Soluna Announces Monthly Business Update

Rhea-AI Summary

Soluna Holdings (NASDAQ: SLNH) issued a monthly business update highlighting key developments and metrics for May 2024. The company reported strong Q1 2024 results, including record adjusted EBITDA growth and increased cash reserves. A 166 MW power purchase agreement (PPA) was secured for Project Kati in Texas, enhancing hosting potential. Financing for Project Dorothy 2 was secured with a $30 million commitment from Spring Lane Capital. Additionally, Soluna launched Soluna Cloud, a new AI-focused subsidiary. Key projects, including Project Dorothy 1A, 1B, 2, Sophie, and Kati, continue to progress, with various milestones expected throughout 2024.

Positive

• Record Q1 2024 adjusted EBITDA growth.
• Increased cash reserves in Q1 2024.
• Secured 166 MW PPA for Project Kati.
• Financing commitment of $30 million for Project Dorothy 2.
• Launch of Soluna Cloud for sustainable AI Cloud services.
• Successful mitigation of tornado impacts on Project Sophie.

Negative

• Upcoming operational challenges with Four Coincident Peak Program (4CP) for Project Dorothy 1A and 1B.
• Pending finalization of Project Dorothy 2's schedule and substation interconnection.

Insights

Financial Analyst

The financial results released for Q1 2024 show record growth in Quarterly Adjusted EBITDA. These results suggest improved operational efficiency and profitability. The increase in cash reserves is another positive indicator, representing better liquidity and potential for further investments or capital expenditures. The commitment of up to $30 million from Spring Lane Capital to finance Project Dorothy 2 is a substantial vote of confidence in Soluna's projects and strategic direction. This funding will likely accelerate the project's progress and potentially enhance revenue streams upon completion.

For retail investors, this financial performance and secured financing reduce risk and enhance the potential for future returns. However, the dependability of ongoing project developments and economic conditions should still be considered when assessing long-term investment prospects.

Tech Expert

The developments surrounding Soluna's AI and data center initiatives are noteworthy. The launch of Soluna Cloud, aimed at sustainable and scalable AI cloud and hosting services, represents a strategic expansion into a high-growth sector. Collaborating with a leading high-performance computing company reinforces the credibility and technical capabilities of this initiative. This move could diversify revenue streams beyond Bitcoin mining, presenting a significant growth opportunity. The extensive use of their proprietary MaestroOS software for maintaining compliance with ERCOT demand thresholds reflects advanced technological capabilities, which could be a competitive advantage.

For retail investors, this diversification into AI and the robust infrastructure in place for dynamic computing present long-term growth opportunities. However, investors should be mindful of the execution risks associated with new ventures and technology integration.

Market Research Analyst

The 166 MW PPA agreement for Project Kati with EDF Renewables and Masdar and the related Retail Electrical Provider agreements with Tenaska, highlight significant progress in securing long-term, sustainable power sources. This positions Soluna favorably in the burgeoning renewable energy market, emphasizing its commitment to green energy solutions. Given the increasing regulatory and societal emphasis on sustainability, aligning with renewable energy partners could enhance Soluna's market appeal and attract eco-conscious investors.

For retail investors, these strategic partnerships underline the company's dedication to sustainable energy solutions, bolstering its market positioning. However, the long-term success will depend on timely project completions and effective management of power resources.

ALBANY, N.Y.--(BUSINESS WIRE)-- Soluna Holdings, Inc. (“SHI” or the “Company”), (NASDAQ: SLNH), a developer of green data centers for intensive computing applications including Bitcoin mining and AI, announced its May project site-level operations, developments, and updates.

The future site of Soluna's Project Dorothy 2 and its new Helix Data Center. (Photo: Business Wire)

The Company has provided the following Corporate and Site Updates.

Key Company Metrics:

The monthly metrics are now available here.

Corporate Highlights:

