10-Q: Soluna Holdings Reports Q3 Loss Amid Revenue Decline, Secures New Financing

Sentiment:

Quarterly Report 14 November 2025 4:16 PM

Soluna Holdings reported a significant net loss and revenue decline in Q3 2025, despite raising substantial capital and advancing its renewable computing project pipeline.

Capital raiseEntered into an At the Market Offering Agreement (ATM Agreement) on April 29, 2025, to sell up to $87.65 million of common stock, with $23.0 million in net proceeds raised as of September 30, 2025, and $69.7 million remaining available.Entered into a Standby Equity Purchase Agreement (SEPA) on August 12, 2024, with YA II PN, LTD., to purchase up to $25 million in common stock, with $6.2 million in net proceeds raised as of September 30, 2025.Completed a public offering on July 15, 2025, raising approximately $4.2 million in net proceeds and issuing common stock and warrants, with an additional $9.4 million in gross proceeds from warrant exercises.Secured a Credit and Guaranty Agreement with Generate Lending, LLC on September 12, 2025, providing up to $35.5 million in senior secured term loan commitments, with $12.6 million drawn, and permitting additional tranches up to $64.5 million.

Worse than expectedNet loss more than doubled to $40.9 million for the nine months ended September 30, 2025, compared to $19.8 million in the prior year.Total revenue decreased by 31% for the nine-month period, with significant declines in both cryptocurrency mining and data hosting segments.Adjusted EBITDA turned negative, reporting a loss of $9.2 million for the nine months ended September 30, 2025, a substantial decline from a positive $3.5 million in the prior year.The company incurred a significant fair value adjustment loss of $22.2 million related to warrant revaluations, indicating adverse movements in equity instrument valuations.General and administrative expenses and interest expenses both saw substantial increases, contributing to the expanded net loss.

Summary

Net loss for the nine months ended September 30, 2025, increased to $40.9 million from $19.8 million in the prior year.
Total revenue decreased by 31% to $20.5 million for the nine months ended September 30, 2025, compared to $29.7 million in the same period of 2024.
Cryptocurrency mining revenue declined by 37% to $8.6 million, primarily due to the Bitcoin halving event and aging miners, partially offset by an 87.5% increase in Bitcoin's average market price.
Data hosting revenue decreased by 25% to $10.8 million, impacted by the Bitcoin halving and a shift in customer contract mix, though partially mitigated by the energization of Project Dorothy 2.
Demand response service revenue fell by 34% to $1.1 million, attributed to lower Megawatts bid into the program and operational limitations.
The company's cash position significantly improved to $51.4 million as of September 30, 2025, from $7.8 million at December 31, 2024.
Working capital turned positive, reaching $10.2 million as of September 30, 2025, compared to a deficit of $34.4 million at December 31, 2024.
Adjusted EBITDA for the nine months ended September 30, 2025, was a negative $9.2 million, a significant decrease from a positive $3.5 million in the prior year.
The company settled its NYDIG equipment financing loan, resulting in a net gain on debt extinguishment of approximately $10.1 million.
Project Dorothy 2, a 48 MW facility, completed construction and achieved full energization on November 13, 2025, bringing total energized capacity to 123 MW and over 5 EH/s.
Construction began on Project Kati, a 166 MW facility, in Q3 2025, with initial energization targeted for Q1 2026 and Galaxy Digital secured as the first customer.
Soluna Holdings regained compliance with Nasdaq's $1.00 minimum bid price requirement on October 3, 2025.
Stockholders approved an increase in authorized common stock from 75 million to 375 million shares on November 7, 2025.

Sentiment

Score: 3

Explanation: The company faces significant financial challenges, including substantial net losses, negative Adjusted EBITDA, and an explicit 'going concern' warning. While recent capital raises and project developments offer some operational progress and liquidity, the underlying profitability issues and increased expenses, coupled with internal control weaknesses, indicate a precarious financial position.

Positives

Cash and restricted cash significantly increased to $60.5 million as of September 30, 2025, from $10.5 million at the beginning of the period, indicating successful capital raising efforts.
Working capital improved substantially to a positive $10.2 million as of September 30, 2025, from a deficit of $34.4 million at December 31, 2024.
Secured a new $100 million credit facility with Generate Lending, LLC, with $12.6 million already drawn, providing significant project-level financing capacity.
Successfully settled the NYDIG equipment financing loan, resulting in a gain on debt extinguishment of approximately $10.1 million.
Project Dorothy 2 (48 MW) completed construction and achieved full energization on November 13, 2025, increasing total energized data center capacity to 123 MW and over 5 EH/s.
Regained compliance with Nasdaq's minimum bid price requirement on October 3, 2025, resolving a key listing concern.
Stockholders approved an increase in authorized common stock to 375 million shares, providing flexibility for future capital raises and strategic initiatives.
Initiated construction on Project Kati (166 MW) in Q3 2025, with initial energization planned for Q1 2026 and a major customer (Galaxy Digital) already secured.
Formed new hosting partnerships with KULR Technology Group and Canaan Inc., expanding the customer base and deploying additional Bitcoin mining capacity.

