Soluna Announces Monthly Business Update

Rhea-AI Summary

Soluna Holdings, Inc. has reduced its convertible debt by over $4 million and plans to raise capital for a new AI venture. The company achieved major milestones in 2023 and is committed to operational excellence in 2024. It has also tested ancillary services successfully and made progress in various projects. The company's data centers are 18% greener than traditional data centers. Key metrics and project updates are provided, reflecting the company's operational performance.

Insights

Financial Analyst

The reduction of convertible debt by over $4 million at Soluna Holdings, Inc. signifies an important development in the company's capital structure. Convertible notes are a form of financing that can be converted into equity, typically at a later date and often carry less risk for investors compared to traditional debt instruments. The conversion of debt to equity can dilute existing shareholders but may also improve the company's balance sheet by reducing debt levels. This could potentially lead to a lower cost of capital and a more flexible financial position, which can be favorable for future investments and operations.

Furthermore, the retention of BitOoda Technologies, LLC as a financial advisor to assist with raising capital for a new AI business venture indicates strategic growth initiatives. This move suggests that Soluna is diversifying its business model and investing in innovation, which can be attractive to investors seeking growth opportunities. However, the success of such ventures remains speculative until more concrete results are demonstrated.

Lastly, the company's focus on green data centers and the report of an 18% lower carbon footprint compared to traditional data centers could appeal to environmentally conscious investors and may offer a competitive advantage as global focus shifts towards sustainability. This could potentially increase the company's market share in the data center industry and improve long-term profitability.

Market Research Analyst

From a market perspective, Soluna Holdings, Inc.'s developments in the green data center sector and Bitcoin mining operations present a dual interest in renewable energy and cryptocurrency markets. The successful test signal for Ancillary Services from ERCOT demonstrates the company's ability to integrate with the energy grid's demand response programs, which can lead to additional revenue streams and operational efficiencies.

Additionally, the progress in development projects such as Project Dorothy 2 and Project Kati suggests that the company is scaling its infrastructure to meet increasing demand. The growth in installed and operating hashrate, despite weather-related curtailments, reflects resilience in operations and potential for increased mining output when conditions normalize.

The announcement of a new 8.8 MW customer for Project Sophie is indicative of Soluna's customer acquisition strategy and potential for revenue growth. However, the impact of this new customer on the company's financials will need to be monitored over the coming quarters to assess the actual contribution to profitability.

Energy Sector Analyst

The emphasis on green data centers by Soluna Holdings, Inc. is particularly relevant in the context of the energy sector's transition towards sustainability. The company's data centers outperforming traditional ones by 18% in terms of carbon footprint is a significant metric for stakeholders focused on environmental impact. The ability to consume curtailed energy, which is energy that the grid cannot absorb or finds not economically valuable, showcases an innovative approach to energy utilization that can optimize costs and support renewable energy integration.

As an energy sector analyst, understanding the implications of Soluna's interaction with ERCOT (Electric Reliability Council of Texas) is crucial. ERCOT manages the flow of electric power in Texas and Soluna's successful Ancillary Services test signal is a testament to its operational compatibility with the grid. This not only supports the stability of the grid during demand fluctuations but also positions the company as a responsive and adaptive player in the energy market.

Moreover, the company's long-term contracted average power cost of $30 per MWh is a critical figure. It reflects the company's cost efficiency, which is essential for profitability in energy-intensive industries like Bitcoin mining. However, the volatility of cryptocurrency markets and the regulatory environment around green energy and Bitcoin mining are factors that could affect Soluna's business trajectory and should be monitored closely.

Company Reduces Convertible Debt by Over $4 Million

Plans Capital Raise for New AI Venture

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

John Belizaire, CEO of Soluna Holdings, commented, “We've reached major milestones in 2023, and our unwavering commitment to operational excellence propels us forward as we make further strides to grow our business in 2024. I want to express my gratitude to our exceptional team for their ongoing commitment to our success.”

The Company has provided the following Corporate and Site Updates.

Corporate Highlights:

• Reduction of Convertible Debt – Since the Company’s last quarterly report, $4.1 million of the principal amount of the outstanding convertible notes have been converted into 1,029,769 shares of the Company’s common stock, reducing the total outstanding principal to $8.1 million (unaudited).
• Advisor Retained for AI Capital Raise – The Company retained BitOoda Technologies, LLC as a financial advisor to assist with raising capital for its new AI business venture.
• Ancillary Services Tested Successfully – The Company successfully conducted its initial test signal for Ancillary Services from ERCOT. Upon receiving the demand response test signal, MaestroOS efficiently ramped down Project Dorothy within the specified time and seamlessly brought it back up.
• Project Dorothy 2 (50 MW) – The project continues to progress in development. The Company’s engineering team held a Helix design workshop with the country’s leading data center design firm. They’ve designed data centers for the leading hyperscalers.
• Project Kati (166 MW) – The project continues to build momentum and is expected to exit the ERCOT planning phase before the end of Q1 2024.
• Project Sophie – Signed a new 8.8 MW customer as part of its ongoing plan to improve site profitability.
• Soluna Data Centers are 18% Greener – An Independent report found that Soluna’s Datacenters outperform traditional data centers with 18% lower carbon footprint.
• December AMA – The Company published responses to investor questions in its monthly AMA. View the CEO’s responses here.
• US Climate Investor Conference - Watch CEO John Belizaire’s presentation here. (Note: You’ll need to register to view.)

