract
-
10,934
Adjusted EBITDA Full Year 2021
and 2022
(Dollars in thousands)
Years Ended December
31,
2022
2021
Net loss from continuing operations
$
(107,016
)
$
(6,388
)
Interest expense
8,375
1,879
Income tax (benefit) expense
(1,346
)
44
Depreciation and amortization
28,214
3,703
EBITDA
(71,773
)
(762
)
Adjustments: Non-cash items
Stock-based compensation costs
3,852
1,941
Loss on sale of fixed assets
4,089
—
Loss on debt extinguishment and
revaluation, net
11,130
—
Impairment of equity investment
750
—
Impairment on fixed assets
47,372
—
Adjustments: Non-recurring
items
Exchange registration expenses
—
293
Adjusted EBITDA
$
(4,580
)
$
1,472
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230403005529/en/
Contact Information Michael Toporek, CEO Soluna Holdings,
Inc. hello@soluna.io
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