# EDGAR Filing Document

**Accession Number:** 0000064463
**File Stem:** 0001641172-25-024045
**Filing Date:** 2025-8
**Character Count:** 276556
**Document Hash:** 6555cf426bb3828a9a0cffc9ca815dd3
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001641172-25-024045.hdr.sgml**: 20250814

**ACCESSION NUMBER**: 0001641172-25-024045

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 96

**CONFORMED PERIOD OF REPORT**: 20250630

**FILED AS OF DATE**: 20250814

**DATE AS OF CHANGE**: 20250814

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Soluna Holdings, Inc
- **CENTRAL INDEX KEY:** 0000064463
- **STANDARD INDUSTRIAL CLASSIFICATION:** FINANCE SERVICES [6199]
- **ORGANIZATION NAME:** 09 Crypto Assets
- **EIN:** 141462255
- **STATE OF INCORPORATION:** NV
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-40261
- **FILM NUMBER:** 251219426

**BUSINESS ADDRESS:**
- **STREET 1:** 325 WASHINGTON AVENUE EXTENSION
- **CITY:** ALBANY
- **STATE:** NY
- **ZIP:** 12205
- **BUSINESS PHONE:** 518-218-2500

**MAIL ADDRESS:**
- **STREET 1:** 325 WASHINGTON AVENUE EXTENSION
- **CITY:** ALBANY
- **STATE:** NY
- **ZIP:** 12205

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** MECHANICAL TECHNOLOGY INC
- **DATE OF NAME CHANGE:** 19920703

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-Q**

---

| | |
|:---|:---|
| ☒ | **QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** |
|  | **For the quarterly period ended June 30, 2025** |
| **OR** |  |
| ☐ | **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** |
|  | **For the transition period from _____to _____** |

---

**Commission File Number: 001-40261**

**Soluna Holdings, Inc.**

**(Exact name of registrant as specified in its charter)**

__________________

---

| | |
|:---|:---|
| **Nevada** | **14-1462255** |
| **State or other jurisdiction** | **(I.R.S. Employer** |
| **of incorporation or organization** | **Identification No.)** |

---

**325 Washington Avenue Extension, Albany, New York 12205** 

**(Address of principal executive offices) (Zip Code)**

**(516) 216-9257** 

**(Registrant's telephone number, including area code)**

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading symbol(s)** | **Name of each exchange on which registered** |
| Common Stock, par value $0.001 per share | SLNH | The Nasdaq Stock Market LLC |
| 9.0% Series A Cumulative Perpetual Preferred Stock, par value $0.001 per share | SLNHP | The Nasdaq Stock Market LLC |

---

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ <br> Non-accelerated filer ☒ Smaller reporting company ☒ <br> Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

As of August 8, 2025, the Registrant had 30,145,958 shares of common stock outstanding.

**SOLUNA HOLDINGS, INC. AND SUBSIDIARIES**

**INDEX**

---

| | | |
|:---|:---|:---|
| **[Glossary of Abbreviations and Acronyms](#a_001)** | **[Glossary of Abbreviations and Acronyms](#a_001)** | **2** |
| **[PART I. FINANCIAL INFORMATION](#a_002)** | **[PART I. FINANCIAL INFORMATION](#a_002)** | **4** |
| **Item 1.** | **[Financial Statements](#a_003)** | **4** |
|  | **[Condensed Consolidated Balance Sheets As of June 30, 2025 (Unaudited) and December 31, 2024](#a_004)** | **4** |
|  | **[Condensed Consolidated Statements of Operations (Unaudited) For the Three and Six Months Ended June 30, 2025 and 2024](#a_005)** | **5** |
|  | **[Condensed Consolidated Statements of Changes in Equity For the Year Ended December 31, 2024 and the Three and Six Months Ended June 30, 2025 (Unaudited)](#a_005)** | **6** |
|  | **[Condensed Consolidated Statements of Cash Flows (Unaudited) For the Six Months Ended June 30, 2025 and 2024](#a_008)** | **8** |
|  | **[Notes to Condensed Consolidated Financial Statements (Unaudited)](#a_009)** | **9** |
| **Item 2.** | [**Management's Discussion and Analysis of Financial Condition and Results of Operations**](#sd_001) | **40** |
| **Item 3.** | [**Quantitative and Qualitative Disclosures About Market Risk**](#sd_002) | **60** |
| **Item 4.** | [**Controls and Procedures**](#sd_003) | **60** |
| [**PART II. OTHER INFORMATION**](#sd_004) | [**PART II. OTHER INFORMATION**](#sd_004) | **60** |
| **Item 1.** | [**Legal Proceedings**](#sd_005) | **60** |
| **Item 1A.** | [**Risk Factors**](#sd_006) | **61** |
| **Item 2.** | [**Unregistered Sales of Equity Securities and Use of Proceeds**](#sd_007) | **61** |
| **Item 3.** | **[Defaults Upon Senior Securities](#sd_008)** | **61** |
| **Item 4.** | [**Mine Safety Disclosures**](#sd_009) | **61** |
| **Item 5.** | [**Other Information**](#sd_010) | **61** |
| **Item 6.** | [**Exhibits**](#sd_011) | **61** |
| [**SIGNATURES**](#sd_012) | [**SIGNATURES**](#sd_012) | **62** |

---

**Glossary of Abbreviations and Acronyms for Selected References**

The following list defines various abbreviations and acronyms used throughout this Quarterly report, including Management's Discussion and Analysis of Financial Condition and Results of Operations, the Condensed Consolidated Financial Statements, the Condensed Notes to Consolidated Financial Statements and the Condensed Financial Statement Schedules.

This glossary covers essential terms related to Bitcoin mining, high-performance computing, Artificial Intelligence ("AI") and related fields, providing valuable context for readers of the Form 10-Q. A number of cross-references to additional information included throughout this Quarterly Report on Form 10-Q are also utilized throughout this report, to assist readers seeking additional information related to a particular subject.

**Artificial Intelligence ("AI")**: The simulation of human intelligence processes by machines, especially computer systems. These processes include learning (the acquisition of information and rules for using the information), reasoning (using rules to reach approximate or definite conclusions), and self-correction. AI applications include expert systems, natural language processing, speech recognition, and machine vision.

**Bitcoin**: A decentralized digital currency created in 2009 by an unknown person or group of people using the name Satoshi Nakamoto. It operates on a peer-to-peer network, allowing direct transactions without intermediaries. Transactions are verified by network nodes through cryptography and recorded on a publicly distributed ledger called a blockchain.

**Bitcoin Halving**: An event occurring approximately every four years where the reward for mining new Bitcoin blocks is halved. This reduces the number of new Bitcoins generated by miners, impacting their profitability and potentially affecting Bitcoin's value. Bitcoin Halving is part of Bitcoin's deflationary monetary policy, designed to control supply.

**Bitcoin Mining**: The process of adding new transactions to the Bitcoin blockchain. It involves solving complex cryptographic puzzles to discover a new block, rewarding miners with transaction fees and newly created Bitcoins. This process secures and verifies transactions on the network.

**Curtailment ("Curtailed" or "Curtailments"):** In energy management, the reduction in electrical power supply by power plants to balance the grid or avoid excess generation. In Bitcoin mining or other computing activities, curtailment - pausing computing activities and related energy usage - can occur during peak demand periods or insufficient energy supply.

**Data Center Colocation**: A service where businesses can be provided with services and infrastructure such as electrical power and network connectivity for servers and other computing hardware at a third-party provider's data center. This arrangement allows for cost savings, better infrastructure, and enhanced security compared to private data centers.

**Electric Reliability Council of Texas ("ERCOT"):** An independent system operator that manages the flow of electric power to more than 26 million Texas customers, representing about 90 percent of the state's electric load. ERCOT schedules power on an electric grid that connects more than 46,500 miles of transmission lines and over 680 generation units.

**Exahash ("EH/s")**: A unit of computational power equal to one quintillion (10^18) hashes per second. EH/s are used to measure the hashrate of the most powerful cryptocurrency mining equipment and the overall computational power of the Bitcoin network.

**Fork**: A fork refers to a change or divergence in the protocol of a blockchain network. It occurs when the blockchain's code is modified, resulting in two separate chains: one that follows the old rules and one that follows the new rules.

**Generative AI**: AI that can generate new content, such as text, images, or music, based on its training data. It learns from vast amounts of data to create outputs that mimic original human-generated content, often used in creative and analytical applications.

**Gigawatt ("GW")**: A unit of power equal to one billion watts. Often used to measure the capacity of large power plants or the power usage of large operations like data centers and industrial complexes.

**Graphics Processing Unit ("GPU")- as-a Service**: The sale of GPU clusters, ranging from bare metal to turnkey solutions, which may be either owned by the Company, or leased from another company and that are housed within data centers which may be owned by the Company or leased from another company, typically on a "per GPU-hour" basis, either on a reserved or on demand basis.

**Grid Demand Response Services**: Services provided to support the basic services of generating and delivering electricity to the grid. They help maintain power quality, reliability, and efficiency. In the context of Bitcoin mining, the use of mining facilities to provide grid stabilization services is an emerging concept.

**Hashrate**: The measure of computational power per second used in cryptocurrency mining. It indicates the number of hash function computations per second by a miner's hardware, with higher hashrates implying greater efficiency and network security.

**High Performance Computing ("HPC")**: The use of supercomputers and parallel processing techniques for solving complex computational problems. HPC is used in fields such as scientific research, simulation, and large-scale data analysis.

**Joules**: A unit of energy in the International System of Units (SI). One joule is the energy transferred when one watt of power is exerted for one second. In Bitcoin mining, energy efficiency is often measured in joules per hash.

**Large Language Models ("LLMs")**: Advanced AI models designed to understand, generate, and respond to human language in a way that mimics human-like understanding. They are trained on vast datasets and can perform a variety of language-based tasks, such as translation, summarization, and question-answering.

**Machine Learning**: A subset of AI involving the creation of algorithms that can learn and make decisions or predictions based on data. It enables computers to improve their performance on a specific task with experience and data, without being explicitly programmed.

**Megawatts ("MW")**: A unit of power measurement equivalent to one million watts used to measure the electrical power consumption of large operations like data centers and Bitcoin mining rigs.

**Mining Pool**: A group of cryptocurrency miners who combine their computational resources over a network to increase their chances of finding a block and receiving rewards. The rewards are then divided among the pool participants, proportional to the amount of hashing power each contributed.

**Petahash ("PH/s")**: A unit of computational power equal to one quadrillion (10^15) hashes per second. It is used to measure the hashrate of extremely powerful cryptocurrency mining equipment.

**Power Usage Effectiveness ("PUE")**: A ratio that describes how efficiently a computer data center uses energy; specifically, how much energy is used by the computing equipment (in contrast to cooling and other overhead that supports the equipment).

**PART I. FINANCIAL INFORMATION**

**Item 1. Financial Statements**

**Soluna Holdings, Inc. and Subsidiaries**

**Condensed Consolidated Balance Sheets**

**As of June 30, 2025 (Unaudited) and December 31, 2024**

---

| | | |
|:---|:---|:---|
| (Dollars in thousands, except per share) | **June 30, 2025** | **December 31, 2024** |
| **Assets** |  |  |
| **Current Assets:** |  |  |
| &nbsp;&nbsp;&nbsp;Cash | $9878 | $7843 |
| &nbsp;&nbsp;&nbsp;Restricted cash | 2215 | 1150 |
| &nbsp;&nbsp;&nbsp;Accounts receivable, net (allowance for expected credit losses of $244 at June 30, 2025 and December 31, 2024) | 2649 | 2693 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 2236 | 1781 |
| &nbsp;&nbsp;&nbsp;Equipment held for sale | - | 28 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Current Assets | 16978 | 13495 |
| **Restricted cash, noncurrent** | 3060 | 1460 |
| **Other assets** | 1107 | 2724 |
| **Deposits and credits on equipment** | 1046 | 5145 |
| **Property, plant and equipment, net** | 56521 | 47283 |
| **Intangible assets, net** | 12957 | 17620 |
| **Operating lease right-of-use assets** | 283 | 313 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Assets** | $91952 | $88040 |
| **Liabilities and Stockholders' Equity** |  |  |
| **Current Liabilities:** |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | $3942 | $2840 |
| &nbsp;&nbsp;&nbsp;Accrued liabilities | 5934 | 6785 |
| &nbsp;&nbsp;&nbsp;Accrued interest payable | 3286 | 2275 |
| &nbsp;&nbsp;&nbsp;Contract liability | 19348 | 20015 |
| &nbsp;&nbsp;&nbsp;Current portion of debt | 13255 | 14444 |
| &nbsp;&nbsp;&nbsp;Income tax payable | 62 | 37 |
| &nbsp;&nbsp;&nbsp;Customer deposits | 1962 | 1416 |
| &nbsp;&nbsp;&nbsp;Operating lease liability | 63 | 61 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Current Liabilities | 47852 | 47873 |
| **Other liabilities** | 333 | 235 |
| **Long-term debt** | 10021 | 7061 |
| **Operating lease liability** | 220 | 252 |
| **Deferred tax liability, net** | 4207 | 5257 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Liabilities** | 62633 | 60678 |
| **Commitments and Contingencies (Note 10)** |  |  |
| **Stockholders' Equity:** |  |  |
| &nbsp;&nbsp;&nbsp;9.0% Series A Cumulative Perpetual Preferred Stock, par value $0.001 per share, $25.00 liquidation preference; authorized 6,040,000; 4,953,545 shares issued and outstanding as of June 30, 2025 and December 31, 2024 | 5 | 5 |
| &nbsp;&nbsp;&nbsp;Series B Preferred Stock, par value $0.0001 per share, authorized 187,500; 62,500 shares issued and outstanding as of June 30, 2025 and December 31, 2024 |  |  |
| &nbsp;&nbsp;&nbsp;Common stock, par value $0.001 per share, authorized 75,000,000; 19,095,863 shares issued and 19,055,122 shares outstanding as of June 30, 2025 and 10,647,761 shares issued and 10,607,020 shares outstanding as of December 31, 2024 | 19 | 11 |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 323557 | 315607 |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (329242) | (314304) |
| &nbsp;&nbsp;&nbsp;Common stock in treasury, at cost, 40,741 shares at June 30, 2025 and December 31, 2024 | (13798) | (13798) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Soluna Holdings, Inc. Stockholders' (Deficit) Equity** | (19459) | (12479) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-Controlling Interest | 48778 | 39841 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Stockholders' Equity** | 29319 | 27362 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Liabilities and Stockholders' Equity** | $91952 | $88040 |

---

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

**Soluna Holdings, Inc. and Subsidiaries**

**Condensed Consolidated Statements of Operations (Unaudited)**

**For the Three and Six Months Ended June 30, 2025 and 2024**

---

| | | | | |
|:---|:---|:---|:---|:---|
| (Dollars in thousands, except per share) | **Three Months Ended** | **Three Months Ended** | **Six Months Ended** | **Six Months Ended** |
|  | **June 30,** | **June 30,** | **June 30,** | **June 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Cryptocurrency mining revenue | $2861 | $4484 | $5860 | $10880 |
| Data hosting revenue | 3136 | 4898 | 5538 | 10176 |
| Demand response service revenue | 161 | 293 | 668 | 1168 |
| High-performance computing service revenue | - | - | 28 | - |
| &nbsp;&nbsp;&nbsp;Total revenue | 6158 | 9675 | 12094 | 22224 |
| Operating costs: |  |  |  |  |
| Cost of cryptocurrency mining revenue, exclusive of depreciation | 1767 | 1883 | 3721 | 3724 |
| &nbsp;&nbsp;&nbsp;Cost of data hosting revenue, exclusive of depreciation | 1617 | 2176 | 2945 | 4427 |
| &nbsp;&nbsp;&nbsp;Cost of high-performance computing services |  |  | 7 |  |
| &nbsp;&nbsp;&nbsp;Cost of cryptocurrency mining revenue- depreciation | 1074 | 1065 | 2147 | 2152 |
| &nbsp;&nbsp;&nbsp;Cost of data hosting revenue- depreciation | 512 | 441 | 913 | 877 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total costs of revenue | 4970 | 5565 | 9733 | 11180 |
| Operating expenses: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;General and administrative expenses, exclusive of depreciation and amortization | 5397 | 5382 | 11344 | 9378 |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization associated with general and administrative expenses | 2403 | 2403 | 4807 | 4805 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total general and administrative expenses | 7800 | 7785 | 16151 | 14183 |
| Impairment on fixed assets | 12 | - | 12 | 130 |
| Operating loss | (6624) | (3675) | (13802) | (3269) |
| Interest expense | (1196) | (449) | (2034) | (873) |
| (Loss) gain on debt extinguishment and revaluation, net |  | (5600) | 551 | (8698) |
| Loss on sale of fixed assets | (22) | (21) | (22) | (21) |
| Other expense, net | (546) | (49) | (860) | (25) |
| Loss before income taxes | (8388) | (9794) | (16167) | (12886) |
| Income tax benefit, net | 608 | 649 | 1033 | 1197 |
| Net loss | (7780) | (9145) | (15134) | (11689) |
| (Less) Net (loss) income attributable to non-controlling interest | (398) | 1728 | (196) | 4438 |
| Net loss attributable to Soluna Holdings, Inc. | $(7382) | $(10873) | $(14938) | $(16127) |
| Basic and Diluted loss per common share: |  |  |  |  |
| Basic & Diluted loss per share | $(0.69) | $(2.97) | $(1.55) | $(5.68) |
| Weighted average shares outstanding (Basic and Diluted) | 14991125 | 4563696 | 13473983 | 3683558 |

---

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

**Soluna Holdings, Inc. and Subsidiaries Condensed Consolidated Statements of Changes in Equity For the Year Ended December 31, 2024**

**And the Three and Six Months Ended June 30, 2025 (Unaudited)**

(Dollars in thousands, except per share)

---

| | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Preferred Stock** | **Preferred Stock** | **Preferred Stock** | **Preferred Stock** | **Common Stock** | **Common Stock** | | | **Treasury Stock** | **Treasury Stock** | | |
|  | **Series A<br> Shares** | **Amount** | **Series B<br> Shares** | **Amount** | **Shares** | **Amount** | <br>**Additional<br> Paid-in<br> Capital** | <br>**Accumulated<br> Deficit** | **Shares** | **Amount** | <br>**Non-<br> Controlling<br> Interest** | <br>**Total<br> Stockholders'<br> Equity** |
| **January 1, 2024** | 3061245 | $3 | &nbsp;&nbsp;&nbsp;&nbsp;62500 | $— | 2546361 | $3 | $291276 | $(250970) | 40741 | $(13798) | $26845 | $53359 |
| Net loss |  |  |  |  |  |  |  | (5254) |  |  | 2710 | (2544) |
| Reverse split adjustment |  |  |  |  | 17 |  |  |  |  |  |  |  |
| Stock-based compensation |  |  |  |  |  |  | 661 |  |  |  |  | 661 |
| Issuance of shares – warrant exercise |  |  |  |  | 61501 |  | 300 |  |  |  |  | 300 |
| Restricted stock units vested |  |  |  |  | 3780 |  |  |  |  |  |  |  |
| Issuance of shares- Notes conversion |  |  |  |  | 270572 |  | 1023 |  |  |  |  | 1023 |
| Warrant revaluation |  |  |  |  |  |  | (1715) |  |  |  |  | (1715) |
| Distribution to Non-Controlling interest |  |  |  |  |  |  |  |  |  |  | (2233) | (2233) |
| **March 31, 2024** | 3061245 | $3 | 62500 | $— | 2882231 | $3 | $291545 | $(256224) | 40741 | $(13798) | $27322 | $48851 |
| Net loss |  |  |  |  |  |  |  | (10873) |  |  | 1728 | (9145) |
| Series A Preferred Stock issuance | 1892300 | 2 |  |  |  |  | (2) |  |  |  |  |  |
| Stock-based compensation |  |  |  |  |  |  | 1368 |  |  |  |  | 1368 |
| Issuance of shares – warrant exercise |  |  |  |  | 529354 |  | 2004 |  |  |  |  | 2004 |
| Restricted stock units vested |  |  |  |  | 100 |  |  |  |  |  |  |  |
| Issuance of shares-Restricted stock awards |  |  |  |  | 1149767 | 1 | (1) |  |  |  |  |  |
| Issuance of shares- Notes conversion |  |  |  |  | 711393 | 1 | 2688 |  |  |  |  | 2689 |
| Warrants revaluation |  |  |  |  |  |  | 7648 |  |  |  |  | 7648 |
| Distribution to Non-Controlling interest |  |  |  |  |  |  |  |  |  |  | (3482) | (3482) |
| **June 30, 2024** | 4953545 | $5 | 62500 | $— | 5272845 | $5 | $305250 | $(267097) | 40741 | $(13798) | $25568 | $49933 |
| Net (loss) income |  |  |  |  |  |  |  | (7190) |  |  | (903) | (8093) |
| Stock-based compensation |  |  |  |  |  |  | 1257 |  |  |  |  | 1257 |
| Issuance of shares-warrant exercise |  |  |  |  | 596390 | 1 | 26 |  |  |  |  | 27 |
| Issuance of shares – Restricted stock awards |  |  |  |  | 1188691 | 1 | (1) |  |  |  |  |  |
| SEPA commitment fee payment |  |  |  |  | 59382 |  | 250 |  |  |  |  | 250 |
| Issuance of shares- notes conversion |  |  |  |  | 572911 | 1 | 2165 |  |  |  |  | 2166 |
| Contribution from Non-Controlling interest |  |  |  |  |  |  |  |  |  |  | 7259 | 7259 |
| Distribution to Non-Controlling interest |  |  |  |  |  |  |  |  |  |  | (1204) | (1204) |
| **September 30, 2024** | 4953545 | $5 | 62500 | $— | 7690219 | $8 | $309947 | $(274287) | 40741 | $(13798) | $30720 | $51595 |
| Net (loss) income |  |  |  |  |  |  |  | (40017) | —— |  | 1499 | (38518) |
| Stock-based compensation |  |  |  |  |  |  | 2027 |  |  |  |  | 2027 |
| Issuance of shares –warrants exercise |  |  |  |  | 530776 | 1 | (1) |  |  |  |  |  |
| Restricted stock units vested |  |  |  |  | 89380 |  |  |  |  |  |  |  |
| Issuance of shares – Restricted stock awards |  |  |  |  | 1065101 | 1 | (1) |  |  |  |  |  |
| SEPA consent fee |  |  |  |  | 5938 |  | 25 |  |  |  |  | 25 |
| Issuance of shares- Placement agent release payment |  |  |  |  | 308642 |  | 1000 |  |  |  |  | 1000 |
| Issuance of shares- notes conversion |  |  |  |  | 957705 | 1 | 3510 |  |  |  |  | 3511 |
| Distribution to non-controlling interest |  |  |  |  |  |  |  |  |  |  | (2014) | (2014) |
| Contribution from Non-Controlling interest |  |  |  |  |  |  |  |  |  |  | 9636 | 9636 |
| **December 31, 2024** | 4953545 | $5 | 62500 | $— | 10647761 | $11 | $315607 | $(314304) | 40741 | $(13798) | $39841 | $27362 |

---

---

| | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Preferred Stock** | **Preferred Stock** | **Preferred Stock** | **Preferred Stock** | **Common Stock** | **Common Stock** | | | **Treasury Stock** | **Treasury Stock** | | |
|  | **Series A<br> Shares** | **Amount** | **Series B<br> Shares** | **Amount** | **Shares** | **Amount** | <br>**Additional<br> Paid-in<br> Capital** | <br>**Accumulated<br> Deficit** | **Shares** | **Amount** | <br>**Non-<br> Controlling<br> Interest** | <br>**Total<br> Stockholders'<br> Equity** |
| **January 1, 2025** | 4953545 | $5 | &nbsp;&nbsp;&nbsp;&nbsp;62500 | $— | 10647761 | $11 | $315607 | $(314304) | 40741 | $(13798) | $39841 | $27362 |
| Net (loss) income |  |  |  |  |  |  |  | (7556) |  |  | 202 | (7354) |
| Stock-based compensation |  |  |  |  |  |  | 1847 |  |  |  |  | 1847 |
| Issuance of shares – warrant exercise |  |  |  |  | 384721 |  |  |  |  |  |  |  |
| Restricted stock units vested |  |  |  |  | 3432 |  |  |  |  |  |  |  |
| Issuance of shares- SEPA draws |  |  |  |  | 1512872 | 2 | 2121 |  |  |  |  | 2123 |
| Contribution from Non-Controlling interest |  |  |  |  |  |  |  |  |  |  | 4310 | 4310 |
| Distribution to Non-Controlling interest |  |  |  |  |  |  |  |  |  |  | (1295) | (1295) |
| **March 31, 2025** | 4953545 | $5 | 62500 | $— | 12548786 | $13 | $319575 | $(321860) | 40741 | $(13798) | $43058 | $26993 |
| Net (loss) income |  |  |  |  |  |  |  | (7382) |  |  | (398) | (7780) |
| Stock-based compensation |  |  |  |  |  |  | 1942 |  |  |  |  | 1942 |
| Issuance of shares – warrant exercise |  |  |  |  | 59131 |  |  |  |  |  |  |  |
| Restricted stock units vested |  |  |  |  | 6600 |  |  |  |  |  |  |  |
| Issuance of shares- restricted stock awards |  |  |  |  | 2140683 | 2 | (2) |  |  |  |  |  |
| Issuance of shares- ATM settlements |  |  |  |  | 3340663 | 3 | 2043 |  |  |  |  | 2046 |
| Issuance of restricted shares-Green Cloud issuance |  |  |  |  | 1000000 | 1 | (1) |  |  |  |  |  |
| Contribution from Non-Controlling interest |  |  |  |  |  |  |  |  |  |  | 7542 | 7542 |
| Distribution to Non-Controlling interest |  |  |  |  |  |  |  |  |  |  | (1424) | (1424) |
| **June 30, 2025** | 4953545 | $5 | 62500 | $— | 19095863 | $19 | $323557 | $(329242) | 40741 | $(13798) | $48778 | $29319 |

---

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

**Soluna Holdings, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (Unaudited)** 

**For the Six Months Ended June 30, 2025 and 2024**

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
| (Dollars in thousands) | **2025** | **2024** |
| **Operating Activities** |  |  |
| Net loss | $(15134) | $(11689) |
| Adjustments to reconcile net loss to net cash used in operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;Depreciation expense | 3121 | 3091 |
| &nbsp;&nbsp;&nbsp;Amortization expense | 4746 | 4743 |
| &nbsp;&nbsp;&nbsp;Stock-based compensation | 3789 | 2029 |
| &nbsp;&nbsp;&nbsp;Deferred income taxes | (1051) | (1259) |
| &nbsp;&nbsp;&nbsp;Impairment on fixed assets | 12 | 130 |
| &nbsp;&nbsp;&nbsp;Provision for credit losses |  | 244 |
| &nbsp;&nbsp;&nbsp;Amortization of operating lease asset | 30 | 122 |
| &nbsp;&nbsp;&nbsp;(Gain) loss on debt extinguishment and revaluation, net | (551) | 8698 |
| &nbsp;&nbsp;&nbsp;Amortization of deferred financing costs and discount on notes | 338 | 59 |
| &nbsp;&nbsp;&nbsp;SEPA fair value revaluation | 118 |  |
| &nbsp;&nbsp;&nbsp;Loss on sale of fixed assets | 22 | 21 |
| Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Accounts receivable | 44 | (486) |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | (455) | (10767) |
| &nbsp;&nbsp;&nbsp;Other long-term assets | 1607 | 1 |
| &nbsp;&nbsp;&nbsp;Accounts payable | 1102 | 353 |
| &nbsp;&nbsp;&nbsp;Contract liability | (667) |  |
| &nbsp;&nbsp;&nbsp;Operating lease liabilities | (30) | (123) |
| &nbsp;&nbsp;&nbsp;Other liabilities and customer deposits | 644 | (404) |
| &nbsp;&nbsp;&nbsp;Accrued liabilities and interest payable | 1042 | 1764 |
| Net cash used in operating activities | (1273) | (3473) |
| **Investing Activities** |  |  |
| &nbsp;&nbsp;&nbsp;Purchases of property, plant and equipment | (12365) | (278) |
| &nbsp;&nbsp;&nbsp;Purchases of intangible assets | (83) | (64) |
| &nbsp;&nbsp;&nbsp;Proceeds from sale of property, plant and equipment |  | 215 |
| &nbsp;&nbsp;&nbsp;Deposits on equipment, net | 4099 | (2096) |
| Net cash used in investing activities | (8349) | (2223) |
| **Financing Activities** |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from common stock warrant exercises |  | 2304 |
| &nbsp;&nbsp;&nbsp;Proceeds from sale of common stock on SEPA | 2005 |  |
| &nbsp;&nbsp;&nbsp;Proceeds from notes | 5269 | 13220 |
| &nbsp;&nbsp;&nbsp;Proceeds from sale of common stock on ATM | 2178 |  |
| &nbsp;&nbsp;&nbsp;Payments on notes and deferred financing costs | (3275) | (1910) |
| &nbsp;&nbsp;&nbsp;Payments on ATM | (132) |  |
| &nbsp;&nbsp;&nbsp;Contributions from non-controlling interest | 11852 |  |
| &nbsp;&nbsp;&nbsp;Distributions to non-controlling interest | (3575) | (5776) |
| Net cash provided by financing activities | 14322 | 7838 |
| Increase in cash & restricted cash | 4700 | 2142 |
| Cash & restricted cash – beginning of period | 10453 | 10367 |
| Cash & restricted cash – end of period | $15153 | $12509 |
| **Supplemental Disclosure of Cash Flow Information** |  |  |
| &nbsp;&nbsp;&nbsp;Interest paid on debt | 685 | 203 |
| &nbsp;&nbsp;&nbsp;Warrant consideration in relation to convertible notes and revaluation of warrant liability |  | 7648 |
| &nbsp;&nbsp;&nbsp;Notes converted to common stock |  | 3712 |
| &nbsp;&nbsp;&nbsp;Noncash membership distribution accrual | 323 | 456 |
| &nbsp;&nbsp;&nbsp;Warrant consideration in relation to Soluna Cloud |  | 314 |
| &nbsp;&nbsp;&nbsp;Fair value consideration for Green Cloud issuance of shares | 810 |  |

---

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

**Notes to Condensed Consolidated Financial Statements (Unaudited)**

**1.** **Nature of Operations**

**Description of Business**

*Unless the context requires otherwise in these notes to the consolidated financial statements, the terms "SHI," " the "Company," "we," "us," and "our" refer to Soluna Holdings, Inc. together with its consolidated subsidiaries, "SDI" refers to Soluna Digital, Inc., "SCI" refers to Soluna Computing, Inc., formerly known as EcoChain, Inc., "Soluna Cloud" or "Cloud" refers to Soluna Cloud, Inc., and "SEI" refers to Soluna Energy, Inc.* 

Soluna Holdings, Inc. ("SHI") is a digital infrastructure company that specializes in transforming surplus renewable energy into computing resources. The Company's strategy is to operate modular data centers co-located with wind, solar, and hydroelectric power plants, supporting compute-intensive applications, including Bitcoin mining, generative AI, and soon-high performance computing ("HPC"). This approach aims to create a more sustainable grid while providing cost-effective and environmentally friendly computing solutions.

