Ramps Project Dorothy and Kicks Off New Business Plan

ALBANY, N.Y. / May 16, 2023 / Business Wire / Soluna Holdings, Inc. (“SHI” or the “Company”), (NASDAQ: SLNH), the parent company of Soluna Computing, Inc. (“SCI”), a developer of green data centers for Bitcoin mining and other intensive computing, reported financial results for the first quarter ended March 31, 2023.

John Belizaire, CEO of Soluna Holdings, said, “Soluna has been busy the last few months. In the first quarter, we began our transition to a new business model, focused on monetizing our sites through hosting and joint ventures. We continue to reduce G&A costs to put us on a trajectory to reach positive cash flows from operations. We expect the first two quarters of this year to be transition quarters as we ramp up Project Dorothy and Project Sophie’s new hosting customers. In the coming weeks I will provide a more fulsome Earnings Power Illustration for our shareholders.”

Operating Highlights:

Revenue:

• Completed Project Dorothy interconnection work and received ERCOT approval to energize.
• Project Dorothy 1A: 25 MW of hosting contracts executed with strategic customers. Thousands of machines are being delivered the week of May 15th as the facility ramps up.
• Project Dorothy 1B: Secured Navitas Global as investment partner for $14 million proprietary mining partnership. Construction is currently being completed and we expect it to energize in June 2023.
• Project Sophie: Secured 25 MW hosting agreement with Sustainability-focus Bitcoin Miner.

Expenses:

• Continued G&A expense reductions.

Capital Structure:

• Obtained a 14-month Extension from October Noteholders, to July 25, 2024.
• Returned approximately $3 million of collateral to NYDIG.
• Decommissioned Project Marie facility in Kentucky.

Financial Summary:

Key financial results for the first quarter include:

• Total revenue in the first quarter of 2023 decreased by 67% to $3.1 million compared to $9.3 million in the first quarter of 2022. The decrease is primarily attributable to decommissioning of Project Marie impacting both proprietary mining and hosting. In addition, the average Bitcoin pricing decreased by 45% in the first quarter of 2023 versus the first quarter of 2022.
• Net loss improved from $8.9 million in the first quarter of 2022 to $7.1 million in the first quarter of 2023 - due mainly to a reduction in depreciation expense, which resulted from an impairment charge at the end of 2022 and cost reductions implemented during the first quarter.
• General and Administrative expenses declined by 10% to $4.4 million in the first quarter of 2023, as compared to $4.9 million in the first quarter of 2022, primarily due to cost reductions related to salaries and benefits, consulting and professional fees, offset in part by an increase in investor relations costs. Stock compensation in the first quarter 2023 was $847 thousand versus $927 thousand in the first quarter of 2022.
• Non-GAAP Adjusted EBITDA for the quarter ended March 31, 2023, was negative ($2.9) million, as compared to positive $853 thousand in the first quarter of 2022.

The unaudited financial statements are available online.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "confident" and similar statements. Soluna Holdings, Inc. may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including but not limited to statements about Soluna’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties, further information regarding which is included in the Company's filings with the Securities and Exchange Commission. All information provided in this press release is as of the date of the press release, and Soluna Holdings, Inc. undertakes no duty to update such information, except as required under applicable law.

About Soluna Holdings, Inc (SLNH)

Soluna Holdings, Inc. is the leading developer of green data centers that convert excess renewable energy into global computing resources. Soluna builds modular, scalable data centers for computing intensive, batchable applications such as Bitcoin mining, AI, and machine learning. Soluna provides a cost-effective alternative to battery storage or transmission lines. Soluna uses technology and intentional design to solve complex, real-world challenges. Up to 30% of the power of renewable energy projects can go to waste. Soluna’s data centers enable clean electricity asset owners to ‘Sell. Every. Megawatt.’

Reconciliations of Adjusted EBITDA to net income from continuing operations, the most comparable GAAP financial metric, for historical periods are presented in the table below: