Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Aug. 28, 2022 | Jun. 30, 2021 | |
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2021 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2021 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity File Number | 001-40261 | ||
Entity Registrant Name | Soluna Holdings, Inc. | ||
Entity Central Index Key | 0000064463 | ||
Entity Tax Identification Number | 14-1462255 | ||
Entity Incorporation, State or Country Code | NV | ||
Entity Address, Address Line One | 325 Washington Avenue Extension | ||
Entity Address, City or Town | Albany | ||
Entity Address, State or Province | NY | ||
Entity Address, Postal Zip Code | 12205 | ||
City Area Code | 518 | ||
Local Phone Number | 218-2550 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 62,830,478 | ||
Entity Common Stock, Shares Outstanding | 13,949,706 | ||
Auditor Name | UHY LLP (1195) | ||
Auditor Firm ID | 1195 | ||
Auditor Location | Albany, New York | ||
Common Stock Par Value 0. 001 Per Share [Member] | |||
Title of 12(b) Security | Common Stock, par value $0.001 per share | ||
Trading Symbol | SLNH | ||
Security Exchange Name | NASDAQ | ||
Sec 9. 0 Series Cumulative Perpetual Preferred Stock Par Value 0. 001 Per Share [Member] | |||
Title of 12(b) Security | 9.0% Series A Cumulative Perpetual Preferred Stock, par value $0.001 per share | ||
Trading Symbol | SLNHP | ||
Security Exchange Name | NASDAQ |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Current Assets: | ||
Cash | $ 10,258 | $ 2,630 |
Accounts receivable | 531 | 59 |
Inventories | ||
Prepaid expenses and other current assets | 977 | 22 |
Deposits on equipment | 10,188 | 279 |
Current assets associated with discontinued operations | 3,028 | 1,789 |
Total Current Assets | 24,982 | 4,779 |
Other assets | 1,121 | 309 |
Deferred tax asset, net | 699 | |
Equity investment | 750 | 750 |
Property, plant and equipment, net | 44,597 | 722 |
Intangible assets, net | 45,839 | |
Operating lease right-of-use assets | 405 | 427 |
Long-term assets associated with discontinued operations | 961 | |
Total Assets | 117,694 | 8,647 |
Current Liabilities: | ||
Accounts payable | 2,958 | 192 |
Accrued liabilities | 2,859 | 663 |
Line of credit | 1,000 | |
Notes payable | 7,121 | |
Deferred revenue | 316 | |
Operating lease liability | 184 | 134 |
Income taxes payable | 2 | 2 |
Current liabilities associated with discontinued operations | 1,243 | 646 |
Total Current Liabilities | 15,683 | 1,637 |
Other liabilities | 509 | 203 |
Operating lease liability | 237 | 297 |
Deferred tax liability, net | 10,277 | |
Long-term liabilities associated with discontinued operations | 594 | |
Total Liabilities | 26,706 | 2,731 |
Stockholders’ Equity: | ||
9.0% Series A Cumulative Perpetual Preferred Stock, par value $0.001 per share, $25.00 liquidation preference; authorized 3,640,000; 1,252,299 shares issued and outstanding as of December 31, 2021 and no shares issued and outstanding as of December 31, 2020 | 1 | |
Common stock, par value $0.001 per share, authorized 75,000,000; 14,769,699 issued and outstanding as of December 31, 2021 and 10,750,100 issued and outstanding as of December 31, 2020 | 15 | 11 |
Additional paid-in capital | 228,420 | 137,462 |
Accumulated deficit | (123,684) | (117,793) |
Common stock in treasury, at cost, 1,015,493 shares in both 2021 and 2020 | (13,764) | (13,764) |
Total Stockholders’ Equity | 90,988 | 5,916 |
Total Liabilities and Stockholders’ Equity | $ 117,694 | $ 8,647 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2021 | Dec. 31, 2020 |
Preferred stock, shares authorized | 3,640,000 | 3,640,000 |
Preferred Stock, shares issued | 1,252,299 | 0 |
Preferred Stock, shares outstanding | 1,252,299 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common Stock, shares authorized | 75,000,000 | 75,000,000 |
Common Stock, shares issued | 14,769,699 | 10,750,100 |
Common Stock, shares outstanding | 14,769,699 | 10,750,100 |
Treasury stock, shares | 1,015,493 | 1,015,493 |
Series A Preferred Stock [Member] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, liquidationPreference | $ 25 | $ 25 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Total revenue | $ 14,345 | $ 595 |
Operating costs and expenses: | ||
Cost of cryptocurrency mining revenue | 5,626 | 405 |
Cost of data hosting revenue | 2,444 | |
Selling, general and administrative expenses | 10,751 | 1,832 |
Operating loss | (4,476) | (1,642) |
Interest expense | (1,879) | |
Other income, net | 11 | 100 |
Loss before income taxes from continuing operations | (6,344) | (1,542) |
Income tax (expense) benefit from continuing operations | (44) | 332 |
Net loss from continuing operations | (6,388) | (1,210) |
Income before income taxes from discontinued operations | 1,087 | 3,096 |
Income tax benefit from discontinued operations | 40 | 60 |
Net income from discontinued operations | 1,127 | 3,156 |
Net (loss) income | $ (5,261) | $ 1,946 |
Net loss from continuing operations per share (Basic) | $ (0.59) | $ (0.13) |
Net Income from discontinued operations per share (Basic) | 0.09 | 0.33 |
Basic (loss) earnings per share | (0.50) | 0.20 |
Net loss from continuing operations per share (Diluted) | (0.59) | (0.13) |
Net Income from discontinued operations per share (Diluted) | 0.09 | 0.33 |
Diluted (loss) earnings per share | $ (0.50) | $ 0.20 |
Weighted average shares outstanding (Basic & Diluted) | 11,840,242 | 9,581,886 |
Cryptocurrency Revenue [Member] | ||
Total revenue | $ 10,932 | $ 595 |
Data Hosting Revenue [Member] | ||
Total revenue | $ 3,413 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity - USD ($) $ in Thousands | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Treasury Stock [Member] | Total |
December 31, 2020 at Dec. 31, 2019 | $ 10 | $ 137,326 | $ (119,739) | $ (13,764) | $ 3,833 | |
Beginning balance (in shares) at Dec. 31, 2019 | 0 | 10,586,170 | 1,015,493 | |||
Net loss | 1,946 | 1,946 | ||||
Stock based compensation | 54 | 54 | ||||
Issuance of shares – option exercises | 83 | 83 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period (in shares) | 83,000 | |||||
Issuance of shares – restricted stock | $ 1 | (1) | ||||
Stock Issued During Period, Shares, Restricted Stock Award, Gross (in shares) | 80,930 | |||||
December 31, 2021 at Dec. 31, 2020 | $ 11 | 137,462 | (117,793) | $ (13,764) | 5,916 | |
Ending balance (in shares) at Dec. 31, 2020 | 0 | 10,750,100 | 1,015,493 | |||
Net loss | (5,261) | (5,261) | ||||
Stock based compensation | 2,021 | 2,021 | ||||
Issuance of shares – option exercises | 102 | 102 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period (in shares) | 123,400 | |||||
Issuance of shares – restricted stock | 256 | 256 | ||||
Stock Issued During Period, Shares, Restricted Stock Award, Gross (in shares) | 232,331 | |||||
Preferred dividends | (630) | (630) | ||||
Issuance of shares – preferred offering | $ 1 | 25,056 | 25,057 | |||
Stock Issued During Period, Shares, New Issues (in shares) | 1,252,299 | 2,782,258 | ||||
Issuance of shares – stock offering | $ 3 | 15,400 | 15,403 | |||
Stock issued during period, shares, new issues (in shares) | 1,252,299 | 2,782,258 | ||||
Issuance of shares – warrant exercises | $ 1 | 4,792 | 4,793 | |||
Issuance of shares warrant exercises (in shares) | 581,610 | |||||
Issuance of shares- Notes conversion | 1,377 | 1,377 | ||||
Issuance of shares note conversion (in shares) | 150,000 | |||||
Issuance of shares- termination shares | 1,917 | 1,917 | ||||
Issuance of shares termination shares (in shares) | 150,000 | |||||
Warrants issued in relation to debt financing | 7,037 | 7,037 | ||||
Share consideration of asset acquisition | 33,000 | 33,000 | ||||
December 31, 2021 at Dec. 31, 2021 | $ 1 | $ 15 | $ 228,420 | $ (123,684) | $ (13,764) | $ 90,988 |
Ending balance (in shares) at Dec. 31, 2021 | 1,252,299 | 14,769,699 | 1,015,493 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Operating Activities | ||
Net loss- continuing operations | $ (6,388,000) | $ (1,210,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 3,703,000 | 81,000 |
Stock based compensation | 1,941,000 | 40,000 |
Consultant stock compensation | 104,000 | |
Deferred income taxes | 41,000 | (336,000) |
Amortization of operating lease asset | 169,000 | 86,000 |
Amortization on deferred financing costs and discount on notes | 1,876,000 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (471,000) | (26,000) |
Prepaid expenses and other current assets | (956,000) | 3,000 |
Other long-term assets | (812,000) | (309,000) |
Accounts payable | 2,765,000 | 163,000 |
Deferred revenue | 316,000 | |
Income taxes and uncertain tax positions | 2,000 | |
Operating lease liabilities | (156,000) | (82,000) |
Other liabilities | 306,000 | 203,000 |
Accrued liabilities | 2,197,000 | 171,000 |
Net cash provided by (used in) operating activities | 4,635,000 | (1,214,000) |
Net cash provided by operating activities- discontinued operations | 917,000 | 3,115,000 |
Investing Activities | ||
Purchases of equipment | (45,792,000) | (805,000) |
Purchases of intangible assets | (1,567,000) | |
Deposits of equipment, net | (9,909,000) | (279,000) |
Purchase of stock in equity investment | (750,000) | |
Net cash used in investing activities | (57,268,000) | (1,834,000) |
Net cash used in investing activities- discontinued operations | (37,000) | (30,000) |
Financing Activities | ||
Proceeds from equity offering | 17,250,000 | |
Proceeds from preferred offering | 27,965,000 | |
Proceeds from notes issuance | 15,000,000 | |
Costs of equity offering | (1,847,000) | |
Costs of preferred offering | (2,707,000) | |
Costs of notes issuance | (1,338,000) | |
Cash dividends on preferred stock | (630,000) | |
Borrowings under line of credit | 1,000,000 | |
Proceeds from stock option exercises | 102,000 | 83,000 |
Proceeds from common stock warrant exercises | 4,586,000 | |
Net cash provided by financing activities | 59,381,000 | 83,000 |
Increase (decrease) in cash-continuing operations | 6,748,000 | (2,965,000) |
Increase in cash- discontinued operations | 880,000 | 3,085,000 |
Cash - beginning of period | 2,630,000 | 2,510,000 |
Cash - end of period | 10,258,000 | 2,630,000 |
Supplemental Disclosure of Cash Flow Information | ||
Purchase of miner equipment using restricted stock | (207,000) | |
Termination shares issued in conjunction with merger for intangible assets | 1,917 | |
S-3 fees in accounts payable | (200,000) | |
Warrants exercised prior to year-end not received until subsequent period | 206,000 | |
Share consideration in relation to strategic pipeline contract | $ 33,000,000 |
Nature of Operations
Nature of Operations | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations | 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, “SCI” refers to Soluna Computing, Inc., formerly known as EcoChain, Inc., and “MTI Instruments” refers to MTI Instruments, Inc.. Soluna Holdings, Inc., formerly known as Mechanical Technology, Incorporated was incorporated in Nevada on March 24, 2021, and is the successor to Mechanical Technology, Inc., which was incorporated in the State of New York in 1961, as a result of a merger which became effective on March 29, 2021, and is headquartered in Albany, New York. Effective November 2, 2021, the Company changed its name from “Mechanical Technology, Incorporated” to “Soluna Holdings, Inc.” SHI currently conducts our businesses through our two wholly owned subsidiaries, SCI and MTI Instruments. SCI is presently engaged in the mining of cryptocurrency through data centers that can be powered by renewable energy sources. MTI Instruments is engaged in the design, manufacture, and sale of vibration measurement and system balancing solutions, precision linear displacement sensors, instruments and system solutions, and wafer inspection tools. Recently, SCI has built, and intends to continue to develop and build, modular data centers that are currently used for cryptocurrency mining and that in the future can be used for computing intensive, batchable applications, such as artificial intelligence and machine learning, with the goal of providing a cost-effective alternative to battery storage or transmission lines. Headquartered in Albany, New York, the Company uses technology and intentional design to solve complex, real-world challenges. SCI was incorporated in Delaware on January 8, 2020 as EcoChain, Inc., which has a cryptocurrency mining facility that integrates with the cryptocurrency blockchain network in the State of Washington. Through the October 2021 acquisition by EcoChain, Inc. of an entity at the time named Soluna Computing, Inc., SCI also has a pipeline of certain cryptocurrency mining projects previously owned by Harmattan Energy, Ltd. (“HEL”) (formerly known as Soluna Technologies, Ltd.), a Canadian corporation incorporated under the laws of the Province of British Colombia that develops vertically-integrated, utility-scale computing facilities focused on cryptocurrency mining and cutting-edge blockchain applications. Following such acquisition, on November 15, 2021, SCI completed its conversion and redomicile to Nevada and changed its name from “EcoChain, Inc.” to “Soluna Computing, Inc.” The following day, the acquired entity, Soluna Computing, Inc., changed its name to “Soluna Callisto Holdings Inc.” (“Soluna Callisto”). MTI Instruments was incorporated in New York on March 8, 2000 and is a supplier of vibration measurement and balancing systems, precision linear displacement solutions, and wafer inspection tools. MTI Instruments’ products consist of engine vibration analysis systems for both military and commercial aircraft and electronic gauging instruments for position, displacement and vibration application within the industrial manufacturing markets, as well as in the research, design and process development markets. These systems, tools and solutions are developed for markets and applications that require consistent operation of complex machinery and the precise measurements and control of products, processes, the development and implementation of automated manufacturing and assembly. On On April 29, 2021, the Company closed a public securities offering (the “April Offering”), pursuant to which the Company issued and sold 2,419,355 604,839 15.0 million 7.0 1.05 million 225 13.7 million 362,903 90,726 2.25 million 7.0 2.03 million 350 15.4 million 8.24 five years 139,113 6.82 On May 4, 2021, Soluna MC LLC 25-year Soluna MC Soluna MC Soluna MC Soluna MC has agreed to pay rent to the landlord of $ 500,000 4,000,000 Soluna MC Soluna MC Soluna MC The Company is required to issue to the landlord 100,000 Soluna MC Soluna MC Soluna MC Soluna MC Soluna MC Soluna MC Soluna MC On August 23, 2021, the Company issued and sold pursuant to a firm commitment public offering (the “August Preferred Offering”) 720,000 shares of a new series of the Company’s preferred shares known as the 9.0 25.00 18.0 million 6.0 640 16.2 million 108,000 86,585 2.16 million 140 aggregate net proceeds to the Company of $2.0 million. Dividends on the Series A Preferred Stock will be payable when, as and if declared by the Board of Directors monthly in arrears on the final day of each month or the next business day at an annual rate of 9.0% of the $25.00 liquidation preference per share . On December 28, 2021, the Company issued and sold pursuant to a firm commitment public offering (the “December Preferred Offering”) 445,714 shares of the Series A Preferred Stock for aggregate gross proceeds of approximately $7.8 million less underwriting discounts of 7.0% ($546,000) and other offering fees and expenses of approximately ($500,000), resulting in aggregate net proceeds to the Company of approximately $6.7 million. In connection with the December Preferred Offering,, the Company granted the underwriters a 45-day option to purchase up to an additional 66,587 shares (the “Option Shares”) of the Series A Preferred Stock on the same terms as the shares sold in the December preferred Offering (the “Over-Allotment Option”). . The Over-Allotment Option was exercised by the underwriters in full on January 5, 2022, resulting in additional aggregate gross proceeds of approximately $1.17 million less applicable underwriter discounts and other offering fees and expenses. Liquidity The Company has historically incurred significant losses primarily due to our past efforts to fund direct methanol fuel cell product development and commercialization programs and had a consolidated accumulated deficit of approximately $ 123.7 9.3 million 1.0 million 7.1 million 16.2 million pproximately $4.6 million in cash provided by operating activities for continuing operations, and approximately $10.3 million of cash available to fund our operations. During the year ended December 31, 2021, the Company paid approximately $ 45.8 million 10.0 million 14.6 million 10.0 million The COVID-19 global pandemic has been unprecedented and unpredictable and our impact is likely to continue to result in significant national and global economic disruption, which may adversely affect our business. Although the Company has experienced some minor changes to its miner shipments due to disruptions in the global supply chain, the Company however does not expect any material impact on its long-term strategic plans, our operations, or our liquidity due to the impacts of COVID-19. However, the Company is actively monitoring this situation and the possible effects on our financial condition, liquidity, operations, suppliers, and the industry. |
Accounting Policies
Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Accounting Policies | 2. Accounting Policies Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, SCI and MTI Instruments. All intercompany balances and transactions are eliminated in consolidation. 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. The reclassifications relate to the presentation of discontinued operations. Use of Estimates The consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”), which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Inventories The Company notes that Inventory is included in Current assets associated with discontinued operations. Inventories are valued at the lower of cost (first-in, first-out) or net realizable value. The Company periodically reviews inventory quantities on hand and records a provision for excess, slow moving and obsolete inventory based primarily on our estimated forecast of product demand, as well as based on historical usage. The Company also provides estimated inventory allowances for inventory whose carrying value is in excess of net realizable value. Demand and usage for products and materials can fluctuate significantly. A significant decrease in demand for our products could result in a short-term increase in the cost of inventory purchases and an increase of excess inventory quantities on hand. Although the Company makes every effort to assure the accuracy of our forecasts of future product demand, any significant unanticipated changes in demand could have a significant impact on the value of our inventory and our reported operating results. If changes in market conditions result in reductions in the estimated net realizable value of our inventory below our previous estimate, the Company would increase our reserve in the period in which we made such a determination and record a charge to cost of product revenue. Property, Plant, and Equipment Property, plant and equipment are stated at cost and depreciated using the straight-line method over their estimated useful lives as follows: Schedule of Useful Lives Leasehold improvements Lesser of the life of the lease or the useful life of the improvement Computers and related software 3 5 Cryptocurrency miners 3 Machinery and equipment 8 15 Office furniture, equipment and fixtures 2 10 Buildings 30 40 Purchased modular buildings 15 20 Significant additions or improvements extending assets’ useful lives are capitalized; normal maintenance and repair costs are expensed as incurred. The costs of fully depreciated assets remaining in use are included in the respective asset and accumulated depreciation accounts. When items are sold or retired, related gains or losses are included in net (loss) income. Intangible assets Intangible assets include the Strategic Pipeline Contract with an estimated useful life of 5 5 15 25 Income Taxes The Company is subject to income taxes in the U.S. (federal and state). As part of the process of preparing our consolidated financial statements, the Company calculates income taxes for each of the jurisdictions in which the Company operates. This involves estimating actual current taxes due together with assessing temporary differences resulting from differing treatment for tax and accounting purposes that are recorded as deferred tax assets and liabilities, loss carryforwards and tax credit carryforwards, for which income tax benefits are expected to be realized in future years. A valuation allowance has been established to reduce deferred tax assets, if it is more likely than not that all, or some portion, of such deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized in the period that includes the enactment date. Significant management judgment is required in determining the Company’s provision for income taxes, deferred tax assets and liabilities, and any valuation allowance recorded against the Company’s net deferred tax assets. The Company considers all available evidence, both positive and negative, such as historical levels of income and future forecasts of taxable income amongst other items in determining the Company’s valuation allowance. In addition, the Company’s assessment requires the Company 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 accounts for taxes in accordance with the asset and liability method of accounting for income taxes. Under this method, the Company must recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. The impact of the Company’s reassessment of its tax positions for these standards did not have a material impact on its results of operations, financial condition, or liquidity. The Company is currently subject to audit in various jurisdictions, and these jurisdictions may assess additional income tax liabilities against us. Developments in an audit, litigation, or in applicable laws, regulations, administrative practices, principles, and interpretations could have a material effect on the Company’s operating results or cash flows in the period or periods in which such developments occur, as well as for prior and in subsequent periods. Tax laws, regulations, and administrative practices in various jurisdictions may be subject to significant change, with or without notice, due to economic, political, and other conditions, and significant judgment is required in evaluating and estimating the Company’s provision and accruals for these taxes. There are many transactions that occur during the ordinary course of business for which the ultimate tax determination is uncertain. The Company’s effective tax rates could be affected by numerous factors, such as intercompany transactions, earnings being lower than anticipated in jurisdictions where the Company has lower statutory rates and higher than anticipated in jurisdictions where the Company has higher statutory rates, the applicability of special tax regimes, losses incurred in jurisdictions for which the Company is not able to realize the related tax benefit, changes in foreign currency exchange rates, entry into new businesses and geographies, changes to its existing businesses and operations, acquisitions and investments and how they are financed, changes in the Company’s stock price, changes in its deferred tax assets and liabilities and their valuation, and changes in the relevant tax, accounting, and other laws, regulations, administrative practices, principles, and interpretations. Equity Investment – HEL The Company owns approximately 1.79 1.86 750 Equity Investments without Readily Determinable Fair Values Our equity investment in HEL is accounted for under the measurement alternative. Equity securities measured and recorded using the measurement alternative are recorded at cost minus impairment, if any, plus or minus changes resulting from qualifying observable price changes. Adjustments resulting from impairments and observable price changes are recorded in the income statement. There was no impairment of investment recognized in 2021 and 2020. Equity Method Investments The Company’s consolidated net income will include our proportionate share, if any, of the net income or loss of our equity method investee. When the Company records its proportionate share of net income, it increases equity income (loss), net in our consolidated statements of operations and our carrying value in that investment. Conversely, when the Company records its proportionate share of a net loss, it decreases equity income (loss), net in our consolidated statements of operations and our carrying value in that investment. When the Company’s carrying value in an equity method investee company has been reduced to zero, no further losses are recorded in the Company’s financial statements unless the Company guaranteed obligations of the investee company or has committed additional funding. When the investee company subsequently reports income, the Company will not record its share of such income until it equals the amount of its share of losses not previously recognized. As of December 31, 2021, the Company owned approximately 47.5 75,049,937 240,000,000 0 Fair Value Measurement The estimated fair value of certain financial instruments, including cash, accounts receivable and short-term debt approximates their carrying value due to their short maturities and varying interest rates. “Fair value” is the price that would be received to sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Based on the observability of the inputs used in the valuation methods, the Company is required to provide the following information according to the fair value accounting standards. These standards established a fair value hierarchy as specified that ranks the quality and reliability of the information used to determine fair values. Financial assets and liabilities are classified and disclosed in one of the following three categories: Level 1: Quoted market prices in active markets for identical assets or liabilities, which includes listed equities. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. These items are typically priced using models or other valuation techniques. These models are primarily financial industry-standard models that consider various assumptions, including the time value of money, yield curves, volatility factors, as well as other relevant economic measures. Level 3: These use unobservable inputs that are not corroborated by market data. These values are generally estimated based upon methodologies utilizing significant inputs that are generally less observable from objective sources. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. On October 25, 2021, pursuant to a securities purchase agreement dated October 20, 2021 (the “SPA), the Company issued to certain accredited investors Class A, Class B and Class C common stock purchase warrants (collectively, the “Warrants”) to purchase up to an aggregate of 1,776,073 12.50 15 18 The fair value of the Warrants was determined to be $ 8.29 8.10 7.95 The following table provides quantitative information regarding the inputs to the fair value measurement of the Warrants as of the valuation date: Input 2021 Risk-free interest rate 1.19 % Expected term (years) 5.00 Expected volatility 150.00 % Consistent with the guidance in purchase accounting, the value of the pipeline of certain cryptocurrency mining projects previously owned by HEL acquired in the Soluna Callisto acquisition in October 2021 as of the acquisition date was estimated using an expected value approach, which probability-weights various future outcomes and uses certain Level 3 inputs. Including in those inputs are the following key assumptions: expected growth in share price at a risk-free rate in the risk-neutral framework based on U.S. Treasury Rates as of the valuation date, volatility of share price based on historical equity volatilities of comparable companies over a lookback period, and assessment associated with qualified projects based on assessment on timing of payments and assessment of active megawatt scenarios and the associated probabilities. The resulting amounts are then discounted to present value through use of a discount rate that considers, among other things, the risk of the payments, credit risk of the Company, and overall weighted average cost of capital of the acquired business. The resulting calculations resulted in an estimated fair value of the acquired assets and consideration paid in common stock of approximately $ 33 805-50 provides that assets acquired in an asset acquisition are measured based on the costs of the acquisition, which is the consideration that the acquirer transfers to the seller, and includes direct transaction costs related to the acquisition in which costs were an additional $ 3.5 million Revenue Recognition Cryptocurrency Mining Revenue The Company recognizes revenue under ASC 606, Revenue from Contracts with Customers. The core principles of the revenue standard is that a company should recognize revenue to depict the transfer of promised good or services to customers in an amount that reflects the consideration to which the company expects to be entitled for those goods or services. The following five steps are applied to achieve that core principle: ● Step 1: Identify the contract with the customer ● Step 2: Identify the performance obligations in the contract ● Step 3: Determine the transaction price ● Step 4: Allocate the transaction price to the performance obligations in the contract ● Step 5: Recognize revenue when the Company satisfies a performance obligation In order to identify the performance obligations in a contract with a customer, a company must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606’s definition of a “distinct” good or service (or bundle of goods or services) if both of the following criteria are met: The customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e., the good or service is capable of being distinct), and the entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract). If a good or service is not distinct, the good or service is combined with other promised goods or services until a bundle of goods or services is identified that is distinct. The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. When determining the transaction price, an entity must consider the effects of all of the following: ● Variable consideration ● Constraining estimates of variable consideration ● The existence of a significant financing component in the contract ● Noncash consideration ● Consideration payable to a customer Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The transaction price is allocated to each performance obligation on a relative standalone selling price basis. The transaction price allocated to each performance obligation is recognized when that performance obligation is satisfied, at a point in time or over time as appropriate. Providing computing power to solve complex cryptographic algorithms in support of the Bitcoin blockchain (in a process known as “solving a block”) is an output of the Company’s ordinary activities. The provision of providing such computing power is the only performance obligation in the Company’s contracts with mining pool operators. The transaction consideration the Company receives, if any, is noncash consideration, which the Company measures at fair value on the date received, which is not materially different than the fair value at contract inception or the time the Company has earned the award from the pools. The consideration is all variable. Because it is not probable that a significant reversal of cumulative revenue will not occur, the consideration is constrained until the mining pool operator successfully places a block (by being the first to solve an algorithm) and the Company receives confirmation of the consideration it will receive, at which time revenue is recognized. There is no significant financing component in these transactions. Fair value of the cryptocurrency award received is determined using the quoted price of the related cryptocurrency where the Company is registered at the time of receipt. The mined cryptocurrency is immediately paid to the Coinbase wallet. Cryptocurrency is converted to U.S. dollars daily, as SCI is not in the business of accumulating cryptocurrency on its balance sheet. Data center hosting The Company has entered into customer hosting contracts whereby the Company provides electrical power and network connectivity to cryptocurrency mining customers, and the customers pay a stated amount per megawatt-hour (“MWh”) (“Contract Capacity”), a fixed rate, as well as a share of the coins mined. The fee is paid monthly in advance. The actual monthly amounts are calculated after the close of each month and reconciled to the monthly advance based on the clauses contained in the respective contracts. If any shortfalls due to outages are experienced, service level credits may be made to customers to offset outages which prevented them from cryptocurrency mining. Monthly advanced payments and customer deposits are reflected as other liabilities. Customer contract security deposits are made at the time the contract is signed and held until the conclusion of the contract relationship. Deferred revenue is primarily from advance monthly payments received and revenue is recognized when service is completed. Product Revenue The Company notes that product revenue is included within Net income from discontinued operations for the year ended December 31, 2021 and 2020. Product revenue consists of revenue recognized from MTI Instruments’ product lines. In general, the Company determines revenue recognition by: (1) identifying the contract, or contracts, with the customer; (2) identifying the performance obligations in the contract; (3) determining the contract price; (4) allocating the transaction price to performance obligations in the contract; and (5) recognizing revenue when, or as, the performance obligations are satisfied by transferring the promised goods or services. Based on past experience, the Company reasonably estimates its returns and warranty reserves. Revenue is presented net of discounts and allowances, which are determined when the sale is negotiated. The nature of the Company’s contracts do not give rise to variable consideration. The Company enters into contracts that can include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. If the product requires that the Company provide installation, all revenue related to the product is deferred and recognized upon the completion of the installation. If the product requires specific customer acceptance criteria, such as on-site customer acceptance and/or acceptance after install, then revenue is deferred until customer acceptance occurs or the acceptance provisions lapse, unless the Company can objectively and reliably demonstrate that the criteria specified in the acceptance provisions is satisfied. The Company may also record unearned revenues, which include payments for other offerings for which we have been paid in advance. The resulting revenue would be earned when we transfer control of the product or service. As of December 31, 2021 and December 31, 2020 the Company had no deferred or unearned revenue. MTI Instruments currently has distributor agreements in place for the international sale of general instrument and semiconductor products in certain global regions. Such agreements grant a distributor the right of first refusal to act as distributor for such products in the distributor’s territory. In return, the distributor agrees to not market other products which are considered by MTI Instruments to be in direct competition with MTI Instruments’ products. The distributor is allowed to purchase MTI Instruments’ equipment at a price which is discounted off the published domestic/international list prices. Such list prices can be adjusted by MTI Instruments during the term of the distributor agreement. Generally, payment terms with the distributor are standard net 30 days; however, on occasion, extended payment terms have been granted. Title and risk of loss of the product passes to the distributor upon delivery to the independent carrier (standard “free-on-board” factory), and the distributor is responsible for any required training and/or service with the end-user. The sale (and subsequent payment) between MTI Instruments and the distributor is not contingent upon the successful resale of the product by the distributor. Distributor sales are covered by MTI Instruments’ standard one-year warranty and there are no special return policies for distributors. The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring services to the customer. If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price basis unless the transaction price is variable and meets the criteria to be allocated entirely to a performance obligation or to a distinct good or service that forms part of a single performance obligation. The Company determines standalone selling price based on the price at which the performance obligation is sold separately. If the standalone selling price is not observable through past transactions, the Company estimates the standalone selling price taking into account available information such as market conditions and internally approved pricing guidelines related to the performance obligations. Shipping and handling charges billed to customers is a pass-through from the freight forwarder and is included in product revenue. Cost of Cryptocurrency Mining and Data Center Hosting Revenue Cost of cryptocurrency mining and data center hosting revenue includes direct utility costs as well as overhead costs that relate to the operations of SCI’s cryptocurrency mining facility. Cost of Product Revenue Cost of product revenue includes material, labor, overhead and shipping and handling costs. Accounts Receivable and Allowance for Doubtful Accounts Trade accounts receivable are stated at the invoiced amount billed to customers and do not bear interest. An allowance for doubtful accounts, if necessary, represents the Company’s best estimate of the amount of probable credit losses in its existing accounts receivable. The Company determines the allowance based on historical write-off experience and current exposures identified. The Company reviews its allowance for doubtful accounts monthly. Past due balances over 90 days and over a specified amount are reviewed individually for collectability. All other balances are reviewed on a pooled basis by type of receivable. Account balances are charged off against the allowance when the Company believes it is probable the receivable will not be recovered. The Company does not have any off-balance-sheet credit exposure related to its customers. The Company’s allowance for doubtful accounts was $0 at both December 31, 2021 and December 31, 2020. Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 20 days. In instances where the timing of revenue recognition differs from the timing of invoicing, we have determined our contracts generally do not include a significant financing component. The primary purpose of the Company’s invoicing terms is to provide customers with simplified and predictable ways of purchasing our products and services, not to receive financing from its customers. The Company recognizes an asset for the incremental costs of obtaining a contract with a customer, if the Company expects the benefit of those costs to be longer than one year. As of December 31, 2021 and December 31, 2020, the Company has recorded no capitalized costs to obtain a contract. Deposits on Equipment As of December 31, 2021 and 2020, the Company had approximately $ 10.2 million 279 Warranty The Company notes that warranty liability is included in current liabilities associated with discontinued operations for the year ended December 31, 2021 and 2020. The Company accrues a warranty liability at the time product revenue is recorded based on historical experience. The liability is reviewed during the year and is adjusted, if appropriate, to reflect new product offerings or changes in experience. Actual warranty claims are tracked by product line. Warranty liability was $ 18 22 3 11 Long-Lived Assets The Company accounts for impairment or disposal of long-lived assets in accordance with accounting standards that address the financial accounting and reporting for the impairment or disposal of long-lived assets, specify how impairment will be measured, and how impaired assets will be classified in the consolidated financial statements. On a quarterly basis, the Company analyzes the status of its long-lived assets at each subsidiary for potential impairment. As of December 31, 2021, the Company does not believe that any of its long-lived assets have suffered any type of impairment that would require an adjustment to that asset’s recorded value. 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. Net Income (Loss) per Share The Company computes basic income (loss) per common share by dividing net income by the weighted average number of common shares outstanding during the reporting period. Diluted income (loss) per share reflects the potential dilution, if any, computed by dividing income (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. Share-Based Payments The Company grants options to purchase our common stock and awards restricted stock to our employees and directors under our equity incentive plans. The benefits provided under these plans are share-based payments and the Company accounts for stock-based awards exchanged for employee service in accordance with the appropriate share-based payment accounting guidance. Stock-based compensation represents the cost related to stock-based awards granted to employees and directors. The Company measures stock-based compensation cost at grant date based on the estimated fair value of the award and recognizes the cost as expense on a straight-line basis in accordance with the vesting of the options (net of estimated forfeitures) over the employee’s requisite service period. The Company estimates the fair value of stock-based awards on the grant date using a Black- Scholes valuation model. The Company uses the fair value method of accounting, which provides for certain changes to the method for valuing share-based compensation. The valuation provisions apply to new awards and to awards that are outstanding on the effective date and subsequently modified. Under the modified prospective application, prior periods are not revised for comparative purposes. Stock-based compensation expense is recorded in the lines titled “Cost of revenue,” and “Selling, general and administrative expenses” in the Consolidated Statements of Operations based on the employees’ respective functions. The Company records deferred tax assets for awards that potentially can result in deductions on the Company’s income tax returns based on the amount of expense that is recognized and the Company’s statutory tax rate. All income tax effects of awards, including excess tax benefits, recognized on stock-based compensation expense are reflected in the Consolidated Statements of Operations as a component of the provision for income taxes on a prospective basis. The determination of the fair value of share-based payment awards on the date of grant using an option-pricing model is affected by the Company’s stock price as well as assumptions regarding a number of complex and subjective variables. These variables include the Company’s expected stock price volatility over the term of the awards, actual and projected employee stock option exercise behaviors, risk-free interest rate, and expected dividends. Theoretical valuation models and market-based methods are evolving and may result in lower or higher fair value estimates for share-based compensation. The timing, readiness, adoption, general acceptance, reliability, and testing of these methods is uncertain. Sophisticated mathematical models may require voluminous historical information, modeling expertise, financial analyses, correlation analyses, integrated software and databases, consulting fees, customization, and testing for adequacy of internal controls. For purposes of estimating the fair value of stock options granted using the Black-Scholes model, the Company uses the historical volatility of its stock for the expected volatility assumption input to the Black-Scholes model, consistent with the accounting guidance. The risk-free interest rate is based on the risk-free zero-coupon rate for a period consistent with the expected option term at the time of grant. The expected option term is calculated based on our historical forfeitures and cancellation rates. The fair value of restricted stock awards is based on the market close price per share on the grant date. The Company expenses the compensation cost of these awards as the restriction period lapses, which is typically a one- to three-year service period to the Company. The shares represented by restricted stock awards are outstanding at the grant date, and the recipients are entitled to voting rights with respect to such shares upon issuance. Notes payable The Company records notes payable net of any discount or premiums. Discounts and premiums are amortized as interest expense or income over the life of the note in such a way as to result in a constant rate of interest when applied to the amount outstanding at the beginning of any given period. Concentration of Credit Risk Financial instruments that subject the Company to concentrations of credit risk principally consist of cash equivalents and trade accounts receivable. The Company’s trade accounts receivable are from data hosting revenue with the Company’s two customers. The Company does not require collateral and has not historically experienced significant credit losses related to receivables from individual customers or groups of customers in any particular industry or geographic area. From time to ti |
Accounts Receivable
Accounts Receivable | 12 Months Ended |
Dec. 31, 2021 | |
Receivables [Abstract] | |
Accounts Receivable | 3. Accounts Receivable Accounts receivables consist of the following at: Schedule of accounts receivables (Dollars in thousands) December 31, December 31, Data Hosting $ 450 — Other 81 59 Total $ 531 $ 59 |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | 4. Property, Plant and Equipment Property, plant and equipment consist of the following at: Schedule of Property, Plant and Equipment (Dollars in thousands) December 31, December 31, Land $ 52 $ — Land improvements 238 — Buildings 5,650 — Leasehold improvements 317 223 Vehicles 15 — Computers and related software 30,890 1,140 Machinery and equipment 2,588 — Office furniture and fixtures 22 — Construction in progress 7,590 — 47,362 1,363 Less: Accumulated depreciation (2,765 ) (641 ) $ 44,597 $ 722 Depreciation expense was $ 2.1 million 81 77 16 |
Asset Acquisition
Asset Acquisition | 12 Months Ended |
Dec. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Asset Acquisition | 5. Asset Acquisition As discussed above, on October 29, 2021, we completed the Soluna Callisto acquisition pursuant to an Agreement and Plan of Merger dated as of August 11, 2021, by and among the Company, SCI and Soluna Callisto (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 HEL, which assets consisted of Soluna Callisto’s existing pipeline of certain cryptocurrency mining projects that HEL previously transferred to Soluna Callisto 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 up to 2,970,000 The acquisition was accounted for, for purposes of U.S. GAAP, using the asset acquisition method of accounting under the ASC 805-50. We determined that we acquired in the acquisition a group of similar identifiable assets (primarily, the “strategic pipeline contract” of certain cryptocurrency mining projects), which it classified as an intangible asset for accounting purposes. As a result, our acquisition of the set of assets and activities constituted an asset acquisition, as opposed to a business acquisition, under ASC 805. ASC 805-50 provides that assets acquired in an asset acquisition are measured based on the costs of the acquisition, which is the consideration that the acquirer transfers to the seller, and includes direct transaction costs related to the acquisition. We include Soluna Callisto’s results of operations in our results of operations beginning on the effective date of the acquisition. Termination Consideration In connection with the Soluna Callisto acquisition, effective as of October 29, 2021, pursuant to the terms of a termination agreement dated as of August 11, 2021 by and among the Company, SCI, and HEL, on November 5, 2021, SCI paid HEL $725,000 and SHI issued to HEL 150,000 shares of SHI common stock (the “Termination Shares”). SCI also reimbursed HEL $75,000 for transaction-related fees and expenses. SHI included the termination costs as part of asset acquisition per ASC 805-50. Based on the closing price of the SHI common stock on Nasdaq on November 5, 2021, SHI has valued the aggregate termination consideration at approximately $1.9 million. Merger Consideration The fair value of the Merger Consideration includes various assumptions, including those related to the allocation of the estimated value of the maximum number of Merger Shares ( 2,970,000 . The Merger Consideration and the timing of the payment thereof is subject to the following qualifications and limitations: 1a) Upon buyer achieving each one active MegaWatts (“Active MWs”) from the projects in which the cost requirement is satisfied, this will cause SHI to issue to HEL 19,800 shares for each one MW up to a maximum 150 Active MW. i. If, on or before June 30, 2022, SCI or Soluna Callisto directly or indirectly achieves at least 50 active MWs from one or more of three current projects as set forth in the Merger Agreement that satisfy the Cost Requirement as defined within the Merger Agreement, then the Merger Shares will be issued at an accelerated rate of 29,700 Merger Shares for each of such first 50 Active MW, such that the Merger Shares in respect of the remaining 100 Active MWs (if any) will be issued at a reduced rate of 14,850 Merger Shares per Active MW; ii. If, by June 30, 2023, SCI or Soluna Calisto fail to achieve directly or indirectly (other than pursuant to a Portfolio Acquisition) at least 50 Active MW from Projects that satisfy the Cost Requirement, then the maximum aggregate number of Merger Shares shall be reduced from 2,970,000 1,485,000 iii. No Merger Shares will be issued to HEL without our prior written consent; iv. Issuance of the Merger Shares will also be subject to the continued employment with or engagement by SCI or the surviving corporation of (A) John Belizaire and (B) at least two of Dipul Patel, Mohammed Larbi Loudiyi, (through ML&K Contractor), and Phillip Ng at the time that such Merger Shares are earned. If both (A) and (B) cease to be satisfied on or prior to the date that all Merger Shares are earned (such date, a “Trigger Date”), then “Qualified Projects” for purposes of determining Merger Shares shall only apply to those Qualified Projects that are in the pipeline as of the Trigger Date. For these purposes, if any such individual’s employment or service relationship with SCI is terminated without cause, as a result of his death or disability, or with good reason (as such terms are defined in the employment and consulting agreements), such individual shall be deemed to continue to be employed or engaged by SCI for these purposes; v. If SHI or SCI consummates a Change of Control before the fifth anniversary of the date of the closing of the merger, then we will be obligated to issue all of the unissued Merger Shares (subject to (ii) and (iii) above). The Merger Agreement defines “Change of Control” as (A) the sale, exchange, transfer, or other disposition of all or substantially all of the assets of us or SCI, (B) our failure to continue to own (directly or indirectly) 100 50 vi. if on any of the fifth anniversary of the effective time of the merger, June 30, 2022 or June 30, 2023, a facility has not become a Qualified Facility and therefore is not taken into consideration in the calculation of Active MW because any of the elements set forth in the definition of “Qualified Facility” as defined in the Merger Agreement have not been met for reasons beyond the reasonable control of SCI’s management team, but SCI’s management team is then actively engaged in the process of completing and is diligently pursuing the completion of the missing elements, then (A) the target dates set forth above shall be extended for an additional 90 days, and (B) additional extensions of time may be granted by the Board of Directors in its commercially reasonable discretion, in each case for the purpose of enabling SCI’s management team to complete the steps needed to qualify the facility as a Qualified Facility. The number of Merger Shares is also subject to customary anti-dilution adjustments in the event of any stock split, stock consolidation, stock dividend, or similar event involving the shares of our common stock. Based on the assessment performed, the fair value of the merger consideration as of October 29, 2021 was approximately $33.0 million. Based on management’s evaluation, management concluded that due to the high volatility of its share price, the low probability of not achieving the MW targets, and the fact the value associated with meeting the performance measures are not intended to drive the number of shares to be issued, but rather act as a proxy for and driver of share value, the monetary value of the obligation at inception is predominantly a function of equity shares. As such, the consideration will be treated as equity as ASC 480-10-25-14 is not applicable since the monetary value of the Merger Shares is not (1) fixed, or (2) dependent on (i) variations in something other than the fair value of the Company’s equity shares, or (ii) variations inversely related to changes in the fair value of the Company’s equity shares and is instead exposed to changes in the fair value of the Company’s share price, and as such does not represent a liability under ASC 480. The economic risks and characteristics of the share consideration are clearly and closely related to a residual equity interest since the underlying (i.e., the incremental shares of common stock delivered upon achievement of each MW target) will participate in the increase in value of the common equity of the Company, similar to a call option on common stock. Based on guidance in ASC 815-40-25-7 through 25-35, the share consideration is considered to be indexed to the Company’s stock and meets the additional criteria for equity classification. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 6. Intangible Assets Intangible assets consist of the following as of December 31, 2021: (Dollars in thousands) Intangible Assets Accumulated Amortization Total For the year ended December 31, 2021 Strategic pipeline contract $ 46,885 $ 1,562 $ 45,323 Assembled workforce 500 17 483 Patents 33 — 33 Total $ 47,418 $ 1,579 $ 45,839 There were no intangible assets or amortization expense as of December 31, 2020. Amortization expense for the year ended December 31, 2021 was approximately $ 1.6 million The strategic pipeline contract relates to supply of a critical input to our digital mining 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 2021 2022 $ 9,479 2023 9,479 2024 9,479 2025 9,479 2026 7,899 Thereafter 24 Total $ 45,839 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 7. Income Taxes Income tax expense (benefit) for each of the years ended December 31 consists of the following: Schedule of income tax expense (Dollars in thousands) 2021 2020 Federal $ — $ — State 3 4 Deferred 41 (336 ) Total $ 44 $ (332 ) The significant components of deferred income tax expense (benefit) from operations for each of the years ended December 31 consists of the following: Schedule of deferred income tax expense (Dollars in thousands) 2021 2020 Deferred tax (expense) benefit $ (574 ) $ (73 ) Net operating loss carry forward (1,589 ) 331 Valuation allowance 2,204 (594 ) Deferred tax benefit (expense) $ 41 $ (336 ) The Company’s effective income tax rate from operations differed from the Federal statutory rate for each of the years ended December 31 as follows: Schedule of effective income tax rate 2021 2020 Federal statutory tax rate 21 % 21 % Change in valuation allowance ( 35 ) ( 39 ) State taxes, net of federal benefit 1 — Expiration of stock option 2 1 Intangible amortization — — Change in UTP 9 — Federal tax benefits, R&D 1 ( 3 ) Other Deferred Adjustments 2 ( 1 ) Tax rate 1 % ( 21 )% Deferred Tax (Liabilities) Assets: Deferred tax (liabilities) assets are determined based on the temporary differences between the financial statement and tax bases of assets and liabilities as measured by the enacted tax rates. Temporary differences, net operating loss carryforwards and tax credit carryforwards that give rise to deferred tax assets and liabilities are summarized as follows as of December 31: Schedule of deferred tax assets (Dollars in thousands) 2021 2020 Deferred tax assets: Vacation accrual $ — $ 3 Allowance for related party note receivable 76 69 Net operating loss 11,777 10,187 Property, plant and equipment — 6 Stock options 278 31 Research and development tax credit 144 120 Deferred tax assets 12,275 10,416 Valuation allowance (11,921 ) (9,717 ) Deferred tax assets, net of valuation allowance 354 699 Deferred tax liabilities: Property, plant and equipment (61 ) — Intangibles (10,570 ) — Deferred tax liabilities (10,631 ) — Deferred tax (liabilities) assets $ (10,277 ) $ 699 In connection with the strategic contract pipeline acquired in the Soluna Callisto acquisition as further discussed in Note 6, 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 Valuation Allowance: 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. As a result of its assessment in 2021, the Company increased its valuation allowance against its deferred tax assets. The increase in the valuation allowance caused incremental tax expense of $ 2.2 million The valuation allowance at December 31, 2021 and 2020 was $ 11.9 9.7 Schedule of deferred tax asset valuation allowance (Dollars in thousands) 2021 2020 Valuation allowance, beginning of year $ 9,717 $ 10,310 Allowance for related party note receivable — (65 ) Inventory — 1 Net operating (loss) income 2,179 (406 ) Property, plant and equipment — (27 ) Stock options — (57 ) Research and development credit 25 (32 ) Warranty and other sales obligations — 13 Deferred revenue — (10 ) Accrued compensation — (10 ) Valuation allowance, end of year $ 11,921 $ 9,717 Net operating losses: At December 31, 2021, the Company has unused Federal net operating loss carryforwards of approximately $ 55 The Company’s and/or its subsidiaries’ ability to utilize their net operating loss carryforwards may be significantly limited by Section 382 of the IRC of 1986, as amended, if the Company or any of its subsidiaries undergoes an “ownership change” as a result of changes in the ownership of the Company’s or its subsidiaries’ outstanding stock pursuant to the exercise of the warrants or otherwise. Unrecognized tax benefits: The Company has unrecognized tax benefits of $ 0 710 Additionally, the Company does not have uncertain tax positions that it expects will increase or decrease within twelve months of this reporting date. The Company recognizes interest and penalties related to uncertain tax positions as a component of tax expense. The Company did not recognize any interest or penalties in 2021 and 2020. The Company files income tax returns, including returns for its subsidiaries, with federal and state jurisdictions. The Company is no longer subject to IRS or state examinations for any periods prior to 2018, although carryforward attributes that were generated prior to 2018 may still be adjusted upon examination by the IRS if they either have been or will be used in a future period. |
Accrued Liabilities
Accrued Liabilities | 12 Months Ended |
Dec. 31, 2021 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | 8. Accrued Liabilities Accrued liabilities consist of the following at: Schedule of accrued liabilities (Dollars in thousands) December 31, 2021 December 31, 2020 Salaries, wages and related expenses $ 611 $ 70 Liability to shareholders for previous acquisition 363 363 Legal, audit, tax and professional fees 363 158 Sales tax accrual 248 - Development fees 373 - Hosting and utility fees 626 - Other 275 72 Total $ 2,859 $ 663 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Debt | 9. Debt Convertible Notes Debt consists of the following Maturity Date Interest Rate December 31, 2021 Convertible Note October 25, 2022 8 % $ 14,927 Less: debt discount 967 Less: discount from issuance of warrants 5,747 Less: debt issuance costs 1,092 Total convertible notes, net of discount and issuance costs $ 7,121 On October 25, 2021, pursuant to the SPA, the Company issued to certain accredited investors (i) secured convertible notes in an aggregate principal amount of $16.3 million for an aggregate purchase price of $15 million (collectively, the “Notes”), which are, subject to certain conditions, convertible at any time by the investors, into an aggregate of 1,776,073 shares (the “Conversion Shares”) of the Company’s common stock, at a price per share of $9.18 (the “Fixed Conversion Price”) and (ii) Class A, Class B and Class C common stock purchase warrants (collectively, the “Warrants”) to purchase up to an aggregate of 1,776,073 shares of common stock , at an exercise price $12.50, $15 and $18 per share, respectively. The Warrants are legally detachable and can be separately be exercised immediately for five years upon issuance, subject to applicable Nasdaq rules. The Notes, subject to an original issue discount of 8 The fair value of the Warrants, as of the issuance date, was $ 7 16.3 million 15 300 1.3 million During the year ended December 31, 2021, $14.9 million is remaining in the principal balance of the Notes and approximately $1.4 million was converted into 150,000 shares of the Company’s common stock. Line of Credit On September 13, 2021, the Company entered into a $ 1 4 1 |
Stockholders_ Equity
Stockholders’ Equity | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Stockholders’ Equity | 10. Stockholders’ Equity Preferred Stock The Company has one series of preferred stock outstanding, known as the 0.001 25.00 1,252,299 0 Common Stock The Company has one class of common stock, par value $ 0.001 13,754,206 9,734,607 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 of Directors 630 There were no dividends declared or paid on either the common or preferred stock during 2020. Reservation of Shares The Company had reserved shares of common stock for future issuance as follows as of December 31, 2021: Schedule of reserved common shares for future issuance Stock options outstanding 991,550 Restricted stock units outstanding 160,473 Warrants outstanding 2,193,512 Common stock available for future equity awards or issuance of options 392,717 Number of common shares reserved 3,738,252 |