• Q1 2024 Results – The Company released its strong first quarter 2024 results. It included record Quarterly Adjusted EBITDA growth and a healthy increase in cash.
• 2024 Annual Stockholders’ Meeting – The Company held its annual meeting of stockholders. All matters put to a shareholder vote were approved including the election of directors and the 4th Convertible Note Amendment and related warrant repricing.
• CEO’s Letter to Shareholders – CEO John Belizaire shared the Company’s 2024 strategy and roadmap for profitability.
• 2024 Earnings Power Presentation – The Company published its updated annual Earnings Power Presentation that includes Project Dorothy 2.
• Project Kati PPA – Secured 166 MW PPA with EDF Renewables and Masdar for Project Kati in Texas. Unlocks significant Hosting potential.
• Financing Secured for Project Dorothy 2 - Spring Lane Capital has agreed to lead the financing round for Project Dorothy 2 with a commitment of up to $30 million. Learn more here.
• Strategic Collaboration for AI Business – We launched Soluna Cloud, our new subsidiary focused on sustainable, scalable AI Cloud and hosting services in collaboration with a Leading High-Performance Computing Company
• Quick Takes Video Series - CEO John Belizaire discusses “Convergence and the Power of AI”, and Soluna’s under-rated resilience. Watch here.
• AMA - The Company published responses to investor questions in its monthly AMA for April. View the responses here.

Key Project Updates:

Project Dorothy 1A (25 MW, Hosting) / Project Dorothy 1B (25 MW, Prop-Mining):

• Preparations for the onset of the Four Coincident Peak Program (4CP) to begin in June through September are underway. With our participation in the program, our MaestroOS software will dynamically maintain site operations compliance with ERCOT demand thresholds through the summer months to support local community needs.
• Actual power consumption and uptime % continued to remain steady for the month of May and in line with month-over-month performance.

Project Dorothy 2 (50 MW):

• Project schedule in the process of being finalized with the substation interconnection targeted for late fall preceding energization of the initial 16 of 48 MW aimed for by the end of 2024.
• Power partner’s approval process is nearing completion.
• Spring Lane’s definitive documentation is underway.

Project Sophie (25 MW, Bitcoin Hosting with Profit Share, AI Hosting):

• The team responded exceptionally well, mitigating the impacts of recent tornadoes in the Kentucky region. Despite widespread outages, their efforts resulted in minimal downtime at the site.
• Infrastructure optimization efforts are ongoing to prepare for the summer heat.
• Infrastructure upgrades are underway to support the growth of AI Hosted Clients.

Project Kati (166 MW):

• PPA agreements signed with EDF Renewables and Masdar.
• Retail Electrical Provider agreements executed with Tenaska.
• ERCOT planning continues to progress with final edits made on one key study.
• Negotiations continue with landowners for the site land leases.

View Soluna’s recent AMA here.

View Soluna 2024 Earnings Power Presentation here.

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 figures prepared in accordance with GAAP, Soluna from time to time presents alternative non-GAAP performance measures, e.g., EBITDA, adjusted EBITDA, adjusted net profit/loss, adjusted earnings per share, free cash flow, both on a company basis and on a project-level basis. Project-level measures may not take into account a full allocation of corporate expenses. These measures should be considered in addition to, but not as a substitute for, the information prepared in accordance with GAAP. Alternative performance measures are not subject to GAAP or any other generally accepted accounting principle. Other companies may define these terms in different ways. See our annual report on Form 10-K for the year ended December 31, 2023 for an explanation of how management uses these measures in evaluating its operations.

About Soluna Holdings, Inc (SLNH)

Soluna is on a mission to make renewable energy a global superpower using computing as a catalyst. The company designs, develops, and operates digital infrastructure that transforms surplus renewable energy into global computing resources. Soluna’s pioneering data centers are strategically co-located with wind, solar, or hydroelectric power plants to support high-performance computing applications including Bitcoin Mining, Generative AI, and other compute-intensive applications. Soluna’s proprietary software MaestroOS(™) helps energize a greener grid while delivering cost-effective and sustainable computing solutions, and superior returns. To learn more visit solunacomputing.com. Follow us on X (formerly Twitter) at @SolunaHoldings.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240605317023/en/

Sam Sova

Partner and CEO

SOVA

Sam@letsgosova.com

Source: Soluna Holdings, Inc.

FAQ

What are Soluna Holdings' (SLNH) key updates in May 2024?

Soluna Holdings reported strong Q1 2024 results, secured financing for Project Dorothy 2, and launched Soluna Cloud.

What is the significance of the 166 MW PPA for Project Kati?

The 166 MW PPA for Project Kati enhances Soluna's hosting potential and supports its growth strategy.

What financing has been secured for Project Dorothy 2?

Spring Lane Capital committed up to $30 million in financing for Project Dorothy 2.

How did Soluna Holdings perform in Q1 2024?

Soluna Holdings reported record adjusted EBITDA growth and increased cash reserves in Q1 2024.

What are the challenges for Project Dorothy 1A and 1B?

Project Dorothy 1A and 1B face operational challenges with the upcoming Four Coincident Peak Program (4CP).