SHI was originally incorporated in the State of New York in 1961 as Mechanical Technology, Incorporated and reincorporated in the State of Nevada on March 24, 2021. On March 23, 2021, SHI's common stock commenced trading on the Nasdaq Stock Market LLC ("Nasdaq"). Headquartered in Albany, New York, the Company changed its name from "Mechanical Technology, Incorporated" to Soluna Holdings, Inc. on November 2, 2021. On October 29, 2021, Soluna Callisto Holdings, Inc. ("Soluna Callisto") merged into Soluna Computing, Inc. ("SCI"), a private green data center development company and a subsidiary of SHI. MTI Instruments, Inc., a subsidiary of SHI, was sold on April 11, 2022. The Company formed a wholly owned subsidiary of SHI on December 27, 2023, Soluna Digital, Inc. ("Soluna Digital," or "SDI"). Effective December 31, 2023, SCI transferred substantially all of its assets to SHI or its subsidiaries, including SDI. The Company sold SCI in April 2024.

During fiscal year 2021, the Company commenced mining operations at its Murray, Kentucky location ("Project Sophie") and Calvert City, Kentucky site ("Project Marie"). Project Marie was decommissioned in February 2023, while Project Sophie transitioned its focus from proprietary Bitcoin mining to hosting customers' Bitcoin mining operations in the second quarter of 2023. All 25 MW of Project Sophie now perform data hosting services. The Company has since sold all Bitcoin miners at Project Sophie and redeployed the capital.

The Company's Texas site ("Project Dorothy"), located at a wind farm, holds the potential for up to 100 MW of power generation. By June 2024, SHI had energized 50 MW of the site across two phases, Project Dorothy 1A and 1B. As of June 30, 2025, SHI holds a 15% Class B membership interest in Soluna DVSL ComputeCo, LLC ("DVSL"), owner of Project Dorothy 1A, and a subsidiary of SHI holds a 100% Class A membership interest in DVSL. SHI also holds a 51% ownership interest in Soluna DV ComputeCo, LLC ("DVCC"), owner of Project Dorothy 1B. On July 22, 2024, the Company closed financing for the 48 MW modular data center (the "Project Dorothy 2"). Project Dorothy 2 is financed by Soluna2 SLC Fund II Project Holdco LLC, an investment vehicle of Spring Lane Capital ("SLC") and SDI. As of June 30, 2025, SDI has 100% Class A membership and 0% Class B membership interest in Project Dorothy 2.

***Going Concern and Liquidity***

The Company's condensed consolidated financial statements as of June 30, 2025 have been prepared using generally accepted accounting principles in the United States of America ("U.S. GAAP") applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. As shown in the accompanying condensed consolidated financial statements, the Company was in a net loss position, has negative working capital, and has significant outstanding debt as of June 30, 2025. In addition, Soluna MC Borrowings, LLC 2021-1 ("Borrower"), a subsidiary of Soluna MC, LLC ("Soluna MC"), a subsidiary of Soluna Digital, Inc. ("Soluna Digital" or "SDI"), a subsidiary of the Company, has a litigation matter with NYDIG ABL LLC ("NYDIG") in relation to their Master Equipment Finance Agreement. See further discussion around the NYDIG litigation in Note 10. The Company had outstanding commitments as of June 30, 2025 related to SDI of $10.1 million in capital expenditures related to Project Dorothy 2 and Project Kati. In addition, in June 2024, Soluna AL Cloudco, LLC ("CloudCo"), a subsidiary of Soluna Cloud, entered into an agreement (the "HPE Agreement") with Hewlett Packard Enterprise Company ("HPE"), with an initial pre-payment of $10.3 million and a total commitment of $34 million over a 36-month period. On March 24, 2025, CloudCo notified HPE of its termination of the HPE Agreement and, on March 26, 2025, HPE notified CloudCo of its termination of the HPE Agreement for cause, effective immediately, due to CloudCo's material breach of its payment obligations that remained uncured for more than thirty (30) days. In accordance with the terms of the HPE Agreement, upon a termination for cause by HPE, CloudCo must pay HPE the remaining payment stream under the term of the HPE Agreement of approximately $19.3 million as of June 30, 2025, including all upfront payments and monthly charges, plus any fees incurred for the terminated Services (as defined in the HPE Agreement). CloudCo has not made any additional payments under the HPE Agreement since CloudCo notified HPE of its termination of the HPE Agreement.

These factors, among others indicate that there is substantial doubt about the Company's ability to continue as a going concern within one year after issuance of these condensed consolidated financial statements as of June 30, 2025, or August 14, 2025.

The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. In the near term, management is evaluating and implementing different strategies to obtain financing to fund the Company's expenses and growth to achieve a level of revenue adequate to support the Company's current cost structure. Financing strategies may include, but are not limited to, stock issuances, project level equity, debt borrowings, partnerships and/or collaborations. If the Company is unable to meet its financial obligations, it could be forced to restructure or refinance, seek additional equity capital or sell its assets. The Company might then be unable to obtain such financing or capital or sell its assets on satisfactory terms. There can be no assurance that additional financing will be available to the Company when needed or, if available, that it can be obtained on commercially reasonable terms. If the Company is not able to obtain the additional financing on a timely basis, if and when it is needed, it will be forced to delay or scale down some or all of its development activities or perhaps even cease the operation of its business.

In addition to the Company's cash on hand for available use of approximately $9.9 million as of June 30, 2025, the Company will need to raise additional capital through financing raising activities, to meet its capital expenditure needs for its current pipeline and other operational needs. On August 12, 2024, the Company entered into a Standby Equity Purchase Agreement (the "SEPA") with YA II PN, LTD., a Cayman Islands exempt limited company ("YA"). In accordance with the terms of the SEPA, YA has agreed to purchase up to $25 million in aggregate gross purchase price of newly issued fully paid shares of the Company's common stock from time to time subject to the limits and the conditions of the SEPA. The Company drew on the SEPA in the first quarter of 2025, and the proceeds were used to pay debt, invest in data center projects, and for working capital and general corporate purposes. As of June 30, 2025, the Company has drawn approximately $2.0 million on the SEPA. Additionally, on April 29, 2025, the Company entered into an At the Market Offering Agreement (the "ATM Agreement") with H.C. Wainwright & Co., LLC ("Wainwright"), as sales agent, pursuant to which the Company may offer and sell, from time to time, through Wainwright, up to $3.75 million of shares of common stock. As of June 30, 2025, the Company has drawn approximately $2.2 million pursuant to the ATM Agreement. On July 15, 2025, the Company entered into a securities purchase agreement with the purchasers signatory thereto, pursuant to which the Company received gross proceeds of $5.0 million from a public offering of common stock. See Subsequent Events: Note 16 for further details on the public offering.

The Company, in 2025, will continue to look to evaluate different strategies to obtain financing to fund operations. However, management cannot provide any assurances that the Company will be successful in accomplishing additional financing or any of its other plans. These financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

**2.** **Basis of Presentation**

In the opinion of management, the Company's condensed consolidated financial statements reflect all adjustments, which are of a normal recurring nature, necessary for a fair statement of the results for the periods presented in accordance with United States of America's Generally Accepted Accounting Principles ("U.S. GAAP"). The results of operations for the interim periods presented are not necessarily indicative of results for the full year.

Certain information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. These unaudited condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2024 ("the Annual Report").

The information presented in the accompanying condensed consolidated balance sheet as of December 31, 2024 has been derived from the Company's audited consolidated financial statements. All other information has been derived from the Company's unaudited condensed consolidated financial statements for the three and six months ended June 30, 2025 and June 30, 2024.

***Principles of Consolidation***

 ****

The condensed consolidated financial statements include the accounts of the Company and its subsidiaries, including the Company's variable interest entities disclosed in Note 14. All intercompany balances and transactions are eliminated in consolidation.

***Cash and Cash Equivalents***

Cash and cash equivalents consist of cash and highly liquid short-term investments with original maturities of less than three months.

***Restricted Cash***

Restricted cash relates to cash that is legally restricted as to withdrawal and usage or is being held for a specific purpose and thus not available to the Company for immediate or general business use. As of June 30, 2025, the Company had restricted cash of approximately $5.3 million, of which $2.2 million was classified as current and $3.1 million was classified as non-current. As of December 31, 2024, the Company had restricted cash of approximately $2.6 million, of which $1.1 million was classified as current and $1.5 million was classified as non-current. Currently, the balance in restricted cash relates to restricted deposits held with customers that were for less than 12 months, or held for debt covenant purposes. The Company has a long-term restricted cash balance in relation to a collateralized deposit.

***Deposits and Credits on equipment***

As of June 30, 2025 and December 31, 2024, the Company had approximately $1.0 million and $5.1 million, respectively, in deposits and credits on equipment that had not yet been received by the Company. Once the Company receives such equipment in a subsequent period, the Company will reclassify such balance into Property, Plant and Equipment, net. Included in these balances was a credit on equipment of $975 thousand, of which approximately $195 thousand has been used as of June 30, 2025, and the remaining $780 thousand will be restricted to be used on future purchases for Project Dorothy 2 and Project Kati until September 1, 2025 ("expiration date"). The Company notes that if an order is not executed by the expiration date, the credit would be forfeited. The Company intends to utilize the full credit balance for future orders prior to the expiration date.

***Debt Issuance Costs***

Debt issuance costs consist of costs incurred in obtaining long-term financing. These costs are classified on the condensed consolidated balance sheet as a direct deduction from the carrying amount of the related debt liability and subsequently amortized as interest expense in the condensed consolidated statement of operations using the effective interest rate method.

The Company evaluates amendments to its debt instruments in accordance with ASC 470-50, *Debt - Modifications and Extinguishments* ("ASC 470") to determine whether the amendment should be accounted for as a modification or an extinguishment. An amendment may be considered modified when the terms of the new debt and original instrument are not "substantially different" (as defined in the debt modification guidance in ASC 470). Amendments that are considered modifications are accounted for prospectively as yield adjustments, based on the revised terms, and lender fees and costs directly incurred with third parties, to the extent material, are recorded as debt discount and amortized to interest expense using the effective interest rate method.

***Reclassification***

Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations or net assets.

**3.** **Accounts Receivable, net**

Accounts receivables consist of the following at:

**** 

---

| | | |
|:---|:---|:---|
| (Dollars in thousands) | **June 30, 2025** | **December 31, 2024** |
| Data hosting | $1714 | $1385 |
| Demand response service receivable | 842 | 1159 |
| Proprietary mining Coinbase receivable | 33 | 37 |
| Other | 304 | 356 |
| Accounts receivables, gross | 2893 | 2937 |
| Less: Allowance for expected credit losses | (244) | (244) |
| Accounts receivables, net | $2649 | $2693 |

---

The Company's allowance for expected credit loss was $244 thousand at June 30, 2025 and December 31, 2024. For the year ended December 31, 2024, one of the Company's borrowers for a note receivable was having financial difficulty securing additional financing to pay the note. As such, the Company fully reserved the note balance and incurred a provision on credit loss of approximately $244 thousand. In addition, the Company had a credit provision for approximately $516 thousand due to a pricing dispute with a Bitcoin hosting customer, in which the agreement with the customer was terminated in December 2024. As of December 31, 2024, the Company wrote off the entire allowance with the Bitcoin hosting customer of $516 thousand.

Rollforward of Allowance of Expected Credit Losses:

---

| | | |
|:---|:---|:---|
| (Dollars in thousands) | **January 1, 2025- June 30, 2025** | **January 1, 2024 – December 31, 2024** |
| Allowance for expected credit losses, beginning of period | $244 | $- |
| Current period credit provision |  | 760 |
| Write offs charged against the allowance |  | (516) |
| Recoveries collected | - | - |
| Allowance of expected credit losses, end of period | $244 | $244 |

---

**4.** **Property, Plant and Equipment, net**

Property, plant and equipment consist of the following at:

---

| | | |
|:---|:---|:---|
| (Dollars in thousands) | **June 30, 2025** | **December 31, 2024** |
| Land and land improvements | $2177 | $1553 |
| Buildings and leasehold improvements | 29163 | 25453 |
| Computers and related software | 11774 | 11533 |
| Machinery and equipment | 13536 | 9324 |
| Office furniture and fixtures | 74 | 34 |
| Construction in progress | 12728 | 9250 |
| Property, plant and equipment, gross | 69452 | 57147 |
| Less: Accumulated depreciation | (12931) | (9864) |
| Property, plant and equipment, net | $56521 | $47283 |

---

Depreciation expense was approximately $1.6 million and $1.5 million for the three months ended June 30, 2025 and 2024, respectively. Depreciation expense was approximately $3.1 million for the six months ended June 30, 2025 and 2024.

**5.** **Intangible Assets, net**

Intangible assets consist of the following as of June 30, 2025:

---

| | | | |
|:---|:---|:---|:---|
| (Dollars in thousands) | **Intangible Assets** | **Accumulated<br> Amortization** | **Total** |
| Strategic pipeline contract | $46885 | $34382 | $12503 |
| Assembled workforce | 500 | 367 | 133 |
| Patents | 349 | 28 | 321 |
| Total | $47734 | $34777 | $12957 |

---

Intangible assets consist of the following as of December 31, 2024:

---

| | | | |
|:---|:---|:---|:---|
| (Dollars in thousands) | **Intangible Assets** | **Accumulated<br> Amortization** | **Total** |
| Strategic pipeline contract | $46885 | $29694 | $17191 |
| Assembled workforce | 500 | 317 | 183 |
| Patents | 266 | 20 | 246 |
| Total | $47651 | $30031 | $17620 |

---

Amortization expense for the each of the three and six months ended June 30, 2025 and 2024 was approximately $2.4 million and $4.7 million, respectively.

The strategic pipeline contract relates to supply of a critical input to our digital mining and hosting business. The Company has analyzed this strategic pipeline contract similar to a permit for future benefit. The strategic pipeline contract relates to potential renewable energy datacenters that fit in the alignment of the Company structure to expand operations of the Company's new focus in their business.

The Company expects to record amortization expense of intangible assets over the next five years and thereafter as follows:

---

| | |
|:---|:---|
| (Dollars in thousands) |  |
| **Year** | **2025** |
| 2025 (remainder of the year) | $4747 |
| 2026 | 7914 |
| 2027 | 17 |
| 2028 | 17 |
| 2029 | 17 |
| Thereafter | 245 |
| Total | $12957 |

---

**6. Accrued Liabilities**

Accrued liabilities consist of the following at:

---

| | | |
|:---|:---|:---|
| (Dollars in thousands) | June 30, 2025 | December 31,<br> 2024 |
| Salaries, wages, and related expenses | $118 | $552 |
| Liability to shareholders for previous acquisition | 363 | 363 |
| Legal, audit, tax, and professional fees | 1290 | 537 |
| Sales tax accrual |  | 575 |
| Real estate taxes accrual | 301 | 182 |
| Hosting and utility fees | 1211 | 1036 |
| Construction fees | 2238 | 2211 |
| Membership distribution accrual | 329 | 1179 |
| Other | 84 | 150 |
| Total | $5934 | $6785 |

---

*Contract liability* 

On March 24, 2025, CloudCo notified HPE of its termination of the HPE Agreement and, on March 26, 2025, HPE sent notice of its termination of the HPE Agreement. The HPE Agreement provided the Company access to datacenter and cloud services for AI and supercomputing applications utilizing NVIDIA H100 GPUs. In accordance with the terms of the HPE Agreement, CloudCo is required to pay all of the unpaid fees that were payable over the entire term of the HPE Agreement. As of December 31, 2024, the Company reduced its prepaid assets and other long-term assets by approximately $8.6 million, increased termination liability by approximately $20.0 million and recorded a loss on contract of approximately $28.6 million to account for the termination of the contract and CloudCo's contractual payments. The liability has been reduced to approximately $19.3 million as of June 30, 2025. See Note 1 for details.

**7. Income Taxes**

During the three and six months ended June 30, 2025, the Company's effective income tax rate was 7.2% and 6.4%, respectively, and for the three and six months ended June 30, 2024, the Company's effective tax rate was 6.6% and 9.3%, respectively. The projected annual effective tax rate is less than the Federal statutory rate of 21%, primarily due to the change in the valuation allowance, as well as changes to estimated taxable income for 2025 and permanent differences. For the three months ended June 30, 2025 and 2024, there was a deferred income tax benefit of $615 thousand and $714 thousand respectively, offset by a $7 thousand and $65 thousand current tax expense for the three months ended June 30, 2025 and 2024, respectively. For the six months ended June 30, 2025 and 2024, there was a deferred income tax benefit of approximately $1.1 million and $1.3 million, respectively, offset by a $12 thousand and $63 thousand current tax expense for the six months ended June 30, 2025 and 2024, respectively.

In connection with the strategic contract pipeline acquired in the acquisition as further discussed in Note 5, ASC 740-10-25-51 requires the recognition of a deferred tax impact of acquiring an asset in a transaction that is not a business combination when the amount paid exceeds the tax basis on the acquisition date. As such, the Company is required to adjust the value of the strategic contract pipeline by approximately $10.9 million at inception date, which was recorded as a deferred tax liability, and this amount will be amortized over the life of the asset. For the three and six months ended June 30, 2025 and 2024, the Company amortized $547 thousand and $1.1 million, respectively.

The Company provides for recognition of deferred tax assets if the realization of such assets is more likely than not to occur in accordance with accounting standards that address income taxes. Significant management judgment is required in determining the period in which the reversal of a valuation allowance should occur. The Company has considered all available evidence, both positive and negative, such as historical levels of income and future forecasts of taxable income amongst other items, in determining its valuation allowance. In addition, the Company's assessment requires us to schedule future taxable income in accordance with accounting standards that address income taxes to assess the appropriateness of a valuation allowance which further requires the exercise of significant management judgment.

The Company believes that the accounting estimate for the valuation of deferred tax assets is a critical accounting estimate because judgment is required in assessing the likely future tax consequences of events that have been recognized in our financial statements or tax returns. The Company based the estimate of deferred tax assets and liabilities on current tax laws and rates and, in certain cases, business plans and other expectations about future outcomes. In the event that actual results differ from these estimates, or the Company adjusts these estimates in future periods, the Company may need to adjust the recorded valuation allowance, which could materially impact our financial position and results of operations. The Company has a full valuation allowance for the deferred tax asset of $41.7 million and $38.5 million on June 30, 2025 and December 31, 2024, respectively. We will continue to evaluate the ability to realize our deferred tax assets and related valuation allowance on a quarterly basis.

**8. Debt**

The following table represents total debt outstanding by agreement as of June 30, 2025:

---

| | | | |
|:---|:---|:---|:---|
| (Dollars in thousands): | **Current portion of debt** | **Long term debt** | **Total** |
| NYDIG financing | $9183 | $- | $9183 |
| Green Cloud secured note | 3061 | 6033 | 9094 |
| Equipment loan | 519 |  | 519 |
| Galaxy loan | 492 | 3988 | 4480 |
| Total Debt | $13255 | $10021 | $23276 |

---

The following table represents total debt outstanding by agreement as of December 31, 2024:

---

| | | | |
|:---|:---|:---|:---|
| (Dollars in thousands): | **Current portion of debt** | **Long term debt** | **Total** |
| Convertible Notes | $- | $- | $- |
| NYDIG financing | 9183 |  | 9183 |
| Navitas term loan | 137 |  | 137 |
| Green Cloud secured note | 3922 | 7061 | 10983 |
| July 2024 additional secured note | 1202 | - | 1202 |
| Total Debt | $14444 | $7061 | $21505 |

---

***NYDIG Financing***

******

---

| | | | | |
|:---|:---|:---|:---|:---|
| (Dollars in thousands) | Maturity Dates | Interest Rate | January 1, 2025-<br> June 30, 2025 | January 1, 2024-<br> December 31, 2024 |
| NYDIG Loans #1-11 | April 25, 2023 thru January 25, 2027\* | 14% thru 16% | $9183 | $9183 |
| Less: repossession of collateralized assets |  |  |  |  |
| Total outstanding debt |  |  | $9183 | $9183 |

---

\* Due to event of default- the entire NYDIG financing became current, see note below.

On December 30, 2021, Borrower, a subsidiary of Soluna MC, a subsidiary of SDI, a subsidiary of the Company, entered into a Master Equipment Finance Agreement (the "Master Agreement") with NYDIG as lender, servicer and collateral agent (the "NYDIG facility"). The Master Agreement outlined the framework for a financing up to approximately $14.4 million in aggregate equipment financing. Subsequently, the parties negotiated the specific terms of each equipment financing transaction as well as the terms upon which the Noteholders would consent to the transactions contemplated by the Master Agreement.

On January 14, 2022, the Borrower effected an initial drawdown under the Master Agreement in the aggregate principal amount of approximately $4.6 million that bore interest at 14% and was to be repaid over 24 months. On January 26, 2022, the Borrower had a subsequent drawdown of $9.8 million. As part of the transactions contemplated under the Master Agreement, (i) the Company's indirect wholly owned subsidiary, Soluna MC LLC, formerly EcoChain Block LLC ("Guarantor"), which is the owner of 100% of the equity interests of Borrower, executed a Guaranty Agreement in favor of NYDIG, as lender, dated as of December 30, 2021 (the "Guaranty Agreement"), (ii) Borrower had granted a lien on, and security interest in, all of its assets to NYDIG, as collateral agent, (iii) Guarantor entered into an equipment financing arrangement on assets purchased with the borrowed funds, (iv) Borrower would borrow from NYDIG the loans as set forth in certain loan schedules (the "Specified Loans"), and (v) Borrower had executed a Digital Asset Account Control Agreement (the "ACA Wallet Agreement") with NYDIG, as collateral agent and secured party, and NYDIG Trust Company LLC, as custodian, dated as of December 30, 2021, as well as such other agreements related to the foregoing as mutually agreed (collectively, the "NYDIG Transactions").

On December 20, 2022, as a result of the Borrower's default on as series of loans made by NYDIG to the Borrower, the Borrower received a Notice of Acceleration and Repossession (the "NYDIG Notice") from NYDIG with respect to the Master Agreement, by and between Borrower and NYDIG. The obligations of Borrower under the Master Agreement and reflected in the NYDIG Notice are ring-fenced to Borrower and its direct parent company, Soluna MC LLC. The Company is not a party to any guaranty, collateral agreement, or other support agreement with or for the benefit of NYDIG.

On February 23, 2023, NYDIG proceeded to foreclose on all of the collateral securing the MEFA, and repossessed the collateralized assets that totaled approximately $3.4 million, approximately $560 thousand of which was first used to pay off accrued interest and penalty to date. On September 5, 2023, NYDIG provided a letter finalizing the accounting for the repossessed collateralized assets totaling proceeds of approximately $3.4 million. On December 7, 2023, NYDIG filed its Motion for Summary Judgment seeking entry of a judgment against Soluna in the approximate amount of $10.3 million for principal and interest and penalties. On January 12, 2024, Soluna filed its objection to NYDIG's motion for summary judgment on the grounds that NYDIG failed to explain what collateral of which loan was sold and how the sale proceeds were allocated to each loan. A summary judgment motion hearing took place on February 13, 2024, where it was agreed upon by both NYDIG and the Borrower, that the total outstanding loan principal balance would be approximately $9.2 million. The Company applied the per diem interest rate agreed upon with the summary judgement and recorded interest expense for the three and six months ended June 30, 2025 of approximately $361 thousand and $719 thousand, respectively. The Company's interest expense for the three and six months ended June 30, 2024 related to the NYDIG financing was approximately $361 thousand and $723 thousand, respectively. The Company has an outstanding interest and penalty accrual of approximately $3.0 million recorded within "Accrued interest payable" as of June 30, 2025. See Note 10 for further information in relation to the NYDIG litigation matter.

***Green Cloud secured note***

 **** ****

---

| | | | | |
|:---|:---|:---|:---|:---|
| (Dollars in thousands) | Maturity Date | Interest Rate | January 1, 2025-<br> June 30, 2025 | June 20, 2024-<br> December 31, 2024 |
| Term Loan and capitalized interest (excludes debt issuance cost) | June 20, 2027 | 9% | $11748 | $12784 |
| Less: principal and capitalized interest payments |  |  | (2144) | (1036) |
| Less: debt discount |  |  | (153) | (230) |
| Less: debt issuance costs |  |  | (357) | (535) |
| Total outstanding note |  |  | 9094 | 10983 |
| (Less) Current note outstanding |  |  | 3061 | 3922 |
| Long-term note outstanding |  |  | $6033 | $7061 |

---

On June 20, 2024, pursuant to the terms and subject to the conditions of a Note Purchase Agreement (the "June SPA") by and among (i) CloudCo, a Delaware limited liability company and indirect wholly owned subsidiary of the Company, (ii) Soluna Cloud, a Nevada corporation, indirect wholly owned subsidiary of the Company, and parent of CloudCo, (iii) the Company and (iv) the accredited investor named therein (the "Investor", and collectively the "Note Parties"), CloudCo issued to the Investor a secured promissory note in a principal amount equal to $12.5 million (the "Note" or "Green Cloud secured note"). The Note accrues interest at a rate 9.0% per annum, subject to adjustment upon an event of default. The Note matures on June 20, 2027. CloudCo's obligations under the Note will be secured by all or substantially all of CloudCo's assets, including pursuant to a security agreement to be executed and delivered by CloudCo in favor of the Investor (the "CloudCo Security Agreement", and together with the June SPA and the Note, the "CloudCo Agreements").

As further inducement for the Investor to purchase the Note, Soluna Cloud issued to the Investor a warrant (the "Warrant") exercisable within three years from June 20, 2024 for a number of shares of common stock of Soluna Cloud equal to the sum of (a) 12.5% of Soluna Cloud's issued and outstanding common stock as of the date of the Warrant divided by 0.875, plus (b) the percentage of each Qualified Issuance (as defined below) divided by 0.875. For purposes of the Warrant, "Qualified Issuance" means (y) each issuance of common stock of Soluna Cloud during the period commencing on the day after the date of the Warrant and ending on the earlier to occur of (i) the conclusion of up to an additional $112.5 million of capital raised, whether in the form of debt, equity, mixed or otherwise, by Soluna Cloud and its subsidiaries and (ii) December 31, 2024 and (z) the number of shares of common stock of Soluna Cloud issuable upon the exercise or conversion of any convertible securities of CloudCo issued during such period (other than certain issuances pursuant to CloudCo's equity compensation plans). On June 20, 2024, the Company determined that the warrant should be treated as a warrant liability and based on valuation, the Company booked a warrant liability of approximately $314 thousand and a related debt discount which will be amortized over the life of the loan. Further evaluation of the Warrants under ASC 815-10 was required to determine if the warrants meet the definition of a derivative. The warrants are classified as a liability that are required to be adjusted to fair market value. The Company applied a discounted cash flow method in relation to the valuation of Cloud in which assumptions from forecasted projected cash flow data and other key operating assumptions such as working cash flow were used to determine an enterprise value less any current debt in order to determine an equity value for Cloud. As of June 30, 2025 and December 31, 2024, the warrants were fair valued, and deemed to not have any further value, as such the Company wrote down the liability balance to $0.