Retirement Plan
Retirement Plan | 12 Months Ended |
Dec. 31, 2021 | |
Retirement Benefits [Abstract] | |
Retirement Plan | 11. Retirement Plan The Company maintains a voluntary savings and retirement plan under IRC Section 401(k) covering substantially all employees. Employees must complete six months of service and have attained the age of twenty-one prior to becoming eligible for participation in the plan. The Company plan allows eligible employees to contribute a percentage of their compensation on a pre-tax basis and the Company matches employee contributions, on a discretionary basis, currently in an amount equal to 100% of the first 3% and 50% of the next 2% of the employee’s salary, subject to annual tax deduction limitations. Effective January 1, 2017, Company matching contributions are vested immediately. Company matching contributions were $ 18 11 |
Net (loss) income per Share
Net (loss) income per Share | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Net (loss) income per Share | 12. Net (loss) income per Share The following table sets forth the reconciliation of the numerators and denominators of the basic and diluted per share computations for continuing operations for the years ended December 31: (Dollars in thousands, except shares) 2021 2020 Numerator Net loss from continuing operations $ (6,388 ) $ (1,210 ) Net income from discontinuing operations 1,127 3,156 Net (Loss) Income $ (5,261 ) $ 1,946 Less: Preferred Dividend (630 ) - Balance $ (5,891 ) $ 1,946 Denominator: Basic and Diluted EPS: Common shares outstanding, beginning of period 9,734,607 9,570,677 Weighted average common shares issued during the period 2,105,635 11,209 Denominator for basic earnings per common shares — Weighted average common shares 11,840,242 9,581,886 The Company notes as continuing operations was in a Net loss for fiscal year 2021 and 2020, 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 year ended December 31, 2021, were options to purchase 991,550 160,473 2,193,512 1,626,073 Not included in the computation of earnings per share, assuming dilution, for the year ended December 31, 2020, were options to purchase 398,550 |
Stock Based Compensation
Stock Based Compensation | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Stock Based Compensation | 13. Stock Based Compensation Stock-based incentive awards are provided to employees and directors under the terms of the Company’s 2012 Equity Incentive Plan (the 2012 Plan), which was amended and restated as of October 20, 2016, 2014 Equity Incentive Plan (the 2014 Plan), and the 2021 Equity Incentive Plan, which was amended and restated effective as of October 29, 2021, (collectively, the Plans). Awards under the Plans have generally included at-the-money options and restricted stock grants. The 2012 Plan was adopted by the Company’s Board of Directors on April 14, 2012 and approved by its stockholders on June 14, 2012. The 2012 Plan was amended and restated by the Board of Directors effective October 20, 2016. The October 2016 amendment allowed for the award agreement or another agreement entered into between the Company and the award grantee to vary the method of exercise of options issued under the 2012 Plan and an agreement entered into between the Company and the award grantee to vary the provisions governing expiration of options or other awards under the 2012 Plan following termination of the award recipient. The 2012 Plan provides an initial aggregate number of 600,000 The 2014 Plan was adopted by the Company’s Board of Directors on March 12, 2014 and approved by its stockholders on June 11, 2014. The 2014 Plan provides an initial aggregate number of 500,000 The Company’s 2021 Plan was adopted by the Board on February 12, 2021 and approved by the stockholders on March 25, 2021. The 2021 Plan was amended and restated effective as of October 29, 2021. The 2021 Plan authorizes the Company to issue shares of common stock upon the exercise of stock options, the grant of restricted stock awards, and the conversion of restricted stock units (collectively, the “Awards”). The Compensation Committee has full authority, subject to the terms of the 2021 Plan, to interpret the 2021 Plan and establish rules and regulations for the proper administration of the 2021 Plan. Subject to certain adjustments as provided in the 2021 Plan, the maximum aggregate number of shares of the Company’s common stock that may be issued under the 2021 Plan (i) pursuant to the exercise of stock options, (ii) as restricted stock, and (iii) as available pursuant to restricted stock units shall be limited to (A) during the Company’s fiscal year ending December 31, 2021 (the “2021 Fiscal Year”), 1,460,191 During the fiscal year ended December 31, 2021, the Company granted options to purchase 716,200 186,200 7.52 10 530,000 7.08 5.04 During the fiscal year ended December 31, 2021, the Company awarded 201,926 47,500 11.10 During the fiscal year ended December 31, 2021, the Company awarded 160,473 11.10 16.61 15,000 In connection with the sale of shares of common stock to Brookstone, the Company entered into an Option Exercise and Stock Transfer Restriction Agreement (collectively, the Option and Transfer Agreements) with its Chief Executive Officer, its Chief Financial Officer and each of its non-employee directors (collectively, the Insiders). The Option and Transfer Agreements amend the stock option grant agreements between the Company and each Insider with respect to an option granted under and modify the terms of any option to purchase common stock held by each such Insider (collectively, Options) granted under, the Plans. The Option and Transfer Agreements restrict the aggregate amount of shares of common stock for which the Insiders may exercise Options during calendar years 2016, 2017, 2018 and 2019, and provide for a modified procedure for exercising Options in order to ensure the limit on the aggregate amount of Options that may be exercised in any such year is not exceeded. Such amendments and modifications also operate to, except with respect to the termination of Options in connection with an Insider’s termination of employment or service in connection with misconduct as described in the Option and Transfer Agreements, (i) remove all references to an expiration of the exercisability of such Options within a special, delineated time period following the termination of service to or employment by the Company, and (ii) provide that all vested Options are exercisable by the Insider until default expiration under the applicable Plan (i.e., ten years from the date of grant). If an Option and Transfer Agreement is terminated, the limitations on Option exercises described above will terminate, but the exercisability of the Insider’s vested Options until default expiration under the applicable Plan and stock option agreement (i.e., ten years from the date of grant) will survive indefinitely. On January 14, 2020, the Company awarded to members of the Company’s Investment Committee and to the Company’s CEO special one-time restricted stock awards totaling 68,930 67,930 1,000 0.99 During 2020, the Company granted options to purchase 25,000 0.70 0.57 During 2020, the Company granted options to purchase 25,000 0.75 0.61 On December 21, 2020, the Company awarded to its CFO and the President of MTI Instruments restricted stock awards totaling 15,000 3.63 Stock-based compensation expense for the years ended December 31, 2021 and 2020 was generated from stock option and restricted stock awards. Stock options are awards that allow holders to purchase shares of the Company’s common stock at a fixed price. Certain options granted may be fully or partially exercisable immediately, may vest on other than a four-year schedule or vest upon attainment of specific performance criteria. Restricted stock awards generally vest one to three years after the date of grant, although certain awards may vest immediately or vest upon attainment of specific performance criteria. Option exercise prices are generally equivalent to the closing market value price of the Company’s common stock on the date of grant. Unexercised options generally terminate ten years after date of grant. The following table presents the weighted-average assumptions used for options granted under the 2021 Plan: 2021 Option term (years) 4.04 Volatility 108.33 % Unvested forfeiture rate 0.18 % Risk-free interest rate 0.84 % Dividend yield 0.00 % Weighted-average fair value per option granted $ 5.04 The following table presents the weighted-average assumptions used for options granted under the 2014 Plan: 2020 Option term (years) 6.25 Volatility 106.22 % Unvested forfeiture rate 0.20 % Risk-free interest rate 0.31 % Dividend yield 0.00 % Weighted-average fair value per option granted $ 0.57 No options were granted under the 2014 Plan for the year ended December 31, 2021. The following table presents the weighted-average assumptions used for options granted under the 2012 Plan: 2020 Option term (years) 6.25 Volatility 106.46 % Unvested forfeiture rate 0.20 % Risk-free interest rate 0.28 % Dividend yield 0.00 % Weighted-average fair value per option granted $ 0.61 No options were granted under the 2012 Plan for the year ended December 31, 2021. Share-based compensation expense recognized in the Consolidated Statements of Operations is based on awards ultimately expected to vest, therefore, awards are reduced for estimated forfeitures. The accounting standard requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Total share-based compensation expense, related to the Company’s share-based awards, recognized for the years ended December 31, was comprised as follows: 2021 2020 (Dollars in thousands) Cost of cryptocurrency revenue $ 3 $ — Selling, general and administrative 1,938 40 Share-based compensation expense $ 1,941 $ 40 Total unrecognized compensation costs related to non-vested stock options as of December 31, 2021 and December 31, 2020 is approximately $ 1.9 million 78 2.34 2.55 Presented below is a summary of the Company’s stock option activity for the Plans for the years ended December 31: 2021 2020 Shares under option, beginning 398,750 527,875 Granted 716,200 50,000 Exercised (123,400 ) (83,000 ) Forfeited — (27,750 Expired/canceled — (68,375 ) Shares under option, ending 991,550 398,750 Options exercisable 385,800 276,000 Remaining shares available for granting of options 392,717 11,125 The weighted average exercise price for the Company’s stock option activity for the Plans is as follows for each of the years ended December 31: 2021 2020 Shares under option, beginning $ 0.87 $ 0.89 Granted $ 7.20 $ 0.73 Exercised $ 0.83 $ 1.00 Forfeited $ — $ 0.90 Expired/canceled $ — $ 0.73 Shares under option, ending $ 5.44 $ 0.87 Options exercisable, ending $ 4.10 $ 0.89 The following table summarizes information for options outstanding and exercisable for the Plans as of December 31, 2021: Outstanding Exercisable Weighted Average Weighted Weighted Average Weighted Exercise Remaining Average Remaining Average Price Range Number Contractual Life Exercise Price Number Contractual Life Exercise Price $0.29 - $1.08 241,350 6.25 $ 0.84 165,600 5.55 $ 0.86 $1.09 - $1.20 34,000 3.17 $ 1.20 34,000 3.17 $ 1.20 $6.84 - $11.10 716,200 6.66 $ 7.20 186,200 4.36 $ 7.52 991,550 6.44 $ 5.44 385,800 4.77 $ 4.10 The aggregate intrinsic value (i.e. the difference between the closing stock price and the price to be paid by the option holder to exercise the option) is approximately $ 5.3 million 2.6 million 10.76 Non-vested restricted stock activity is as follows for the year ended December 31: 2021 2020 Non-vested restricted stock balance, beginning January 1 80,930 — Non-vested restricted stock granted 362,399 83,930 Vested restricted stock — — Non-vested restricted stock exercised (37,962 ) — Non-vested restricted stock forfeited/expired — (3,000 ) Non-vested restricted stock balance, ending December 31 405,367 80,930 The weighted average fair value price for the Company’s restricted stock activity for the Plans is as follows for each of the years ended December 31: 2021 2020 Restricted stock, beginning $ 1.48 $ 0.00 Granted $ 12.43 $ 1.46 Exercised $ 1.34 $ 0.00 Forfeited/ expired $ — $ 0.99 Restricted stock, ending $ 11.28 $ 1.48 At December 31, 2021 and 2020, there was approximately $ 3.1 million 94 3.18 2.15 Stock Warrants: The following is a summary of common stock warrant activity during the year ended December 31, 2021. The Company did not have or issue any warrants during the year ended December 31, 2020. Number of Weighted Balance, December 31, 2020 — $ — Granted 2,775,122 12.67 Exercised (581,610 ) 8.24 Forfeited/ Expired — — Balance, December 31, 2021 2,193,512 $ 13.85 As of December 31, 2021, the outstanding warrants have a weighted average remaining term of 4.78 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 14. Commitments and Contingencies Commitments: Leases The Company determines whether an arrangement is a lease at inception. The Company has operating leases for certain manufacturing, laboratory, office facilities and certain equipment. The leases have remaining lease terms of less than one year five years Lease expense for these leases is recognized on a straight-line basis over the lease term. For the twelve months ended December 31, total lease costs are comprised of the following: (Dollars in thousands) 2021 2020 Operating lease cost $ 169 $ 86 Short-term lease cost — 2 Total net lease cost $ 169 $ 88 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 lease asset or liability for such leases. Supplemental cash flows information related to leases for the twelve months ended December 31 was as follows: (Dollars in thousands) 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 156 $ 82 Non-Cash Activity Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 131 $ 504 Supplemental balance sheet information for the twelve months ended December 31 was as follows: (Dollars in thousands, except lease term and discount rate) 2021 2020 Operating leases: Operating lease ROU asset $ 405 $ 427 Current operating lease liabilities $ 184 $ 134 Non-current operating lease liabilities 237 297 Total operating lease liabilities $ 421 $ 431 Operating leases: ROU assets $ 635 $ 504 Asset lease expense (230 ) (77 ) ROU assets, net $ 405 $ 427 Weighted Average Remaining Lease Term (in years): Operating leases 2.38 3.09 Weighted Average Discount Rate: Operating leases 3.83 % 3.81 % Maturities of operating lease liabilities are as follows for the year ending December 31: (Dollars in thousands) 2021 2022 $ 197 2023 159 2024 85 Total lease payments 441 Less: imputed interest (20 ) Total lease obligations 421 Less: current obligations 184 Long-term lease obligations $ 237 As of December 31, 2021, except for the ground lease entered into as described in Note 1, there were no additional operating lease commitments that had not yet commenced. Contingencies: 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. The Company has been named as a party in the December 19, 2019 United States Environmental Protection Agency (“EPA”) Demand Letter regarding the Malta Rocket Fuel Area Superfund Site (Site) located in Malta and Stillwater, New York in connection with an alleged release of hazardous materials into the environment. The EPA is seeking reimbursement of response costs from all named parties in the amount of approximately $ 358,000 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 15. 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 $ 380 329 321 Legal Services During the years ended December 31, 2021 and December 31, 2020, the Company incurred $ 19 95 HEL Transactions On January 8, 2020, the Company formed SCI as a wholly owned subsidiary to pursue a new business line focused on cryptocurrency and the blockchain ecosystem. In connection with this new business line, SCI established a facility to mine cryptocurrencies and integrate with the blockchain network. Pursuant to an Operating and Management Agreement dated January 13, 2020, by and between SCI and HEL, HEL assisted the Company, and later SCI, in developing, and is now operating, the cryptocurrency mining facility. The Operating and Management Agreement requires, among other things, that HEL provide project sourcing services to SCI, including acquisition negotiations and establishing an operating model, investments/financing timeline, and a project development path, as well as developmental and operational services, as directed by SCI, with respect to the applicable cryptocurrency mining facility in exchange for SCI’s payment to HEL of a one-time management fee ranging from $ 65,000 350,000 237 Pursuant to the Operating and Management Agreement, during the developmental phase of the cryptocurrency mining facility, which ended on March 14, 2020, HEL gathered and analyzed information with respect to SCI’s cryptocurrency mining efforts and produced budgets, financial models, and technical and operational plans, including a detailed business plan, that it delivered to SCI in March 2020 (the “Deliverables”), all of which was designed to assist with the efficient implementation of a cryptocurrency mine. The agreement provided that, following SCI’s acceptance of the Deliverables, which occurred on March 23, 2020, HEL, on behalf of SCI, would commence operations of the cryptocurrency mine in a manner that would allow SCI to mine and sell cryptocurrency. In that regard, on May 21, 2020, SCI acquired the intellectual property of GigaWatt, Inc. (“GigaWatt”) and certain other property and rights of GigaWatt associated with GigaWatt’s operation of a crypto-mining operation located in Washington State. The acquired assets formed the cornerstone of SCI’s current cryptocurrency mining operation. SCI sells for U.S. dollars all cryptocurrency it mines and is not in the business of accumulating cryptocurrency on its balance sheet for speculative gains. On October 22, 2020, SCI loaned HEL $ 112 On November 19, 2020, SCI and HEL entered into a second Operating and Management Agreement related to a potential location for a cryptocurrency mine in the Southeast United States. In accordance with the terms of the agreement, which are consistent with the first Operating and Management agreement noted above, HEL is entitled to ongoing success payments of 20.0% of the earnings before interest, taxes, depreciation and amortization of the mine. SCI paid HEL $ 150 221 On December 1, 2020, SCI and HEL entered into a third Operating and Management Agreement with respect to a potential location for a cryptocurrency mine in the Southwestern United States. In accordance with the terms of the agreement, which are consistent with the first Operating and Management agreement noted above, HEL is entitled to ongoing success payments of 20.0 38,000 On February 8, 2021, SCI and HEL entered into a fourth Operating and Management Agreement related to a potential location for a cryptocurrency mine in the Southeast United States. In accordance with the terms of the agreement, which are consistent with the first Operating and Management agreement noted above, HEL is entitled to ongoing success payments of 20.0% of the earnings before interest, taxes, depreciation and amortization of the mine. SCI paid HEL $ 544 As of December 31, 2021 and 2020, the Company paid $ 245 77 Each Operating and Management Agreement, all of which were terminated effective November 5, 2021, pursuant to the Termination Agreement, among other things, required that HEL provide project sourcing services to SCI, including acquisition negotiations and establishing an operating model, investments/financing timeline, and project development path. Simultaneously with entering into the initial Operating and Management Agreement with HEL, the Company, pursuant to a purchase agreement it entered into with HEL, made a strategic investment in HEL by purchasing 158,730 500 79,365 250 Technologies Investment I, LLC, a Delaware limited liability company that owns, on a fully diluted basis, 57.9% As discussed above, on October 29, 2021, we completed the Soluna Callisto acquisition pursuant to 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 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, 725,000 Please see Note 5 for additional information regarding the Soluna Callisto acquisition and related transactions. Several of HEL’s equityholders are affiliated with Brookstone Partners, the investment firm that holds 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 Board and separate legal representation. The transactions were subsequently unanimously approved by both the independent investment committee and the full Board. Five of the Company’s directors have various affiliations with HEL. Michael Toporek, our Chief Executive Officer and a director, 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 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 through December 31, 2021, were $19.9 million and $0, respectively. John Belizaire and John Bottomley, who were elected to the Company’s Board of Directors 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 of 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. Finally, the Company’s director William P. Phelan served as an observer on HEL’s board of directors on behalf of the Company through March 2021. The Company’s investment in HEL is carried at the cost of investment and was $ 750 1.79 |