Key Company Metrics:

• Previously, operational and project updates provided insights into partial-month progress. Going forward, the company will release monthly updates recapping activities from the previous months only.
• Metrics for all sites are as of December 31, 2023.
• The data in the site charts throughout the release reflect a consistent calculation of power consumption using month-over-month versus a year-to-date calculation, which is now standard for all business updates from the Company going forward. Edits have also been made to improve clarity.
• All power consumption metrics are cumulative, year-to-date, totals.
• Curtailed Energy is energy produced by the wind farm and consumed by Soluna’s Project Dorothy which the grid either could not absorb or was not economically valuable.
• Average Power Cost is a long-term contracted average. It does not represent a month-to-month average.
• Average Hashrate decreased at Project Dorothy due to increased curtailments resulting from the cold weather in December and January.
• Project Sophie’s Average Hashrate decreased as the Company began rolling in its new 8.8 MW customer.
• Project Dorothy Average Hashrate was also affected by a wind farm substation outage in late December.

Metric [All sites]	Oct	Nov	Dec
Installed Hashrate	2.6 EH/s	2.5 EH/s	2.6 EH/s
Total Installed Power Capacity	75 MW	75 MW	75 MW
Average Operating Hashrate	2.3 EH/s	2.3 EH/s	2.3 EH/s
Prop Mining	690 PH/s	764 PH/s	680 PH/s
Hosting	1.6 EH/s	1.5 EH/s	1.6 EH/s
Average Power Cost*	$30 / MWh
Average J/TH (across all sites)	29 J/TH	30 J/TH	29 J/TH
Curtailed Energy Consumed (Project Dorothy 1A & 1B)	11,664 MWh	17,544 MWh	22,601 MWh
Bitcoin Miners Deployed	23,655	23,571	23,728

*Note: Long-term contracted average. Does not represent a month-to-month average.

Key Project Updates

Project Dorothy 1A ( 953 PH/s, 25 MW, Hosting):

Metric	Oct	Nov	Dec
Total Power Consumed YTD	60,624 MWh	76,652 MWh	90,976 MWh
Curtailed Energy Consumed YTD*	6,397 MWh	9,392 MWh	11,932 MWh

*Note: Curtailed Energy is energy produced by the wind farm and consumed by Soluna’s Project Dorothy, which the grid either could not absorb or did not deem economically valuable.

Project Dorothy's operations continue to remain strong through the winter months.

Project Dorothy 1B ( 816 PH/s, 25 MW, Prop-Mining):

Metric	Oct	Nov	Dec
Average Operating Hashrate (PH/s)	690	764	680
Total Bitcoin Mined YTD	96	143	162
Total Power Consumed YTD	37,003 MWh	52,444 MWh	66,627 MWh
Curtailed Energy Consumed YTD*	5,267 MWh	8,152 MWh	10,668 MWh

*Note: Curtailed Energy is energy produced by the wind farm and consumed by Soluna’s Project Dorothy, which the grid either could absorb or did not deem economically valuable.

Project Sophie (653 PH/s, 25 MW, Hosting with Profit Share):

Metric	Oct	Nov	Dec
Average Operating Hashrate (PH/s)*	770	658	701

*Note: Under our contract at Project Sophie, we are only allowed to operate 83% of the time. The average has been adjusted to contemplate only the hours we are contractually permitted to run.

• Deployment of the new 8.8 MW customer and expansion of an existing customer is underway and will be completed before the end of January. The site will return to full utilization in February.

Project Dorothy 2 (50 MW):

• The construction bid period is still planned for the first quarter.
• Procurement of long-lead equipment continues.
• ERCOT model update submission completed with approval expected in early March.
• Helix design session held with a leading data center design firm.

Project Kati (166 MW):

• Project Kati is still expected to exit the ERCOT planning phase before the end of Q1 2024.
• Definitive PPA agreements are set to be finalized before the end of Q1 2024.
• Negotiations have begun with land owners for land lease agreements.

View Soluna’s Earnings Power Presentation here.

View Soluna’s recent AMA 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.

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. 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.

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.’

View source version on businesswire.com: https://www.businesswire.com/news/home/20240124316818/en/

Sam Sova

Partner and CEO

SOVA

Sam@letsgosova.com

Source: Soluna Holdings, Inc.

FAQ

What is the ticker symbol for Soluna Holdings, Inc.?

The ticker symbol for Soluna Holdings, Inc. is SLNH.

What is the company's plan for reducing convertible debt?

The company has reduced its convertible debt by over $4 million by converting outstanding notes into shares of common stock.

What financial advisor has the company retained for its new AI venture?

The company has retained BitOoda Technologies, LLC as a financial advisor for raising capital for its new AI business venture.

What percentage greener are Soluna's data centers compared to traditional data centers?

An independent report found that Soluna's data centers are 18% greener than traditional data centers.

What are the key project updates for Project Dorothy 2?

The construction bid period for Project Dorothy 2 is planned for the first quarter, and procurement of long-lead equipment continues.