For the three and six months ended June 30, 2025, the Company incurred approximately $354 thousand and $744 thousand in interest expense in relation to the June SPA, which includes interest paid on the note and amortization of deferred financing costs.

*June SPA Modification*

On March 21, 2025, the Note Parties entered into a Modification Agreement (the "Modification Agreement") to, among other things:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) provide
 for the deposit of 1,000,000 shares (the "Escrow Shares") of the Company's common stock, into an escrow account
 maintained by Northland Securities, Inc., pursuant to an escrow agreement (as further described below),

(ii) provide
 for the issuance to the Investor of penny warrants to purchase shares of the Company's common stock. The number of penny warrants
 (exercise price at $0.01) shall equal $1.25 million divided by the 5-day VWAP of the Company's common stock at time of issuance.
 The warrants will be issued at the time the Investor removes its lien on the property of the Company. As of August 14, 2025, the
 lien has not yet been removed and the warrants have not been issued,

(iii) amend
 the payment schedule of the Note to provide (a) for each of the six scheduled payments occurring after the earlier of the effectiveness
 of a registration statement for the resale of the Escrow Shares and the Conversion Shares (as defined below) or the date that the
 Escrow Shares and the Conversion Shares may be sold pursuant to Rule 144 under the Securities Act of 1933, as amended (the "Securities
 Act"), without any information requirements, the amount of principal and interest payable on such date shall be reduced by
 50% (the aggregate amount of the six months of such reductions, the "Specified Amount") and (b) if the aggregate amount
 of payments on the Amended Note applied from the proceeds of the sale of the Escrow Shares on or prior to the last six scheduled
 payments is less than the Specified Amount (such difference, the "Make Whole Amount"), than the amount of each of the
 remaining scheduled payments shall be increased by an amount equal to the Make Whole Amount divided by the number of remaining scheduled
 payments,

(iv) modify
 the Note such that the Note is now convertible into up to 2,500,000 shares of the Company's common stock based ("Conversion
 Shares") on a conversion price of $5.00 ,

(v) amend
 the Note to provide that the Company will be a direct co-obligor with CloudCo under the Note; and

(vi) amend
 the SPA to allow the Company to organize or incorporate any subsidiary, over which the Company shall have voting or beneficial control,
 which is being formed with the intent to engage in a business or line of business substantially similar to that of Soluna Cloud or
 the Company, without first paying all of the principal and interest due under the Note and without first obtaining Investor's
 prior written consent (collectively, the "June SPA Modification").

The joint-and-several liability arrangement is between the Company and CloudCo. While no written agreement has been created to establish the amount that each entity agrees to pay under the obligation, the nature of the relationship is such that the Company has taken a significant role in the economics of the Notes. The Company expects to make any necessary payments on behalf of CloudCo in order to prevent default on the Notes because the Investor has a lien on all property and assets of the Company in connection with the Notes. Based on quantitative analysis performed by the Company, it was determined that the terms of the debt instrument before and after the June SPA Modification were not substantially different. Accordingly, the June SPA Modification is accounted for as a debt modification.

Subsequently, the Company and the Investor mutually agreed that the 1,000,000 Escrow Shares would instead be issued directly to the Investor and, on April 29, 2025, the Company issued 1,000,000 shares of common stock to the Investor.

***July 2024 Additional Secured Note***

 **** 

---

| | | | | |
|:---|:---|:---|:---|:---|
| (Dollars in thousands) | Maturity Date | Interest Rate | January 1, 2025- <br> June 30, 2025 | July 12, 2024-<br> December 31, 2024 |
| Term Loan and capitalized interest (excludes debt issuance cost) | July 12, 2027\* | 9% | $1209 | $1278 |
| Less: principal and capitalized interest payments |  |  | (658) | (69) |
| Debt discount |  |  |  | (6) |
| Gain on extinguishment |  |  | (551) | - |
| Total outstanding debt |  |  | $- | $1203 |

---

\* On March 14, 2025, the Company satisfied the assignment and assumption agreement, as such a gain on extinguishment was recorded.

On July 12, 2024, the Company, CloudCo, Soluna Cloud, and the Investor entered into a First Amendment to the Note Purchase Agreement (the "June SPA Amendment"). This amendment allows CloudCo to issue additional secured promissory notes totaling $1.25 million (the "Additional Notes") to new accredited investors (the "Additional Investors"). These Additional Notes are subject to the same terms and conditions as the June SPA financing.

To further incentivize the Additional Investors, Soluna Cloud issued warrants (the "Cloud Additional Warrants") to each Additional Investor. These Cloud Additional Warrants are exercisable within three years from the effective date of the June SPA Amendment. They allow the purchase of a number of shares of Soluna Cloud common stock equal to 1.25% of Soluna Cloud's issued and outstanding common stock as of the Cloud Additional Warrant date, divided by 0.9875, plus 1.25% of each Qualified Issuance, divided by 0.9875. On July 12, 2024, the Company determined that the additional warrants were treated as a warrant liability and based on valuation, the Company booked a warrant liability of approximately $13 thousand and a related debt discount which will be amortized over the life of the loan. Further evaluation of the Warrants under ASC 815-10 was required to determine if the warrants meet the definition of a derivative. The warrants are classified as a liability that are required to be adjusted to fair market value. The Company applied a discounted cash flow method in relation to the valuation of Cloud which assumptions from forecasted projected cash flow data and other key operating assumptions such as working cash flow were used to determine an enterprise value less any current debt in order to determine an equity value for Cloud. As of June 30, 2025 and December 31, 2024, the warrants were fair valued, and deemed to not have any further value, as such the Company wrote down the liability balance to $0.

A "Qualified Issuance" includes any issuance of common stock by Soluna Cloud from the day after the Cloud Additional Warrant date until the earlier of raising an additional $111.25 million or December 31, 2024, as well as shares issuable upon exercise or conversion of convertible securities issued during this period, excluding certain equity compensation plan issuances.

On October 1, 2024, CloudCo, Soluna Cloud and the Company entered into assignment and assumption agreements (the "Assignment Agreements") with the Additional Investors with respect to an aggregate of $1.25 million of notes issued by CloudCo. Pursuant to the Assignment Agreements, the Company will be able to purchase such notes for a purchase price of $750 thousand, or 60% of face value. The assignment and assumption will be effective once all conditions of the agreement are met including fulfilling the purchase price. The notes will be paid to the note holders from an escrow that is funded in installments from the SEPA funding. The transfer is not effective until payment from the escrow is made. The Company was required to escrow 20% of all SEPA draws until the $750 thousand purchase price is accumulated. In addition to the 20% of SEPA funds, the Company would apply all principal payments and 50% of interest payments made to date from October 1, 2024, until the $750 thousand purchase price has been met.

On March 14, 2025, the Company fulfilled the purchase obligations, and assumed the Additional Notes through payment of $750 thousand through principal and 50% interest payments and use of 20% SEPA funds. Effectively, the remaining debt assignment was assumed by Soluna Holdings, Inc. and was recorded as an intercompany debt obligation that was eliminated on the Company's condensed consolidated financial statements as of June 30 2025. The Company recorded a gain on extinguishment of the July 2024 Additional Secured Notes of approximately $551 thousand for the six months ended June 30, 2025. For the three and six months ended June 30, 2025, the Company incurred approximately $0 and $33 thousand in interest expense in relation to the July Additional Secured Note.

**Galaxy Loan**

 ****

---

| | | | |
|:---|:---|:---|:---|
| (Dollars in thousands) | Maturity Date | Interest Rate | March 12, 2025 –<br> June 30, 2025 |
| Term Loan | March 12, 2030 | 15% | $5000 |
| Less: principal payments |  |  | (125) |
| Less: debt discount and issuance costs |  |  | (395) |
| Total outstanding note |  |  | 4480 |
| (Less) Current note outstanding |  |  | 492 |
| Long-term note outstanding |  |  | $3988 |

---

On March 12, 2025, Soluna SW LLC (the "SW Borrower"), a Delaware limited liability company and subsidiary of Soluna SW Holdings LLC ("SW Holdings", and together with the SW Borrower, the "SW Loan Parties"), a subsidiary of SDI, a Nevada corporation and wholly owned subsidiary of Company, entered into a Loan Agreement (the "Galaxy Loan Agreement") with SW Holdings and Galaxy Digital LLC (the "Lender").

The Galaxy Loan Agreement provides for a term loan facility in the principal amount of $5.0 million (the "Term Loan Facility"). The Term Loan Facility bears interest at a rate of 15.0% per annum, subject to an increase of 5.0% (for a total of 20.0%) in the event an Event of Default as defined within the Galaxy Loan Agreement has occurred and is continuing. The Term Loan Facility matures on March 12, 2030 and includes scheduled payments over a five-year term. For the three and six months ended June 30, 2025, the Company incurred approximately $236 thousand and $277 thousand in interest expense in relation to the Term Loan Facility, which includes interest paid on the note and amortization of deferred financing costs.

The SW Borrower may voluntarily prepay all or part of the Term Loan Facility at any time together with accrued and unpaid interest on the principal amount to be prepaid up to the date of prepayment. The SW Borrower shall prepay all or part of the Term Loan Facility with 100% of the Net Cash Proceeds (as defined therein) received upon the occurrence of (i) an Asset Sale or Casualty Event (each as defined therein), (ii) an Equity Issuance (as defined therein), (iii) an issuance or incurrence of Indebtedness (as defined therein), or (iv) an Extraordinary Receipt (as defined therein), each subject to certain exceptions. In addition, certain principal payments are subject to the payment of a premium amount equal to 50% of the remaining amount of interest payable on such principal amount through the scheduled maturity date, if paid on or prior to the 30-month anniversary of the closing date, and 25% of the remaining amount of interest payable on such principal amount through the scheduled maturity date, if paid after the 30-month anniversary of the closing date.

The Galaxy Loan Agreement includes certain restrictions (subject to certain exceptions outlined in the Galaxy Loan Agreement) on the ability of the SW Loan Parties and their subsidiaries to undertake certain activities, including to incur indebtedness and liens, enter into sale or lease-back transactions, merge or consolidate with other entities, dispose or transfer their assets, pay dividends or make distributions, make investments, make Restricted Payments (as defined therein), enter into burdensome agreements or transact with affiliates. In addition, the SW Loan Parties are subject to three financial covenants – a minimum debt service coverage ratio, a minimum current ratio, and cash in customer deposit account must equal or be greater than related customer liabilities. As of the date of these condensed consolidated financial statements, the Company is in compliance with all covenants in relation to the Galaxy Loan Agreement.

Proceeds of the Term Loan Facility will be used to issue a distribution to SW Holdings, the proceeds of which may be used to make a distribution to SDI.

In connection with the Galaxy Loan Agreement, on March 12, 2025, the SW Loan Parties and the Lender entered into a security agreement to secure the obligations under the Term Loan Facility by a lien on substantially all the assets and properties of SW Borrower and SW Holdings, subject to certain exceptions. The SW Borrower is the owner and operator of the Company's Project Sophie data center.

In connection with the Galaxy Loan Agreement, on March 12, 2025, SDI and the Lender entered into a Limited Guarantee Agreement pursuant to which SDI guarantees the Loss Liabilities (as defined therein) and, after the occurrence of a Recourse Trigger Event (as defined therein), the obligations under the Loan Agreement.

***Equipment Loan Agreement***

On May 16, 2024, SDI SL Borrowing – 1, LLC, an affiliate of the Company (the "SDI Borrower"), entered into a loan agreement (the "Equipment Loan Agreement" or the "Loan") with Soluna2 SLC Fund II Project Holdco LLC (the "Lender", and collectively, the "Parties"). As further amended on February 28, 2025, the Equipment Loan Agreement provides for the Company to borrow, from time to time, up to $4.0 million, to be used to purchase necessary equipment for the progression of Project Dorothy 2 and Project Kati. Any loans made under the Equipment Loan Agreement have a maturity date of May 16, 2027 and will bear interest at a rate of 15% per annum. The Equipment Loan Agreement includes customary covenants for loans of this nature including financial reporting, monthly updates, event reporting, as well as conduct of business. In addition, the Equipment Loan Agreement contains a multiple on invested capital ("MOIC") provision, which requires the Company to pay, in addition to principal and interest, an amount equal to the difference of (i) the greater of (a) the principal amount of the Loan being repaid *plus* all interest previously paid or simultaneously being paid to Lender in respect of such principal of the Loan, and (b) the principal amount of the Loan being repaid multiplied by three, *minus* (ii) the sum of the principal amount of the Loan being repaid *plus* all interest previously paid or simultaneously being paid to Lender in respect of such principal of the Loan.

On May 17, 2024, the SDI Borrower drew down $720 thousand of the Loan with the Lender. On July 22, 2024, the SDI Borrower satisfied and repaid the borrowing amount in full by issuing the Investor Class B Membership Interests in the Dorothy 2 project valued at three times the borrowing amount (i.e., $2.16 million). The redemption of debt through equity created approximately a $1.4 million loss on debt extinguishment for the year ended December 31, 2024.

On March 21, 2025, the SDI Borrower drew down $250 thousand of the Loan with the Lender, in relation to Project Kati. In addition, on June 11, 2025, the SDI Borrower drew down an additional $269 thousand of the Loan with the Lender, in relation to Project Kati. The total amount of equipment loans of $519 thousand was outstanding as of June 30, 2025. The SDI Borrower shall repay the Loans under these Borrowing Requests with a different MOIC Payment than as defined in the Equipment Loan Agreement. The MOIC Payment for these Borrowing Requests only, shall be an amount equal to the difference of (i) the greater of (a) the principal amount of the Loan being repaid *plus* all interest previously paid or simultaneously being paid to Lender in respect of such principal of the Loan, and (b) the principal amount of the Loan being repaid multiplied by three and three tenths (3.3), *minus* (ii) the sum of the principal amount of the Loan being repaid *plus* all interest previously paid or simultaneously being paid to Lender in respect of such principal of the Loan. As of June 30, 2025, the Company had approximately $108 thousand in Accrued interest payable in relation to the MOIC and 15% interest accruing on the Loan that was outstanding.

Per ASC 835-30-S45-1, debt issuance costs related to line of credits should be recorded as an asset and amortized over the life of the line of credit agreement. As such, the Company recorded $62 thousand and $53 thousand within Prepaid expenses and other current assets as of June 30, 2025 and December 31, 2024 and $56 thousand and $75 thousand within Other assets on the consolidated balance sheet as of June 30, 2025 and December 31, 2024, of which approximately $16 thousand and $30 thousand has been amortized and recorded within Interest Expense for the three and six months ended June 30, 2025.

***Navitas Term Loan***

---

| | | | | |
|:---|:---|:---|:---|:---|
| (Dollars in thousands) | Maturity Date | Interest Rate | January 1, 2025- <br> June 30, 2025 | January 1, 2024-<br> December 31, 2024 |
| Term Loan and capitalized interest (excludes debt issuance cost) | May 9, 2025\* | 15% | $137 | $1707 |
| Less: principal and capitalized interest payments |  |  | (137) | (1570) |
| Total outstanding debt |  |  | $- | $137 |

---

\* May 9, 2025 was the maturity date, however, as noted below, the Navitas loan was fully paid off in the first quarter of 2025, and as such no longer remains outstanding.

On May 9, 2023, DVCC and Navitas West Texas Investments SPV, LLC entered into a 2-year Loan Agreement ("Navitas Term Loan") for $2,050,000. As of June 30, 2025, the Company has paid the remaining outstanding balance of $137 thousand, therefore fulfilling its debt obligation with Navitas. Interest expense related to the Navitas Term Loan for the three and six months ended June 30, 2025 was approximately $0 and $2 thousand, respectively. Interest expense related to the Navitas Term Loan for the three and six months ended June 30, 2024 was approximately $37 thousand and $100 thousand, respectively.

***Convertible Notes***

On October 25, 2021, pursuant to a Securities Purchase Agreement (the "October SPA"), the Company issued to certain accredited investors (the "Noteholders") (i) secured convertible notes in an aggregate principal amount of $16.3 million for an aggregate purchase price of $15 million (collectively, the "October Secured Notes"), which were, subject to certain conditions, convertible at any time by the investors, into an aggregate of 1,776,073 shares of the Company's common stock, at a price per share of $9.18 and (ii) Class A, Class B and Class C common stock purchase warrants (collectively, the "October Warrants") to purchase up to an aggregate of 1,776,073 shares of common stock, at an initial exercise price of $12.50, $15 and $18 per share, respectively. The October Warrants are legally detachable and can be separately exercised immediately for five years upon issuance, subject to applicable Nasdaq rules.

On July 19, 2022 and on September 13, 2022, the Company entered into an Addendum and Addendum Amendment which adjusted the terms such as maturity date, conversion prices, and the issuance of new warrants to the Noteholders. Pursuant to the Addendum and Addendum Amendment, the Company evaluated whether the new addendums qualified as debt modification or debt extinguishment. Based on ASC 470, Debt, the Company determined the Addendum and Addendum Amendment to fall under Debt Extinguishment treatment and the Company would be required to record the new debt at fair value, and in turn write off the existing debt on the Company's books.

Following the debt extinguishment on July 19, 2022 as noted above, the Convertible Notes have been accounted for under the fair value method on a recurring basis upon issuance (e.g., upon execution of the Addendum) per guidance within ASC 480, and at each subsequent reporting period, with changes in fair value reported in earnings. See below for rollforward of the fair value of the convertible debt:

 

---

| | |
|:---|:---|
| (in thousands) |  |
| Balance January 1, 2024 | $8474 |
| Conversions of debt (January 1, 2024- March 31, 2024) | (1023) |
| Total revaluation gains (January 1, 2024- March 31, 2024) | (1235) |
| Balance March 31, 2024 | 6216 |
| Conversions of debt (April 1, 2024- June 30, 2024) | (2689) |
| Revaluation losses and extinguishment of debt, net (April 1, 2024- June 30, 2024) | 3999 |
| Extension fee | 325 |
| Balance June 30, 2024 | 7851 |
| Conversions of debt (July 1, 2024- December 31, 2024) | (5289) |
| Revaluation gains and extinguishment of debt, net (July 1, 2024- December 31, 2024) | (2562) |
| Balance December 31, 2024 | $- |

---

For the three and six months ended June 30, 2024, the Company had approximately $2.7 million and $3.7 million of note conversions with the Noteholders, approximately $4.0 million and $2.8 million in revaluation losses, net in relation to fair value assessments of the convertible debt, and a 4% note extension in June 2024 increasing the note balance by approximately $325 thousand. As of June 30, 2024, the Company had a fair value outstanding balance of approximately $7.9 million and a principal outstanding value of approximately $5.3 million. In addition, from July 1, 2024 through December 31, 2024, there were approximately $5.3 million of note conversions with the Noteholders, and the Company incurred a revaluation gain of debt of approximately $2.6 million, and, as of December 31, 2024, the Convertible Notes were no longer outstanding.

The following table represents the significant and subjective fair value assumptions used for Convertible Notes during the year ended December 31, 2024. As the Convertible Notes were fully converted in fiscal year 2024, no assumptions were noted for the three and six months ended June 30, 2025.

---

| | |
|:---|:---|
|  | **Year Ended December 31, 2024** |
| Stock price | $2.88 – 6.09 |
| Conversion price | $2.30 – 3.78 |
| Volatility | 80.0 – 115% |
| Risk-free interest rate | 4.73- 5.46% |

---

There were two additional amendments in fiscal year 2023. On February 28, 2024, the Company and the Noteholders entered into a Fourth Amendment Agreement to amend the Notes, SPA and related agreements to facilitate future financings by the Company. In addition, the Company was permitted to unilaterally extend the maturity date of the Notes for two 3-Month extensions if prior to the then in effect maturity date the Company gives notice to the Noteholders and increases the principal amount of the Notes on the date of each such extension by two percent (2%) the principal amount of the Notes outstanding on the date of such extension.

In consideration of the foregoing, the Company:

● Reduced the conversion price of the Notes to $3.78 per share;

● The Noteholders received an aggregate of 850,000 three year warrants exercisable at $0.01 per share;

● An aggregate of 320,005 warrants held by the Noteholders had the exercise price reduced to $3.78 per share (the "$3.78 Warrants"); and

● An aggregate of 478,951 warrants held by the Noteholders had the exercise price reduced to $6.00 per share (the "$6.00 Repriced Warrants"). For every one $6.00 Repriced Warrant exercised by a Purchaser, such Purchaser shall receive 1.36 new five-year warrants with an exercise price of $0.01, 1.6 new five-year warrants with an exercise price of $4.20, and 1.6 new five-year warrants with an exercise price of $5.70 .

In June 2024, pursuant to the Fourth Amendment Agreement, the Company exercised its right to extend the maturity date of the Notes for an additional six months, or until January 24, 2025, to enable the Company to continue to pursue its significant project development opportunities for Soluna Cloud, Dorothy 2, and other projects. The extension of the notes caused an increase in the convertible note balance of approximately $325 thousand and the extension fee was recorded within Other Expense, net for the year ended December 31, 2024.

The effect of the additional penny warrants, $3.78 warrants, and the $6.00 repriced warrants including additional warrants if exercised with the Noteholders, created a loss on debt extinguishment of approximately $5.8 million due to the fair value associated as of February 28, 2024. Such amounts were recorded as a loss on debt extinguishment and affected the Company's warrant liability and additional paid in capital balance account. Due to the requirement of the shareholder approval associated with the Fourth Amendment, the warrants associated were initially treated as a liability. In addition, a warrant revaluation was done on March 31, 2024, which created a gain on revaluation associated with the warrant liability of approximately $1.5 million.

On May 30, 2024, shareholder approval was obtained removing the cap containment provision for the warrants, and as such, the liability accounting treatment was no longer required. Since all other criteria were met to be treated as equity, the Company adjusted the warrant liability as of the date of shareholder approval and reclassified balance to equity. As such, the Company accounted for the change in the fair value of the warrant liability as of the date of the shareholder approval (May 30, 2024), in connection with its loss on revaluation of the warrant of approximately $1.6 million.

Pursuant to additional agreements with holders of another 51,618 outstanding warrants, similar adjustments with those warrants, resulted in a total adjustment to 530,569 warrants. As the 51,618 warrants were not with the Noteholders, the treatment of $6.00 repriced warrants was recorded as a deemed dividend and adjusted the Company's earnings per share calculation for the year ended December 31, 2024. The fair value associated with the 51,618 warrants with non-Noteholders totaled approximately $386 thousand. On May 17, 2024, the Company permitted the holders of the Company's Amended Class C Warrants, previously exercisable at $6 per share, to exercise such warrants at a reduced exercise price of $4 per share, provided that each such holder exercised at least 61.83% of their Amended Class C Warrants by the close of business on May 17, 2024. The Company also agreed to reduce the exercise price on all remaining Amended Class C Warrants. The adjustment in the exercise price, resulted in an additional deemed dividend which amounted to approximately $66 thousand for the year ended December 31, 2024.

For the year ended December 31, 2024, 529,161 of the Amended Class C warrants have been exercised by both the Noteholders and non-Noteholders, resulting in the issuance of 719,658 shares of $0.01 warrants, 846,657 shares of $4.20 warrants, and 846,657 shares of $5.70 warrants.

The following table represents the significant fair value assumptions used for warrants issued or repriced during the year ended December 31, 2024. No warrants were issued or repriced for the three and six months ended June 30, 2025.

---

| | |
|:---|:---|
|  | **Year ended <br> December 31, 2024** |
| Stock price | $2.43- 4.07 |
| Exercise price | $0.01- 287.50 |
| Expected term in years | 0.53 – 8.77 |
| Expected dividend yield | 0.00% |
| Volatility | 105.0 – 137.50% |
| Risk-free interest rate | 3.51- 4.44% |

---

As previously discussed in Footnote 1, the Company entered into the SEPA with YA on August 12, 2024. Access to the SEPA was subject to a number of conditions precedent including, but not limited to, various consents from the Company's Note Holders. On October 1, 2024, the Noteholders entered into a Consent, Waiver, and Mutual Release Agreement (the "Master Consent") which provides the following:

● consent to the Company's entry into the SEPA;

● waiver of any rights of first refusal or participation rights in connection with the SEPA;

● standstill of the rights to exercise certain $0.01 warrants pursuant to the SPA;

● the right to prepay the convertible notes with a 20 % premium;

● termination of the SPA and related agreements upon the full payoff of the convertible notes; and

● mutual limited release of claims between the Noteholders and the Company.

In return for these consents, the Company agreed to pay a $750 thousand waiver fee and to prepay to the remaining Note Holders the 20% premium for the prepayment of the Notes of approximately $625 thousand. Such amounts were recorded as within Other Expense, net for the year ended December 31, 2024.

For the year ended December 31, 2024, the Company issued 2,512,581 shares of common stock for conversion of the debt, which includes the final conversion shares noted below.

On December 12, 2024, the Company entered into an agreement with the remaining three Note Holders who held an outstanding principal balance as of December 12, 2024, pursuant to which the three remaining Note Holders elected to immediately convert all of the outstanding principal of certain convertible notes into shares of the Company's common stock. The agreement satisfied the full outstanding debt owed to the remaining three Note Holders under the Convertible Notes. Following the conversion, 335,661 shares of common stock were issued to the Note Holders in accordance with the terms of the Convertible Notes, as amended. The Company recorded a debt inducement conversion expense of approximately $388 thousand within Other Expense, net for the year ended December 31, 2024. No further amounts are owed by the Company under the Convertible Notes as of December 31, 2024 and June 30, 2025.

***Line of Credit***

On September 15, 2021, the Company entered into a $1.0 million unsecured line of credit with KeyBank National Association ("KeyBank"), that will, among other things, allow the Company to request loans and to use the proceeds of such loans for working capital and other general corporate purposes (the "KeyBank facility"). The line of credit bears interest at a rate of Prime + 0.75% per annum. Accrued interest is due monthly and principal is due in full following KeyBank's demand. The Company does not have any remaining balance outstanding as of December 31, 2024 and June 30, 2025. The Company does not plan to draw down on the line of credit in the foreseeable future. In addition, future drawdowns require pre-approval by KeyBank.

**9.** **Stockholders' Equity**

***Preferred Stock***

The Company has two series of preferred stock outstanding: the Series A Preferred Stock, par value $0.001 per share (the "Series A Preferred Stock"), with a $25.00 liquidation preference; and the Series B Convertible Preferred Stock, par value $0.0001 per share (the "Series B Preferred Stock"). As of June 30, 2025 and December 31, 2024, there were 4,953,545 shares of Series A Preferred Stock issued and outstanding, and as of June 30, 2025 and December 31, 2024, there was 62,500 shares of Series B Preferred Stock issued and outstanding.

*Series A Preferred Stock*

The Series A Preferred Stock is not convertible into or exchangeable into common stock of the Company, except upon the occurrence of a delisting event or change of control. Per the Company's Certificate of Designations, Preferences and Rights of 9.0% Series A Cumulative Perpetual Preferred Stock ("Series A Certificate of Designations"), if there is an occurrence of delisting or change of control, the holders of Series A Preferred Stock will have the right to convert the number of preferred A shares into a number of common shares by the lesser of (a) the sum of the $25.00 liquidation preference per share of Series A Preferred Stock plus the amount of any accumulated and unpaid dividends divided by the closing price of the common stock on ten consecutive trading days preceding a delisting event, or (b) the share cap of 0.2817.

*Series B Preferred Stock*

On July 19, 2022, the Company entered into a Securities Purchase Agreement (the "Series B SPA") with an accredited investor (the "Series B Investor") pursuant to which the Company sold to the Series B Investor 62,500 shares of Series B Preferred Stock, for a purchase price of $5,000,000. The shares of Series B Preferred Stock are initially convertible, subject to certain conditions, into 46,211 shares of common stock, at a price per share of $135.25 per share, a 20% premium to the closing price of the common stock on July 18, 2022, subject to adjustment as set forth in the Certificate of Designations of Preferences, Rights and Limitations for the Series B Preferred Stock ("Series B Certificate of Designations"). On October 1, 2024, the Company agreed, as a condition of a waiver of the Series B Investor's' right of first refusal and participation rights in connection with the SEPA, to reduce the conversion price to $5.00 upon stockholder approval, which was obtained on November 15, 2024.