Discontinued Operations-Held fo
Discontinued Operations-Held for Sale | 12 Months Ended |
Dec. 31, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations-Held for Sale | 16. Discontinued Operations-Held for Sale As described in Note 1, the Company entered into the nonbinding LOI with the Buyer regarding the potential Sale of MTI Instruments business segment. As of December 31, 2021, our Instrumentation business segment met the held for sale criteria and is reflected as discontinued operations in our financial statements for all periods presented. Our consolidated balance sheets and consolidated statements of operations report discontinued operations separate from continuing operations. Our consolidated statements of equity and statements of cash flows combine continuing and discontinuing operations. As discussed in Footnote 9, MTI Instruments potential sale will need approval of the holders of the Notes prior to the sale of MTII. Set forth below are the results of the discontinued operations: (Dollars in thousands) 2021 2020( * Product revenue $ 7,147 $ 9,004 Cost of sales 2,358 2,669 Research and development 1,525 1,491 Selling, general, and administrative 2,198 1,752 Other income, net 21 4 Income tax benefit 40 60 Net income from discontinued operations $ 1,127 $ 3,156 (*) Reclassified to conform with the current period presentation The following table summarizes information about assets and liabilities from discontinued operations held for sale as of December 31, 2021 and 2020: (Dollars in thousands) December 31, December 31, 2021 2020 Assets held for sale from discontinued operations: Accounts receivable $ 1,189 $ 916 Inventories 964 828 Prepaid expenses and other current assets 54 45 Property, plant and equipment, net 92 125 Deferred tax assets, net 101 60 Operating lease right-of-use assets 628 776 Total Assets held for sale from discontinued operations $ 3,028 $ 2,750 Liabilities held for sale from discontinued operations: Accounts payable $ 136 $ 108 Accrued liabilities 479 356 Operating lease liability-current 628 182 Operating lease liability-noncurrent - 594 Total Liabilities held for sale from discontinued operations $ 1,243 $ 1,240 MTI Instruments sells its products on a worldwide basis with its principal markets listed in the table below where information on product revenue is summarized by geographic area for the Company as a whole for each of the years ended December 31: (Dollars in thousands) 2021 2020 Product revenue: United States $ 4,582 $ 6,670 Association of South East Asian Nations (ASEAN) 1,864 1,510 Europe, the Middle East and Africa (EMEA) 576 713 Americas (Canada, Mexico, South America) 125 111 Total product revenue $ 7,147 $ 9,004 Product revenues are attributed to regions based on the location of customers. In 2021 and 2020, approximately 35.9 25.9 At MTI Instruments, the largest commercial customer in 2021 was a Singapore manufacturer and distributer of industrial and technology product and services of support solutions to the aerospace and energy markets, which accounted for 13.0% of total product revenue. At MTI Instruments, the largest commercial customer in 2020 was a U.S. supplier that builds and executes custom solutions for industry and government markets, which accounted for 9.1 18.5 42.9 |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Segment Information | 17. Segment Information The Company applies ASC 280, Segment Reporting two 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 mining activities. The Data Center Hosting segment generates revenue from contracts for the provision/consumption of electricity and operation of the data center from the Company’s high performance computing facility in Calvert City, Kentucky. For the year ended December 31, 2021, approximately 34 41 25 100 The Company evaluates performance based on profit or loss from operations before income taxes, accounting changes, items management does not deem relevant to segment performance, and interest income and expense. Inter-segment sales and expenses are not significant. Non-cash items of depreciation and amortization are included within both costs of sales and selling, general and administrative expenses. The following table details revenue and cost of revenues for the Company’s reportable segments (Dollars in thousands) December 31, 2021 December 31, 2020 Reportable segment revenue: Cryptocurrency mining revenue $ 10,932 $ 595 Data hosting revenue 3,413 — Total segment and consolidated revenue 14,345 595 Reportable segment cost of revenue: Cost of revenues-cryptocurrency mining 5,626 405 Cost of revenues-data hosting 2,444 — Total segment and consolidated cost of revenues 8,070 405 Reconciling items: Selling, general and administrative expenses 10,751 1,832 Interest expense (1,879 ) — Other income 11 100 Income tax (expense) benefit from continuing operations (44 ) 332 Net loss (continuing operations) (6,388 ) (1,210 ) Income from discontinued operations before income tax 1,087 3,096 Income tax (expense) benefit from discontinued operations 40 60 Net income from discontinued operations 1,127 3,156 Net loss (5,261 ) 1,946 Capital expenditures 45,792 805 Depreciation and amortization 3,703 81 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | 18. Subsequent Events In accordance with U.S. GAAP, the Company has evaluated subsequent events for disclosure between the consolidated balance sheet date of December 31, 2021 and March 31, 2022, the date the financial statements were available to be issued. NYDIG Financing On December 30, 2021, Soluna MC Borrowing 2021-1 LLC (“Borrower”), an indirect wholly owned subsidiary of the Company entered into a Master Equipment Finance Agreement (the “Master Agreement”) with NYDIG ABL LLC (“NYDIG”) as lender, servicer and collateral agent. The Master Agreement outlined the framework for a financing up to approximately $ 14.4 million On January 14, 2022, Borrower effected an initial drawdown under the Master Agreement in the aggregate principal amount of approximately $ 4.6 million 14 On January 26, 2022, Borrower had a subsequent drawdown of $ 9.6 In connection with the NYDIG Transactions, on January 13, 2022, the Company entered into a Consent and Waiver Agreement, dated as of January 13, 2022 (the “Consent”), with the Convertible Investors, in connection with the SPA, pursuant to which the Convertible Investors agreed to waive any lien on, and security interest in, certain assets 3,000,000 Promptly after the date of the Consent, the Company warrants to purchase up to 85,000 Promissory Notes On February 22, 2022, the Company issued to certain institutional lenders (the “Lenders”) promissory notes in an aggregate principal amount of $7.6 million for an aggregate purchase price of $7.6 million (collectively, the “First Tranche Notes”). The Notes were issued as the first tranche of an aggregate financing of $20.0 million. On March 10, 2022, the Company has issued to the lenders a second tranche of an aggregate principal amount of $2.4 million (the “Second Tranche Notes”). The Company expects to issue to the Lenders a third tranche of promissory notes in an aggregate principal amount of $10.0 million for an aggregate purchase price of $10.0 million 500,000 The First Tranche Notes have a maturity date of February 22, 2027, the Second Tranche Notes have a maturity date of March 10, 2027 and Third Tranche will have a maturity date five years from the date of issuance (each a “Maturity Date”), upon which dates the Notes shall be payable in full, and accrue interest at a rate of two percent (2%) per annum. The exercise of the Warrants will be subject to beneficial ownership limitations such that the Lenders may not exercise the Warrants to the extent that such exercise would result in each of the Lenders being the beneficial owner in excess of 4.99 |
Accounting Policies (Policies)
Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, SCI and MTI Instruments. All intercompany balances and transactions are eliminated in consolidation. |
Reclassification | 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. The reclassifications relate to the presentation of discontinued operations. |
Use of Estimates | Use of Estimates The consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”), which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Inventories | Inventories The Company notes that Inventory is included in Current assets associated with discontinued operations. Inventories are valued at the lower of cost (first-in, first-out) or net realizable value. The Company periodically reviews inventory quantities on hand and records a provision for excess, slow moving and obsolete inventory based primarily on our estimated forecast of product demand, as well as based on historical usage. The Company also provides estimated inventory allowances for inventory whose carrying value is in excess of net realizable value. Demand and usage for products and materials can fluctuate significantly. A significant decrease in demand for our products could result in a short-term increase in the cost of inventory purchases and an increase of excess inventory quantities on hand. Although the Company makes every effort to assure the accuracy of our forecasts of future product demand, any significant unanticipated changes in demand could have a significant impact on the value of our inventory and our reported operating results. If changes in market conditions result in reductions in the estimated net realizable value of our inventory below our previous estimate, the Company would increase our reserve in the period in which we made such a determination and record a charge to cost of product revenue. |
Property, Plant, and Equipment | Property, Plant, and Equipment Property, plant and equipment are stated at cost and depreciated using the straight-line method over their estimated useful lives as follows: Schedule of Useful Lives Leasehold improvements Lesser of the life of the lease or the useful life of the improvement Computers and related software 3 5 Cryptocurrency miners 3 Machinery and equipment 8 15 Office furniture, equipment and fixtures 2 10 Buildings 30 40 Purchased modular buildings 15 20 Significant additions or improvements extending assets’ useful lives are capitalized; normal maintenance and repair costs are expensed as incurred. The costs of fully depreciated assets remaining in use are included in the respective asset and accumulated depreciation accounts. When items are sold or retired, related gains or losses are included in net (loss) income. |
Intangible assets | Intangible assets Intangible assets include the Strategic Pipeline Contract with an estimated useful life of 5 5 15 25 |
Income Taxes | Income Taxes The Company is subject to income taxes in the U.S. (federal and state). As part of the process of preparing our consolidated financial statements, the Company calculates income taxes for each of the jurisdictions in which the Company operates. This involves estimating actual current taxes due together with assessing temporary differences resulting from differing treatment for tax and accounting purposes that are recorded as deferred tax assets and liabilities, loss carryforwards and tax credit carryforwards, for which income tax benefits are expected to be realized in future years. A valuation allowance has been established to reduce deferred tax assets, if it is more likely than not that all, or some portion, of such deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized in the period that includes the enactment date. Significant management judgment is required in determining the Company’s provision for income taxes, deferred tax assets and liabilities, and any valuation allowance recorded against the Company’s net deferred tax assets. The Company considers all available evidence, both positive and negative, such as historical levels of income and future forecasts of taxable income amongst other items in determining the Company’s valuation allowance. In addition, the Company’s assessment requires the Company 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 accounts for taxes in accordance with the asset and liability method of accounting for income taxes. Under this method, the Company must recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. The impact of the Company’s reassessment of its tax positions for these standards did not have a material impact on its results of operations, financial condition, or liquidity. The Company is currently subject to audit in various jurisdictions, and these jurisdictions may assess additional income tax liabilities against us. Developments in an audit, litigation, or in applicable laws, regulations, administrative practices, principles, and interpretations could have a material effect on the Company’s operating results or cash flows in the period or periods in which such developments occur, as well as for prior and in subsequent periods. Tax laws, regulations, and administrative practices in various jurisdictions may be subject to significant change, with or without notice, due to economic, political, and other conditions, and significant judgment is required in evaluating and estimating the Company’s provision and accruals for these taxes. There are many transactions that occur during the ordinary course of business for which the ultimate tax determination is uncertain. The Company’s effective tax rates could be affected by numerous factors, such as intercompany transactions, earnings being lower than anticipated in jurisdictions where the Company has lower statutory rates and higher than anticipated in jurisdictions where the Company has higher statutory rates, the applicability of special tax regimes, losses incurred in jurisdictions for which the Company is not able to realize the related tax benefit, changes in foreign currency exchange rates, entry into new businesses and geographies, changes to its existing businesses and operations, acquisitions and investments and how they are financed, changes in the Company’s stock price, changes in its deferred tax assets and liabilities and their valuation, and changes in the relevant tax, accounting, and other laws, regulations, administrative practices, principles, and interpretations. |
Equity Investment – HEL | Equity Investment – HEL The Company owns approximately 1.79 1.86 750 Equity Investments without Readily Determinable Fair Values Our equity investment in HEL is accounted for under the measurement alternative. Equity securities measured and recorded using the measurement alternative are recorded at cost minus impairment, if any, plus or minus changes resulting from qualifying observable price changes. Adjustments resulting from impairments and observable price changes are recorded in the income statement. There was no impairment of investment recognized in 2021 and 2020. Equity Method Investments The Company’s consolidated net income will include our proportionate share, if any, of the net income or loss of our equity method investee. When the Company records its proportionate share of net income, it increases equity income (loss), net in our consolidated statements of operations and our carrying value in that investment. Conversely, when the Company records its proportionate share of a net loss, it decreases equity income (loss), net in our consolidated statements of operations and our carrying value in that investment. When the Company’s carrying value in an equity method investee company has been reduced to zero, no further losses are recorded in the Company’s financial statements unless the Company guaranteed obligations of the investee company or has committed additional funding. When the investee company subsequently reports income, the Company will not record its share of such income until it equals the amount of its share of losses not previously recognized. As of December 31, 2021, the Company owned approximately 47.5 75,049,937 240,000,000 0 |
Fair Value Measurement | Fair Value Measurement The estimated fair value of certain financial instruments, including cash, accounts receivable and short-term debt approximates their carrying value due to their short maturities and varying interest rates. “Fair value” is the price that would be received to sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Based on the observability of the inputs used in the valuation methods, the Company is required to provide the following information according to the fair value accounting standards. These standards established a fair value hierarchy as specified that ranks the quality and reliability of the information used to determine fair values. Financial assets and liabilities are classified and disclosed in one of the following three categories: Level 1: Quoted market prices in active markets for identical assets or liabilities, which includes listed equities. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. These items are typically priced using models or other valuation techniques. These models are primarily financial industry-standard models that consider various assumptions, including the time value of money, yield curves, volatility factors, as well as other relevant economic measures. Level 3: These use unobservable inputs that are not corroborated by market data. These values are generally estimated based upon methodologies utilizing significant inputs that are generally less observable from objective sources. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. On October 25, 2021, pursuant to a securities purchase agreement dated October 20, 2021 (the “SPA), the Company issued to certain accredited investors Class A, Class B and Class C common stock purchase warrants (collectively, the “Warrants”) to purchase up to an aggregate of 1,776,073 12.50 15 18 The fair value of the Warrants was determined to be $ 8.29 8.10 7.95 The following table provides quantitative information regarding the inputs to the fair value measurement of the Warrants as of the valuation date: Input 2021 Risk-free interest rate 1.19 % Expected term (years) 5.00 Expected volatility 150.00 % Consistent with the guidance in purchase accounting, the value of the pipeline of certain cryptocurrency mining projects previously owned by HEL acquired in the Soluna Callisto acquisition in October 2021 as of the acquisition date was estimated using an expected value approach, which probability-weights various future outcomes and uses certain Level 3 inputs. Including in those inputs are the following key assumptions: expected growth in share price at a risk-free rate in the risk-neutral framework based on U.S. Treasury Rates as of the valuation date, volatility of share price based on historical equity volatilities of comparable companies over a lookback period, and assessment associated with qualified projects based on assessment on timing of payments and assessment of active megawatt scenarios and the associated probabilities. The resulting amounts are then discounted to present value through use of a discount rate that considers, among other things, the risk of the payments, credit risk of the Company, and overall weighted average cost of capital of the acquired business. The resulting calculations resulted in an estimated fair value of the acquired assets and consideration paid in common stock of approximately $ 33 805-50 provides that assets acquired in an asset acquisition are measured based on the costs of the acquisition, which is the consideration that the acquirer transfers to the seller, and includes direct transaction costs related to the acquisition in which costs were an additional $ 3.5 million |