Negatives

Net loss for the nine months ended September 30, 2025, more than doubled to $40.9 million, compared to $19.8 million in the prior year.
Total revenue decreased by 31% to $20.5 million for the nine months ended September 30, 2025, from $29.7 million in the same period of 2024.
Cryptocurrency mining revenue decreased by 37% and data hosting revenue by 25% for the nine-month period, primarily due to the Bitcoin halving event and operational factors.
Adjusted EBITDA turned significantly negative, reporting a loss of $9.2 million for the nine months ended September 30, 2025, compared to a positive $3.5 million in the prior year.
Incurred a substantial fair value adjustment loss of $22.2 million for the nine months ended September 30, 2025, mainly from the revaluation of Series A and B warrants.
General and administrative expenses (exclusive of depreciation and amortization) increased by 30% to $19.1 million for the nine-month period.
Interest expense increased by 92% to $3.2 million for the nine-month period, driven by new debt facilities.
Recognized $5.2 million in other financing expenses for the nine months ended September 30, 2025, related to consent fees and transaction costs.
Incurred a $0.8 million loss from the forfeiture of an equipment credit due to non-use by the expiration date.
Material weaknesses in internal control over financial reporting were identified, specifically regarding EPS calculation and accounting for complex equity transactions.

Risks

Substantial doubt exists about the Company's ability to continue as a going concern within one year due to recurring losses and negative cash flows from operations.
Dependence on raising additional working capital through equity offerings, debt financing, partnerships, and collaborations, with no assurance of availability or favorable terms.
Profitability of Bitcoin mining is highly sensitive to Bitcoin's market price, global network hashrate, mining difficulty, and electricity costs.
The Bitcoin Halving event significantly reduces block rewards, impacting future cryptocurrency mining revenue.
Revenue concentration among a small number of customers in the Bitcoin Hosting Business poses a risk if any major customer exits or reduces operations.
Operational degradation of aging miner fleets and the need for hardware upgrades can impact efficiency and revenue generation.
Market conditions and operational limitations can reduce demand response service revenue, as seen with the decline in ERCOT Clearing Price per MW and site outages.
The company's strategic pipeline of projects requires significant capital expenditures, and delays or inability to secure financing could hinder development.
Material weaknesses in internal control over financial reporting could lead to further financial misstatements or regulatory scrutiny.

Future Outlook

The company's growth strategy focuses on expanding its pipeline of renewable energy-powered data center projects and accelerating their development through joint ventures and strategic partnerships. Key initiatives for 2025 and 2026 include increasing curtailment assessments with power partners, advancing projects to shovel-ready status, executing additional project term sheets, developing AI/HPC data center joint ventures, building AI/HPC expertise, energizing Project Dorothy 2, optimizing existing data centers, and pursuing financing opportunities for Projects Kati and Rosa. The company aims to leverage project cash flows to refinance and deploy debt financing in new projects.

Management Comments

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).
Renewable Computing bridges the gap—unlocking stranded renewable energy and turning it into scalable computing power.
Our approach is purpose-built for the energy transition, specializing in curtailment solutions and working closely with leading renewable energy developers.
A key strategic advantage is our model of co-locating data centers directly with renewable power generation assets, improving power economics and accelerating time-to-market.
With a repeatable strategy and a growing pipeline of projects, we are scaling a new category of digital infrastructure—one that enhances returns for renewable farms, lowers computing costs, and advances a more sustainable future.

Industry Context

The company operates at the intersection of renewable energy and high-performance computing, addressing the global challenge of curtailed clean energy and the critical power shortage for energy-intensive applications like AI, HPC, and Bitcoin mining. The Bitcoin halving event in April 2024 significantly impacted cryptocurrency mining revenue across the industry, necessitating strategic adjustments like shifting to hosting services and diversifying into AI/HPC. Increased participation in demand response programs reflects a broader industry trend towards grid stabilization and monetization of flexible energy loads.