In addition, in 2022, the Company issued to the Series B Investor 60,000 common stock purchase warrants (the "Series B Warrants") to purchase up to an aggregate of shares of common stock. In connection with the above referenced waiver, the exercise price of these warrants was reduced to $0.01 per share and an additional 140,000 warrants exercisable for $0.01 per share were issued. The Series B Investor exercised the 60,000 Series B Warrants on April 22, 2025 through a cashless warrant exercise resulting in the issuance of 59,131 shares of common stock.

Effective from October 1, 2024, the sale of common stock as a result of conversion of Series B Preferred Stock and exercise of the new 140,000 warrants is subject to a 12-month lockup, followed by a 12 month leak out where the holder may not sell shares during the lockup period and may sell up to 1/12<sup>th</sup> of total conversion and warrant exercise shares per month during the leak out. The effects of the modification of the Series B Preferred Stock on October 1, 2024, including repriced and newly issued penny warrants, and dividend amendments, created an extinguishment on the Series B Preferred Stock in which the Company recorded a deemed dividend of approximately $1.7 million which relates to the fair value consideration of the modified Series B Preferred Stock less the original carrying value for the year ended December 31, 2024, excluding the consideration of the Preferred B dividend as discussed below.

***Common Stock***

The Company has one class of common stock, par value $0.001 per share. Each share of the Company's common stock is entitled to one vote on all matters submitted to stockholders. As of June 30, 2025 and December 31, 2024, there were 19,055,122 and 10,607,020 shares of common stock outstanding, respectively.

***Dividends***

Pursuant to the Certificate of Designations, Preferences and Rights of 9.0% Series A Cumulative Perpetual Preferred Stock of the Company, dividends, when, as and if declared by the Board (or a duly authorized committee of the Board), will be payable monthly in arrears on the final day of each month, beginning August 31, 2021. The Board of Directors had not declared any Series A Preferred Stock dividends beginning October 2022 through June 30, 2025, as such the Company has accumulated approximately $18.5 million of dividends in arrears on the Series A Preferred Stock through December 31, 2024, and an additional $2.8 million and $5.6 million of dividends in arrears for the three and six months ended June 30, 2025, for a total of approximately $24.1 million.

The Company's Series B Preferred Stock included a 10% accruing dividend compounded daily for 12 months from the original issue date of July 20, 2022, and annually thereafter, that may be paid in cash or stock at the Company's option at the earlier of (i) the date the Series B Preferred Stock is converted, or (ii) the Series B Dividend Termination Date. On August 11, 2023, the Company paid a mandatory dividend on its outstanding Series B Preferred Stock in the amount of approximately $656 thousand. Pursuant to the Certificate of Designation for the Series B Preferred Stock, the Company had the option to pay the dividend in cash or shares of Common Stock. Pursuant to a Dividend Payment Agreement, the Company and the holder of the Series B Preferred Stock agreed to satisfy the payment of the dividend through the issuance of 44,000 shares of its Common Stock and 70,300 pre-funded warrants (the "Pre-funded Warrants").

Effective October 1, 2024, the dividend payment obligation has been modified to be annual. The amendment resulted in annual dividend payments going forward. As a result of the amendment, the Company would be obligated to make annual dividend payments for the period starting from July 2023 as per the Series B Preferred Consent and Waiver, however, the board of directors has not yet declared any dividends for that period. As such, the Company has accumulated approximately $941 thousand dividends in arrears in relation to the Series B Preferred Stock through December 31, 2024 and an additional $170 thousand and $335 thousand for the three and six months ended June 30, 2025, for a total of approximately $1.3 million. The dividends in arrears are included in the calculation of net loss per share as discussed below.

***Standby Equity Purchase Agreement***

On August 12, 2024, the Company entered into the SEPA with YA. Pursuant to the terms of the SEPA, the Company agreed to issue and sell to YA, from time to time, and YA agreed to purchase from the Company, up to $25 million of shares of the Company's common stock (the "SEPA Shares"). The Company paid a commitment fee of approximately $250 thousand to YA and consent fee of $25 thousand to the holder of shares of Series B Preferred Stock, which was paid through the issuance of 65,320 shares of common stock. The commitment and consent fees were recorded within Other expense, net on the Company's consolidated financial statements for the year ended December 31, 2024. The Company and YA also entered into a registration rights agreement, pursuant to which the Company agreed to prepare and file with the SEC a Registration Statement on Form S-1, registering the resale of the SEPA Shares. On November 12, 2024, the Company filed a registration statement on Form S-1 (File No. 333-282559) with the SEC for the resale by YA of 3,000,000 SEPA Shares, which was declared effective by the SEC on February 5, 2025. During the six months ended June 30, 2025, the Company has issued and sold approximately 1.5 million shares of common stock to YA pursuant to the SEPA for aggregate net proceeds to the Company of approximately $2.0 million.

***ATM Agreement***

On April 29, 2025, the Company entered into the ATM Agreement" with Wainwright, as sales agent, pursuant to which the Company may offer and sell, from time to time, through Wainwright, up to $3.75 million of shares of common stock. The Company will pay Wainwright a commission of 3.0% of the aggregate gross proceeds from each sale of shares and has agreed to provide Wainwright with customary indemnification and contribution rights. During the three months ended June 30, 2025, the Company sold 3,340,663 shares of common stock pursuant to the ATM Agreement for net proceeds of $2.2 million after deducting sales agent commissions of approximately $88 thousand. The Company has sold 1,867,824 shares of common stock pursuant to the ATM Agreement subsequent to June 30, 2025 for additional net proceeds of approximately $1.4 million.

**Reservation of Shares**

The Company had reserved common shares for future issuance as follows as of June 30, 2025:

Schedule of Reserved Shares of Common Stock for Future Issuance

---

| | |
|:---|:---|
| Stock options outstanding | 2645 |
| Restricted stock units outstanding | 209885 |
| Warrants outstanding | 2347135 |
| Common stock available for future equity awards or issuance of options | 1,720,565 |
| Number of common shares reserved | 4,280,230 |

---

As noted above in relation to the Series B Preferred Stock, as of June 30, 2025, the Series B Preferred Stock can be converted to 1,250,000 shares of the Company's common stock at approximately $5.00 per share. The Company also notes that as of June 30, 2025, there are 23,138 Series A preferred stock available for future equity awards under the 2021 Plan.

***Loss per Share***

The Company computes basic loss per common share by dividing net loss by the weighted average number of common shares outstanding during the reporting period. Diluted loss per share reflects the potential dilution, if any, computed by dividing loss by the combination of dilutive common share equivalents, comprised of shares issuable under outstanding investment rights, warrants and the Company's share-based compensation plans, and the weighted average number of common shares outstanding during the reporting period. Dilutive common share equivalents include the dilutive effect of in-the-money stock options, which are calculated based on the average share price for each period using the treasury stock method. Under the treasury stock method, the exercise price of a stock option and the amount of compensation cost, if any, for future service that the Company has not yet recognized are assumed to be used to repurchase shares in the current period.

The following table sets forth the reconciliation of the numerators and denominators of the basic and diluted per share computations for operations for the three and six months ended June 30:

---

| | | | | |
|:---|:---|:---|:---|:---|
| (Dollars in thousands, except shares) | **Three Months Ended**<br> **June 30,** | **Three Months Ended**<br> **June 30,** | **Six Months Ended**<br> **June 30,** | **Six Months Ended**<br> **June 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| **<u>Numerator:</u>** |  |  |  |  |
| Net loss | $(7780) | $(9145) | $(15134) | $(11689) |
| (Less) Net income (loss) attributable to non-controlling interest | 398 | (1728) | 196 | (4438) |
| Net loss attributable to Soluna Holdings, Inc. | (7382) | (10873) | (14938) | (16127) |
| Less: Preferred dividends or deemed dividends |  | (66) |  | (452) |
| Less: Cumulative Preferred Dividends in arrears | (2956) | (2609) | (5908) | (4331) |
| Balance | $(10338) | $(13548) | $(20846) | $(20910) |
| **<u>Denominator:</u>** |  |  |  |  |
| **Basic and Diluted EPS:** |  |  |  |  |
| Common shares outstanding, beginning of period, including penny warrants | 11327446 | 2958851 | 11327446 | 2592454 |
| Weighted average common shares issued during the period including penny warrants issued and outstanding as of quarter-end | 3663679 | 1594845 | 2146536 | 1091104 |
| Denominator for basic and diluted earnings per common shares — weighted average common shares | 14991125 | 4563696 | 13473983 | 3683558 |
| Basic and diluted loss per share | $(0.69) | $(2.97) | $(1.55) | $(5.68) |

---

The Company notes as continuing operations was in a Net loss for the three and six months ended June 30, 2025 and 2024, as such basic and diluted EPS is the same balance as continuing operations acts as the control amount in which would cause antidilution. Not included in the computation of earnings per share, assuming dilution, for the three and six months ended June 30, 2025, were options to purchase 2,645 shares of the Company's common stock, 209,885 nonvested restricted stock units, and 2,347,135 outstanding warrants not exercised which excludes penny warrants that can be potentially exercised. These potentially dilutive items were excluded because the calculation of incremental shares resulted in an anti-dilutive effect.

Not included in the computation of earnings per share, assuming dilution, for the three and six months ended June 30, 2024, were options to purchase 3,325 shares of the Company's common stock, 5,692 nonvested restricted stock units, and 3,820,152 outstanding warrants not exercised which excludes penny warrants that can be potentially exercised. These potentially dilutive items were excluded because the calculation of incremental shares resulted in an anti-dilutive effect.

**10.** **Commitments and Contingencies**

**Commitments:**

**Leases**

The Company determines whether an arrangement is a lease at inception. The Company and its subsidiaries have operating leases for certain manufacturing, laboratory, office facilities and certain equipment. The leases have remaining lease terms of approximately 3 years to less than ten years. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. As of June 30, 2025 and December 31, 2024, the Company has no assets recorded under finance leases.

Lease expense for these leases is recognized on a straight-line basis over the lease term. For the three and six months ended June 30, total lease costs are comprised of the following:

Summary of Lease Expense Recognized on Straight-line Basis Over Lease Term

---

| | | | | |
|:---|:---|:---|:---|:---|
| (Dollars in thousands) | **Three Months Ended** <br> **June 30,** | **Three Months Ended** <br> **June 30,** | **Six Months Ended** <br> **June 30,** | **Six Months Ended** <br> **June 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Operating lease cost | $18 | $61 | $37 | $122 |
| Short-term lease cost | 38 |  | 38 |  |
| &nbsp;&nbsp;&nbsp;Total net lease cost | $56 | $61 | $75 | $122 |

---

Short-term leases are leases having a term of twelve months or less. The Company recognizes short-term leases on a straight-line basis and does not record a related asset or liability for such leases. On April 3, 2025, Soluna KK Energy ServiceCo, LLC ("Soluna KK Energy"), a subsidiary of the Company, entered into a lease agreement for 50 acres of property located in Willacy County, Texas, for the purpose of constructing, installing, operating, and maintaining modular data centers and related facilities. Soluna KK Energy can terminate the lease within six months of April 3, 2025. As of June 30, 2025, there was uncertainty over project funding and whether the Company would extend the lease agreement. As such, the Company recorded the lease agreement as short-term. If Soluna KK Energy extends the lease agreement for an additional term of twenty-two years, the Company will record a right-of-use asset and lease liability.

Other information related to leases was as follows:

---

| | |
|:---|:---|
|  | **Six Months Ended** <br> **June 30, 2025** |
| Weighted Average Remaining Lease Term (in years): |  |
| &nbsp;&nbsp;&nbsp;Operating leases | 5.36 |
| Weighted Average Discount Rate: |  |
| &nbsp;&nbsp;&nbsp;Operating leases | 7.71% |

---

---

| | | |
|:---|:---|:---|
| (Dollars in thousands) | **Six Months Ended**<br> **June 30, 2025** | **Six Months Ended** <br> **June 30, 2024** |
| Supplemental Cash Flows Information: |  |  |
| Cash paid for amounts included in the measurement of lease liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Operating cash flows from operating leases | $41 | $123 |
| Non-Cash Activity Right-of-use assets obtained in exchange for lease obligations: |  |  |
| &nbsp;&nbsp;&nbsp;Operating leases | $- | $- |

---

Maturities of noncancellable operating lease liabilities are as follows for the quarter ending June 30:

---

| | |
|:---|:---|
| (Dollars in thousands) |  |
|  | **2025** |
| 2025 (remainder of year) | $41 |
| 2026 | 82 |
| 2027 | 82 |
| 2028 | 29 |
| 2029 | 29 |
| Thereafter | 88 |
| &nbsp;&nbsp;&nbsp;Total lease payments | 351 |
| Less: imputed interest | (68) |
| &nbsp;&nbsp;&nbsp;Total lease obligations | 283 |
| Less: current obligations | 63 |
| &nbsp;&nbsp;&nbsp;Long-term lease obligations | $220 |

---

As of June 30, 2025, there were no additional operating lease commitments that had not yet commenced.

 

*Project Dorothy 2 and Project Kati Commitments:*

As of June 30, 2025, the Company was contractually committed for approximately $10.1 million of capital expenditures, primarily related to infrastructure builds, equipment procurement, and labor associated with the Company's Project Dorothy 2 and Project Kati datacenters. These capital expenditures are expected to occur over the current year.

**Contingencies:**

***Spring Lane Capital Contingency***

The Company has a potential contingency associated with an agreement with Spring Lane of up to $250 thousand which would be reduced by a proportion of funding received from Spring Lane up to the $45.0 million aggregate contribution cap. The Company considers the probability of a payment for the contingency to be remote.

***Bonus Contingency***

During the year ended December 31, 2024, the Company's Board of Directors approved a discretionary bonus program with an aggregate payout of approximately $2.1 million, including associated payroll taxes. The bonus is subject to achievement of specific conditions. As of June 30, 2025, management evaluated the likelihood of meeting the requisite conditions for payout and determined that it is not probable that conditions will be satisfied. Accordingly, no liability has been recorded in the accompanying condensed consolidated financial statements as of June 30, 2025 and December 31, 2024. The Company will continue to monitor the status of the conditions and will recognize a liability in future periods if and when it becomes probable that the bonus will be paid.

**Legal**

We are subject to legal proceedings, claims and liabilities which arise in the ordinary course of business. When applicable, we accrue for losses associated with legal claims when such losses are probable and can be reasonably estimated. These accruals are adjusted as additional information becomes available or circumstances change. Legal fees are charged to expense as they are incurred.

On December 29, 2022, NYDIG filed a complaint against Soluna MC Borrowings, LLC 2021- 1, a subsidiary of Soluna MC, LLC, a subsidiary of Soluna Digital, a subsidiary of the Company ("Borrower") and Soluna MC, LLC ("Guarantor", and together with Borrower, "NYDIG Defendants") in Marshall Circuit Court of the Commonwealth of Kentucky regarding a series of loans (the "NYDIG Loans") made by NYDIG to Borrower pursuant to a Master Equipment Finance Agreement ("MEFA") that were secured by certain assets of Borrower and guaranteed by Guarantor pursuant to a written guaranty agreement executed by Guarantor. On February 23, 2023, NYDIG proceeded to foreclose on all of the collateral securing the MEFA, and repossessed the collateralized assets. Subsequently, NYDIG filed its Motion for Summary Judgment seeking entry of a judgment against the NYDIG Defendants in the approximate amount of $10.3 million, and NYDIG and the NYDIG Defendants consensually resolved the motion in the form of a Stipulation and Agreed Judgment, which the Circuit Court approved on February 23, 2024.

On March 13, 2024, NYDIG served the NYDIG Defendants with a post-judgment discovery seeking information regarding the NYDIG Defendants' assets and liabilities. The NYDIG Defendants completed responding to NYDIG's initial document requests on May 13, 2024. On September 24, 2024, NYDIG sent a letter seeking supplemental discovery from the NYDIG Defendants, and the NYDIG Defendants completed responding to NYDIG's additional/supplemental document requests by November 20, 2024. A deposition of a representative of the NYDIG Defendants occurred on January 23, 2025. On April 2, 2025, NYDIG sent another letter seeking supplemental discovery from the NYDIG Defendants or alternatively to commence discovery discussions. The NYDIG Defendants sent a response on April 10, 2025 requesting contact information for potential settlement discussions and proposing a rolling discovery schedule; as of August 14, 2025 there has not been a response on the proposed discovery schedule.

Additionally, NYDIG has stated its intention to pursue the parent company of Guarantor ("Parent Entity") under a piercing of the corporate veil theory relating to NYDIG Defendants' debts and liabilities under the loan documents. Parent Entity intends to vigorously defend itself from NYDIG's parent company claims. Parent Entity denies any such liability and filed a complaint for a declaratory judgment against NYDIG in the Eighth Judicial District Court in Clark County, Nevada on March 16, 2023, seeking a declaratory judgment as to such matter. On June 22, 2023, the court issued an order granting NYDIG's motion to dismiss, without prejudice. Parent Entity intends to continue to vigorously defend any allegations regarding liability on account of NYDIG Defendants' debts and liabilities to NYDIG under their loan documents.

As of June 30, 2025, the Company still has an outstanding principal of approximately $9.2 million and outstanding interest and penalty balance of approximately $3.0 million. This settlement did not result in the admission of any liability on the part of SHI, whose declaratory judgment remains the subject of litigation.

**11.** **Related Party Transactions**

**MeOH Power, Inc.**

On December 18, 2013, MeOH Power, Inc. and the Company executed a Senior Demand Promissory Note (the Note) in the amount of $380 thousand to secure the intercompany amounts due to the Company from MeOH Power, Inc. upon the deconsolidation of MeOH Power, Inc. Interest accrues on the Note at the Prime Rate in effect on the first business day of the month, as published in the Wall Street Journal. At the Company's option, all or part of the principal and interest due on this Note may be converted to shares of common stock of MeOH Power, Inc. at a rate of $0.07 per share. Interest began accruing on January 1, 2014. The Company recorded a full allowance against the Note. As of June 30, 2025 and December 31, 2024, $394 thousand and $385 thousand, respectively, of principal and interest are available to convert into shares of common stock of MeOH Power, Inc. Any adjustments to the allowance are recorded as miscellaneous expense during the period incurred.

***Employee Receivables***

 ****

Certain employees have a receivable due to the Company based on their stock-based awards, in which $128 thousand and $178 thousand was outstanding as of June 30, 2025 and December 31, 2024, respectively. The balance is currently presented as $31 thousand and $82 thousand, respectively within Prepaid expenses and other current assets as of June 30, 2025 and December 31, 2024, and $97 thousand and $96 thousand, respectively within Other assets on the condensed consolidated financial statements.

***HEL Transactions***

As discussed in the Company's 2023 Annual Report and all agreements included as exhibits and defined within the 2023 Annual Report, on October 29, 2021, the Company completed the Soluna Callisto acquisition pursuant to the merger agreement (the "Merger Agreement"). The purpose of the transaction was for SCI to acquire substantially all of the assets (other than those assets physically located in Morocco) formerly held by Harmattan Energy, Ltd. ("HEL"), which assets consisted of SCI's existing pipeline of certain cryptocurrency mining projects that HEL previously transferred to SCI, which was formed expressly for this purpose, and to provide SCI with the opportunity to directly employ or retain the services of four individuals whose services it had retained through HEL prior to the merger. As a result of the merger, each share of common stock of Soluna Callisto issued and outstanding immediately prior to the effective time of the merger, other than shares owned by the Company or any of our subsidiaries, was cancelled and converted into the right to receive a proportionate share of the Merger Consideration.

In connection with the Soluna Callisto acquisition, effective as of October 29, 2021, upon and subject to the terms and conditions of the Termination Agreement, on November 5, 2021: (1) the existing Operating and Management Agreements between HEL and SCI were terminated in all respects; and (2)(A) SCI paid HEL $725 thousand, (B) SHI issued to HEL the Termination Shares, and (C) HEL and SHI entered into an Amended and Restated Contingent Rights Agreement that, among other things, amended the existing Contingent Rights Agreement by and between HEL and SHI, dated January 13, 2020, to provide SHI the right to invest directly in certain cryptocurrency mining opportunities being pursued by HEL. SHI filed a registration statement with the SEC to register the resale of the Termination Shares on February 14, 2022.

Due to conditions being met within the Merger Agreement in relation to energization and retention of employees, the Company has advised SCI US Holdings LLC, a Delaware limited liability company, who is the sole Effective Time Holder (as defined in the Merger Agreement) of the right to receive the Merger Shares of the Company and that 19,800 Merger Shares were issued on May 26, 2023 and 39,600 Merger Shares were issued on October 10, 2023. SCI US Holdings LLC has consented to the issuance of such Merger Shares as required under the Merger Agreement and has directed the Company to issue such Merger Shares to its affiliate, HEL. Following the issuance of the 59,400 Merger Shares, a total of 59,400 Merger Shares remains available for possible issuance through October 29, 2026 pursuant to the terms of the Merger Agreement.

Several of HEL's equity holders are affiliated with Brookstone Partners, the investment firm that previously held an equity interest in the Company through Brookstone Partners Acquisition XXIV, LLC. The Company's two Brookstone-affiliated directors also serve as directors and, in one case, as an officer, of HEL and also have ownership interest in HEL. In light of these relationships, the various transactions by and between the Company and SCI, on the one hand, and HEL, on the other hand, were negotiated on behalf of the Company and SCI via an independent investment committee of the Board and separate legal representation. The transactions were subsequently unanimously approved by both the independent investment committee and the full Board.

Four of the Company's directors have various affiliations with HEL.

Michael Toporek, the former Chief Executive Officer, and current Executive Chairman of the Board, owns (i) 90% of the equity of Soluna Technologies Investment I, LLC, which owns 57.9% of HEL and (ii) 100% of the equity of MJT Park Investors, Inc., which owns 3.1% of HEL, in each case, on a fully diluted basis. Mr. Toporek does not own directly, or indirectly, any equity interest in Tera Joule, LLC, which owns 9.2% of HEL; however, as a result of his 100% ownership of Brookstone IAC, Inc., which is the manager of Tera Joule, LLC, he has dispositive power over the equity interests that Tera Joule owns in HEL.

In addition, one of the Company's directors, Matthew E. Lipman, serves as a director and is currently acting as President of HEL. Mr. Lipman does not directly own any equity interest in Tera Joule, LLC, which owns 9.2% of HEL; however, as a result of his position as a director and officer of Brookstone IAC, Inc., which is the manager of Tera Joule, LLC, he has dispositive power over the equity interests that Tera Joule owns in HEL. As a result, the approximate dollar value of the amount of Mr. Toporek's and Mr. Lipman's interest in the Company's transactions with HEL for the year ended December 31, 2024 was $0 and $0, respectively.

John Belizaire, the Company's Chief Executive Officer, and John Bottomley, who were elected to the Board upon the effective time of SCI's acquisition of Soluna Callisto, serve as directors of HEL. In addition, Mr. Belizaire is the beneficial owner of 1,317,567 shares of common stock of HEL and 102,380 Class Seed Preferred shares, which are convertible into 86,763 shares of common stock of HEL. These interests give Mr. Belizaire an ownership of 10.54% in HEL. Mr. Belizaire also owns an interest in HEL indirectly through his 5.0139% interest in Tera Joule, LLC's 965,945 Class Seed Preferred shares, which are convertible into 818,596 shares of common stock of HEL. Mr. Bottomley is the beneficial owner of 96,189, or approximately 0.72%, of the outstanding shares of common stock of HEL.

The Company owned approximately 1.79% of HEL, calculated on a converted fully diluted basis, as of June 30, 2025 and December 31, 2024. The Company's equity investment of HEL was fully impaired in fiscal year 2023, as such the equity investment is valued at $0 for both June 30, 2025 and December 31, 2024. The Company may enter into additional transactions with HEL in the future.

**12.** **Stock Based Compensation**

The Company currently issues awards under the Soluna Holdings, Inc. Third Amended and Restated 2021 Stock Incentive Plan, as amended (the "2021 Plan"), and the Soluna Holdings, Inc. Amended and Restated 2023 Stock Incentive Plan, as amended (the "2023 Plan"). There were no amendments to the 2021 Plan or the 2023 Plan during the three and six months ended June 30, 2025. For further details regarding our stock-based compensation plans and the methods and assumptions used in the determination of the fair value of stock-based awards, refer to our Annual Report on Form 10-K filed with the SEC on March 31, 2025.

During the three and six months ended June 30, 2025, the Company awarded the following under the 2021 Plan:

---

| | | |
|:---|:---|:---|
| Award Type | Number of Awards | Fair Value/Closing<br> Market Price at Grant |
| Restricted Stock Awards – Common Stock | 2140683 | $0.64 |
| Restricted Stock Units – Common Stock | 32000 | $0.63 |
|  | 2172683 |  |

---

1,201,312 of the restricted stock awards vest at separation from the Company, 939,371 of the restricted stock awards vest 33% on June 1 ,2026, 33% on June 1, 2027 and 34% on June 1, 2028, and 32,000 of the restricted stock units vest 33% on June 3, 2026, 33% on June 3, 2027 and 34% on June 3, 2028.

During the three and six months ended June 30, 2024, the Company awarded the following under the 2021 Plan:

---

| | | |
|:---|:---|:---|
| Award Type | Number of Awards | Fair Value/Closing<br> Market Price at Grant |
| Restricted Stock Awards – Common Stock | 391544 | $1.52 |
| Restricted Stock Awards – Common Stock | 90734 | $2.41 |
| Restricted Stock Awards – Preferred A Stock | 1892300 | $2.50 |
|  | 2374578 |  |

---

During the three and six months ended June 30, 2024, the Company awarded the following under the 2023 Plan:

---

| | | |
|:---|:---|:---|
| Award Type | Number of Awards | Fair Value/Closing<br> Market Price at Grant |
| Restricted Stock Awards – Common Stock | 610234 | $1.52 |
| Restricted Stock Awards – Common Stock | 57255 | $2.41 |
|  | 667489 |  |

---

25,309 of the restricted stock awards vest immediately, 2,022,246 of the restricted stock awards vest at separation from the Company, 690,223 of the restricted stock awards vest 33% on June 1 ,2024, 33% on June 1, 2025 and 34% on June 1, 2026, and 304,289 of the restricted stock awards vest 33% on June 1, 2025, 33% on June 1, 2026 and 34% on June 1, 2027.

No options were granted under the 2021 Plan and the 2023 Plan for the three and six months ended June 30, 2025 and June 30, 2024.

During April 2024, the Company cancelled certain vested Awards and modified the terms of certain unvested Awards, to permit different settlement outcomes. The service period and vesting terms were changed at the time of modification. All such vested Awards were fully vested as of the cancellation date and all compensation cost had been recognized. All such unvested equity awards were probable of vesting as of the modification date and the change was accounted for as a Type I modification. In a Type I modification, the Company is required to calculate the incremental difference of the awards, which equals the difference of new award value inclusive of estimated forfeitures and the fair value of the original award as of the modification date. As of the modification date, there is no reversal or adjustment of previously recognized stock compensation expense. The modification related to the cancellation of 48,547 under the water stock options granted to eight board members. The options were replaced with new awards of restricted stock. The amount of incremental compensation cost resulting from the modification was approximately $4.0 million.

The Company will recognize the compensation expense on a straight-line basis over the service period for the entire Awards. Accordingly, as of June 30, 2025 and December 31, 2024, the Awards from the Plans are presented within the stockholders' equity section of the Company's balance sheet.

As of June 30, 2025, unrecognized compensation cost related to unvested Awards was approximately $9.3 million. That cost is expected to be recognized over a weighted-average period of approximately 1.5 years.

**13.** **Effect of Recent Accounting Updates**

 ****

***Accounting Updates Effective for fiscal year 2025***

Changes to U.S. GAAP are established by the Financial Accounting Standards Board (the "FASB") in the form of accounting standard updates ("ASUs") to the FASB's Accounting Standards Codification ("ASC"). The Company considered the applicability and impact of all ASUs. ASUs not mentioned below were assessed and determined to be either not applicable or are expected to have minimal impact on our consolidated financial position or results of operations.

*<u>Improvements to Income Tax Disclosures</u>*

In December 2023, the FASB issued ASU 2023-09, *Income Taxes (Topic 740): Improvements to Income Tax Disclosures* (ASU 2023-09), which requires disclosure of incremental income tax information within the rate reconciliation and expanded disclosures of income taxes paid, among other disclosure requirements. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The amendment is required to be disclosed on an annual basis, in which the Company will include on its annual report for the year ended December 31, 2025.