Revenue Recognition | Revenue Recognition Cryptocurrency Mining Revenue The Company recognizes revenue under ASC 606, Revenue from Contracts with Customers. The core principles of the revenue standard is that a company should recognize revenue to depict the transfer of promised good or services to customers in an amount that reflects the consideration to which the company expects to be entitled for those goods or services. The following five steps are applied to achieve that core principle: ● Step 1: Identify the contract with the customer ● Step 2: Identify the performance obligations in the contract ● Step 3: Determine the transaction price ● Step 4: Allocate the transaction price to the performance obligations in the contract ● Step 5: Recognize revenue when the Company satisfies a performance obligation In order to identify the performance obligations in a contract with a customer, a company must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606’s definition of a “distinct” good or service (or bundle of goods or services) if both of the following criteria are met: The customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e., the good or service is capable of being distinct), and the entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract). If a good or service is not distinct, the good or service is combined with other promised goods or services until a bundle of goods or services is identified that is distinct. The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. When determining the transaction price, an entity must consider the effects of all of the following: ● Variable consideration ● Constraining estimates of variable consideration ● The existence of a significant financing component in the contract ● Noncash consideration ● Consideration payable to a customer Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The transaction price is allocated to each performance obligation on a relative standalone selling price basis. The transaction price allocated to each performance obligation is recognized when that performance obligation is satisfied, at a point in time or over time as appropriate. Providing computing power to solve complex cryptographic algorithms in support of the Bitcoin blockchain (in a process known as “solving a block”) is an output of the Company’s ordinary activities. The provision of providing such computing power is the only performance obligation in the Company’s contracts with mining pool operators. The transaction consideration the Company receives, if any, is noncash consideration, which the Company measures at fair value on the date received, which is not materially different than the fair value at contract inception or the time the Company has earned the award from the pools. The consideration is all variable. Because it is not probable that a significant reversal of cumulative revenue will not occur, the consideration is constrained until the mining pool operator successfully places a block (by being the first to solve an algorithm) and the Company receives confirmation of the consideration it will receive, at which time revenue is recognized. There is no significant financing component in these transactions. Fair value of the cryptocurrency award received is determined using the quoted price of the related cryptocurrency where the Company is registered at the time of receipt. The mined cryptocurrency is immediately paid to the Coinbase wallet. Cryptocurrency is converted to U.S. dollars daily, as SCI is not in the business of accumulating cryptocurrency on its balance sheet. Data center hosting The Company has entered into customer hosting contracts whereby the Company provides electrical power and network connectivity to cryptocurrency mining customers, and the customers pay a stated amount per megawatt-hour (“MWh”) (“Contract Capacity”), a fixed rate, as well as a share of the coins mined. The fee is paid monthly in advance. The actual monthly amounts are calculated after the close of each month and reconciled to the monthly advance based on the clauses contained in the respective contracts. If any shortfalls due to outages are experienced, service level credits may be made to customers to offset outages which prevented them from cryptocurrency mining. Monthly advanced payments and customer deposits are reflected as other liabilities. Customer contract security deposits are made at the time the contract is signed and held until the conclusion of the contract relationship. Deferred revenue is primarily from advance monthly payments received and revenue is recognized when service is completed. Product Revenue The Company notes that product revenue is included within Net income from discontinued operations for the year ended December 31, 2021 and 2020. Product revenue consists of revenue recognized from MTI Instruments’ product lines. In general, the Company determines revenue recognition by: (1) identifying the contract, or contracts, with the customer; (2) identifying the performance obligations in the contract; (3) determining the contract price; (4) allocating the transaction price to performance obligations in the contract; and (5) recognizing revenue when, or as, the performance obligations are satisfied by transferring the promised goods or services. Based on past experience, the Company reasonably estimates its returns and warranty reserves. Revenue is presented net of discounts and allowances, which are determined when the sale is negotiated. The nature of the Company’s contracts do not give rise to variable consideration. The Company enters into contracts that can include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. If the product requires that the Company provide installation, all revenue related to the product is deferred and recognized upon the completion of the installation. If the product requires specific customer acceptance criteria, such as on-site customer acceptance and/or acceptance after install, then revenue is deferred until customer acceptance occurs or the acceptance provisions lapse, unless the Company can objectively and reliably demonstrate that the criteria specified in the acceptance provisions is satisfied. The Company may also record unearned revenues, which include payments for other offerings for which we have been paid in advance. The resulting revenue would be earned when we transfer control of the product or service. As of December 31, 2021 and December 31, 2020 the Company had no deferred or unearned revenue. MTI Instruments currently has distributor agreements in place for the international sale of general instrument and semiconductor products in certain global regions. Such agreements grant a distributor the right of first refusal to act as distributor for such products in the distributor’s territory. In return, the distributor agrees to not market other products which are considered by MTI Instruments to be in direct competition with MTI Instruments’ products. The distributor is allowed to purchase MTI Instruments’ equipment at a price which is discounted off the published domestic/international list prices. Such list prices can be adjusted by MTI Instruments during the term of the distributor agreement. Generally, payment terms with the distributor are standard net 30 days; however, on occasion, extended payment terms have been granted. Title and risk of loss of the product passes to the distributor upon delivery to the independent carrier (standard “free-on-board” factory), and the distributor is responsible for any required training and/or service with the end-user. The sale (and subsequent payment) between MTI Instruments and the distributor is not contingent upon the successful resale of the product by the distributor. Distributor sales are covered by MTI Instruments’ standard one-year warranty and there are no special return policies for distributors. The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring services to the customer. If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price basis unless the transaction price is variable and meets the criteria to be allocated entirely to a performance obligation or to a distinct good or service that forms part of a single performance obligation. The Company determines standalone selling price based on the price at which the performance obligation is sold separately. If the standalone selling price is not observable through past transactions, the Company estimates the standalone selling price taking into account available information such as market conditions and internally approved pricing guidelines related to the performance obligations. Shipping and handling charges billed to customers is a pass-through from the freight forwarder and is included in product revenue. Cost of Cryptocurrency Mining and Data Center Hosting Revenue Cost of cryptocurrency mining and data center hosting revenue includes direct utility costs as well as overhead costs that relate to the operations of SCI’s cryptocurrency mining facility. Cost of Product Revenue Cost of product revenue includes material, labor, overhead and shipping and handling costs. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Trade accounts receivable are stated at the invoiced amount billed to customers and do not bear interest. An allowance for doubtful accounts, if necessary, represents the Company’s best estimate of the amount of probable credit losses in its existing accounts receivable. The Company determines the allowance based on historical write-off experience and current exposures identified. The Company reviews its allowance for doubtful accounts monthly. Past due balances over 90 days and over a specified amount are reviewed individually for collectability. All other balances are reviewed on a pooled basis by type of receivable. Account balances are charged off against the allowance when the Company believes it is probable the receivable will not be recovered. The Company does not have any off-balance-sheet credit exposure related to its customers. The Company’s allowance for doubtful accounts was $0 at both December 31, 2021 and December 31, 2020. Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 20 days. In instances where the timing of revenue recognition differs from the timing of invoicing, we have determined our contracts generally do not include a significant financing component. The primary purpose of the Company’s invoicing terms is to provide customers with simplified and predictable ways of purchasing our products and services, not to receive financing from its customers. The Company recognizes an asset for the incremental costs of obtaining a contract with a customer, if the Company expects the benefit of those costs to be longer than one year. As of December 31, 2021 and December 31, 2020, the Company has recorded no capitalized costs to obtain a contract. |
Deposits on Equipment | Deposits on Equipment As of December 31, 2021 and 2020, the Company had approximately $ 10.2 million 279 |
Warranty | Warranty The Company notes that warranty liability is included in current liabilities associated with discontinued operations for the year ended December 31, 2021 and 2020. The Company accrues a warranty liability at the time product revenue is recorded based on historical experience. The liability is reviewed during the year and is adjusted, if appropriate, to reflect new product offerings or changes in experience. Actual warranty claims are tracked by product line. Warranty liability was $ 18 22 3 11 |
Long-Lived Assets | Long-Lived Assets The Company accounts for impairment or disposal of long-lived assets in accordance with accounting standards that address the financial accounting and reporting for the impairment or disposal of long-lived assets, specify how impairment will be measured, and how impaired assets will be classified in the consolidated financial statements. On a quarterly basis, the Company analyzes the status of its long-lived assets at each subsidiary for potential impairment. As of December 31, 2021, the Company does not believe that any of its long-lived assets have suffered any type of impairment that would require an adjustment to that asset’s recorded value. |
Cash and Cash Equivalents | 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. |
Net Income (Loss) per Share | Net Income (Loss) per Share The Company computes basic income (loss) per common share by dividing net income by the weighted average number of common shares outstanding during the reporting period. Diluted income (loss) per share reflects the potential dilution, if any, computed by dividing income (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. |
Share-Based Payments | Share-Based Payments The Company grants options to purchase our common stock and awards restricted stock to our employees and directors under our equity incentive plans. The benefits provided under these plans are share-based payments and the Company accounts for stock-based awards exchanged for employee service in accordance with the appropriate share-based payment accounting guidance. Stock-based compensation represents the cost related to stock-based awards granted to employees and directors. The Company measures stock-based compensation cost at grant date based on the estimated fair value of the award and recognizes the cost as expense on a straight-line basis in accordance with the vesting of the options (net of estimated forfeitures) over the employee’s requisite service period. The Company estimates the fair value of stock-based awards on the grant date using a Black- Scholes valuation model. The Company uses the fair value method of accounting, which provides for certain changes to the method for valuing share-based compensation. The valuation provisions apply to new awards and to awards that are outstanding on the effective date and subsequently modified. Under the modified prospective application, prior periods are not revised for comparative purposes. Stock-based compensation expense is recorded in the lines titled “Cost of revenue,” and “Selling, general and administrative expenses” in the Consolidated Statements of Operations based on the employees’ respective functions. The Company records deferred tax assets for awards that potentially can result in deductions on the Company’s income tax returns based on the amount of expense that is recognized and the Company’s statutory tax rate. All income tax effects of awards, including excess tax benefits, recognized on stock-based compensation expense are reflected in the Consolidated Statements of Operations as a component of the provision for income taxes on a prospective basis. The determination of the fair value of share-based payment awards on the date of grant using an option-pricing model is affected by the Company’s stock price as well as assumptions regarding a number of complex and subjective variables. These variables include the Company’s expected stock price volatility over the term of the awards, actual and projected employee stock option exercise behaviors, risk-free interest rate, and expected dividends. Theoretical valuation models and market-based methods are evolving and may result in lower or higher fair value estimates for share-based compensation. The timing, readiness, adoption, general acceptance, reliability, and testing of these methods is uncertain. Sophisticated mathematical models may require voluminous historical information, modeling expertise, financial analyses, correlation analyses, integrated software and databases, consulting fees, customization, and testing for adequacy of internal controls. For purposes of estimating the fair value of stock options granted using the Black-Scholes model, the Company uses the historical volatility of its stock for the expected volatility assumption input to the Black-Scholes model, consistent with the accounting guidance. The risk-free interest rate is based on the risk-free zero-coupon rate for a period consistent with the expected option term at the time of grant. The expected option term is calculated based on our historical forfeitures and cancellation rates. The fair value of restricted stock awards is based on the market close price per share on the grant date. The Company expenses the compensation cost of these awards as the restriction period lapses, which is typically a one- to three-year service period to the Company. The shares represented by restricted stock awards are outstanding at the grant date, and the recipients are entitled to voting rights with respect to such shares upon issuance. |
Notes payable | Notes payable The Company records notes payable net of any discount or premiums. Discounts and premiums are amortized as interest expense or income over the life of the note in such a way as to result in a constant rate of interest when applied to the amount outstanding at the beginning of any given period. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that subject the Company to concentrations of credit risk principally consist of cash equivalents and trade accounts receivable. The Company’s trade accounts receivable are from data hosting revenue with the Company’s two customers. The Company does not require collateral and has not historically experienced significant credit losses related to receivables from individual customers or groups of customers in any particular industry or geographic area. From time to time, the Company’s cash account balances exceed the balances as covered by the Federal Deposit Insurance System. The Company has never suffered a loss due to such excess balances. |
Research and Development Costs | Research and Development Costs Research and development costs entirely related to the MTI Instruments business and as such was included within Net income from discontinued operations. The Company expenses research and development costs as incurred. The Company incurred research and development costs of approximately $1.5 million and $1.5 million for the years ended December 31, 2021 and 2020, respectively. |
Advertising Costs | Advertising Costs Advertising costs entirely related to the MTI Instruments business and as such was included within Net income from discontinued operations . The Company expenses advertising costs as incurred. The Company incurred advertising costs of approximately $66 thousand and $39 thousand, for the years ended December 31, 2021 and 2020, respectively. |
Other Comprehensive Income | Other Comprehensive Income The Company had no other comprehensive income items for the years ended December 31, 2021 and 2020. |
Leases | Leases The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets and operating lease liability on our consolidated balance sheets. The Company did not have any finance leases as of December 31, 2021 or December 31, 2020. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The Company’s lease terms may include options to extend or terminate its leases when it is reasonably certain that the Company will exercise those options. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. For real estate leases, the Company accounts for lease components together with non-lease components (e.g. common-area maintenance). |
Accounting Updates Not Yet Effective | Accounting Updates Not Yet Effective Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“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. In June 2016, the FASB issued ASU 2016-13 (Financial Instruments - Credit Losses (Topic 326)) and its subsequent amendments to the initial guidance within ASU 2018-19, ASU 2019-04, ASU 2019-05, ASU 2019-10, ASU 2019-11 and ASU 2020-02, respectively (collectively, Topic 326). Topic 326 changes how entities will measure credit losses for most financial assets and certain other instruments that are not accounted for at fair value through net income. This standard replaces the existing incurred credit loss model and establishes a single credit loss framework based on a current expected credit loss model for financial assets carried at amortized cost, including loans and held-to- maturity debt securities. The current expected loss model requires an entity to estimate credit losses expected over the life of the credit exposure upon initial recognition of that exposure when the financial asset is originated or acquired, which will generally result in earlier recognition of credit losses. This standard also requires expanded credit quality disclosures. For available-for-sale debt securities, entities will be required to record allowances rather than reduce the carrying amount, as they do today under the other-than-temporary impairment model. This standard also simplifies the accounting model for purchased credit-impaired debt securities and loans. This standard will affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any |
Accounting Updates Recently Adopted by the Company | Accounting Updates Recently Adopted by the Company On January 1, 2021, the Company adopted ASU 2019-12 (Income Taxes (Topic 740) – Simplifying the Accounting for Income Taxes). This standard removes exceptions to the general principles in Topic 740 for allocating tax expense between financial statement components, accounting basis differences stemming from an ownership change in foreign investments and interim period income tax accounting for year-to-date losses that exceed projected losses. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. On January 1, 2021, the Company adopted ASU 2020-01 (Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)). This standard clarifies certain interactions between the guidance to account for certain equity securities under Topic 321, the guidance to account for investments under the equity method of accounting in Topic 323, and the guidance in Topic 815, which could change how an entity accounts for an equity security under the measurement alternative or a forward contract or purchased option to purchase securities that, upon settlement of the forward contract or exercise of the purchased option, would be accounted for under the equity method of accounting or the fair value option in accordance with Topic 825, Financial Instruments. This standard improves current GAAP by reducing diversity in practice and increasing comparability of the accounting for these interactions. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. On January 1, 2021, the Company early adopted ASU 2020-06 (Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging- Contracts in Entity’s Own Equity (Subtopic 815-40). ASU 2020-06 simplifies the guidance in Accounting Standards Codification (ASC) 470-20, Debt - Debt with Conversion and Other Options. Under ASU 2020-06, convertible instruments with embedded conversion features, that are not required to be accounted for as a derivative or that do not result in a substantial premium, are no longer required to be separated from the host contract thereby eliminating the cash conversion and beneficial conversion feature model. Instead, these convertible debt instruments will be accounted for as a single liability measured at amortized cost under the traditional convertible debt accounting model. ASU 2020-06 also requires the if-converted method to be applied for all convertible instruments when calculating diluted earnings per share. The Company has early adopted this standard for the year ended December 31, 2021. The early adoption of this standard eliminated calculating a beneficial conversion feature in relation to the SPA agreements that were entered into on October 25, 2021. Refer to Note 9 for more details. There have been no other significant changes in the Company’s reported financial position or results of operations and cash flows as a result of its adoption of new accounting pronouncements or changes to its significant accounting policies that were disclosed in its consolidated financial statements for the fiscal year ended December 31, 2021. |
