Company: SLNH
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001641172-25-024045
Chunk: 95

Company: Soluna Holdings, Inc
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 8
Chunk 95
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 our business.

53

EBITDA
and Adjusted EBITDA

In
addition to financial measures calculated in accordance with GAAP, we also use “EBITDA” and “Adjusted EBITDA.”
“EBITDA” is defined as earnings before interest, taxes, and depreciation and amortization. “Adjusted
EBITDA” is defined as EBITDA adjusted for stock-based compensation costs, loss on sale of fixed assets, loss on debt extinguishment
and revaluation, placement agent release expense, loss on contract, provision for credit losses, convertible note inducement expense
and impairment on fixed assets. Management believes that EBITDA and Adjusted EBITDA results
in a performance measurement that represents a key indicator of our business operations of cryptocurrency mining, hosting customers engaged
in cryptocurrency mining, demand service revenue, and high-performance computing services.

We
believe EBITDA and Adjusted EBITDA can be important financial measures because they allow 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 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.

EBITDA
and Adjusted EBITDA are provided in addition to and should not be considered to be substitutes for, or superior to net income, the comparable
measure calculated in accordance with GAAP. Further, EBITDA and Adjusted EBITDA should not be considered as alternatives to revenue growth,
net income, or any other performance measure calculated in accordance with GAAP, or as alternatives to cash flow from operating activities
as a measure of our liquidity. EBITDA and Adjusted EBITDA have limitations as analytical tools, and you should not consider such measures
either in isolation or as substitutes for analyzing our results as reported under GAAP.

Reconciliations
of EBITDA and Adjusted EBITDA to net loss, the most comparable GAAP financial metric,