*<u>Stock Compensation</u>*

In March 2024, the FASB issued ASU 2024-01, *Compensation—Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards* ("ASU 2024-01"), to clarify the scope application of profits interest and similar awards by adding illustrative guidance in *ASC 718, Compensation—Stock Compensation* ("ASC 718"). ASU 2024-01 clarifies how to determine whether profits interest and similar awards should be accounted for as a share-based payment arrangement (ASC 718) or as a cash bonus or profit-sharing arrangement *(ASC 710, Compensation—General,* or other guidance*)* and applies to all reporting entities that account for profits interest awards as compensation to employees or non-employees. In addition to adding the illustrative guidance, ASU 2024-01 modified the language in paragraph 718-10-15-3 to improve its clarity and operability without changing the guidance. ASU 2024-01 is effective for fiscal years beginning after December 15, 2024, and interim periods within those annual periods. Early adoption is permitted. The amendments should be applied either retrospectively to all prior periods presented in the financial statements, or prospectively to profits interests and similar awards granted or modified on or after the adoption date. The Company notes that this ASU did not have an impact on the condensed consolidated financial statements for the three and six months ended June 30, 2025. If any new awards are issued in the future, the Company will evaluate the scope application of this ASU.

***Accounting Updates Not Yet Effective***

*<u>Improvements to Comprehensive Income- Expense Disaggregation</u>*

In December 2024, the FASB issued ASU 2024-03, *Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40)* ("ASU 2024-03"). ASU 2024-03 requires, in the notes to the financial statements, disclosures of specified information about certain costs and expenses specified in the updated guidance. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is evaluating the impact the updated guidance will have on its disclosures.

 

*<u>Debt with Conversion and Other Options</u>*

In December 2024, the Financial Accounting Standards Board ("FASB") issued ASU No. 2024-04, *Debt - Debt with Conversion and Other Options* (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments. ASU 2024-04 clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion to improve relevance and consistency. The new standard is effective for the Company for its annual periods beginning after December 15, 2025 and interim periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the impact of adopting the standard.

**14.** **Variable Interest Entities and Voting Interest Entities**

On January 26, 2022, DVSL was created in order to construct, own, operate and maintain data centers in order to support the mining of cryptocurrency assets, batch processing and other non-crypto related activities (collectively, the "Project"). On May 3, 2022, SCI entered into a Bilateral Master Contribution Agreement (the "Bilateral Contribution Agreement") with Spring Lane Capital, pursuant to which Spring Lane agreed, pursuant to the terms and conditions of such agreement, to make one or more capital contributions to, and in exchange for equity in, SCI or one of its subsidiaries up to an aggregate amount of $45 million, as amended in the third quarter of fiscal year 2024 to fund certain projects to develop green data centers co-located with renewable energy assets (the "Spring Lane Commitment").

On August 5, 2022, the Company entered into a Contribution Agreement (the "Dorothy Contribution Agreement") with Spring Lane, Soluna DV Devco, LLC ("Devco"), an indirect wholly owned subsidiary of SCI, and DVSL an entity formed in order to further the Company's development for Project Dorothy, (each, a "Party" and, together, the "Parties"). Pursuant to the Dorothy Contribution Agreement, the Company committed to a capital contribution of up to approximately $26.3 million to DVSL (the "Company Commitment"), and on August 5, 2022, the Company was deemed to have contributed approximately $8.1 million, through payment of capital expenditures and development costs made on behalf of DVSL by the Company prior to August 5, 2022. Further under the Agreement, Spring Lane committed to a capital contribution of up to $12.5 million to DVSL (the "Spring Lane Dorothy Commitment"), and as of December 31, 2022, Spring Lane had actually contributed approximately $4.8 million. Under the Dorothy Contribution Agreement, the Company and Spring Lane have committed to make subsequent contributions, up to their respective Company Commitment and Spring Lane Dorothy Commitment amounts, on a pro rata basis, upon receipt of a contribution request from DVSL, as set forth in the Dorothy Contribution Agreement and subject to the satisfaction of certain conditions described therein. The proceeds of any subsequent commitments will be applied to pay project costs in accordance with the project budget.

In exchange for their contributions, the Company and Spring Lane were issued 67.8% and 32.2% of the Class B Membership Interests in DVSL, respectively, and were admitted as Class B members of DVSL. Further pursuant to the Dorothy Contribution Agreement, DVSL issued 100% of its Class A Membership Interests to Devco.

The Company evaluated this legal entity under *ASC 810, Consolidations* and determined that DVSL is a variable interest entity ("VIE") that should be consolidated into the Company, with a non-controlling interest recorded to account for Spring Lane's equity ownership of the Company. The Company has a variable interest in DVSL. The entity was designed by the Company to create an entity for outside investors to invest in specific projects. The creation of this entity resulted in the Company, through its equity interest in DVSL, absorbing operational risk that the entity was created to create and distribute, resulting in the Company having a variable interest in DVSL.

On March 10, 2023, the Company along with <u>Devco</u>, and DVSL, a Delaware limited liability company (the "Project Company") entered into a Purchase and Sale Agreement (the "Purchase and Sale Agreement") with Soluna SLC Fund I Projects Holdco, LLC, a Delaware limited liability company ("Spring Lane") that is wholly owned indirectly by Spring Lane Management LLC. The Project Company was constructing a modular data center with a peak demand of 25 MW (the "Dorothy Phase 1A Facility").

Under a series of transactions in February 2023 and March 2023, culminating in the March 10, 2023 Purchase and Sale Agreement, the Company sold to Spring Lane certain Class B Membership Interests for a purchase price of $7.5 million (the "Sale"). After giving effect to the Sale, the Company owned 6,790,537 Class B Membership Interests (constituting 14.6% of the Class B Membership Interests) and Spring Lane owns 39,791,988 Class B Membership Interests (constituting 85.4% of the Class B Membership Interests). The cash portion of the purchase price paid by Spring Lane to the Company was approximately $5.8 million, which represented the purchase price of $7.5 million less the Company's pro rata share of certain contributions funded entirely by Spring Lane in the earlier portion of this series of transactions occurring during February 2023 and March 2023. As a further part of these transactions, the parties agreed that from January 1, 2023 onwards, the Company would bear only 14.6% of the costs relating to the construction and operation of the Dorothy Phase 1A Facility, compared to its 67.8% share until that time, including during the calendar year 2022. After Spring Lane Capital realizes an 16% Internal Rate of Return hurdle on its investments, the Company retains the right to 50% of the profits on DVSL. In connection with the Spring Lane transactions and agreements, Soluna DV Services, LLC. will be providing the operations and maintenance services to DVSL. DVCC expects to receive a margin of 20% for services rendered on certain expenses.

Concurrently with the Sale, the Company, Spring Lane, Devco and the Project Company entered into (a) the Fourth Amended and Restated Limited Liability Company Agreement of the Project Company, dated as of March 10, 2023 (the "Fourth A&R LLCA"), an amendment and restatement of the Third Amended and Restated Limited Liability Company Agreement of the Project Company dated as of March 3, 2023, and (b) the Amended and Restated Contribution Agreement, dated as of March 10, 2023 (the "A&R Contribution Agreement"), an amendment and restatement of the Contribution Agreement dated as of August 5, 2022. The Fourth A&R LLCA provides for certain updates in respect of Spring Lane's majority ownership. The A&R Contribution Agreement reflects updated pro rata member funding percentages as a result of the Sale as well as updated contribution caps for each of the Company and Spring Lane.

As of January 1, 2023, there were no changes in the Limited Liability Agreement of DVSL other than those related to incorporating the new investment and the purpose and design of DVSL has not changed. The Company evaluated the concepts under ASC 810 for DVSL after the change in membership interest, concluding that this resulted in the Project Company not being structured with non-substantive voting rights, as the noncontrolling shareholders have disproportionately fewer voting rights but the activities are not conducted on their behalf. This, in conjunction with there being sufficient equity at risk to finance its activities and the equity holders as a group having the characteristics of a controlling financial interest in DVSL, results in DVSL not meeting the definition of a VIE. The Company's consolidation model is based on the concept of power. Given the Company's Class A membership interest, the Company has the ability to control the significant decisions made in the ordinary course of the business of DVSL. The non-controlling shareholders do not hold substantive participating rights, voting rights or liquidation rights. This results in the Project Company being a voting interest entity ("VOE"), therefore allowing the Company to continue to consolidate.

The carrying amount of the assets and liabilities was as follows for DVSL:

---

| | | |
|:---|:---|:---|
| (Dollars in thousands) | **June 30, 2025** | **December 31, 2024** |
| Current assets: |  |  |
| Cash and restricted cash | $2785 | $2598 |
| Accounts receivable, net | 689 | 481 |
| Other receivable, related party | 434 | 1090 |
| Prepaid expenses and other current assets | 90 | 34 |
| Total current assets | 3998 | 4203 |
| Other assets, related party | 1948 | 2452 |
| Operating lease right-of-use assets | 41 | 42 |
| Property, plant and equipment, net | 12285 | 12744 |
| Total assets | $18272 | $19441 |
| Current liabilities: |  |  |
| Due to intercompany | $- | $51 |
| Accrued liabilities | 818 | 1608 |
| Customer deposits | 899 | 296 |
| Operating lease liability | 4 | 4 |
| Total current liabilities | 1721 | 1959 |
| Operating lease liability | 37 | 39 |
| Other liabilities, related party | 291 | 275 |
| Total liabilities | $2049 | $2273 |

---

Effective January 1, 2023, the Company's ownership in DVSL was reduced from 67.8% to 14.6%; see above for details.

On May 9, 2023, the Company's indirect subsidiary DVCC completed a strategic partnership and financing with a special purpose vehicle, Navitas West Texas Investments SPV, LLC**,** ("Navitas") organized by Navitas Global, to complete the second phase of the Dorothy Project ("Dorothy 1B"). Under a Contribution Agreement among the parties, the Company owned a substantially complete 25MW data center under construction, in which the Company had contributed capital expenditures for the data center. Soluna and Navitas amended and restated the Initial LLCA (the "Existing LLCA") to reflect Navitas' contribution of $4.5 million and its receipt of 4,500 Membership Interests, constituting 26.5% of the outstanding Membership Interests of DVCC. On June 2, 2023, Soluna and Navitas amended and restated the Existing LLCA to (a) reflect (i) Navitas's additional capital contribution of approximately $7.6 million and receipt of an additional 7,597 Membership Interests, for a total of 12,097 Membership Interests and 49% ownership of DVCC, and (ii) Soluna's additional capital contribution of $1.34 million and receipt of an additional 1,340 Membership Interests, for a total of 12,590 Membership Interests and 51% ownership of DVCC, and (b) describe the respective rights and obligations of the Members and the management of DVCC. As of June 30, 2025, Navitas owns 49% and Soluna owns 51% of DVCC.

The Company evaluated this legal entity under *ASC 810, Consolidations* and determined that DVCC is a VIE that should be consolidated into the Company, with a non-controlling interest recorded to account for Navitas' equity ownership of DVCC. The Company has a variable interest in DVCC. The entity was designed by the Company to create an entity for outside investors to invest in specific projects. The creation of this entity resulted in the Company, through its equity interest in DVCC, absorbing operational risk that the entity was created to create and distribute, resulting in the Company having a variable interest in DVCC.

DVCC is a VIE of the Company due to DVCC being structured with non-substantive voting rights. This is due to the following two factors being met as outlined in *ASC 810-10-15-14* that require the VIE model to be followed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. The
 voting rights of the Company are not proportional to their obligation to absorb the expected losses of the legal entity. The Company
 gave Navitas veto rights over significant decisions, which resulted in Soluna having fewer voting rights relative to their obligation
 to absorb the expected losses of the legal entity.

b. Substantially
 all of DVCC's activities are conducted on behalf of the Company, which has disproportionally fewer voting rights.

Also, the Company is the primary beneficiary due to having the power to direct the activities of DVCC that most significantly impact the performance of DVCC due to its role as the manager handling the day-to-day activities of DVCC as well as majority ownership and the obligation to absorb losses or gains of DVCC that could be significant to the Company.

Accordingly, the accounts of DVCC are consolidated in the accompanying financial statements.

The carrying amount of the VIE's assets and liabilities was as follows for DVCC:

---

| | | |
|:---|:---|:---|
| (Dollars in thousands) | **June 30, 2025** | **December 31, 2024** |
| Current assets: |  |  |
| Cash and restricted cash | $1560 | $2057 |
| Accounts receivable | 33 | 37 |
| Prepaid expenses and other current assets | 100 | 49 |
| Other receivable, related party | 1582 | 1692 |
| Total current assets | 3275 | 3835 |
| Other assets, related party | 1948 | 2452 |
| Operating lease right-of-use assets | 41 | 42 |
| Property, plant and equipment, net | 15742 | 17774 |
| Total assets | $21006 | $24103 |
| Current liabilities: |  |  |
| Due to intercompany | $1426 | $1475 |
| Accrued liabilities | 616 | 1392 |
| Operating lease liability | 4 | 4 |
| Current portion of debt | - | 137 |
| Total current liabilities | 2046 | 3008 |
| Operating lease liability | 37 | 39 |
| Total liabilities | $2083 | $3047 |

---

On July 22, 2024 (the "Effective Date"), Soluna Holdings, Inc. (the "Company") closed financing for the Dorothy 2 project. This project involves Soluna Digital, Inc. (the "Developer") and Soluna DVSL II ComputeCo, LLC (the "ComputeCo"), a special purpose vehicle initially owned solely by the Developer. They are collaborating on the development, design, procurement, and construction of a 48 MW modular data center (the "Project Dorothy 2") in Silverton, Texas. This facility is owned by ComputeCo and operated by Soluna US Services, LLC, and may engage in cryptocurrency, batch processing, and other non-crypto related activities. It is adjacent to two other company modular data center projects at the same site.

Project Dorothy 2 is financed by Soluna2 SLC Fund II Project Holdco LLC, an investment vehicle of Spring Lane Capital ("SLC") with a capital contribution of up to $29.98 million, and the Developer, as the parent company of ComputeCo, with an initial capital contribution of up to $4.6 million. As of the Effective Date, the Company and the Developer became co-owners of ComputeCo. In exchange for contributions to ComputeCo, the Company and SLC were initially issued 42% and 58% of the Class B Membership Interests in ComputeCo, respectively, and were admitted as Class B members of ComputeCo. Further, ComputeCo issued 100% of its Class A Membership Interests to SDI. In relation to distributions, once ERCOT Achievement Date has been met (date on which SLC and the Company have mutually agreed upon the parameters for power trading or demand response program in the ERCOT market) until the Target Return Date (last day of quarter in which the Class B members achieve an 18% internal rate of return, the Class A members will obtain 7.5% of the distributable cash with the remaining 92.5% being distributed to the Class B members on a pro-rata basis. After the Target Return Date is met, 50% of distributable cash will be allocated to the Class A members and 50% allocated to the Class B members in accordance with their membership interests.

Project Dorothy 2 allows the Developer to invest in ComputeCo, with the total ownership of the Developer and its affiliates capped at 49% of the Class B Membership Interests. This investment can occur within 30 days after the Effective Date (treated equally to the initial Investor), from day 31 to 180 days after the Effective Date (subject to a purchase price formula with a 20% discount rate), or after 180 days with the initial Investor's approval.

On May 16, 2024, the Company secured $1.0 million in financing from SLC for equipment and machinery for Project Dorothy 2 through an Equipment Loan Agreement (the "ELA") between SDI SL Borrowing - 1, LLC (the "Borrower") and SLC. On that date, SLC lent the Borrower $720,000 to purchase medium voltage cables and low voltage switchboards. This debt was later assigned to ComputeCo on the Effective Date. Subsequently, the borrowing amount was paid in full by issuing SLC Class B Membership Interests in the Dorothy 2 project valued at three times the borrowing amount (i.e., $2.16 million).

On April 4, 2025, the Company transferred its Class B Membership to SLC, resulting in 0% Class B Membership Interests held by the Company. SDI still retains 100% Class A Membership Interests in ComputeCo as of June 30, 2025. Based on evaluation, the Company would be able to consolidate this entity.

The Company evaluated this legal entity under *ASC 810, Consolidations* and determined that this entity is a VIE, as the equity holders as a group do not have the characteristics of a controlling financial interest. Even though SLC has all of the Class B membership, the Company holds all the Class A membership, which gives them the ability to control the significant decisions made in the ordinary course of business. The Company has the right to receive benefits that could potentially be significant to the VIE through its Class A membership interest, as it is eligible to receive 50% of distributions upon SLC obtaining a specified internal rate of return. The non-controlling shareholders do not hold substantive participating rights, voting rights or liquidation rights.

The carrying amount of the assets and liabilities was as follows for ComputeCo:

---

| | | |
|:---|:---|:---|
| (Dollars in thousands) | **June 30, 2025** | **December 31, 2024** |
| Current assets: |  |  |
| Cash and restricted cash | $1080 | $402 |
| Accounts receivable, trade | 171 |  |
| Accounts receivable, intercompany |  | 2868 |
| Prepaid expenses and other current assets | 210 | 41 |
| Other receivable, related party | 3118 | 3370 |
| Total current assets | 4579 | 6681 |
| Other assets | 463 |  |
| Other assets, related party | 14152 | 13223 |
| Operating lease right-of-use assets | 78 | 82 |
| Property, plant and equipment, net | 9132 |  |
| Deposits on equipment | - | 716 |
| Total assets | $28404 | $20702 |
| Current liabilities: |  |  |
| Accounts payable, trade | $468 | $- |
| Accounts payable, related party | 2685 | 3598 |
| Accrued liabilities | 172 |  |
| Due to intercompany |  | 9 |
| Customer deposits | 30 |  |
| Operating lease liability | 8 | 7 |
| Total current liabilities | 3363 | 3614 |
| Other liabilities | 84 |  |
| Operating lease liability | 72 | 74 |
| Total liabilities | $3519 | $3668 |

---

**15.** **Segment Information**

The Company applies ASC 280, *Segment Reporting*, in determining its reportable segments. The Company has adopted ASU) 2023-07, *Segment Reporting (Topic 280): Improvement to Reportable Segment Disclosures* (ASU 2023-07), which requires disclosure of incremental segment information on an annual and interim basis, primarily through enhanced disclosures of significant segment expenses. Operating segments are aggregated into a reportable segment if the operating segments have similar quantitative economic characteristics and if the operating segments are similar in the following qualitative characteristics: (i) nature of products and services; (ii) nature of production processes; (iii) type or class of customer for their products and services; (iv) methods used to distribute the products or provide services; and (v) if applicable, the nature of the regulatory environment. The Company's reportable segments are identified based on the types of service performed. The Company has three reportable segments: Cryptocurrency Mining, Data Center Hosting, and High-Performance Computing. In the third quarter of 2024, the Company initiated Soluna Cloud Services, a new business line to provide high performance computing services to support generative AI workstreams, but decided to exit active provision of these services during the first quarter of 2025 and will focus in the future on provision of colocation services at our datacenters to host customers in the AI generative space.

The guidance requires that segment disclosures present the measure(s) used by the Chief Operating Decision Maker ("CODM") to decide how to allocate resources and for purposes of assessing such segments' performance. The Company's CODM is composed of several members of its senior leadership team directed by the CEO and CFO who use revenue and cost of revenues which formulate gross profit (loss), as well as total general and administrative expenses of the reporting segments to assess the performance of the business of our reportable operating segments and allocate resources. Operating profit (loss) is used to evaluate actual results against expectations, which are based on comparable prior results, current budget, and current forecast. Non-cash items of depreciation and amortization are included within both costs of sales and general and administrative expenses, however only depreciation through the Company's site levels are evaluated for segment performance.

In the adoption of ASU 2023-07, the most significant provision was for the Company to disclose significant segment expenses (ie: costs of revenue) that are regularly provided to the CODM. Utility costs, wages and benefit related costs, facility and equipment costs, and depreciation costs at the site level were determined to be significant segment expenses. The CODM only reviews general and administrative expenses by site level as a whole, and not by significant expenses. No operating segments have been aggregated to form the reportable segments. The Company does not allocate all assets to the reporting segments as these are managed on an entity-wide basis. Therefore, the Company does not separately disclose the total assets of its reportable operating segments.

The Cryptocurrency Mining segment generates revenue from the cryptocurrency the Company earns through its Bitcoin mining activities, which is currently generated from Project Dorothy, and previously from Project Sophie and Marie. The Data Center Hosting segment generated revenue from hosting services provided to third-party Bitcoin mining customers at the Company's data centers, which were previously at Project Marie and are currently from Project Sophie and Project Dorothy. The High-Performance Computing Services segment may generate revenue from either the sale or lease of HPC assets (such as Project Ada which leased GPUs), or from HPC/AI data centers to be leased to third-party HPC/AI customers. This segment began generating revenue in December 2024, as Project Ada worked to build its customer base. With the termination of the HPE Agreement, revenue was minimal for the six months ended June 30, 2025 and a majority of the costs associated with the termination of approximately $28.6 million were included in the December 31, 2024 financial statements.

The Company includes demand response revenue as a reconciling item of revenue and is not included within the three reportable segments. The Company utilizes its data centers to deliver demand response services to grid operators or utilities. Under these arrangements with a grid operator, the Company agrees to be available to ramp down a registered data center's power consumption to a specific target level. In exchange, the grid pays the company a fee for this dispatch right, provided the Company can perform within certain parameters. The Company can be providing any type of service at the data centers whether it be Cryptocurrency Mining, Data Center Hosting, or AI to generate demand response service revenue.

The following table details revenue, cost of revenues, and other operating costs for the Company's reportable segments for three months ended June 30, 2025 and 2024, and reconciles to net income (loss) on the consolidated statements of operations:

**Schedule of Segment Reporting Information**

**For the three months ended June 30, 2025**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Cryptocurrency<br> Mining** | **Data Center<br> Hosting** | **High-<br> Performance<br> Computing<br> Services** | **Total** |
| Segment Revenue: Revenue from external customers | $2861 | $3136 | $- | $5997 |
| &nbsp;&nbsp;&nbsp;*Reconciliation of revenue* |  |  |  |  |
| Demand response revenue (a) |  |  |  | 161 |
| &nbsp;&nbsp;&nbsp;Total consolidated revenue |  |  |  | 6158 |
| Less: Segment cost of revenue |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Utility costs | 1278 | 471 |  | 1749 |
| &nbsp;&nbsp;&nbsp;Wages, benefits, and employee related costs | 203 | 531 |  | 734 |
| &nbsp;&nbsp;&nbsp;Facilities and Equipment costs | 250 | 521 |  | 771 |
| &nbsp;&nbsp;&nbsp;Cost of revenue- depreciation | 1074 | 512 |  | 1586 |
| &nbsp;&nbsp;&nbsp;Other cost of revenue\* | 148 | 364 | - | 512 |
| &nbsp;&nbsp;&nbsp;Total segment cost of revenue | 2953 | 2399 |  | 5352 |
| &nbsp;&nbsp;&nbsp;General and administrative expenses | 40 | 94 | 110 | 244 |
| &nbsp;&nbsp;&nbsp;Impairment on fixed assets | - | 12 | - | 12 |
| &nbsp;&nbsp;&nbsp;**Segment operating income (loss)** | $(132) | $631 | $(110) | $389 |

---

**For the three months ended June 30, 2024**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Cryptocurrency<br> Mining** | **Data Center<br> Hosting** | **High-<br> Performance<br> Computing<br> Services** | **Total** |
| Segment Revenue: Revenue from external customers | $4484 | $4898 | $- | $9382 |
| &nbsp;&nbsp;&nbsp;*Reconciliation of revenue* |  |  |  |  |
| Demand response revenue (a) |  |  |  | 293 |
|  |  |  |  | 9675 |
| Less: Segment cost of revenue |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Utility costs | 1322 | 1363 |  | 2685 |
| &nbsp;&nbsp;&nbsp;Wages, benefits, and employee related costs | 190 | 468 |  | 658 |
| &nbsp;&nbsp;&nbsp;Facilities and Equipment costs | 336 | 323 |  | 659 |
| &nbsp;&nbsp;&nbsp;Cost of revenue- depreciation | 1065 | 441 |  | 1506 |
| &nbsp;&nbsp;&nbsp;Other cost of revenue\* | 127 | 92 | - | 219 |
| &nbsp;&nbsp;&nbsp;Total segment cost of revenue | 3040 | 2687 |  | 5727 |
| &nbsp;&nbsp;&nbsp;General and administrative expenses | 106 | 146 | 58 | 310 |
| &nbsp;&nbsp;&nbsp;Impairment on fixed assets | - | - | - | - |
| &nbsp;&nbsp;&nbsp;**Segment operating income** | $1338 | $2065 | $(58) | $3345 |

---

(a) Demand response service revenue is included as a reconciling item of total revenue and not included as part of segment gross profit or loss**.**

**\*** Other cost of revenue includes insurance, outside service costs and margins, and general costs**.**

The following table presents the reconciliation of segment operating income (loss) to net income (loss) before taxes:

---

| | | |
|:---|:---|:---|
|  | **For the three months ended June 30,** | **For the three months ended June 30,** |
|  | **2025** | **2024** |
| **Segment operating income** | $389 | $3345 |
| **Reconciling Items:** |  |  |
| &nbsp;&nbsp;&nbsp;Elimination of intercompany costs | 381 | 162 |
| &nbsp;&nbsp;&nbsp;Other revenue (a) | 161 | 293 |
| &nbsp;&nbsp;&nbsp;General and administrative, exclusive of depreciation and amortization (b) | (5152) | (5072) |
| &nbsp;&nbsp;&nbsp;General and administrative, depreciation and amortization | (2403) | (2403) |
| &nbsp;&nbsp;&nbsp;Interest expense | (1196) | (449) |
| &nbsp;&nbsp;&nbsp;Loss on debt extinguishment and revaluation, net |  | (5600) |
| &nbsp;&nbsp;&nbsp;Loss on sale of fixed assets | (22) | (21) |
| &nbsp;&nbsp;&nbsp;Other expense, net | (546) | (49) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net loss before taxes | $(8388) | $(9794) |

---

(a) Demand
 response service revenue is included as a reconciling item of total revenue and not included as part of segment gross profit or loss

(b) The
 reconciling general and administrative expense, exclusive of depreciation and amortization represent corporate and unallocated general
 and administrative expenses for the three months ended June 30, 2025 and 2024.

The following table details revenue, cost of revenues, and other operating costs for the Company's reportable segments for six months ended June 30, 2025 and 2024, and reconciles to net income (loss) on the consolidated statements of operations:

**For the six months ended June 30, 2025**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Cryptocurrency<br> Mining** | **Data Center<br> Hosting** | **High-<br> Performance<br> Computing<br> Services** | **Total** |
| Segment Revenue: Revenue from external customers | $5860 | $5538 | $28 | $11426 |
| &nbsp;&nbsp;&nbsp;*Reconciliation of revenue* |  |  |  |  |
| Demand response revenue (a) |  |  |  | 668 |
| &nbsp;&nbsp;&nbsp;Total consolidated revenue |  |  |  | 12094 |
| Less: Segment cost of revenue |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Utility costs | 2690 | 861 |  | 3551 |
| &nbsp;&nbsp;&nbsp;Wages, benefits, and employee related costs | 421 | 1001 | 7 | 1429 |
| &nbsp;&nbsp;&nbsp;Facilities and Equipment costs | 457 | 886 |  | 1343 |
| &nbsp;&nbsp;&nbsp;Cost of revenue- <br>depreciation | 2147 | 913 |  | 3060 |
| &nbsp;&nbsp;&nbsp;Other cost of revenue\* | 288 | 508 | - | 796 |
| &nbsp;&nbsp;&nbsp;Total segment cost of revenue | 6003 | 4169 | 7 | 10179 |
| &nbsp;&nbsp;&nbsp;General and administrative expenses | 55 | 175 | 269 | 499 |
| &nbsp;&nbsp;&nbsp;Impairment on fixed assets | - | 12 | - | 12 |
| &nbsp;&nbsp;&nbsp;**Segment operating income (loss)** | $(198) | $1182 | $(248) | $736 |

---

**For the six months ended June 30, 2024**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Cryptocurrency<br> Mining** | **Data Center<br> Hosting** | **High-<br> Performance<br> Computing<br> Services** | **Total** |
| Segment Revenue: Revenue from external customers | $10880 | $10176 | $- | $21056 |
| &nbsp;&nbsp;&nbsp;*Reconciliation of revenue* |  |  |  |  |
| Demand response revenue (a) |  |  |  | 1168 |
|  |  |  |  | 22224 |
| Less: Segment cost of revenue |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Utility costs | 2699 | 2720 |  | 5419 |
| &nbsp;&nbsp;&nbsp;Wages, benefits, and employee related costs | 381 | 927 |  | 1308 |
| &nbsp;&nbsp;&nbsp;Facilities and Equipment costs | 511 | 622 |  | 1133 |
| &nbsp;&nbsp;&nbsp;Cost of revenue- depreciation | 2152 | 877 |  | 3029 |
| &nbsp;&nbsp;&nbsp;Other cost of revenue\* | 304 | 309 | - | 613 |
| &nbsp;&nbsp;&nbsp;Total segment cost of revenue | 6047 | 5455 |  | 11502 |
| &nbsp;&nbsp;&nbsp;General and administrative expenses | 107 | 153 | 58 | 318 |
| &nbsp;&nbsp;&nbsp;Impairment on fixed assets | 130 | - | - | 130 |
| &nbsp;&nbsp;&nbsp;**Segment operating income (loss)** | $4596 | $4568 | $(58) | $9106 |

---

(a) Demand response service revenue is included as a reconciling item of total revenue and not included as part of segment gross profit or loss**.**

**\*** Other cost of revenue includes insurance, outside service costs and margins, and general costs**.**

The following table presents the reconciliation of segment operating income (loss) to net income (loss) before taxes:

---

| | | |
|:---|:---|:---|
|  | **For the six months ended June 30,** | **For the six months ended June 30,** |
|  | **2025** | **2024** |
| **Segment operating income** | $736 | $9106 |
| **Reconciling Items:** |  |  |
| &nbsp;&nbsp;&nbsp;Elimination of intercompany costs | 446 | 322 |
| &nbsp;&nbsp;&nbsp;Other revenue (a) | 668 | 1168 |
| &nbsp;&nbsp;&nbsp;General and administrative, exclusive of depreciation and amortization (b) | (10845) | (9060) |
| &nbsp;&nbsp;&nbsp;General and administrative, depreciation and amortization | (4807) | (4805) |
| &nbsp;&nbsp;&nbsp;Interest expense | (2034) | (873) |
| &nbsp;&nbsp;&nbsp;Gain (loss) on debt extinguishment and revaluation, net | 551 | (8698) |
| &nbsp;&nbsp;&nbsp;Loss on sale of fixed assets | (22) | (21) |
| &nbsp;&nbsp;&nbsp;Other expense, net | (860) | (25) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net loss before taxes | $(16167) | $(12886) |

---

(a) Demand
 response service revenue is included as a reconciling item of total revenue and not included as part of segment gross profit or loss

(b) The
 reconciling general and administrative expense, exclusive of depreciation and amortization represent corporate and unallocated general
 and administrative expenses for the six months ended June 30, 2025 and 2024.

***Concentrations***

During the three months ended June 30, 2025 and June 30, 2024, aside from the Bitcoin Mining revenue generated as a result of the Company's participation in a mining pool and the Company's participation in the demand response program, three customers each contributed more than 10% of the Company's total consolidated revenue constituting approximately 40% for the three months ended June 30, 2025 and two customers contributed more than 10% of the Company's total consolidated revenue constituting approximately 41% of the Company's total consolidated revenue for the three months ended June 30, 2024.

During the six months ended June 30, 2025 and June 30, 2024, aside from the Bitcoin Mining revenue generated as a result of the Company's participation in a mining pool and the Company's participation in the demand response program, three customers each contributed more than 10% of the Company's total consolidated revenue constituting approximately 37% for the six months ended June 30, 2025 and two customers contributed more than 10% of the Company's total consolidated revenue constituting approximately 36% of the Company's total consolidated revenue for the six months ended June 30, 2024.

For the three and six months ended June 30, 2025 and 2024, all of the Company's cryptocurrency mining revenue was generated from Project Dorothy 1B (data center located in Silverton, Texas).

For the three months ended June 30, 2025 and June 30, 2024, approximately 53% and 73% of the Company's data center hosting revenue was generated from Project Dorothy 1A, 40% and 27% from Project Sophie, and 7% and 0% from Project Dorothy 2, respectively. For the six months ended June 30, 2025 and June 30, 2024, approximately 55% and 70% of the Company's data center hosting revenue was generated from Project Dorothy 1A, 41% and 30% from Project Sophie, and 4% and 0% from Project Dorothy 2, respectively.

**16.** **Subsequent Events**

 

*July 2025 Public Offering*

On July 15, 2025, the Company entered into a securities purchase agreement with the purchasers signatory thereto, pursuant to which the Company sold in a public offering (the "July 2025 Offering") an aggregate of (i) 8,794,544 shares of common stock (each a "Share" and collectively, the "Shares"); (ii) pre-funded warrants (the "Pre-Funded Warrants") to purchase 296,365 shares of common stock; (iii) Series A warrants (the "Series A Warrants") to purchase 9,090,909 shares of common stock; and (iv) Series B warrants (the "Series B Warrants," and together with the Series A Warrants, the "Common Warrants") to purchase 9,090,909 shares of common stock.

Each Share or Pre-Funded Warrant was sold together with one Series A Warrant to purchase one Share and one Series B Warrant to purchase one Share. The combined public offering price for each Share (or Pre-Funded Warrant) and accompanying Common Warrants was $0.55. The Pre-Funded Warrants have an exercise price of $0.001 per share, are exercisable immediately upon issuance and will expire when exercised in full. Each Common Warrant has an exercise price of $0.55 per share and is exercisable immediately upon issuance. The Series A Warrants will expire on the five-year anniversary of the initial exercise date of July 17, 2025 and the Series B Warrants will expire on the twenty-four-month anniversary of the initial exercise date of July 17, 2025.

The net proceeds of the July 2025 Offering, after deducting the fees and expenses of the placement agent and other offering expenses payable by the Company, but excluding the net proceeds, if any, from the exercise of the Common Warrants, is approximately $4.3 million. The July 2025 Offering closed on July 17, 2025.

*Project Kati Financing*

 

On July 22, 2025, the Company closed a $20 million round of financing from Spring Lane Capital for a 35 megawatt (MW) expansion of Project Kati in Texas with Project Kati 1. The funds will be used for the construction of Project Kati 1 beginning in the third quarter of 2025.

*Chief Financial Officer Resignation and Appointment*

 

On August 5, 2025, John Tunison, the Company's Chief Financial Officer, notified the Company that, effective August 21, 2025, he will resign from his position as Chief Financial Officer and Treasurer of the Company. In connection with Mr. Tunison's resignation, on August 8, 2025, David C. Michaels, a member of the Company's Board of Directors, was appointed as the Company's interim Chief Financial Officer and Treasurer, effective August 21, 2025.

**Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations**

*Unless the context requires otherwise in these condensed consolidated financial statements, the terms "SHI," "Soluna," the "Company," "we," "us," and "our" refer to Soluna Holdings, Inc. together with its consolidated subsidiaries, "SDI" refers to Soluna Digital, Inc. "SCI" refers to Soluna Computing, Inc., formerly known as EcoChain, Inc., "Soluna Cloud" or "Cloud" refer to Soluna Cloud, Inc., and "SEI" refers to Soluna Energy, Inc. Other trademarks, trade names, and service marks used in this Quarterly Report on Form 10-Q are the property of their respective owners.*

*The following discussion of our financial condition and results of operations should be read in conjunction with the Condensed Consolidated Financial Statements and the related notes thereto included in Item 1 of Part I of this Quarterly Report on Form 10-Q and the audited Consolidated Financial Statements and the related notes thereto and Management's Discussion and Analysis of Financial Condition and Results of Operations for the year ended December 31, 2024 contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, as filed with the Securities and Exchange Commission (the "SEC") on March 31, 2025 (the "Annual Report").*

*In addition to historical information, the following discussion contains forward-looking statements, which involve risk and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements. Important factors that could cause actual results to differ include those set forth in Part I Item 1A-Risk Factors in our Annual Report and elsewhere in this Quarterly Report on Form 10-Q. Readers should not place undue reliance on our forward-looking statements. These forward-looking statements speak only as of the date on which the statements were made and are not guarantees of future performance. Except as may be required by applicable law, we do not undertake or intend to update any forward-looking statements after the date of this Quarterly Report on Form 10-Q. Please see "Statement Concerning Forward-Looking Statements" below.*

**Overview and Recent Developments**

Our mission is to make renewable energy a global superpower using computing as a catalyst.

We develop and operate digital infrastructure that taps into a growing global opportunity: the convergence of renewable energy and High-Performance Computing (HPC). We call this model **Renewable Computing™**.

Across the world, vast amounts of clean energy go to waste due to curtailment. At the same time, there is a critical shortage of power for energy-intensive infrastructure like AI, HPC, and Bitcoin mining. Renewable Computing™ bridges this gap—unlocking stranded renewable energy and turning it into scalable computing power.

We build, own or co-own, and operate data centers co-located with wind, solar, and hydroelectric plants. Our modular and scalable design supports high-throughput, batchable applications such as Bitcoin, and soon, HPC/AI workloads. These facilities are managed by **MaestroOS™**, our proprietary operating system ("MaestroOS"), which continuously analyzes signals like local power pricing, weather, grid demand, and market conditions to optimize performance and economics.

This intelligent orchestration enables long-term asset monetization and attractive returns on invested capital. Our approach is purpose-built for the energy transition. We specialize in curtailment solutions, working closely with leading renewable energy developers to access underutilized, low-cost power. Our behind-the-meter model allows us to draw energy directly from the plant or the grid, while also providing demand response services—reducing costs and enhancing grid resilience.

A key strategic advantage is our model of co-locating data centers directly with renewable power generation assets. By building behind the meter, we are able to bypass long interconnection queues and source electricity directly from the generation site. This structure not only improves power economics, but also accelerates time-to-market—an increasingly important factor for companies with large, time-sensitive computing workloads such as AI and HPC.

With a repeatable strategy and a growing pipeline of projects, we are scaling a new category of digital infrastructure—one that energizes the grid, lowers computing costs, and advances a more sustainable future.

We operate across multiple business lines and generate revenue from four primary sources, as described below:

● **Bitcoin Mining Business –** We mine Bitcoin through proprietary operations and joint ventures located at our data centers.

● **Bitcoin Hosting Business** – We provide hosting services to third-party Bitcoin mining customers at our data centers.

● **High Performance Computing (HPC) Business** – We offer colocation and hosting services for companies seeking to train large language models (LLMs), fine-tune existing artificial intelligence models, and deploy other compute-intensive AI or HPC workloads.

● **Demand Response Business** – We leverage our data center infrastructure to provide demand response services to grid operators.

![](form10-q_001.jpg)

In 2024, our execution strategy was centered around four key initiatives:

&nbsp;&nbsp;&nbsp;&nbsp;1. **Project Optimization** – Enhancing the profitability, operational efficiency, and customer mix of our operating data centers, while
 improving overall customer satisfaction.

2. **Pipeline Expansion** – Increasing the number of curtailment assessments completed with power partners, advancing more projects to
 shovel-ready status, and executing additional project term sheets.

3. **Launch AI** – Initiating the entry into the AI market, by starting project development activities focused on supporting artificial
 intelligence workloads, and the formation of strategic partnerships with major HPC original equipment manufacturers.

4. **Capital Formation** – Pursuing financing opportunities to support key growth initiatives, including Project Dorothy 2 ("D2")
 and Project Kati.

***Revenue Sources***

*Bitcoin Mining Business*

We engage in proprietary Bitcoin mining, a process that verifies transactions and secures the Bitcoin blockchain. This process involves the use of specialized computing equipment to solve complex cryptographic algorithms. Miners compete to solve these algorithms; the first to do so is awarded a predetermined number of newly issued Bitcoins (the "Block Reward") and any transaction fees associated with that block.

We participate in one or more mining pools—collaborative networks of miners who combine computing power to improve the probability of earning rewards. Block Rewards earned by the pool are distributed among participants based on each member's proportional contribution. This model helps reduce revenue volatility compared to solo mining operations.

Our mining operations are energy-intensive and require significant computational resources. We operate data centers equipped with both proprietary and third-party hardware and software. Our proprietary data center operating system, **MaestroOS**, is used to optimize performance, manage power consumption, and increase operational efficiency.

Revenue from Bitcoin mining consists of Block Rewards and transaction fees and is recognized upon receipt in accordance with applicable accounting guidance. Upon receipt, all digital assets are promptly converted into U.S. dollars through the Coinbase cryptocurrency exchange.

The profitability of this business is affected by several variables, including the market price of Bitcoin, global network hash rate, mining difficulty, electricity and infrastructure costs, and mining pool fees. In addition, Bitcoin undergoes a periodic "halving" event approximately every four years, reducing the Block Reward and potentially impacting future revenue. For the three and six months ended June 30, 2025, our Bitcoin Mining Business represented approximately 46% and 48% of total revenue. For the three and six months ended June 30, 2024, our Bitcoin Mining Business represented approximately 46% and 49% of total revenue.

 

*Bitcoin Hosting Business*

We provide colocation and hosting services for third-party Bitcoin mining customers at our data centers. Customers contract space based on their power requirements. Our current customer base includes several large-scale ("Hyperscale") Bitcoin miners. Contracts typically range from 12 to 24 months in duration.

We offer two primary commercial structures:

&nbsp;&nbsp;&nbsp;&nbsp;1. **Fixed-Fee Model** – Customers pay a fixed fee based on the volume of energy consumed.

2. **Profit-Share Model** – Customers pay a share of the profits from their mining activity, with power costs passed through.

For the three and six months ended June 30, 2025, our Bitcoin Hosting Business accounted for approximately 51% and 46% of total revenue. For the three and six months ended June 30, 2024, our Bitcoin Hosting Business accounted for approximately 51% and 46% of total revenue. Revenue in the Bitcoin Hosting Business was concentrated among a small number of customers. For the three months ended June 30, 2025, three customers made up approximately 79% of hosting revenue and 40% of total revenue. For the six months ended June 30, 2025, three customers made up approximately 80% of hosting revenue and 37% of total revenue.

*High Performance Computing (HPC) Business*

In June 2024, we began providing GPU-as-a-Service in partnership with Hewlett Packard Enterprise Company ("HPE"), offering GPU resources to startups, enterprises, and GPU marketplaces for a fee. As further described in our Annual Report, we terminated our agreement with HPE.

We are currently developing new infrastructure projects intended to support AI and HPC workloads. These efforts include engagement with potential joint venture partners, conducting site and feasibility studies, securing access to power and land, and performing other early-stage development activities.

Our first planned AI/HPC colocation project is **Project Kati**, which is in advanced development. Additional projects, including the announced **Project Rosa**, are also in progress. For the fiscal year 2024 and the six months ended June 30, 2025, we generated minimal revenue from our HPC Business.

*Demand Response Business*

We provide demand response services to grid operators and utilities by leveraging our data centers as dispatchable energy resources. In select states where we operate, our data centers are enrolled in ancillary services programs that support grid reliability.

Under these programs, we commit to reducing a facility's power consumption to a predetermined level when called upon by the grid operator. In return, we receive compensation for maintaining this dispatch capability, provided we meet specific performance criteria. For example, to qualify for compensation in a given period—typically monthly—the data center must meet minimum uptime and availability requirements.

For the three and six months ended June 30, 2025, our Demand Response Business represented approximately 3% and 6% of total revenue. For the three and six months ended June 30, 2024, our Demand Response Business represented approximately 3% and 5% of total revenue.

***Operations and Project Pipeline***

As of June 30, 2025, we operate approximately 91 MW of capacity across two active sites located in Murray, Kentucky and Silverton, Texas. An additional 32 MW is under construction at our D2 project site, and as of June 30, 2025, we had over 650 MW of facilities in advanced development or near shovel-ready status. In total, our project pipeline includes over 2.8 gigawatts (GW) of renewable energy-powered data center developments.

A summary of our pipeline, current and anticipated operating locations are as follows (as of June 30, 2025):

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Project Name** | **Location** | **MW** | **Status** | **Line of Business** | **Power Source** |
| **Sophie** | Murray, KY | 25 | Operating | Bitcoin Hosting | Grid / Hydro |
| **Dorothy 1A** | Silverton, TX | 25 | Operating | Bitcoin Hosting | Wind |
| **Dorothy 1B** | Silverton, TX | 25 | Operating | Bitcoin Mining | Wind |
| **Dorothy 2** | Silverton, TX | 16/32 | Operating/ In Construction | Bitcoin Hosting | Wind |
| **Grace** | Silverton, TX | 2 | Development | HPC | Wind |
| **Kati** | Willacy County, TX | 166 | Development | Bitcoin Hosting / AI or HPC | Wind |
| **Rosa** | Snyder, TX | 187 | Development | Bitcoin Hosting / AI or HPC | Wind |
| **Hedy** | Cameron County, TX | 120 | Development | Bitcoin Hosting / AI or HPC | Wind |
| **Ellen** | Cameron County, TX | 100 | Development | Bitcoin Hosting / AI or HPC | Wind |
| **Annie** | Lamar, TX | 75 | Development | Bitcoin Hosting / AI or HPC | Solar |

---

We manage our data center operations using **MaestroOS.** MaestroOS continuously monitors and analyzes a variety of real-time signals, including local electricity prices, weather conditions, Bitcoin market metrics, and grid demand signals, to optimize facility performance. In addition, MaestroOS is used to coordinate and execute our participation in demand response programs.

We finance the development and construction of our data centers through a combination of public equity offerings, debt instruments, and partnerships with project-level capital providers. As of June 30, 2025, we had two primary project-level financing partners:

● **Spring Lane Capital ("SLC")** – A private venture capital firm with approximately $450 million in assets under management, focused on sustainability-oriented infrastructure. On May 3, 2022, SLC committed $35 million to finance Soluna's Project Dorothy 1A ("D1A"). On July 22, 2024, SLC committed an additional $30 million to support the development of D2. On July 22, 2025, SLC committed $20.0 million for the first phase of the construction on Project Kati, subject to customary conditions.

● **Navitas West Texas Investments SPV, LLC ("Navitas")** – an investment vehicle organized by Navitas Global, a private equity firm focused on sustainable Bitcoin mining. On May 9, 2023, we entered into a strategic partnership with Navitas to support mining operations at Project Dorothy 1B ("D1B").

**Project Dorothy**

During 2023, we transitioned our flagship data center Project Dorothy from construction to operations. This data center is co-located with Briscoe Wind Farm ("Briscoe"), a 150 MW wind power generation facility in Silverton, Texas. The project comprises three phases, D1A and D1B (each 25 MW facilities), and D2 (48 MW facility).

*Project Dorothy 1A*

D1A is focused on Bitcoin Hosting for industry hyperscale miners. There are approximately 7,800 Bitcoin miners installed at D1A, which as of June 30, 2025, resulted in a hashrate of approximately 900 TH/s. For the year ended December 31, 2024, D1A consumed over 45,700 MWh of Curtailed Energy and for the three and six months ended June 30, 2025, D1A consumed over 12,100 and 24,000 MWh of Curtailed Energy.

D1A was constructed in partnership with SLC, a leading venture capital firm focused on sustainability solutions. SLC owns approximately 85% of the Class B Membership Units of D1A, while we own 15% of the Class B Membership Units of D1A and own 100% of the Class A Membership Units of D1A. After SLC achieves an 18% Internal Rate of Return hurdle, Soluna retains 50% of the profits on D1A.

 

*Project Dorothy 1B*

D1B is focused on proprietary Bitcoin Mining. There are approximately 6,900 Bitmain Antminer S19s, S19j Pro and S19j Pro+ machines installed, resulting in an installed hashrate of 817 PH/s. For the year ended December 31, 2024, D1B consumed over 44,500 MWh of Curtailed Energy and for the three and six months ended June 30, 2025, D1B consumed over 11,300 MWh and 24,400 MWh of Curtailed Energy. D1B is co-owned by Navitas, which owns approximately 49% of D1B, while we own the remaining 51%.

In November 2023, we completed registration of Project Dorothy in one of the ERCOT's Demand Response Services ("DRS") programs. This designation positioned Project Dorothy as a contributor to grid flexibility and resilience in the Texas power market, while also enabling us to diversify our revenue streams.

Under the DRS program, we commit to maintaining a specified level of curtailment capacity—measured as load reduction availability—on a monthly basis. When called upon by ERCOT, we are required to reduce the facility's power consumption by the committed amount. In exchange, we receive compensation for maintaining this curtailment readiness, regardless of whether an actual dispatch occurs.

Participation in the program allows us to generate incremental revenue and offset power costs at Project Dorothy, enhancing its cost-efficiency. As a result, the facility ranks among the lowest-cost operators in the sector. Since registration, Project Dorothy has successfully fulfilled its obligations in the Winter, Spring, and Summer DRS periods, and is currently enrolled in the Fall standby period.

*Project Dorothy 2*

We began planning for the 48 MW expansion of Project Dorothy in 2023 – known as Project Dorothy 2. We partnered with SLC who agreed to finance up to $30 million of the project cost. We closed the initial financing contribution and operation agreement with SLC in July 2024 and broke ground in the third quarter of 2024. Initial energization and ramp-up began as of May 2025. This has enabled the commencement of the commissioning of the first of 3 phases, each of 16MW, that began in May 2025 and is expected to continue through October 2025 when the site is expected to be fully operational. As each phase is commissioned, it will begin to generate revenue, both due to Bitcoin Hosting and Demand Response Services. D2 features a superior financial waterfall structure and enhanced management and development fees for Soluna compared to D1A, allowing us to benefit from improved income once the facility is operational.

**Project Grace**

Project Grace is a 2 MW project located at the D2 site focused on next generation data center designs for AI. It contemplates new direct liquid cooling technologies, proprietary building and power designs – called Helix.

**Project Sophie**

Project Sophie is a 25 MW data center, based in Murray, Kentucky connected to the grid ("Sophie"). The project has a Power Purchase Agreement ("PPA") that requires the curtailment of the site during certain hours of the day to help balance the Kentucky grid. We own 100% of the facility, which was completed in 2021.

Sophie is focused on Bitcoin Hosting of multiple large customers. The data center generates revenue via a combination of fixed services fees and profit share, while energy cost is passed through. As of June 30, 2025, there are approximately 9,480 Bitcoin miners installed or contracted to be installed, resulting in an installed hashrate of approximately 1.24 EH/s and achieved a PUE of 1.03.

**Project Kati**

We are developing Project Kati in Willacy County, Texas, which is expected to be developed into 166 MW (broken out in 2 phases) of data centers for HPC, Bitcoin Hosting and other computing-intensive applications. It is co-located with a 272.6MW wind farm. We have completed the necessary studies for the ERCOT planning phase, which is the last formal step to secure approvals by regulatory agencies or grid operators, such as ERCOT in Texas, to proceed with project construction and commissioning. We have completed the necessary amendments to the interconnection agreements with American Electric Power, the transmission service provider. We have secured land, contingent on reaching final agreement with local government and schools regarding taxation, for the project and have started capital formation activities. On July 22, 2025, we finalized a contribution agreement from SLC for the first 35 MW of the 83 MW phase of Kati 1 with the goal of achieving initial energization by the first quarter of 2026.

**Project Rosa**

We are developing Project Rosa in Snyder, Texas, which is expected to be up to 187 MW of data center capacity for AI and Bitcoin Hosting and other computing-intensive applications. It will be co-located with a 242.5 MW wind farm. We have signed term sheets for both power and land purchase agreements in connection with this project.

 ****

***Our Growth Strategy***

Our growth strategy is focused on expanding our pipeline of renewable energy-powered data center projects and accelerating their development through joint ventures, co-ownership structures, and other strategic partnerships. Over time, we intend to increase our ownership stake in these projects to enhance long-term value.

We believe our renewable energy project pipeline—currently estimated at over 2.8 gigawatts (GW)—represents our most valuable strategic asset. We believe this pipeline has the potential to support the development of approximately 300 to 400 MW of new digital infrastructure annually over the next six to eight years.

In parallel with new project development, we are refining our operational model across existing sites to position ourselves as a partner of choice for both AI/HPC colocation and Bitcoin Hosting.

We continue to grow our pipeline by increasing the number of curtailment assessments completed with power generation partners. These assessments serve as a precursor to securing exclusive Power Purchase Agreements ("PPAs"), acquiring or leasing land, and executing other pre-construction development activities necessary to advance projects to shovel-ready status.

In 2025, we are focused on advancing the following key initiatives:

● **Power Pipeline Expansion** – Increasing the number of curtailment assessments completd with power partners, advancing more projects to shovel-ready status, and executing additional project term sheets.

● **AI Infrastructure Development** – Form partnerships to harness the value of our considerable and growing pipeline by developing AI/HPC data center joint ventures. Building governance, advisory and employee AI/HPC expertise in support of expected growth strategy.

● **Project Optimization** – Energize Project Dorothy 2, and enhancing the profitability, operational efficiency, and customer mix of our operational data centers, while improving overall customer satisfaction.

● **Capital Formation** – Pursuing financing opportunities to support key growth initiatives, including Projects Kati and Rosa. Leveraging strength of project cash flows to refinance and/ or pull forward value of existing projects and to deploy debt financing in new projects.

**Recent Developments**

*Chief Financial Officer Resignation and Appointment*

 

On August 5, 2025, John Tunison, the Company's Chief Financial Officer, notified the Company that, effective August 21, 2025, he will resign from his position as Chief Financial Officer and Treasurer of the Company. In connection with Mr. Tunison's resignation, on August 8, 2025, David C. Michaels, a member of the Company's Board of Directors, was appointed as the Company's interim Chief Financial Officer and Treasurer, effective August 21, 2025.

 

*Project Kati Financing*

 

On July 22, 2025, the Company closed a $20 million round of financing from Spring Lane Capital for a 35 megawatt (MW) expansion of Project Kati in Texas with Project Kati 1. The funds will be used for the construction of Project Kati 1 beginning in the third quarter of 2025.

*July 2025 Public Offering*

On July 15, 2025, the Company entered into a securities purchase agreement with the purchasers signatory thereto, pursuant to which the Company sold in a public offering (the "July 2025 Offering") an aggregate of (i) 8,794,544 shares of common stock (each a "Share" and collectively, the "Shares"); (ii) pre-funded warrants (the "Pre-Funded Warrants") to purchase 296,365 shares of common stock; (iii) Series A warrants (the "Series A Warrants") to purchase 9,090,909 shares of common stock; and (iv) Series B warrants (the "Series B Warrants," and together with the Series A Warrants, the "Common Warrants") to purchase 9,090,909 shares of common stock,.

Each Share or Pre-Funded Warrant was sold together with one Series A Warrant to purchase one Share and one Series B Warrant to purchase one Share. The combined public offering price for each Share (or Pre-Funded Warrant) and accompanying Common Warrants was $0.55. The Pre-Funded Warrants have an exercise price of $0.001 per share, are exercisable immediately upon issuance and will expire when exercised in full. Each Common Warrant has an exercise price of $0.55 per share and is exercisable immediately upon issuance. The Series A Warrants will expire on the five-year anniversary of the initial exercise date and the Series B Warrants will expire on the twenty-four-month anniversary of the initial exercise date.

The net proceeds of the July 2025 Offering, after deducting the fees and expenses of the placement agent, and other offering expenses payable by the Company, but excluding the net proceeds, if any, from the exercise of the Common Warrants, is approximately $4.3 million. The July 2025 Offering closed on July 17, 2025.

 ****

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***ATM Agreement***

On April 29, 2025, the Company entered into an At the Market Offering Agreement (the "ATM Agreement") with H.C. Wainwright & Co., LLC ("Wainwright"), as sales agent, pursuant to which the Company may offer and sell, from time to time, through Wainwright, up to $3.75 million of shares of common stock. The Company will pay Wainwright a commission of 3.0% of the aggregate gross proceeds from each sale of shares and has agreed to provide Wainwright with customary indemnification and contribution rights.

During the three months ended June 30, 2025, the Company sold 3,340,663 shares of common stock pursuant to the ATM Agreement for net proceeds of $2.2 million after deducting sales agent commissions of approximately $88 thousand. The Company has sold 1,867,824 shares of common stock pursuant to the ATM Agreement subsequent to June 30, 2025 for additional net proceeds of approximately $1.4 million.

The shares of common stock sold under the ATM Agreement are offered and sold pursuant to the Company's effective shelf registration statement on Form S-3 (File No. 333-286638) filed by the Company with the U.S. Securities and Exchange Commission (the "SEC") on April 18, 2024, and declared effective by the SEC on April 29, 2025.

Project Specific Developments

**Project Hedy**

We have signed a term sheet for power for Project Hedy, a new 120 MW data center co-located with a 200 MW wind farm in South Texas. The wind farm is owned by a new power partner–a multinational conglomerate that focuses on developing and managing sustainable infrastructure solutions, with a strong emphasis on renewable energy, water management, and services, aiming to contribute to a low-carbon economy and a better planet.

**Project Ellen**

We have signed a term sheet for power for Project Ellen, a new 100 MW data center co-located with a 145 MW wind farm in South Texas. The wind farm is owned by a new power partner—a leader in renewable energy and sustainable infrastructure both in the U.S. and internationally. Project Ellen will be developed in two 50MW phases, leveraging wind energy to drive sustainable computing at scale.

***Project Annie***

We have signed a term sheet for power for Project Annie, a new 75 MW data center co-located with a 114 MW solar farm in Northeast Texas. The solar farm is owned by a new power partner–a leader in renewable energy and sustainable infrastructure both in the U.S. and internationally.