Accounting Policies (Tables)
Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedule of Useful Lives | Property, plant and equipment are stated at cost and depreciated using the straight-line method over their estimated useful lives as follows: Schedule of Useful Lives Leasehold improvements Lesser of the life of the lease or the useful life of the improvement Computers and related software 3 5 Cryptocurrency miners 3 Machinery and equipment 8 15 Office furniture, equipment and fixtures 2 10 Buildings 30 40 Purchased modular buildings 15 20 |
The following table provides quantitative information regarding the inputs to the fair value measurement of the Warrants as of the valuation date: | The following table provides quantitative information regarding the inputs to the fair value measurement of the Warrants as of the valuation date: Input 2021 Risk-free interest rate 1.19 % Expected term (years) 5.00 Expected volatility 150.00 % |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Receivables [Abstract] | |
Schedule of accounts receivables | Accounts receivables consist of the following at: Schedule of accounts receivables (Dollars in thousands) December 31, December 31, Data Hosting $ 450 — Other 81 59 Total $ 531 $ 59 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Property, plant and equipment consist of the following at: Schedule of Property, Plant and Equipment (Dollars in thousands) December 31, December 31, Land $ 52 $ — Land improvements 238 — Buildings 5,650 — Leasehold improvements 317 223 Vehicles 15 — Computers and related software 30,890 1,140 Machinery and equipment 2,588 — Office furniture and fixtures 22 — Construction in progress 7,590 — 47,362 1,363 Less: Accumulated depreciation (2,765 ) (641 ) $ 44,597 $ 722 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible assets consist of the following as of December 31, 2021: | Intangible assets consist of the following as of December 31, 2021: (Dollars in thousands) Intangible Assets Accumulated Amortization Total For the year ended December 31, 2021 Strategic pipeline contract $ 46,885 $ 1,562 $ 45,323 Assembled workforce 500 17 483 Patents 33 — 33 Total $ 47,418 $ 1,579 $ 45,839 |
The Company expects to record amortization expense of intangible assets over the next five years and thereafter as follows: | The Company expects to record amortization expense of intangible assets over the next five years and thereafter as follows: (Dollars in thousands) Year 2021 2022 $ 9,479 2023 9,479 2024 9,479 2025 9,479 2026 7,899 Thereafter 24 Total $ 45,839 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of income tax expense | Income tax expense (benefit) for each of the years ended December 31 consists of the following: Schedule of income tax expense (Dollars in thousands) 2021 2020 Federal $ — $ — State 3 4 Deferred 41 (336 ) Total $ 44 $ (332 ) |
Schedule of deferred income tax expense | The significant components of deferred income tax expense (benefit) from operations for each of the years ended December 31 consists of the following: Schedule of deferred income tax expense (Dollars in thousands) 2021 2020 Deferred tax (expense) benefit $ (574 ) $ (73 ) Net operating loss carry forward (1,589 ) 331 Valuation allowance 2,204 (594 ) Deferred tax benefit (expense) $ 41 $ (336 ) |
Schedule of effective income tax rate | The Company’s effective income tax rate from operations differed from the Federal statutory rate for each of the years ended December 31 as follows: Schedule of effective income tax rate 2021 2020 Federal statutory tax rate 21 % 21 % Change in valuation allowance ( 35 ) ( 39 ) State taxes, net of federal benefit 1 — Expiration of stock option 2 1 Intangible amortization — — Change in UTP 9 — Federal tax benefits, R&D 1 ( 3 ) Other Deferred Adjustments 2 ( 1 ) Tax rate 1 % ( 21 )% |
Schedule of deferred tax assets | Deferred tax (liabilities) assets are determined based on the temporary differences between the financial statement and tax bases of assets and liabilities as measured by the enacted tax rates. Temporary differences, net operating loss carryforwards and tax credit carryforwards that give rise to deferred tax assets and liabilities are summarized as follows as of December 31: Schedule of deferred tax assets (Dollars in thousands) 2021 2020 Deferred tax assets: Vacation accrual $ — $ 3 Allowance for related party note receivable 76 69 Net operating loss 11,777 10,187 Property, plant and equipment — 6 Stock options 278 31 Research and development tax credit 144 120 Deferred tax assets 12,275 10,416 Valuation allowance (11,921 ) (9,717 ) Deferred tax assets, net of valuation allowance 354 699 Deferred tax liabilities: Property, plant and equipment (61 ) — Intangibles (10,570 ) — Deferred tax liabilities (10,631 ) — Deferred tax (liabilities) assets $ (10,277 ) $ 699 In connection with the strategic contract pipeline acquired in the Soluna Callisto acquisition as further discussed in Note 6, 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 |
Schedule of deferred tax asset valuation allowance | The valuation allowance at December 31, 2021 and 2020 was $ 11.9 9.7 Schedule of deferred tax asset valuation allowance (Dollars in thousands) 2021 2020 Valuation allowance, beginning of year $ 9,717 $ 10,310 Allowance for related party note receivable — (65 ) Inventory — 1 Net operating (loss) income 2,179 (406 ) Property, plant and equipment — (27 ) Stock options — (57 ) Research and development credit 25 (32 ) Warranty and other sales obligations — 13 Deferred revenue — (10 ) Accrued compensation — (10 ) Valuation allowance, end of year $ 11,921 $ 9,717 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Payables and Accruals [Abstract] | |
Schedule of accrued liabilities | Accrued liabilities consist of the following at: Schedule of accrued liabilities (Dollars in thousands) December 31, 2021 December 31, 2020 Salaries, wages and related expenses $ 611 $ 70 Liability to shareholders for previous acquisition 363 363 Legal, audit, tax and professional fees 363 158 Sales tax accrual 248 - Development fees 373 - Hosting and utility fees 626 - Other 275 72 Total $ 2,859 $ 663 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Debt consists of the following | Convertible Notes Debt consists of the following Maturity Date Interest Rate December 31, 2021 Convertible Note October 25, 2022 8 % $ 14,927 Less: debt discount 967 Less: discount from issuance of warrants 5,747 Less: debt issuance costs 1,092 Total convertible notes, net of discount and issuance costs $ 7,121 |
Stockholders_ Equity (Tables)
Stockholders’ Equity (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Schedule of reserved common shares for future issuance | The Company had reserved shares of common stock for future issuance as follows as of December 31, 2021: Schedule of reserved common shares for future issuance Stock options outstanding 991,550 Restricted stock units outstanding 160,473 Warrants outstanding 2,193,512 Common stock available for future equity awards or issuance of options 392,717 Number of common shares reserved 3,738,252 |
Net (loss) income per Share (Ta
Net (loss) income per Share (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
The following table sets forth the reconciliation of the numerators and denominators of the basic and diluted per share computations for continuing operations for the years ended December 31: | The following table sets forth the reconciliation of the numerators and denominators of the basic and diluted per share computations for continuing operations for the years ended December 31: (Dollars in thousands, except shares) 2021 2020 Numerator Net loss from continuing operations $ (6,388 ) $ (1,210 ) Net income from discontinuing operations 1,127 3,156 Net (Loss) Income $ (5,261 ) $ 1,946 Less: Preferred Dividend (630 ) - Balance $ (5,891 ) $ 1,946 Denominator: Basic and Diluted EPS: Common shares outstanding, beginning of period 9,734,607 9,570,677 Weighted average common shares issued during the period 2,105,635 11,209 Denominator for basic earnings per common shares — Weighted average common shares 11,840,242 9,581,886 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
The following table presents the weighted-average assumptions used for options granted under the 2021 Plan: | The following table presents the weighted-average assumptions used for options granted under the 2021 Plan: 2021 Option term (years) 4.04 Volatility 108.33 % Unvested forfeiture rate 0.18 % Risk-free interest rate 0.84 % Dividend yield 0.00 % Weighted-average fair value per option granted $ 5.04 The following table presents the weighted-average assumptions used for options granted under the 2014 Plan: 2020 Option term (years) 6.25 Volatility 106.22 % Unvested forfeiture rate 0.20 % Risk-free interest rate 0.31 % Dividend yield 0.00 % Weighted-average fair value per option granted $ 0.57 No options were granted under the 2014 Plan for the year ended December 31, 2021. The following table presents the weighted-average assumptions used for options granted under the 2012 Plan: 2020 Option term (years) 6.25 Volatility 106.46 % Unvested forfeiture rate 0.20 % Risk-free interest rate 0.28 % Dividend yield 0.00 % Weighted-average fair value per option granted $ 0.61 |
Total share-based compensation expense, related to the Company’s share-based awards, recognized for the years ended December 31, was comprised as follows: | Total share-based compensation expense, related to the Company’s share-based awards, recognized for the years ended December 31, was comprised as follows: 2021 2020 (Dollars in thousands) Cost of cryptocurrency revenue $ 3 $ — Selling, general and administrative 1,938 40 Share-based compensation expense $ 1,941 $ 40 |
Presented below is a summary of the Company’s stock option activity for the Plans for the years ended December 31: | Presented below is a summary of the Company’s stock option activity for the Plans for the years ended December 31: 2021 2020 Shares under option, beginning 398,750 527,875 Granted 716,200 50,000 Exercised (123,400 ) (83,000 ) Forfeited — (27,750 Expired/canceled — (68,375 ) Shares under option, ending 991,550 398,750 Options exercisable 385,800 276,000 Remaining shares available for granting of options 392,717 11,125 The weighted average exercise price for the Company’s stock option activity for the Plans is as follows for each of the years ended December 31: 2021 2020 Shares under option, beginning $ 0.87 $ 0.89 Granted $ 7.20 $ 0.73 Exercised $ 0.83 $ 1.00 Forfeited $ — $ 0.90 Expired/canceled $ — $ 0.73 Shares under option, ending $ 5.44 $ 0.87 Options exercisable, ending $ 4.10 $ 0.89 |
The following table summarizes information for options outstanding and exercisable for the Plans as of December 31, 2021: | The following table summarizes information for options outstanding and exercisable for the Plans as of December 31, 2021: Outstanding Exercisable Weighted Average Weighted Weighted Average Weighted Exercise Remaining Average Remaining Average Price Range Number Contractual Life Exercise Price Number Contractual Life Exercise Price $0.29 - $1.08 241,350 6.25 $ 0.84 165,600 5.55 $ 0.86 $1.09 - $1.20 34,000 3.17 $ 1.20 34,000 3.17 $ 1.20 $6.84 - $11.10 716,200 6.66 $ 7.20 186,200 4.36 $ 7.52 991,550 6.44 $ 5.44 385,800 4.77 $ 4.10 |
Non-vested restricted stock activity is as follows for the year ended December 31: | Non-vested restricted stock activity is as follows for the year ended December 31: 2021 2020 Non-vested restricted stock balance, beginning January 1 80,930 — Non-vested restricted stock granted 362,399 83,930 Vested restricted stock — — Non-vested restricted stock exercised (37,962 ) — Non-vested restricted stock forfeited/expired — (3,000 ) Non-vested restricted stock balance, ending December 31 405,367 80,930 |
The weighted average fair value price for the Company’s restricted stock activity for the Plans is as follows for each of the years ended December 31: | The weighted average fair value price for the Company’s restricted stock activity for the Plans is as follows for each of the years ended December 31: 2021 2020 Restricted stock, beginning $ 1.48 $ 0.00 Granted $ 12.43 $ 1.46 Exercised $ 1.34 $ 0.00 Forfeited/ expired $ — $ 0.99 Restricted stock, ending $ 11.28 $ 1.48 |
The following is a summary of common stock warrant activity during the year ended December 31, 2021. The Company did not have or issue any warrants during the year ended December 31, 2020. | The following is a summary of common stock warrant activity during the year ended December 31, 2021. The Company did not have or issue any warrants during the year ended December 31, 2020. Number of Weighted Balance, December 31, 2020 — $ — Granted 2,775,122 12.67 Exercised (581,610 ) 8.24 Forfeited/ Expired — — Balance, December 31, 2021 2,193,512 $ 13.85 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Lease expense for these leases is recognized on a straight-line basis over the lease term. For the twelve months ended December 31, total lease costs are comprised of the following: | Lease expense for these leases is recognized on a straight-line basis over the lease term. For the twelve months ended December 31, total lease costs are comprised of the following: (Dollars in thousands) 2021 2020 Operating lease cost $ 169 $ 86 Short-term lease cost — 2 Total net lease cost $ 169 $ 88 |
Supplemental cash flows information related to leases for the twelve months ended December 31 was as follows: | Supplemental cash flows information related to leases for the twelve months ended December 31 was as follows: (Dollars in thousands) 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 156 $ 82 Non-Cash Activity Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 131 $ 504 |
Supplemental balance sheet information for the twelve months ended December 31 was as follows: | Supplemental balance sheet information for the twelve months ended December 31 was as follows: (Dollars in thousands, except lease term and discount rate) 2021 2020 Operating leases: Operating lease ROU asset $ 405 $ 427 Current operating lease liabilities $ 184 $ 134 Non-current operating lease liabilities 237 297 Total operating lease liabilities $ 421 $ 431 Operating leases: ROU assets $ 635 $ 504 Asset lease expense (230 ) (77 ) ROU assets, net $ 405 $ 427 Weighted Average Remaining Lease Term (in years): Operating leases 2.38 3.09 Weighted Average Discount Rate: Operating leases 3.83 % 3.81 % |
Maturities of operating lease liabilities are as follows for the year ending December 31: | Maturities of operating lease liabilities are as follows for the year ending December 31: (Dollars in thousands) 2021 2022 $ 197 2023 159 2024 85 Total lease payments 441 Less: imputed interest (20 ) Total lease obligations 421 Less: current obligations 184 Long-term lease obligations $ 237 |
Discontinued Operations-Held _2
Discontinued Operations-Held for Sale (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Set forth below are the results of the discontinued operations: | Set forth below are the results of the discontinued operations: (Dollars in thousands) 2021 2020( * Product revenue $ 7,147 $ 9,004 Cost of sales 2,358 2,669 Research and development 1,525 1,491 Selling, general, and administrative 2,198 1,752 Other income, net 21 4 Income tax benefit 40 60 Net income from discontinued operations $ 1,127 $ 3,156 (*) Reclassified to conform with the current period presentation |
The following table summarizes information about assets and liabilities from discontinued operations held for sale as of December 31, 2021 and 2020: | The following table summarizes information about assets and liabilities from discontinued operations held for sale as of December 31, 2021 and 2020: (Dollars in thousands) December 31, December 31, 2021 2020 Assets held for sale from discontinued operations: Accounts receivable $ 1,189 $ 916 Inventories 964 828 Prepaid expenses and other current assets 54 45 Property, plant and equipment, net 92 125 Deferred tax assets, net 101 60 Operating lease right-of-use assets 628 776 Total Assets held for sale from discontinued operations $ 3,028 $ 2,750 Liabilities held for sale from discontinued operations: Accounts payable $ 136 $ 108 Accrued liabilities 479 356 Operating lease liability-current 628 182 Operating lease liability-noncurrent - 594 Total Liabilities held for sale from discontinued operations $ 1,243 $ 1,240 |
MTI Instruments sells its products on a worldwide basis with its principal markets listed in the table below where information on product revenue is summarized by geographic area for the Company as a whole for each of the years ended December 31: | MTI Instruments sells its products on a worldwide basis with its principal markets listed in the table below where information on product revenue is summarized by geographic area for the Company as a whole for each of the years ended December 31: (Dollars in thousands) 2021 2020 Product revenue: United States $ 4,582 $ 6,670 Association of South East Asian Nations (ASEAN) 1,864 1,510 Europe, the Middle East and Africa (EMEA) 576 713 Americas (Canada, Mexico, South America) 125 111 Total product revenue $ 7,147 $ 9,004 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
The following table details revenue and cost of revenues for the Company’s reportable segments | The following table details revenue and cost of revenues for the Company’s reportable segments (Dollars in thousands) December 31, 2021 December 31, 2020 Reportable segment revenue: Cryptocurrency mining revenue $ 10,932 $ 595 Data hosting revenue 3,413 — Total segment and consolidated revenue 14,345 595 Reportable segment cost of revenue: Cost of revenues-cryptocurrency mining 5,626 405 Cost of revenues-data hosting 2,444 — Total segment and consolidated cost of revenues 8,070 405 Reconciling items: Selling, general and administrative expenses 10,751 1,832 Interest expense (1,879 ) — Other income 11 100 Income tax (expense) benefit from continuing operations (44 ) 332 Net loss (continuing operations) (6,388 ) (1,210 ) Income from discontinued operations before income tax 1,087 3,096 Income tax (expense) benefit from discontinued operations 40 60 Net income from discontinued operations 1,127 3,156 Net loss (5,261 ) 1,946 Capital expenditures 45,792 805 Depreciation and amortization 3,703 81 |
Nature of Operations (Details N
Nature of Operations (Details Narrative) - USD ($) | Dec. 28, 2021 | Sep. 28, 2021 | Aug. 23, 2021 | Aug. 23, 2021 | May 27, 2021 | May 04, 2021 | Apr. 29, 2021 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 |
Underwriter discounts | $ 140,000 | |||||||||
Other offering expenses | $ 350,000 | |||||||||
Gross proceeds | $ 2,160,000 | |||||||||
Accumulated deficit | $ (123,684,000) | $ (117,793,000) | ||||||||
Working capital | 9,300,000 | |||||||||
Line of credit outstanding amount | 1,000,000 | |||||||||
Outstanding notes payable | 7,121,000 | |||||||||
Capital expenditure | $ 45,800,000 | |||||||||
Description of cash provided | pproximately $4.6 million in cash provided by operating activities for continuing operations, and approximately $10.3 million of cash available to fund our operations. | |||||||||
Deposits equipment | $ 10,000,000 | |||||||||
Deposits equipment | 14,600,000 | |||||||||
Promissory Notes [Member] | ||||||||||
Deposits equipment | $ 10,000,000 | |||||||||
Series A Cumulativ Preferred Stock [Member] | ||||||||||
Derivative, Fixed Interest Rate | 9.00% | 9.00% | ||||||||
Preferred Stock, Liquidation Preference Per Share | $ 25 | $ 25 | ||||||||
[custom:AggregateGrossProceeds] | $ 18,000,000 | |||||||||
Underwriting discounts | 6.00% | 6.00% | ||||||||
Series A Preferred Stock [Member] | ||||||||||