Management Changes

Role	Previous Person	New Person	Effective Date	Reason
Chief Financial Officer and Treasurer	John Tunison	David C. Michaels (Interim)	2025-08-21	Resignation of John Tunison; David C. Michaels, a Board member, appointed interim.

Corporate Governance

Change Type	Description	Effective Date	Impact Assessment
Internal Control Weakness	Did not maintain effective control over the accurate calculation of basic and diluted EPS due to incorrect inclusion of unvested Restricted Stock Award shares. Also, ineffective controls over accounting for complex equity transactions, specifically derivative warrant liabilities, leading to material adjustments.	2025-09-30	Reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information, though financial statements are deemed fairly stated.
Authorized Shares Increase	Stockholders approved an amendment to increase the Company's authorized shares of common stock from 75,000,000 to 375,000,000 shares.	2025-11-07	Provides greater flexibility for future equity financings and strategic corporate actions, potentially leading to further dilution for existing shareholders.

Legal Proceedings

Settled the NYDIG equipment financing loan dispute on September 29, 2025, resolving the Agreed Judgment Amount of approximately $9.2 million plus interest. All settlement payments have been fully satisfied.

Related Party Transactions

MeOH Power, Inc.: A Senior Demand Promissory Note of $380 thousand, with $399 thousand of principal and interest outstanding as of September 30, 2025, fully reserved by the Company.
Harmattan Energy, Ltd. (HEL): Several directors have affiliations and ownership interests in HEL. Merger Shares remain available for issuance to HEL based on energization and employee retention conditions. The Company's equity investment in HEL was fully impaired in fiscal year 2023.
Spring Lane Capital (SLC): A key project-level financing partner for Project Dorothy 1A, Dorothy 2, and Project Kati, with significant capital commitments and membership interests in these entities.

Stakeholder Impact

Shareholders: Face significant dilution from ongoing equity raises (ATM, SEPA, July Offering) and the increase in authorized shares. The 'going concern' warning poses a substantial risk to investment value. However, project developments and new partnerships offer potential long-term value.
Employees: Stock-based compensation increased, indicating continued incentives. Management changes (CFO) may impact internal stability.
Customers: New hosting partnerships (KULR, Canaan) and the energization of Project Dorothy 2 indicate expanded service offerings and capacity for Bitcoin hosting and AI/HPC workloads.
Creditors: Debt settlements (NYDIG) and new credit facilities (Generate, Galaxy) demonstrate active debt management and access to capital, but increased interest expense and the 'going concern' warning highlight ongoing credit risk.
Suppliers/Partners: Continued project development (Kati, Rosa, Hedy, Ellen, Annie, Fei, Gladys) suggests ongoing demand for equipment and services from partners.

Next Steps

Continue to evaluate and implement strategies to obtain financing to fund expenses and growth.
Advance projects to shovel-ready status and execute additional project term sheets to expand the power pipeline.
Form partnerships to develop AI/HPC data center joint ventures and build related expertise.
Optimize operational efficiency and customer mix of existing data centers.
Achieve initial energization of Project Kati 1 by the first quarter of 2026.
Continue remediation efforts for identified material weaknesses in internal control over financial reporting, with expected implementation prior to December 31, 2025.