**Consolidated Results of Operations (unaudited)**

***Consolidated Results of Operations (unaudited) for the Three Months Ended June 30, 2025 Compared to the Three Months Ended June 30, 2024.***

 

The following table summarizes changes in the various components of our net loss during the three months ended June 30, 2025 compared to the three months ended June 30, 2024.

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| | | | | |
|:---|:---|:---|:---|:---|
| (Dollars in thousands) | **Three months ended <br> June 30, 2025** | **Three months ended <br> June 30, 2024** | **$**<br> **Change** | **%**<br> **Change** |
| Cryptocurrency mining revenue | $2861 | $4484 | $(1623) | (36)% |
| Data hosting revenue | 3136 | 4898 | (1762) | (36)% |
| Demand response service revenue | 161 | 293 | (132) | (45)% |
| Operating costs and expenses: |  |  |  |  |
| Cost of cryptocurrency mining revenue, exclusive of depreciation | 1767 | 1883 | (116) | (6)% |
| Cost of data hosting revenue, exclusive of depreciation | 1617 | 2176 | (559) | (26)% |
| Cost of cryptocurrency mining revenue- depreciation | 1074 | 1065 | 9 | 1% |
| Cost of data hosting revenue- depreciation | 512 | 441 | 71 | 16% |
| General and administrative expenses, exclusive of depreciation and amortization | 5397 | 5382 | 15 | -% |
| Depreciation and amortization associated with general and administrative expenses | 2403 | 2403 |  | -% |
| Impairment on fixed assets | 12 | - | 12 | 100% |
| Operating loss | (6624) | (3675) | (2949) | 80% |
| Other expense, net | (546) | (49) | (497) | 1014% |
| Interest expense | (1196) | (449) | (747) | 166% |
| Loss on sale of fixed assets | (22) | (21) | (1) | 5% |
| Loss on debt extinguishment and revaluation, net | - | (5600) | 5600 | (100)% |
| Loss before income taxes | (8388) | (9794) | 1406 | (14)% |
| Income tax benefit, net | 608 | 649 | (41) | (6)% |
| Net loss | (7780) | (9145) | 1365 | (15)% |
| Net (loss) income attributable to non-controlling interest, net | (398) | 1728 | (2126) | (123)% |
| Net loss attributable to Soluna Holdings, Inc. | $(7382) | $(10873) | $3491 | (32)% |

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The following table summarizes the balances for the project sites for cryptocurrency mining revenue, data hosting revenue, high-performance computing service revenue, demand response revenue, cost of cryptocurrency mining revenue, exclusive of depreciation, cost of data hosting revenue, exclusive of depreciation, cost of high-performance computing services, and cost of depreciation during the three months ended June 30, 2025:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Soluna Digital** | **Soluna Digital** | **Soluna Digital** | **Soluna Digital** | **Soluna Digital** | **Soluna Digital** |
| <br>(Dollars in thousands) | **Project<br> Dorothy<br> 1B** | **Project<br> Dorothy<br> 1A** | **Project<br> Dorothy<br> 2** | **Project<br> Sophie** | **Other** | **Total** |
| Cryptocurrency mining revenue | $2861 | $- | $- | $- | $- | $2861 |
| Data hosting revenue |  | 1653 | 210 | 1273 |  | 3136 |
| Demand response services | - | - | - | - | 161 | 161 |
| **Total revenue** | 2861 | 1653 | 210 | 1273 | 161 | 6158 |
| Cost of cryptocurrency mining, exclusive of depreciation | 1767 |  |  |  |  | 1767 |
| Cost of data hosting revenue, exclusive of depreciation |  | 851 | 346 | 420 |  | 1617 |
| Cost of cryptocurrency mining revenue- depreciation | 1074 |  |  |  |  | 1074 |
| Cost of data hosting revenue- depreciation | - | 274 | 136 | 102 | - | 512 |
| **Total cost of revenue** | 2841 | 1125 | 482 | 522 | - | 4970 |
| **Gross profit (loss)** | $20 | $528 | $(272) | $751 | $161 | $1188 |

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The following table summarizes the balances for the project sites for cryptocurrency mining revenue, data hosting revenue, high-performance computing service revenue, demand response revenue, cost of cryptocurrency mining revenue, exclusive of depreciation, cost of data hosting revenue, exclusive of depreciation, cost of high-performance computing services, and cost of depreciation during the three months ended June 30, 2024:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Soluna Digital** | **Soluna Digital** | **Soluna Digital** | **Soluna Digital** | **Soluna Digital** |
| <br>(Dollars in thousands) | **Project<br> Dorothy<br> 1B** | **Project<br> Dorothy<br> 1A** | **Project<br> Sophie** | **Other** | **Total** |
| Cryptocurrency mining revenue | $4484 | $- | $- | $- | $4484 |
| Data hosting revenue |  | 3567 | 1331 |  | 4898 |
| Demand response services | - | - | - | 293 | 293 |
| **Total revenue** | 4484 | 3567 | 1331 | 293 | 9675 |
| Cost of cryptocurrency mining, exclusive of depreciation | 1883 |  |  |  | 1883 |
| Cost of data hosting revenue, exclusive of depreciation |  | 1758 | 418 |  | 2176 |
| Cost of cryptocurrency mining revenue- depreciation | 1065 |  |  |  | 1065 |
| Cost of data hosting revenue- depreciation | - | 290 | 151 | - | 441 |
| **Total cost of revenue** | 2948 | 2048 | 569 | - | 5565 |
| **Gross profit** | $1536 | $1519 | $762 | $293 | $4110 |

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***Cryptocurrency Mining Revenue***: Cryptocurrency mining revenue decreased between the three months ended June 30, 2025 compared to the three months ended June 30, 2024 related to the Bitcoin halving event that occurred in April 2024, resulting in a $1.0 million decrease from price and a $583 thousand decrease due to volume driven primarily by aging of miners and higher curtailment in 2025 which resulted in fewer available hours.

***Data Hosting Revenue***: Cryptocurrency hosting services provide energized space and operating services to third-party mining companies who locate their mining hardware at our mining locations- D1A, D2 and Project Sophie. Services include fees for hosting the miners which could be fixed fees or profit sharing, as well as potential additional fees for services provided such as installation charges or other services fees. The decrease for the three months ended June 30, 2025 compared to the three months ended June 30, 2024 related mainly in December 2024, in which one of our largest customers who was on a fixed fee charge exited, and the replacement customers were on a profit-sharing fee structure,thereby causing a contract mix change.

***Demand Response Service***: Demand response service revenue was lower in the three months ended June 30, 2025 compared to the three months ended June, 2024 due to the fact that the capacity of MWs that we bid on were less due to known outages in the Texas area, as well as the aging of machines for D1B.

***Cost of Cryptocurrency Mining Revenue, exclusive of depreciation****:* Cost of cryptocurrency mining revenue includes direct utility costs, site overhead expenses, and overhead costs that relate to the operations of our cryptocurrency mining facilities in Kentucky and Texas.

The decrease in costs for the three months ended June 30, 2025 compared to three months ended June 30, 2024 relate mainly to slight decreases in operating and electricity costs due to slight decrease in electricity usage.

***Cost of Data Hosting Revenue, exclusive of depreciation:*** Cost of data hosting revenue includes utility charges, site overhead expenses, and other charges.

Cost of data hosting decreased for the three months ended June 30, 2025 compared to the three months ended June 30, 2024 mainly due to a change in hosting contracts mix, in which contracts were entered that included electricity passthrough contracts replacing fixed rate volume contracts.

***General and Administrative Expenses, exclusive of depreciation and amortization:*** General and administrative expenses, exclusive of depreciation and amortization include cash and non-cash compensation, benefits, and related costs in support of our general corporate operations, including general management, finance and accounting, human resources, marketing, information technology, corporate development, and legal services.

● Stock based compensation expense was $1.9 million for the three months ended June 30, 2025 compared to approximately $1.4 million in relation to the three months ended June 30, 2024, an increase of approximately $500 thousand. This increase primarily related to additional grants issued to directors and officers in June of 2025 and September and December of 2024 in addition to a change in the forfeiture rate from 10% to 5%. The increase was partially offset by grants that stopped vesting from prior years during the quarter and grants that had portion which immediately vested during the 2024 quarter.

● Salaries and benefits decreased approximately $175 thousand due to reduction in bonus expenses for 2025, offset with cost of living adjustment raises for management and employees.

● Provision for credit losses decreased approximately $264 thousand as no losses were noted in three months ended June 30, 2025 compared to the three months ended June 30, 2024.

● Investor relations decreased approximately $176 thousand in relation to fewer investor campaigns run in the current quarter over the prior quarter.

● Other changes in general and administrative expenses were not material.

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***Depreciation and Amortization associated with general and administrative expenses:*** Depreciation and amortization expense was comparable for the three months ended June 30, 2025 and three months ended June 30, 2024 in which the balances totaled approximately $2.4 million, respectively. The balances mainly related to amortization expense related to the strategic pipeline contract that was acquired in October 2021.

***Interest expense:*** Interest expense for the three months ended June 30, 2025 was approximately $1.2 million compared to the $449 thousand for the three months ended June 30, 2024. See table below noting the difference mainly relates to the new loans entered into in fiscal year 2024 and 2025 (June SPA, Galaxy Loan, and equipment loan), which includes amortization of deferred financing costs.

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| | | |
|:---|:---|:---|
| (Dollars in thousands) | **Three months ended**<br> **June 30,** | **Three months ended**<br> **June 30,** |
|  | **2025** | **2024** |
| NYDIG equipment financing | $361 | $361 |
| Navitas term loan |  | 37 |
| Green Cloud secured loan | 354 |  |
| Spring Lane financing cost | 121 |  |
| Galaxy loan | 236 |  |
| Equipment loan | 124 | 51 |
| **Interest expense** | $1196 | $449 |

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***Loss on Debt Extinguishment and Revaluation, net***: For the three months ended June 30, 2025, there was no gain or loss on extinguishment or revaluation of debt.

For the three months ended June 30, 2024, we had a loss on debt revaluation of approximately $5.6 million, which was in relation to approximately $4.0 million for the convertible notes, due to factors including assumptions on conversions and payouts, annual volatility, and stock price conditions on the dates of valuations compared to what the noteholders could convert at as of June 30, 2024. In addition, there was a $1.6 million loss on the valuation of a warrant liability. The warrant liability was ultimately reversed when Shareholder approval occurred on May 30, 2024, however, we needed to revalue the warrants as of May 30, 2024, which created a loss of approximately $1.6 million due to mainly changes in the stock price.

***Other expense, net:*** Other expense, net increased by approximately $497 thousand for the 3 months ended June 30, 2025 compared to June 30, 2024. For the three months ended June 30, 2025, we incurred a loss compensation cost of approximately $291 thousand in relation to the Las Majadas wind farm, and approximately $255 thousand financing expense mainly in relation to consent fees for the ATM Agreement draws, in addition to FINRA and SEC filing charges. For the three months ended June 30, 2024, other expense, net was approximately $49 thousand, related to an extension fee expense of approximately $325 thousand in relation to the Convertible Notes, offset with a gain on settlement of litigation with Atlas Technology Group LLC ("Atlas") of approximately $254 thousand, in addition to some small additional other income items.

***Net (loss) income attributable to non-controlling interest:*** We incurred a net loss attributable to non-controlling interest for the three months ended June 30, 2025 compared to a net income attributable to non-controlling interest for the three months ended June 30, 2024. The decrease related mainly due the variances in gross profit related to D1A and D1B noted above due to the halving event in April 2024 and the increase in profit sharing fees for data hosting for the three months ended June 30, 2025, which created an approximate $1.4 million variance between periods in non-controlling interest. In addition, in the second quarter of 2025, D2 began site energization, however, D2 generated greater costs and expenses than revenue, resulting in an additional cost of approximately $705 thousand in non-controlling interest, in which there is no comparable costs for the three months ended June 30, 2024.

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***Consolidated Results of Operations for the Six Months Ended June 30, 2025 Compared to the Six Months Ended June 30, 2024.***

 

The following table summarizes changes in the various components of our net loss during the six months ended June 30, 2025 compared to the six months ended June 30, 2024.

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| | | | | |
|:---|:---|:---|:---|:---|
| (Dollars in thousands) | **Six months ended <br> June 30, 2025** | **Six months ended <br> June 30, 2024** | **$**<br> **Change** | **%**<br> **Change** |
| Cryptocurrency mining revenue | $5860 | $10880 | $(5020) | (46)% |
| Data hosting revenue | 5538 | 10176 | (4638) | (46)% |
| Demand response service revenue | 668 | 1168 | (500) | (43)% |
| High-performance computing service revenue | 28 |  | 28 | 100% |
| Operating costs and expenses: |  |  |  |  |
| Cost of cryptocurrency mining revenue, exclusive of depreciation | 3721 | 3724 | (3) | -% |
| Cost of data hosting revenue, exclusive of depreciation | 2945 | 4427 | (1482) | (33)% |
| Cost of high-performance computing service revenue | 7 |  | 7 | 100% |
| Cost of cryptocurrency mining revenue- depreciation | 2147 | 2152 | (5) | -% |
| Cost of data hosting revenue- depreciation | 913 | 877 | 36 | 4% |
| General and administrative expenses, exclusive of depreciation and amortization | 11344 | 9378 | 1966 | 21% |
| Depreciation and amortization associated with general and administrative expenses | 4807 | 4805 | 2 | -% |
| Impairment on fixed assets | 12 | 130 | (118) | (91)% |
| Operating loss | (13802) | (3269) | (10533) | 322% |
| Other expense, net | (860) | (25) | (835) | 3340% |
| Interest expense | (2034) | (873) | (1161) | 133% |
| Loss on sale of fixed assets | (22) | (21) | (1) | 5% |
| Gain (loss) on debt extinguishment and revaluation, net | 551 | (8698) | 9249 | (106)% |
| Loss before income taxes | (16167) | (12886) | (3281) | 25% |
| Income tax benefit, net | 1033 | 1197 | (164) | (14)% |
| Net loss | (15134) | (11689) | (3445) | 29% |
| Net (loss) income attributable to non-controlling interest, net | (196) | 4438 | (4634) | 104% |
| Net loss attributable to Soluna Holdings, Inc. | $(14938) | $(16127) | $1189 | (7)% |

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The following table summarizes the balances for the project sites for cryptocurrency mining revenue, data hosting revenue, high-performance computing service revenue, demand response revenue, cost of cryptocurrency mining revenue, exclusive of depreciation, cost of data hosting revenue, exclusive of depreciation, cost of high-performance computing services, and cost of depreciation during the six months ended June 30, 2025:

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Soluna Digital** | **Soluna Digital** | **Soluna Digital** | **Soluna Digital** | **Soluna Digital** | **Soluna Digital** | **Soluna Cloud** | |
| <br>(Dollars in thousands) | **Project Dorothy 1B** | **Project Dorothy 1A** | **Project Dorothy 2** | **Project Sophie** | **Other** | **Soluna Digital Subtotal** | **Project <br> Ada** |<br>**Total** |
| Cryptocurrency mining revenue | $5860 | $- | $- | $- | $- | $5860 | $- | $5860 |
| Data hosting revenue |  | 3024 | 210 | 2304 |  | 5538 |  | 5538 |
| Demand response services |  |  |  |  | 668 | 668 |  | 668 |
| High-performance computing services | - | - | - | - | - | - | 28 | 28 |
| **Total revenue** | 5860 | 3024 | 210 | 2304 | 668 | 12066 | 28 | 12094 |
| Cost of cryptocurrency mining, exclusive of depreciation | 3721 |  |  |  |  | 3721 |  | 3721 |
| Cost of data hosting revenue, exclusive of depreciation |  | 1736 | 416 | 793 |  | 2945 |  | 2945 |
| Cost of high-performance computing service revenue |  |  |  |  |  |  | 7 | 7 |
| Cost of cryptocurrency mining revenue- depreciation | 2147 |  |  |  |  | 2147 |  | 2147 |
| Cost of data hosting revenue- depreciation | - | 569 | 137 | 207 | - | 913 | - | 913 |
| **Total cost of revenue** | 5868 | 2305 | 553 | 1000 | - | 9726 | 7 | 9733 |
| **Gross (loss) profit** | $(8) | $719 | $(343) | $1304 | $668 | $2340 | $21 | $2361 |

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The following table summarizes the balances for the project sites for cryptocurrency mining revenue, data hosting revenue, high-performance computing service revenue, demand response revenue, cost of cryptocurrency mining revenue, exclusive of depreciation, cost of data hosting revenue, exclusive of depreciation, cost of high-performance computing services, and cost of depreciation during the six months ended June 30, 2024:

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Soluna Digital** | **Soluna Digital** | **Soluna Digital** | **Soluna Digital** | **Soluna Digital** | **Soluna Cloud** | |
| <br>(Dollars in thousands) | **Project Dorothy 1B** | **Project Dorothy 1A** | **Project Sophie** | **Other** | **Soluna Digital Subtotal** | **Project <br> Ada** |<br>**Total** |
| Cryptocurrency mining revenue | $10880 | $- | $- | $- | $10880 | $&nbsp;&nbsp;&nbsp;&nbsp;- | $10880 |
| Data hosting revenue |  | 7108 | 3068 |  | 10176 |  | 10176 |
| Demand response services |  |  |  | 1168 | 1168 |  | 1168 |
| High-performance computing services | - | - | - | - | - | - | - |
| **Total revenue** | 10880 | 7108 | 3068 | 1168 | 22224 |  | 22224 |
| Cost of cryptocurrency mining, exclusive of depreciation | $3724 |  |  |  | 3724 |  | 3724 |
| Cost of data hosting revenue, exclusive of depreciation |  | 3495 | 931 | 1 | 4427 |  | 4427 |
| Cost of high-performance computing service revenue |  |  |  |  |  |  |  |
| Cost of cryptocurrency mining revenue- depreciation | 2152 |  |  |  | 2152 |  | 2152 |
| Cost of data hosting revenue- depreciation | - | 575 | 302 | - | 877 | - | 877 |
| **Total cost of revenue** | 5876 | 4070 | 1233 | 1 | 11180 | - | 11180 |
| **Gross profit** | $5004 | $3038 | $1835 | $1167 | $11044 | $- | $11044 |

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***Cryptocurrency Mining Revenue***: Cryptocurrency mining revenue decreased between the six months ended June 30, 2025 compared to the six months ended June 30, 2024 related to the Bitcoin halving event that occurred in April 2024, which reduced the block reward by 50%, which was offset by a change in bitcoin price. We were rewarded 61.2 Bitcoins for the six months ended June 30, 2025 compared to 187.5 Bitcoins for the six months ended June 30, 2024.

***Data Hosting Revenue***: Cryptocurrency hosting services provide energized space and operating services to third-party mining companies who locate their mining hardware at our mining locations- D1A and Project Sophie. Services include fees for hosting the miners which could be fixed fees or profit sharing, as well as potential additional fees for services provided such as installation charges or other services fees. The decrease for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 relate to the Bitcoin halving event that occurred in April 2024, which drove down the dollar Petahash ("PH") per day. Also, in December 2024, one of our largest customers exited leaving 20 MW of capacity to fill that was ultimately filled slowly over December 2024 and into March 2025, in which the replacement customers were on a profit-sharing fee.

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***Demand Response Service***: Demand response service revenue was lower in the six months ended June 30, 2025 compared to the six months ended June 30, 2024 due to a decline in the ERCOT Clearing price per MW, in addition to the fact that the capacity we bid on was reduced due to known outages in the Texas area and efficiency of our aging miners at D1B.

***Cost of Cryptocurrency Mining Revenue, exclusive of depreciation****:* Cost of cryptocurrency mining revenue includes direct utility costs, site overhead expenses, and overhead costs that relate to the operations of our cryptocurrency mining facilities in Kentucky and Texas.

The cost remained consistent between the six months ended June 30, 2025 and the six months ended June 30, 2024.

***Cost of Data Hosting Revenue, exclusive of depreciation:*** Cost of data hosting revenue includes utility charges, site overhead expenses, and other charges.

Cost of data hosting decreased for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 mainly due to a change in hosting contracts mix, in which contracts were entered that included electricity passthrough contracts replacing fixed rate volume contracts.

***General and Administrative Expenses, exclusive of depreciation and amortization:*** General and administrative expenses, exclusive of depreciation and amortization include cash and non-cash compensation, benefits, and related costs in support of our general corporate operations, including general management, finance and accounting, human resources, marketing, information technology, corporate development, and legal services.

● Stock based compensation expense was $3.7 million for the six months ended June 30, 2025 compared to approximately $2.0 million in relation to the six months ended June 30, 2024, an increase of approximately $1.7 million. This increase primarily related to grants issued to directors and officers from April 2024 through June 2025, and grants issued to employees in June 2025 and December of 2024.This increase was partially offset by grants that stopped vesting from prior years and grants that had portion which immediately vested during 2024.

● Professional and legal fees increased approximately $1.0 million in relation to legal fees associated with registration of the SEPA, and other SEC regulatory and compliance matters, in addition to higher fees associated with consulting matters.

● Salaries and benefits decreased approximately $281 thousand due to reduction in bonus expenses for 2025, offset with cost of living adjustment raises for management and employees.

● Provision for credit losses decreased approximately $264 thousand as no losses were noted in three months ended June 30, 2025 compared to the three months ended June 30, 2024.

● Investor relations decreased approximately $268 thousand in relation to fewer investor campaigns run for the six months ended June 30, 2025 compared to the six months ended June 30, 2024.

● Other changes in general and administrative expenses were not material.

***Depreciation and Amortization associated with general and administrative expenses:*** Depreciation and amortization expense was comparable for the six months ended June 30, 2025 and six months ended June 30, 2024 in which the balances totaled approximately $4.7 million, respectively. The balances mainly related to amortization expense related to the strategic pipeline contract that was acquired in October 2021.

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***Interest expense:*** Interest expense for the six months ended June 30, 2025 was approximately $2.0 million compared to the $873 thousand for the six months ended June 30, 2024. See table below noting the difference mainly relates to the new loans entered into in fiscal year 2024 and 2025 (June and July SPA, Galaxy Loan, and equipment loan), which includes amortization of deferred financing costs, offset with the payoff of the Navitas loan.

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| | | |
|:---|:---|:---|
| (Dollars in thousands) | **Six months ended**<br> **June 30,** | **Six months ended**<br> **June 30,** |
|  | **2025** | **2024** |
| NYDIG equipment financing | $719 | $722 |
| Navitas term loan | 2 | 100 |
| Green Cloud secured loan and Additional CloudCo secured loan | 777 |  |
| Galaxy loan | 277 |  |
| Spring Lane financing cost | 121 |  |
| Equipment loan | 138 | 51 |
| **Interest expense** | $2034 | $873 |

---

***Gain (Loss) on Debt Extinguishment and Revaluation, net***: For the six months ended June 30, 2025, there was a gain on extinguishment of debt of approximately $551 thousand. The gain was in relation to the Assignment and Assumption Agreement for the Additional Notes on March 14, 2025.

For the six months ended June 30, 2024, the Company had a loss on debt extinguishment and revaluation of approximately $8.7 million due to the entering into of the Fourth Amendment with the Noteholders on February 28, 2024, pursuant to which the Company lowered the conversion price, issued new warrants, and repriced additional warrants with certain exercise features. The issuance and reprice of warrants created a loss of extinguishment of debt of approximately $5.8 million which was offset by a gain on debt revaluation of the convertible debt of approximately $1.3 million as of February 28, 2024 (date of Fourth Amendment) and March 31, 2024 due to several factors including assumptions on conversions and payouts, annual volatility, and stock price conditions on the dates of valuations. In addition, there was a revaluation of the warrant liability which created a gain on revaluation of approximately $1.5 million. The Company did a fair value assessment of the notes as of June 30, 2024, which created a loss on revaluation of approximately $4.0 million, as noted above. In addition, in the second quarter of fiscal year 2024, the Company did a revaluation of the warrants through May 30, 2024, the date of Annual Shareholder approval, which created a loss on revaluation of approximately $1.6 million.

***Other expense, net:*** Other expense, net increased by approximately $835 thousand for the six months ended June 30, 2025 compared to June 30, 2024. For the six months ended June 30, 2025, we incurred approximately $118 thousand in fair value adjustments due to the timing of the SEPA draws and when such shares were issued, $456 thousand financing expense mainly in relation to consent fees for the SEPA and ATM Agreement draws, and we incurred a loss compensation cost of approximately $291 thousand in relation to the Las Majadas wind farm. For the six months ended June 30, 2024, other expense, net was approximately $25 thousand, related to an extension fee expense of approximately $325 thousand for the Convertible Notes, offset with a gain on settlement of litigation with Atlas of approximately $254 thousand, in addition to some small additional other income items.

***Net (loss) income attributable to non-controlling interest:*** We incurred a net loss attributable to non-controlling interest for the six months ended June 30, 2025 compared to a net income attributable to non-controlling interest for the six months ended June 30, 2024. The decrease related mainly due the variances in gross profit related to D1A and D1B noted above mainly due to the halving event in April 2024 and the increase in profit sharing fees for data hosting for the six months ended June 30, 2025, which created an approximate $3.6 million variance between periods in non-controlling interest. In addition, in the second quarter of 2025, D2 began site energization, however, D2 generated greater costs and expenses than revenue, resulting in an additional cost of approximately $1.0 million in non-controlling interest, in which there is no comparable costs for the six months ended June 30, 2024.

**Non-GAAP Measures**

To supplement our consolidated condensed financial statements included in this quarterly report presented under U.S. generally accepted accounting principles ("GAAP"), we are presenting certain non-GAAP financial measures. We are providing these non-GAAP financial measures to disclose additional information to facilitate the comparison of past and present operations by providing perspective on results absent one-time or significant non-cash items. We utilize these measures in the business planning process to understand expected operating performance and to evaluate results against those expectations. We believe that these non-GAAP financial measures, when considered together with our GAAP financial results, provide management and investors with an additional understanding of our business operating results regarding factors and trends affecting our business and provide a reasonable basis for comparing our ongoing results of operations.

These non-GAAP financial measures are provided as supplemental measures to our performance measures calculated in accordance with GAAP and therefore, are not intended to be considered in isolation or as a substitute for comparable GAAP measures. Further, these non-GAAP financial measures have no standardized meaning prescribed by GAAP and are not prepared under any comprehensive set of accounting rules or principles. Because of the non-standardized definitions of non-GAAP financial measures, we caution investors that the non-GAAP financial measures as used by us in this quarterly report have limits in their usefulness to investors and may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by other companies. Further, investors should be aware that when evaluating these non-GAAP financial measures, these measures should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. In addition, from time to time in the future there may be items that we may exclude for purposes of our non-GAAP financial measures and we may in the future cease to exclude items that we have historically excluded for purposes of our non-GAAP financial measures. Likewise, we may determine to modify the nature of the adjustments to arrive at our non-GAAP financial measures. Investors should review the non-GAAP reconciliations provided below and not rely on any single financial measure to evaluate our business.

 

*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, for historical periods are presented in the table below:

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| | | | | |
|:---|:---|:---|:---|:---|
| (Dollars in thousands) | **Three Months Ended** <br> **June 30,** | **Three Months Ended** <br> **June 30,** | **Six Months Ended** <br> **June 30,** | **Six Months Ended** <br> **June 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Net loss | $(7780) | $(9145) | $(15134) | $(11689) |
| Interest expense | 1196 | 449 | 2034 | 873 |
| Income tax benefit | (608) | (649) | (1033) | (1197) |
| Depreciation and amortization | 3989 | 3909 | 7868 | 7834 |
| **EBITDA** | (3203) | (5436) | (6265) | (4179) |
| **Adjustments: Non-cash items** |  |  |  |  |
| Stock-based compensation costs | 1942 | 1368 | 3789 | 2029 |
| Loss on sale of fixed assets | 22 | 21 | 22 | 21 |
| Provision for credit losses |  | 244 |  | 244 |
| Impairment on fixed assets | 12 |  | 12 | 130 |
| Fair value adjustment on SEPA draws |  |  | 118 |  |
| Loss (gain) on debt extinguishment and revaluation, net | - | 5600 | (551) | 8698 |
| **Adjusted EBITDA** | $(1227) | $1797 | $(2875) | $6943 |

---

Adjusted EBITDA decreased for the three and six months ended June 30, 2025 compared to June 20, 2024 primarily driven by a decrease in revenue of $3.4 million and $9.7 million decline in Cryptocurrency mining and data hosting revenue following the April 2024 Bitcoin halving and a customer ramp-up of 20 MW through the first quarter of 2025, partially offset by approximately $675 thousand and $1.5 million decline in cryptocurrency cost of revenue and cost of data hosting revenue, excluding depreciation. General and administrative expenses, excluding stock-based compensation and provision for credit losses, decreased approximately $272 thousand for the three months ended June 30, 2025 compared to the three months ended June 30, 2024 mainly due to declines in bonus expenses and investor relation fees, offset by legal fees. General and administrative expenses, excluding stock-based compensation and provision for credit losses for the six months ended June 30, 2025 compared to June 30, 2024 increased approximately $527 thousand mainly related to legal fees associated with the SEPA and other consulting fees.

