MTI Releases Q2 Financials, Announces EcoChain Acquisition of Soluna Computing; PCG Digital Tech Watch Review

Rhea-AI Summary

Mechanical Technology Inc (MKTY) reported a strong Q2 2021, with total revenue of $3.3 million, a 35% increase from Q1. Cash reserves rose significantly to $12.1 million after a $15 million equity offering. The company’s EcoChain division generated $1.6 million in cryptocurrency revenue. Additionally, EcoChain announced the acquisition of Soluna Computing, expanding its mining capacity from 50MW to 350MW and enhancing its renewable energy strategy. This move positions MKTY favorably in the crypto mining market.

Positive

• Total revenue increased by 35% to $3.3 million.
• Cash reserves grew to $12.1 million post $15 million equity offering.
• EcoChain acquisition of Soluna Computing enhances mining capacity from 50MW to 350MW.
• Acquisition addresses renewable energy challenges in cryptocurrency mining.

Negative

• Cost of sales increased from 26% to 30%, impacting profit margins.

NEW YORK,, Aug. 12, 2021 /PRNewswire/ -- Mechanical Technology Inc (Nasdaq: MKTY) released its 2021 Q2 financials this week, capping off a strong quarter on both the revenue and production sides. Total revenue was reported at $3.3 million, up 35% from the previous quarter. Cryptocurrency revenue through the Company's EcoChain division, was $1.6 million. 

Cash on hand was $12.1 million after a $15 million equity offering, a significant increase from the $2.7 million reported end of Q1. The additional purchase power opened up an opportunity for MTI to take advantage of crypto market disruptions in China by purchasing dormant S19s at a discounted price. The power density of these chips increases capacity. 

On the production side, EcoChain moved forward with infrastructure improvements at its Washington and Southeast locations. Their TNT site location is now operating at capacity. MTI Instruments, which produces a PBS product line, semiconductors, and EV batteries, reported an increase in cost of sales, from 26% to 30%. 

EcoChain Acquires Soluna Computing

In a strong opening move for Q3, EcoChain, a subsidiary of MTI, announced the acquisition of Soluna Computing, Inc (SCI), a developer of scalable data centers that buy excess renewable energy from solar and wind farms. The new company, called "Soluna Holdings," improves the scalability of EcoChain's renewable energy powered data centers. 

The move increases MTI's mining capacity from 50MW to 350MW, positioning the Company in the large-cap category for cryptocurrency mining operations. MTI will also absorb Soluna's technical team, which is currently developing an additional 200MW capacity, adding expertise in project development, energy markets, finance, and computing.

Soluna's ability to scale using renewable energy addresses one of the crypto mining industry's greatest challenges – power consumption. It also solves the issue of excess energy the renewable energy sector is experiencing. MTI and EcoChain are now able to implement new power sources and scale their approach globally from megawatts to gigawatts.   

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SOURCE PCG Digital

FAQ

What were the key financial results for MKTY in Q2 2021?

MKTY reported total revenue of $3.3 million, a 35% increase from the previous quarter.

How much cash does Mechanical Technology Inc have after its recent equity offering?

After the $15 million equity offering, MKTY has cash reserves of $12.1 million.

What acquisition did EcoChain announce and what is its significance?

EcoChain announced the acquisition of Soluna Computing, which will increase its mining capacity and improve scalability using renewable energy.

What is the expected impact of the acquisition on MKTY's operations?

The acquisition is expected to enhance MKTY's position in the cryptocurrency mining market and improve its renewable energy strategy.

What challenges does the increase in cost of sales present for MKTY?

The increase in cost of sales from 26% to 30% could negatively impact MKTY's profit margins.