Key Dates

Date	Description
2021-12-30	Soluna MC Borrowings, LLC 2021-1 entered into a Master Equipment Finance Agreement with NYDIG.
2022-01-31	Soluna MC LLC completed two drawdowns totaling approximately $14.4 million under the NYDIG Master Agreement.
2023-02-23	NYDIG foreclosed on collateral, repossessing assets valued at approximately $3.4 million, after the Borrower defaulted on NYDIG Loans.
2023-05-09	DVCC and Navitas West Texas Investments SPV, LLC entered into a 2-year Loan Agreement for $2,050,000.
2023-08-11	Company paid a mandatory dividend on its outstanding Series B Preferred Stock in the amount of approximately $656 thousand.
2023-12-07	NYDIG filed a motion for summary judgment seeking approximately $10.3 million for unpaid principal, interest, and penalties.
2024-02-23	Stipulation and Agreed Judgment between Soluna Parties and NYDIG was approved by the Court, granting judgment to NYDIG for approximately $9.2 million.
2024-03-14	Company fulfilled purchase obligations and assumed Additional Notes through payment of $750 thousand.
2024-05-16	SDI Borrower entered into an Equipment Loan Agreement with Soluna2 SLC Fund II Project Holdco LLC for up to $4.0 million.
2024-05-17	SDI Borrower drew down $720 thousand of the Equipment Loan.
2024-06-20	CloudCo issued a secured promissory note for $12.5 million (Green Cloud secured note) to an accredited investor.
2024-07-12	Company, CloudCo, Soluna Cloud, and the Investor entered into a First Amendment to the Note Purchase Agreement, allowing issuance of additional secured promissory notes totaling $1.25 million.
2024-07-22	Company closed financing for Project Dorothy 2; SDI Borrower satisfied and repaid the $720 thousand borrowing amount in full by issuing Class B Membership Interests.
2024-08-12	Company entered into a Standby Equity Purchase Agreement (SEPA) with YA II PN, LTD. for up to $25 million in common stock.
2024-10-01	CloudCo, Soluna Cloud, and the Company entered into assignment and assumption agreements with Additional Investors for $1.25 million of notes.
2024-10-09	Company announced a new hosting partnership with KULR Technology Group, Inc. for 3.3 MW at Project Sophie.
2024-11-07	Stockholders approved an amendment to increase authorized common stock from 75,000,000 to 375,000,000 shares.
2024-11-13	Company announced the completion and full energization of Project Dorothy 2.
2024-12-12	Company entered into an agreement with remaining three Note Holders to immediately convert all outstanding principal of certain convertible notes into common stock.
2025-03-12	Soluna SW LLC entered into a Loan Agreement with Galaxy Digital LLC for a $5.0 million term loan facility.
2025-03-21	Note Parties entered into a Modification Agreement for the Green Cloud secured note; SDI Borrower drew down $250 thousand of the Equipment Loan.
2025-03-24	CloudCo notified HPE of its termination of the HPE Agreement.
2025-03-26	HPE notified CloudCo of its termination of the HPE Agreement for cause.
2025-04-29	Company entered into an At the Market Offering Agreement (ATM Agreement) with H.C. Wainwright & Co., LLC for up to $87.65 million in common stock.
2025-06-11	SDI Borrower drew down an additional $269.2 thousand of the Equipment Loan.
2025-07-15	Company entered into a securities purchase agreement for a public offering (July 2025 Offering) of common stock and warrants.
2025-07-16	SDI Borrower drew down an additional $291.4 thousand of the Equipment Loan.
2025-07-17	The July 2025 Offering closed.
2025-07-22	Company finalized a contribution agreement from SLC for the first 35 MW of Project Kati 1.
2025-08-01	SDI Borrower satisfied and repaid the Equipment Loan in full by issuing Class B Membership Interests in Soluna KKSL JVCo LLC (Kati) project to Spring Lane Capital.
2025-08-05	John Tunison, CFO, notified the Company of his resignation effective August 21, 2025.
2025-08-08	David C. Michaels was appointed interim CFO and Treasurer, effective August 21, 2025.
2025-09-12	Company's subsidiaries entered into a Credit and Guaranty Agreement with Generate Lending, LLC for up to $35.5 million in senior secured term loan commitments.
2025-09-18	Company held a groundbreaking ceremony and officially began construction of Project Kati.
2025-09-28	Company executed a side letter with Generate Lending, LLC in relation to 2.0 million outstanding Generate Common Warrants.
2025-09-29	Soluna Parties and NYDIG entered into a Settlement Agreement to fully resolve the Agreed Judgment Amount.
2025-09-30	Company announced a strategic hosting agreement with Canaan Inc. to deploy 20 MW of Bitcoin miners at Project Dorothy.
2025-10-03	Company received formal written notice from Nasdaq indicating compliance with the Bid Price Rule.
2025-10-08	Company issued an additional 17,820 Merger Shares related to the Soluna Callisto acquisition.
2025-11-07	Company filed the Certificate of Amendment with the Secretary of State of the State of Nevada, increasing authorized common stock.

Recommendation

sell

Despite recent capital raises and project advancements, the company reported a significant increase in net loss and a negative Adjusted EBITDA for the nine months ended September 30, 2025. The explicit 'substantial doubt about the Company's ability to continue as a going concern' is a critical red flag for investors. While liquidity has improved, it is primarily through dilutive equity offerings and new debt, rather than sustainable operational profitability. The material weaknesses in internal controls further compound the risk. For a seasoned investor, the fundamental financial health and the going concern warning outweigh the operational progress and capital infusions, suggesting a high-risk profile and a recommendation to sell.

Keywords

Soluna Holdings, SLNH, Bitcoin mining, cryptocurrency, data center, high-performance computing, AI, renewable energy, SEC filing, 10-Q, financial results, project development, capital raise, corporate governance, risk management

Disclaimer:The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.