The following table represents the Adjusted EBITDA activity between each three-month period from January 1, 2025 through June 30, 2025.

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| | | |
|:---|:---|:---|
| (Dollars in thousands) | **Three months ended**<br> **March 31, 2025** | **Three months ended**<br> **June 30, 2025** |
| Net loss from continuing operations) | $(7354) | $(7780) |
| Interest expense, net | 838 | 1196 |
| Income tax benefit from continuing operations | (425) | (608) |
| Depreciation and amortization | 3879 | 3989 |
| **EBITDA** | (3062) | (3203) |
| **Adjustments: Non-cash items** |  |  |
| Stock-based compensation costs | 1847 | 1942 |
| Loss on sale of fixed assets |  | 22 |
| Impairment on fixed assets |  | 12 |
| Fair value adjustment on SEPA draws | 118 |  |
| Gain on debt extinguishment and revaluation, net | (551) | - |
| **Adjusted EBITDA** | $(1648) | $(1227) |

---

The following table represents the Adjusted EBITDA activity between each three-month period from January 1, 2024 through December 31, 2024.

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| | | | | |
|:---|:---|:---|:---|:---|
| (Dollars in thousands) | **Three months ended**<br> **March 31, 2024** | **Three months ended**<br> **June 30, 2024** | **Three months ended**<br> **September 30, 2024** | **Three months ended**<br> **December 31, 2024** |
| Net loss from continuing operations | $(2544) | $(9145) | $(8093) | $(38518) |
| Interest expense, net | 424 | 449 | 821 | 833 |
| Income tax benefit from continuing operations | (548) | (649) | (547) | (743) |
| Depreciation and amortization | 3926 | 3909 | 3916 | 3889 |
| **EBITDA** | 1258 | (5436) | (3903) | (34539) |
| **Adjustments: Non-cash items** |  |  |  |  |
| Stock-based compensation costs | 661 | 1368 | 1257 | 2025 |
| Loss on sale of fixed assets | 1 | 21 |  | 9 |
| Provision for credit losses |  | 244 | 367 | 149 |
| Convertible note inducement expense |  |  |  | 388 |
| Placement agent release expense |  |  |  | 1000 |
| Loss on contract |  |  |  | 28593 |
| Impairment on fixed assets | 130 |  |  |  |
| Loss (gain) on debt extinguishment and revaluation, net | 3097 | 5600 | (1203) | (145) |
| **Adjusted EBITDA** | $5147 | $1797 | $(3482) | $(2520) |

---

**Liquidity and Capital Resources**

Several key indicators of our liquidity are summarized in the following table:

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| | | | |
|:---|:---|:---|:---|
| (Dollars in thousands) | **Six Months Ended or as of** | **Six Months Ended or as of** | **Year Ended or as of** |
|  | **June 30,** | **June 30,** | **December 31,** |
|  | **2025** | **2024** | **2024** |
| Cash | $9878 | $9558 | $7843 |
| Restricted cash | 5275 | 1951 | 2610 |
| Working capital (deficit) | (30874) | (5046) | (34378) |
| Net loss | (15134) | (11689) | (58300) |
| Net cash used in operating activities | (1273) | (3473) | (5069) |
| Purchase of property, plant and equipment | (12365) | (278) | (9160) |

---

As of June 30, 2025, we had a consolidated accumulated deficit of approximately $329.2 million and we had negative working capital of approximately $30.9 million. As of June 30, 2025, we had total debt outstanding of approximately $23.3 million as summarized further below in the Debt table. In addition, we had outstanding commitments related to Soluna Digital Inc. ("SDI") of approximately $10.1 million in capital expenditures mainly related to Project Dorothy 2 and Project Kati. In addition, due to CloudCo's termination of the HPE Agreement on March 24, 2025, and HPE's termination of the HPE Agreement on March 26, 2025, and the acceleration of the remaining unpaid amounts of the contract in accordance with the HPE Agreement, we have recognized a liability for the remainder of the HPE Agreement on the consolidated balance sheet of approximately $19.3 million. As of June 30, 2025, we had $9.9 million of cash available to fund our operations.

Based on business developments, including changes in production levels, staffing requirements, and network infrastructure improvements, we will require additional capital equipment in the foreseeable future. We are focused on developing and monetizing green, zero-carbon computing and cryptocurrency mining facilities, as well as facilities capable of hosting customers engaged in cryptocurrency mining, and data centers to provide specialized AI Cloud and colocation services.

We plan to continue funding operations, including working capital and operating deficits, from operating cash flows and cash flow debt and equity financings, including the ATM Agreement, SEPA, July 2025 Offering, and others to be closed as needed consistent with management's plans.

The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. In the near term, management is evaluating and implementing different strategies to obtain financing to fund the Company's expenses and growth to achieve a level of revenue adequate to support the Company's current cost structure. Financing strategies may include, but are not limited to, stock issuances, project level equity, debt borrowings, partnerships and/or collaborations. If the Company is unable to meet its financial obligations, it could be forced to restructure or refinance, seek additional equity capital or sell its assets. The Company might then be unable to obtain such financing or capital or sell its assets on satisfactory terms. There can be no assurance that additional financing will be available to the Company when needed or, if available, that it can be obtained on commercially reasonable terms. If the Company is not able to obtain the additional financing on a timely basis, if and when it is needed, it will be forced to delay or scale down some or all of its development activities or perhaps even cease the operation of its business.

**Operating Activities**

Net cash used in operations was approximately $1.3 million during the six months ended June 30, 2025. The Company had a net loss for the six months ended June 30, 2025 of approximately $15.1 million. Non-cash items included approximately $3.1 million of depreciation expense, and $4.7 million of amortization expenses, and $3.8 million of stock compensation expenses. These non-cash items were offset with a deferred tax benefit of $1.1 million and gain on extinguishment of debt of approximately $551 thousand. The change in asset and liabilities of $3.3 million mainly relates to decrease in other long-term assets of $1.6 million in relation to receipt of Briscoe deposit in January 2025 and $1.0 million in relation to increase in interest payable in relation to NYDIG loan and Galaxy loan. The other changes in assets and liabilities of approximately $700 thousand mainly related to increase in customers deposits and accounts payable related to timing and billing amounts of invoices, offset with payment made to HPE in January.

Net cash used in operations was approximately $3.5 million during the six months ended June 30, 2024. The Company had a net loss for the six months ended June 30, 2024 of approximately $11.7 million. Non-cash items included approximately $3.1 million of depreciation expense and $4.7 million of amortization expenses, $2.0 million of stock compensation expenses, $8.7 million of loss on debt extinguishment and revaluation, $244 thousand in provision for credit losses, and $130 thousand of impairment of fixed assets. These non-cash items were offset with a deferred tax benefit of $1.2 million. The change in asset and liabilities of $9.7 million is mainly due to an increase in prepaid expenses by $10.8 million due to a prepayment of an arrangement with HPE of $10.3 million, an increase in accounts receivable of $486 thousand attributable for demand service revenue and data hosting customer receivables increasing, offset with an increase in accrued expenses and accounts payable of $2.1 million in relation to bonus accruals, NYDIG interest, and Project Dorothy 2 and Kati related bills. The other changes in assets and liabilities were not material.

**Investing Activities**

Net cash used in investing activities during the six months ended June 30, 2025 was approximately $8.3 million consisting mainly of capital expenditures of $12.4 million offset with a decrease in deposits on equipment of $4.1 million. Net cash used in investing activities during the six months ended June 30, 2024 was approximately $2.2 million consisting mainly of capital expenditures of $278 thousand and increase in deposits on equipment of $2.1 million.

**Financing Activities**

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| | | |
|:---|:---|:---|
| (Dollars in thousands) | **Six months ended**<br> **June 30,** | **Six months ended**<br> **June 30,** |
|  | **2025** | **2024** |
| Proceeds from debt issuance | $5269 | $13220 |
| Payments on debt and deferred financing costs | (3275) | (1910) |
| Contributions from non-controlling interest | 11852 |  |
| Distributions to non-controlling interest | (3575) | (5776) |
| Proceeds from warrant exercises |  | 2304 |
| Net proceeds from SEPA and ATM | 4051 | - |
| **Net cash provided by financing activities** | $14322 | $7838 |

---

Net cash provided by financing activities was approximately $14.3 million for the six months ended June 30, 2025 consisting mainly of $5.3 million of debt issuance proceeds, $4.1 million of net proceeds from SEPA draws and ATM Agreement settlements, and $11.9 million of contributions from non-controlling interest, offset with cash distributions to non-controlling interest members of approximately $3.6 million and payments on debt and deferred financing costs of approximately $3.3 million to the Green Cloud Secured Loan, CloudCo Additional Secured Loan, Navitas term loan, and for deferred financing costs. Net cash provided by financing activities for the six months ended June 30, 2024 was approximately $7.8 million consisting mainly of proceeds from financing of approximately $13.2 million in which $12.5 million was from 2024 secured loan financing and $720 thousand was drawn down for equipment financing. In addition, there was $2.3 million in warrants exercised. Offsetting the net cash provided by financing activities was $5.8 million in cash distributions to non-controlling interest members, and payments of $1.9 million relation to Navitas loan and deferred financing charges.

***Debt***

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| | | |
|:---|:---|:---|
|  | **June 30, 2025** | **December 31, 2024** |
| (Dollars in thousands) |  |  |
| Galaxy loan | $4480 | $- |
| NYDIG Equipment Financing | 9183 | 9183 |
| Equipment loan | 519 |  |
| Navitas Term Loan |  | 137 |
| Green Cloud Secured Note | 9094 | 10983 |
| CloudCo Additional Secured Loan | - | 1202 |
| **Total Debt** | $23276 | $21505 |

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![](form10-q_002.jpg)

On June 20, 2024, pursuant to the terms and subject to the conditions of the June SPA by and among (i) CloudCo, (ii) Soluna Cloud, (iii) the Company and (iv) the Investor, CloudCo issued to the Investor a secured promissory note in a principal amount equal to $12.5 million (the "Green Cloud Secured Note"). The Green Cloud Secured Note accrues interest at a rate 9.0% per annum, subject to adjustment upon an event of default. The Green Cloud Secured Note matures on June 20, 2027. On July 12, 2024, the Company, CloudCo, Soluna Cloud, and the Existing Investor entered into a First Amendment to the Note Purchase Agreement. Additional Notes were issued for $1.25 million ("Soluna CloudCo Additional Secured Note") on July 12, 2024 and are subject to the same terms and conditions as the June SPA financing. On October 1, 2024, CloudCo, Soluna Cloud and the Company entered into assignment and assumption agreements (the "Assignment Agreements") with the Additional Investors with respect to an aggregate of $1.25 million of notes issued by CloudCo. Pursuant to the Assignment Agreements, the Company will be able to purchase such notes for a purchase price of $750 thousand, or 60% of face value. The assignment and assumption will be effective once all conditions of the agreement are met including fulfilling the purchase price. The assignment and assumption was on March 14, 2025, therefore we extinguished the remaining third party outstanding debt on the Additional Note, and a gain on extinguishment of the debt of approximately $551 thousand was recorded. In relation to the Green Cloud Secured Note, as of June 30, 2025, the Company had an outstanding principal balance of approximately $9.6 million.

On January 14, 2022, the Company effected an initial drawdown under the Master Equipment Finance Agreement ("MEFA") with NYDIG in the aggregate principal amount of approximately $4.6 million that bore interest at 14%. On January 26, 2022, the Company had a subsequent drawdown of $9.6 million. On December 20, 2022, Soluna MC Borrowing 2021-1 LLC ("Borrower") received a Notice of Acceleration and Repossession (the "NYDIG Notice") from NYDIG with respect to the MEFA, by and between Borrower, a subsidiary of Soluna MC, LLC, a subsidiary of Soluna Digital, a subsidiary of the Company, and NYDIG. The obligations of Borrower under the MEFA and reflected in the NYDIG Notice are ring-fenced to Borrower and its direct parent company, Soluna MC LLC. The Company is not a party to any guaranty, collateral agreement, or other support agreement with or for the benefit of NYDIG. As such, the principal balance of $10.5 million as of December 31, 2022 became due immediately and the Borrower shall bear interest, at a rate per annum equal to 2.0% plus the rate per annum otherwise applicable to such obligations set forth in the MEFA. On February 23, 2023, NYDIG proceeded to foreclose on all of the collateral securing the MEFA, and repossessed the collateralized assets that totaled approximately $3.4 million, in which approximately $560 thousand was first used to pay off accrued interest and penalty to date. On September 5, 2023, NYDIG provided a letter finalizing the accounting for the repossessed collateralized assets totaling proceeds of approximately $3.4 million. A summary judgment motion was performed on February 13, 2024 and was agreed upon by both NYDIG and the Borrower, that the total outstanding loan principal balance would be approximately $9.2 million, in which a penalty fee was applied of approximately $1.0 million to the repossessed collateralized assets, and outstanding interest and penalty balance would be approximately $936 thousand as of December 31, 2023. As of June 30, 2025, the Company still has an outstanding loan principal of approximately $9.2 million and outstanding interest and penalty balance of approximately $3.0 million as of June 30, 2025.

On May 9, 2023, DVCC and Navitas West Texas Investments SPV, LLC entered into a 2-year Loan Agreement for $2,050,000. The unpaid principal balance of the Term Loan shall bear interest at per annum rate equal to 15%. As of June 30, 2025, the Navitas loan has been fully paid off.

On May 16, 2024, the SDI Borrower, entered into the Equipment Loan Agreement with the Lender. The Equipment Loan Agreement provides for the SDI Borrower to borrow, from time to time, up to $4.0 million, as further amended on February 28, 2025, to be used to purchase necessary equipment for the progression of D2 and Project Kati. Any loans made under the Equipment Loan Agreement have a maturity date of May 16, 2027 and bear interest at a rate of 15% per annum. The Equipment Loan Agreement includes customary covenants for loans of this nature, as well as a multiple on invested capital provision, which requires us to pay, in addition to principal and interest, an amount equal to the difference of (i) the greater of (a) the principal amount of the Loan being repaid *plus* all interest previously paid or simultaneously being paid to Lender in respect of such principal of the Loan, and (b) the principal amount of the Loan being repaid multiplied by three, *minus* (ii) the sum of the principal amount of the Loan being repaid *plus* all interest previously paid or simultaneously being paid to Lender in respect of such principal of the Loan. On May 17, 2024, the SDI Borrower drew down $720 thousand of the Loan. On July 22, 2024, SDI Borrower satisfied and repaid the borrowing amount in full by issuing the Lender Class B Membership Interests in the D2 valued at three times the borrowing amount (i.e., $2.16 million). The redemption of debt through equity created approximately a $1.4 million loss on debt extinguishment for the year ended December 31, 2024. On March 21, 2025, and June 11, 2025 the SDI Borrower drew down $250 thousand and $269 thousand of the Loan, in relation to Project Kati. The total amount of $519 thousand is outstanding as of June 30, 2025. In addition, the $519 thousand outstanding balance Equipment Loan agreements amended the multiple on invested capital provision to be an amount equal to the difference of (i) the greater of (a) the principal amount of the Loan being repaid *plus* all interest previously paid or simultaneously being paid to Lender in respect of such principal of the Loan, and (b) the principal amount of the Loan being repaid multiplied by three and three tenths (3.3), *minus* (ii) the sum of the principal amount of the Loan being repaid *plus* all interest previously paid or simultaneously being paid to Lender in respect of such principal of the Loan.

On March 12, 2025, the SW Borrower, a Delaware limited liability company and subsidiary of SW Holdings, itself a subsidiary of SDI, a Nevada corporation and wholly owned subsidiary of the Company, entered into the Galaxy Loan Agreement with SW Holdings and Galaxy Digital LLC. The Galaxy Loan Agreement provides for a term loan facility in the principal amount of $5.0 million (the "Term Loan Facility"). The Term Loan Facility bears interest at a rate of 15.0% per annum, subject to an increase of 5.0% (for a total of 20.0%) in the event an Event of Default has occurred and is continuing. The Term Loan Facility matures on March 12, 2030 and includes scheduled payments over a five-year term. As of June 30, 2025, the outstanding principal balance is approximately $4.9 million as we were compliant with all debt covenants.

**Critical Accounting Policies and Significant Judgments and Estimates**

The above discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. Note 2, Accounting Policies, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2024 includes a summary of our most significant accounting policies. There have been no material changes to the critical accounting policies previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024. The preparation of these condensed consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosure of assets and liabilities. On an ongoing basis, we evaluate our estimates and judgments, including those related to revenue recognition, income taxes, fair value measurements, and stock-based compensation. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Periodically, our management reviews our critical accounting estimates with the Audit Committee of our Board of Directors.

***Statement Concerning Forward-Looking Statements***

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Exchange Act. Any statements contained in this Form 10-Q that are not statements of historical fact may be forward-looking statements. When we use the words "anticipate," "estimate," "plans," "projects," "continuing," "ongoing," "expects," "management believes," "we believe," "we intend," "should," "could," "may," "will" and similar words or phrases, we are identifying forward-looking statements. Such forward-looking statements include, but are not limited to, statements regarding:

● the availability of financing opportunities, risks associated with economic conditions, dependence on management and conflicts of interest;

● the ability to service debt obligations and maintain flexibility in respect of debt covenants;

● economic dependence on regulated terms of service and electricity rates;

● the speculative and competitive nature of the technology sector;

● ability of the Company to attract and retain hosted customers for its hosting operations;

● dependency in continued growth in blockchain and cryptocurrency usage;

● lawsuits and other legal proceedings and challenges;

● conflict of interests with directors and management;

● government regulations;

● The ability of the Company to construct and complete the anticipated expansion of its data centers; and

● other risks and uncertainties discussed under the heading "Risk Factors" in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Forward-looking statements speak only as of the date they are made. You should not put undue reliance on any forward-looking statements. We assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions, or changes in other factors affecting forward-looking information, except to the extent required by applicable securities laws. If we do update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

**Item 3. Quantitative and Qualitative Disclosures About Market Risk**

Not applicable.

**Item 4. Controls and Procedures**

The certifications of our Chief Executive Officer and Chief Financial Officers are attached as Exhibits 31.1 and 31.2 to this Quarterly Report on Form 10-Q include, in paragraph 4 of such certification, information concerning our disclosure controls and procedures and internal control over financial reporting. Such certification should be read in conjunction with the information contained in this Item 4 for a more complete understanding of the matters covered by such certification.

*(a) Evaluation of Disclosure Controls and Procedures*

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of SHI's disclosure controls and procedures as of June 30, 2025. The term "disclosure controls and procedures," as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the U.S. Securities and Exchange Commission's (the "SEC") rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company's management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. We recognize that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and we necessarily apply our judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of June 30, 2025, our Chief Executive Officer and our Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

*(b) Changes in Internal Control Over Financial Reporting*

There have been no changes in our internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during our fiscal quarter ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

**PART II. OTHER INFORMATION**

**Item 1. Legal Proceedings**

At any point in time, we may be involved in various lawsuits or other legal proceedings. Such lawsuits could arise from the sale of products or services or from other matters relating to our regular business activities, compliance with various governmental regulations and requirements, or other transactions or circumstances.

*NYDIG*

On December 29, 2022, NYDIG filed a complaint against Borrower, a subsidiary of Soluna MC, LLC, a subsidiary of Soluna Digital, a subsidiary of the Company, and Guarantor in Marshall Circuit Court of the Commonwealth of Kentucky regarding the NYDIG Loans made by NYDIG to Borrower pursuant to the MEFA that were secured by certain assets of Borrower and guaranteed by Guarantor pursuant to a written guaranty agreement executed by Guarantor. On February 23, 2023, NYDIG proceeded to foreclose on all of the collateral securing the MEFA and repossessed the collateralized assets. Subsequently, NYDIG filed its Motion for Summary Judgment seeking entry of a judgment against the NYDIG Defendants in the approximate amount of $10.3 million, and NYDIG and the NYDIG Defendants consensually resolved the motion in the form of a Stipulation and Agreed Judgment, which the Court approved on February 23, 2024.

On March 13, 2024, NYDIG served the NYDIG Defendants with a post-judgment discovery seeking information regarding the NYDIG Defendants' assets and liabilities. The NYDIG Defendants completed responding to NYDIG's initial document requests on May 13, 2024. On September 24, 2024, NYDIG sent a letter seeking supplemental discovery from the NYDIG Defendants, and the NYDIG Defendants completed responding to NYDIG's additional/supplemental document requests by November 20, 2024 and the deposition of a representative of the Defendants on or before December 15, 2024. Per agreement between NYDIG and the NYDIG Defendants, (i) the deadline to respond to the supplemental discovery demands was extended to December 12, 2024 but with rolling weekly production to commence on November 21, 2024, and (ii) a deposition of a representative of the NYDIG Defendants occurred on January 23, 2025. On April 2, 2025, NYDIG sent another letter seeking supplemental discovery from the NYDIG Defendants or alternatively to commence discovery discussions. The NYDIG Defendants sent a response on April 10, 2025 requesting contact information for potential settlement discussions and proposing a rolling discovery schedule; as of August 14, 2025 there has not been a response on the proposed discovery schedule.

Additionally, NYDIG has stated its intention to pursue the parent company of Guarantor (the "Parent Entity") under a piercing of the corporate veil theory relating to NYDIG Defendants' debts and liabilities under the loan documents. Parent Entity intends to vigorously defend itself from NYDIG's parent company claims. Parent Entity denies any such liability and filed a complaint for a declaratory judgment against NYDIG in the Eighth Judicial District Court in Clark County, Nevada on March 16, 2023, seeking a declaratory judgment as to such matter. On June 22, 2023, the court issued an order granting NYDIG's motion to dismiss without prejudice. Parent Entity intends to continue to vigorously defend any allegations regarding liability on account of NYDIG Defendants' debts and liabilities to NYDIG under their loan documents.

**Item 1A. Risk Factors**

Part II, Item 1A (Risk Factors) of our most recently filed Annual Report on Form 10-K with the SEC, filed on March 31, 2025, as supplemented by Item 1A of our Form 10-Q filed with the SEC on May 15, 2025, sets forth information relating to important risks and uncertainties that could materially adversely affect our business, financial condition and operating results. There have been no material changes to our risk factors disclosed in our most recently filed Annual Report on Form 10-K, as supplemented by Item 1A of our Form 10-Q filed with the SEC on May 15, 2025. Those risk factors continue to be relevant to an understanding of our business, financial condition and operating results, however, and, accordingly, you should review and consider such risk factors in making any investment decision with respect to our securities.

**Item 2. Unregistered Sales of Equity Securities and Use of Proceeds**

None

**Item 3. Defaults Upon Senior Securities**

None

**Item 4. Mine Safety Disclosures**

Not applicable.

**Item 5. Other Information**

*Rule 10b5-1 Trading Arrangements and Non-Rule 10b5-1 Trading Arrangements*

During the fiscal quarter ended June 30, 2025, none of our officers or directors, as those terms are defined in Rule 16a-1(f), adopted or terminated a "Rule 10b5-1 trading arrangement" or a "non-Rule 10b5-1 trading arrangement," as those terms are defined in Item 408 of Regulation S-K.

**Item 6. Exhibits**

---

| | |
|:---|:---|
| Exhibit No. | Description |
| 1.1 | [At The Market Offering Agreement, dated as of April 29, 2025, by and between Soluna Holdings, Inc. and H.C. Wainwright & Co., LLC (incorporated by reference to the Company's Current Report on Form 8-K filed with the SEC on April 29, 2025)](https://www.sec.gov/Archives/edgar/data/64463/000164117225006679/ex1-1.htm) |
| 4.1 | [Form of Series A Warrant issued in the Offering (incorporated by reference to the Company's Current Report on Form 8-K filed with the SEC on July 17, 2025)](https://www.sec.gov/Archives/edgar/data/64463/000164117225020082/ex4-1.htm) |
| 4.2 | [Form of Series B Warrant issued in the Offering (incorporated by reference to the Company's Current Report on Form 8-K filed with the SEC on July 17, 2025)](https://www.sec.gov/Archives/edgar/data/64463/000164117225020082/ex4-2.htm) |
| 4.3 | [Form of Pre-Funded Warrant issued in the Offering (incorporated by reference to the Company's Current Report on Form 8-K filed with the SEC on July 17, 2025)](https://www.sec.gov/Archives/edgar/data/64463/000164117225020082/ex4-3.htm) |
| 4.4 | [Form of Placement Agent Warrant issued in the Offering (incorporated by reference to the Company's Current Report on Form 8-K filed with the SEC on July 17, 2025)](https://www.sec.gov/Archives/edgar/data/64463/000164117225020082/ex4-4.htm) |
| 10.1 | [Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.113 to the Company's Registration Statement on Form S-1/A (File No. 333-287519) filed on June 16, 2025).](https://www.sec.gov/Archives/edgar/data/64463/000164117225015179/ex10-113.htm) |
| 31.1 | [Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](ex31-1.htm) |
| 31.2 | [Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](ex31-2.htm) |
| 32.1 | [Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](ex32-1.htm) |
| 32.2 | [Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](ex32-2.htm) |
| 101.INS\* | Inline XBRL Instance Document |
| 101.SCH\* | Inline XBRL Taxonomy Extension Schema Document |
| 101.CAL\* | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.DEF\* | Inline XBRL Taxonomy Definition Linkbase Document |
| 101.LAB\* | Inline XBRL Taxonomy Extension Label Linkbase Document |
| 101.PRE\* | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |

---

All other exhibits for which no other filing information is given are filed herewith.

\* Submitted electronically herewith. Attached as Exhibit 101 are the following materials from the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2025, formatted in eXtensible Business Reporting Language (XBRL) and tagged as blocks of text and including detailed tags: (i) Condensed Consolidated Balance Sheets at June 30, 2025 and December 31, 2024; (ii) Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2025 and 2024; (iii) Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2025 and 2024; and (iv) related notes.

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  | Soluna Holdings, Inc. | Soluna Holdings, Inc. |
| Date: August 14, 2025 | By: | */s/ John Belizaire* |
|  |  | John Belizaire |
|  |  | Chief Executive Officer |
|  | By: | */s/ John Tunison* |
|  |  | John Tunison |
|  |  | Chief Financial Officer |

---

## Exhibit 31.1

**Exhibit 31.1**

**CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, John Belizaire, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Soluna Holdings, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | |
|:---|:---|
| August 14, 2025 | */s/ John Belizaire* |
|  | John Belizaire |
|  | Chief Executive Officer |
|  | (Principal Executive Officer) |

---

## Exhibit 31.2

**Exhibit 31.2**

**CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, John Tunison certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Soluna Holdings, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The
 registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over
 financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons
 performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;(a) All
 significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
 reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information;
 and

(b) Any
 fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's
 internal control over financial reporting.

---

| | |
|:---|:---|
| August 14, 2025 | */s/ John Tunison* |
|  | John Tunison |
|  | Chief Financial Officer |
|  | (Principal Financial Officer) |

---

## Exhibit 32.1

**Exhibit 32.1**

**Soluna Holdings, Inc.<br> Certification of Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002<br> (18 U.S.C. Section 1350)**

In connection with the Quarterly Report on Form 10-Q of Soluna Holdings, Inc. (the "Company") for the three and six month period ended June 30, 2025 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, John Belizaire, Chief Executive Officer of the Company, certify, pursuant to the requirements of Section 906 of the Sarbanes-Oxley Act of 2002, (18 U.S.C. Sections 1350(a) and (b)), that, to my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and <br> <br> (2) The information in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

August 14, 2025

---

| |
|:---|
| */s/ John Belizaire* |
| John Belizaire |
| Chief Executive Officer |
| (Principal Executive Officer) |

---

This certification is made solely for the purpose of 18 U.S.C. Section 1350, and is not being filed as part of the Report or as a separate disclosure document, and may not be disclosed, distributed or used by any person for any reason other than as specifically required by law.

## Exhibit 32.2

**Exhibit 32.2**

**Soluna Holdings, Inc.<br> Certification of Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002<br> (18 U.S.C. Section 1350)**

In connection with the Quarterly Report on Form 10-Q of Soluna Holdings, Inc. (the "Company") for the three and six month period ended June 30, 2025 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, John Tunison, Chief Financial Officer of the Company, certify, pursuant to the requirements of Section 906 of the Sarbanes-Oxley Act of 2002, (18 U.S.C. Sections 1350(a) and (b)), that, to my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and <br> <br> (2) The information in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

August 14, 2025

---

| |
|:---|
| */s/ John Tunison* |
| John Tunison |
| Chief Financial Officer |
| (Principal Financial Officer) |

---

This certification is made solely for the purpose of 18 U.S.C. Section 1350, and is not being filed as part of the Report or as a separate disclosure document, and may not be disclosed, distributed or used by any person for any reason other than as specifically required by law.