Preferred Stock, Liquidation Preference Per Share | $ 25 | $ 25 | ||||||||
Aggregate net proceeds | $ 16,200,000 | |||||||||
Number of shares | 108,000 | |||||||||
Description of aggregate proceeds | aggregate net proceeds to the Company of $2.0 million. Dividends on the Series A Preferred Stock will be payable when, as and if declared by the Board of Directors monthly in arrears on the final day of each month or the next business day at an annual rate of 9.0% of the $25.00 liquidation preference per share | |||||||||
Convertible Common Stock [Member] | ||||||||||
Outstanding notes payable | $ 7,100,000 | |||||||||
Soluna [Member] | ||||||||||
Rent pay | 500,000,000 | |||||||||
Capital expenditure | 16,200,000 | |||||||||
Soluna [Member] | Building [Member] | ||||||||||
Periodic payment | $ 4,000,000,000 | |||||||||
Eco Chain Block L L C [Member] | ||||||||||
Number of shares issued | 100,000 | |||||||||
Lease period | 25 years | |||||||||
Common Stock [Member] | ||||||||||
Number of shares issued | 2,782,258 | |||||||||
IPO [Member] | ||||||||||
Gross proceeds from initial public offering | $ 15,000,000 | |||||||||
Percentage of underwriting discount | 7.00% | |||||||||
Underwriter discounts | $ 1,050,000 | |||||||||
Underwriting expenses | 225,000 | |||||||||
Net Proceeds | $ 13,700,000 | |||||||||
Description of commitment public offering | the Company issued and sold pursuant to a firm commitment public offering (the “December Preferred Offering”) 445,714 shares of the Series A Preferred Stock for aggregate gross proceeds of approximately $7.8 million less underwriting discounts of 7.0% ($546,000) and other offering fees and expenses of approximately ($500,000), resulting in aggregate net proceeds to the Company of approximately $6.7 million. In connection with the December Preferred Offering,, the Company granted the underwriters a 45-day option to purchase up to an additional 66,587 shares (the “Option Shares”) of the Series A Preferred Stock on the same terms as the shares sold in the December preferred Offering (the “Over-Allotment Option”). . The Over-Allotment Option was exercised by the underwriters in full on January 5, 2022, resulting in additional aggregate gross proceeds of approximately $1.17 million less applicable underwriter discounts and other offering fees and expenses. | |||||||||
IPO [Member] | Common Stock [Member] | ||||||||||
Number of shares issued | 362,903 | 2,419,355 | ||||||||
Net Proceeds | $ 203,000 | |||||||||
IPO [Member] | Common Stock [Member] | Warrant [Member] | ||||||||||
Number of shares issued | 90,726 | 604,839 | ||||||||
Gross proceeds from initial public offering | $ 2,250,000 | |||||||||
Percentage of underwriting discount | 7.00% | |||||||||
Over-Allotment Option [Member] | ||||||||||
Net Proceeds | $ 15,400,000 | |||||||||
Underwriter option share | 86,585 | |||||||||
Over-Allotment Option [Member] | Warrants [Member] | ||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 8.24 | |||||||||
Warrants and Rights Outstanding, Term | 5 years | |||||||||
Underwriter [Member] | Common Stock [Member] | Warrant [Member] | ||||||||||
Number of shares issued | 139,113 | |||||||||
Intial exercise price | $ 6.82 |
Schedule of Useful Lives (Detai
Schedule of Useful Lives (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful live | Lesser of the life of the lease or the useful life of the improvement |
Computer Software, Intangible Asset [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful live | P3Y |
Computer Software, Intangible Asset [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful live | P5Y |
Cryptocurrency Miners [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful live | P3Y |
Machinery and Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful live | P8Y |
Machinery and Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful live | P15Y |
Office Furniture Equipment And Fixtures [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful live | P2Y |
Office Furniture Equipment And Fixtures [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful live | P10Y |
Buildings [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful live | P30Y |
Buildings [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful live | P40Y |
Purchased Modular Buildings [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful live | P15Y |
Purchased Modular Buildings [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful live | P20Y |
The following table provides qu
The following table provides quantitative information regarding the inputs to the fair value measurement of the Warrants as of the valuation date: (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Risk-free interest rate | 1.19% |
Expected term | 5 years |
Expected volatility | 150.00% |
Accounting Policies (Details Na
Accounting Policies (Details Narrative) - USD ($) | Oct. 25, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Oct. 26, 2021 |
Property, Plant and Equipment [Line Items] | ||||
Useful life | 5 years | |||
Equity investment | $ 750,000 | $ 750,000 | ||
Common Stock, shares outstanding | 14,769,699 | 10,750,100 | ||
Fair value of assets acquired | $ 33,000,000 | |||
Acquisition costs | 3,500,000 | |||
Depositst equipment | 10,200,000 | $ 279,000 | ||
Warranty liability | 18,000 | 22,000 | ||
Warranty expense | $ 3,000 | $ 11,000 | ||
Common Class A [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Warranty liability | $ 12.50 | |||
Common Class B [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Warranty liability | $ 15 | |||
Common Class C [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Warranty liability | $ 18 | |||
Class A Warrant [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Warranty liability | $ 8.29 | |||
Class B Warrant [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Warranty liability | 8.10 | |||
Class C Warrant [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Warranty liability | $ 7.95 | |||
Common Stock [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Purchase of share | 1,776,073 | |||
Soluna [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Equity ownership percentage | 1.79% | 1.86% | ||
Equity investment | $ 750,000 | $ 750,000 | ||
Me O H Power [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Equity ownership percentage | 47.50% | |||
Equity investment | $ 0 | $ 0 | ||
Investment shares owned | 75,049,937 | |||
Common Stock, shares outstanding | 240,000,000 | |||
Pipeline Contract [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Useful life | 5 years | |||
Patents [Member] | Minimum [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Useful life | 15 years | |||
Patents [Member] | Maximum [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Useful life | 25 years |
Schedule of accounts receivable
Schedule of accounts receivables (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts Receivable, after Allowance for Credit Loss, Current | $ 531 | $ 59 |
Datahosting [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts Receivable, after Allowance for Credit Loss, Current | 450 | 0 |
Other Receivables [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts Receivable, after Allowance for Credit Loss, Current | $ 81 | $ 59 |
Schedule of Property, Plant and
Schedule of Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 47,362 | $ 1,363 |
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | (2,765) | (641) |
Property, Plant and Equipment, Net | 44,597 | 722 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 52 | 0 |
Land Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Land improvements | 238 | 0 |
Buildings [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Buildings | 5,650 | 0 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 317 | 223 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 15 | 0 |
Technology Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 30,890 | 1,140 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 2,588 | 0 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 22 | 0 |
Construction in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 7,590 | $ 0 |
Property, Plant and Equipment_2
Property, Plant and Equipment (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 2,100 | $ 81 |
Rapairs and maintenance expense | $ 77 | $ 16 |
Asset Acquisition (Details Narr
Asset Acquisition (Details Narrative) - shares | 12 Months Ended | |
Dec. 31, 2021 | Oct. 29, 2021 | |
Schedule of Equity Method Investments [Line Items] | ||
Maximum number of merger shares | 2,970,000 | |
Maximum [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Merger shares reduce | 2,970,000 | |
Minimum [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Merger shares reduce | 1,485,000 | |
Soluna [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Number of share receive | 2,970,000 | |
Description of termination consideration | SCI paid HEL $725,000 and SHI issued to HEL 150,000 shares of SHI common stock (the “Termination Shares”). SCI also reimbursed HEL $75,000 for transaction-related fees and expenses. SHI included the termination costs as part of asset acquisition per ASC 805-50. Based on the closing price of the SHI common stock on Nasdaq on November 5, 2021, SHI has valued the aggregate termination consideration at approximately $1.9 million. | |
[custom:EquityMethodInvestmentOwnershipPercentage1-0] | 100.00% | |
Transaction own share | 50.00% |
Intangible assets consist of th
Intangible assets consist of the following as of December 31, 2021: (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Finite-Lived Intangible Assets [Line Items] | |
IntangibleAssets | $ 47,418 |
Accumulated Amortization | 1,579 |
Total | 45,839 |
Strategic Pipeline Contract [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
IntangibleAssets | 46,885 |
Accumulated Amortization | 1,562 |
Total | 45,323 |
Assembled Workforce [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
IntangibleAssets | 500 |
Accumulated Amortization | 17 |
Total | 483 |
Patents [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
IntangibleAssets | 33 |
Accumulated Amortization | |
Total | $ 33 |
The Company expects to record a
The Company expects to record amortization expense of intangible assets over the next five years and thereafter as follows: (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2022 | $ 9,479 |
2023 | 9,479 |
2024 | 9,479 |
2025 | 9,479 |
2026 | 7,899 |
Thereafter | 24 |
Total | $ 45,839 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Amortization eapenses | $ 1,600,000 |
Schedule of income tax expense
Schedule of income tax expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Federal | ||
State | 3 | 4 |
Deferred | 41 | (336) |
Total | $ 44 | $ (332) |
Schedule of deferred income tax
Schedule of deferred income tax expense (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Income Tax Disclosure [Abstract] | ||
Deferred tax (expense) benefit | $ (574) | $ (73) |
Net operating loss carry forward | (1,589) | 331 |
Valuation allowance | 2,204 | (594) |
Deferred tax benefit (expense) | $ 41 | $ (336) |
Schedule of effective income ta
Schedule of effective income tax rate (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Federal statutory tax rate | 21.00% | 21.00% |
Change in valuation allowance | 35.00% | 39.00% |
State taxes, net of federal benefit | 1.00% | |
Expiration of stock option | 2.00% | 1.00% |
Intangible amortization | ||
Change in UTP | 9.00% | |
Effective Income Tax Rate Reconciliation, Tax Credit, Research, Percent | 1.00% | 3.00% |
Other Deferred Adjustments | 2.00% | 1.00% |
Tax rate | 1.00% | 21.00% |
Schedule of deferred tax assets
Schedule of deferred tax assets (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred tax assets: | ||
Vacation accrual | $ 3 | |
Allowance for related party note receivable | 76 | 69 |
Net operating loss | 11,777 | 10,187 |
Property, plant and equipment | 6 | |
Stock options | 278 | 31 |
Research and development tax credit | 144 | 120 |
Deferred tax assets | 12,275 | 10,416 |
Valuation allowance | (11,921) | (9,717) |
Deferred tax assets, net of valuation allowance | 354 | 699 |
Deferred tax liabilities: | ||
Property, plant and equipment | (61) | |
Intangibles | (10,570) | |
Deferred tax liabilities | (10,631) | |
Deferred tax (liabilities) assets | $ (10,277) | $ 699 |
Schedule of deferred tax asset
Schedule of deferred tax asset valuation allowance (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Valuation allowance, beginning of year | $ 9,717 | $ 10,310 |
Allowance for related party note receivable | (65) | |
Inventory | 1 | |
Net operating (loss) income | 2,179 | (406) |
Property, plant and equipment | (27) | |
Stock options | (57) | |
Research and development credit | 25 | (32) |
Warranty and other sales obligations | 13 | |
Deferred revenue | (10) | |
Accrued compensation | (10) | |
Valuation allowance, end of year | $ 11,921 | $ 9,717 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Income Tax Disclosure [Abstract] | ||
Amount of amortised | $ 10,900,000 | |
Incremental tax benefit | 2,200,000 | |
Net operating loss carryforward | 55,000 | |
Unrecognized tax benefits | $ 0 | $ 710,000 |
Schedule of accrued liabilities
Schedule of accrued liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Payables and Accruals [Abstract] | ||
Salaries, wages and related expenses | $ 611 | $ 70 |
Liability to shareholders for previous acquisition | 363 | 363 |
Legal, audit, tax and professional fees | 363 | 158 |
Sales tax accrual | 248 | |
Development fees | 373 | |
Hosting and utility fees | 626 | |
Other | 275 | 72 |
Total | $ 2,859 | $ 663 |
Debt consists of the following
Debt consists of the following (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Debt Disclosure [Abstract] | |
Maturity date | Oct. 25, 2022 |
Interest rate | 8.00% |
Convertible notes | $ 14,927 |
Less: debt discount | 967 |
Less: discount from issuance of warrants | 5,747 |
Less: debt issuance costs | 1,092 |
Total convertible notes, net of discount and issuance costs | $ 7,121 |
Debt (Details Narrative)
Debt (Details Narrative) - USD ($) | Oct. 25, 2021 | Sep. 13, 2021 | Dec. 31, 2021 |
Short-term Debt [Line Items] | |||
Original issue discount | 8.00% | ||
Fair value of warrants | $ 7,000,000 | ||
Face amount | 16,300,000 | ||
Purchase price | 15,000,000 | ||
Debt amortized | 300,000 | ||
Debt issuance costs | $ 1,300,000 | ||
Unsecured lines of credit | $ 1,000,000 | ||
Interest rate | 4.00% | ||
Line of credit maximum amount | $ 1,000,000 | ||
Convertible Notes Payable [Member] | |||
Short-term Debt [Line Items] | |||
Description of accredited investors | the Company issued to certain accredited investors (i) secured convertible notes in an aggregate principal amount of $16.3 million for an aggregate purchase price of $15 million (collectively, the “Notes”), which are, subject to certain conditions, convertible at any time by the investors, into an aggregate of 1,776,073 shares (the “Conversion Shares”) of the Company’s common stock, at a price per share of $9.18 (the “Fixed Conversion Price”) and (ii) Class A, Class B and Class C common stock purchase warrants (collectively, the “Warrants”) to purchase up to an aggregate of 1,776,073 shares of common stock , at an exercise price $12.50, $15 and $18 per share, respectively. The Warrants are legally detachable and can be separately be exercised immediately for five years upon issuance, subject to applicable Nasdaq rules. |
Schedule of reserved common sha
Schedule of reserved common shares for future issuance (Details) | Dec. 31, 2021shares |
Equity [Abstract] | |
Stock options outstanding | 991,550 |
Restricted stock units outstanding | 160,473 |
Warrants outstanding | 2,193,512 |
Common stock available for future equity awards or issuance of options | 392,717 |
Number of common shares reserved | 3,738,252 |
Stockholders_ Equity (Details N
Stockholders’ Equity (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | |
Class of Stock [Line Items] | |||
Preferred stock, outstanding | 1,252,299 | 0 | |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |
Common stock shares issue | 14,769,699 | 13,754,206 | 10,750,100 |
Common Stock, Shares, Outstanding | 14,769,699 | 10,750,100 | |
Dividend [Member] | |||
Class of Stock [Line Items] | |||
Dividends, Total | $ 630 | ||
Series A Cumulative Preferred Stock [Member] | |||
Class of Stock [Line Items] | |||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | ||
Liquidation preference | $ 25 | ||
Preferred stock, outstanding | 1,252,299 | 0 | |
Series A Preferred Stock [Member] | |||
Class of Stock [Line Items] | |||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | |
Liquidation preference | $ 25 | $ 25 | |
Preferred stock rights | Preferences and Rights of 9.0% Series A Cumulative Perpetual Preferred Stock of the Company, dividends, when, as and if declared by the Board of Directors |
Retirement Plan (Details Narrat
Retirement Plan (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Retirement Benefits [Abstract] | ||
Company matching contributions to pension plan | $ 18 | $ 11 |
The following table sets forth
The following table sets forth the reconciliation of the numerators and denominators of the basic and diluted per share computations for continuing operations for the years ended December 31: (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Numerator: | ||
Net loss from continuing operations | $ (6,388) | $ (1,210) |
Net income from discontinuing operations | 1,127 | 3,156 |
Net (Loss) Income | (5,261) | 1,946 |
Less: Preferred Dividend | (630) | |
Balance | $ (5,891) | $ 1,946 |
Basic and Diluted EPS: | ||
Weighted average common shares | 11,840,242 | 9,581,886 |
Weighted average common shares issued during the period | 2,105,635 | 11,209 |
Common Stock [Member] | ||
Basic and Diluted EPS: | ||
Weighted average common shares | 9,734,607 | 9,570,677 |
Net (loss) income per Share (De
Net (loss) income per Share (Details Narrative) | 12 Months Ended |
Dec. 31, 2021shares | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |
Potentially dilutive securities | 398,550 |
Convertible Notes Payable [Member] | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |
Potentially dilutive securities | 1,626,073 |
Restricted Stock Units (RSUs) [Member] | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |
Potentially dilutive securities | 160,473 |
Common Stock [Member] | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |
Potentially dilutive securities | 991,550 |
Warrant [Member] | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |
Potentially dilutive securities | 2,193,512 |
The following table presents th
The following table presents the weighted-average assumptions used for options granted under the 2021 Plan: (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 1.19% | |
Plan 2021 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Option term (years) | 4 years 15 days | |
Volatility | 108.33% | |
Unvested forfeiture rate | 0.18% | |
Risk-free interest rate | 0.84% | |
Dividend yield | 0.00% | |
Weighted-average fair value per option granted | $ 0.0504 | |
Plan 2014 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Option term (years) | 6 years 2 months 30 days | |
Volatility | 106.22% | |
Unvested forfeiture rate | 0.20% | |
Risk-free interest rate | 0.31% | |
Dividend yield | 0.00% | |
Weighted-average fair value per option granted | $ 0.0057 | |
Plan 2012 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Option term (years) | 6 years 2 months 30 days | |
Volatility | 106.46% | |
Unvested forfeiture rate | 0.20% | |
Risk-free interest rate | 0.28% | |
Dividend yield | 0.00% | |
Weighted-average fair value per option granted | $ 0.0061 |
Total share-based compensation
Total share-based compensation expense, related to the Company’s share-based awards, recognized for the years ended December 31, was comprised as follows: (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation expense | $ 1,941 | $ 40 |
Cost Of Cryptocurrency Revenue [Member] | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation expense | 3 | |
Selling General And Administrative [Member] | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation expense | $ 1,938 | $ 40 |
Presented below is a summary of
Presented below is a summary of the Company’s stock option activity for the Plans for the years ended December 31: (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares under option, ending | 991,550 | |
Remaining shares available for granting of options | 392,717 | |
Equity Option [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares under option, beginning | 398,750 | 527,875 |
Granted | 716,200 | 50,000 |
Exercised | (123,400) | (83,000) |
Forfeited | 27,750 | |
Forfeited | (27,750) | |
Expired/canceled | 68,375 | |
Expired/canceled | (68,375) | |
Shares under option, ending | 991,550 | 398,750 |
Options exercisable | 385,800 | 276,000 |
Remaining shares available for granting of options | 392,717 | 11,125 |
Weighted average exercise price under option, beginning | $ 0.87 | $ 0.89 |
Granted | 7.20 | 0.73 |
Exercised | 0.83 | 1 |
Forfeited | 0.90 | |
Expired/canceled | 0.73 | |
Weighted average exercise price under option, ending | 5.44 | 0.87 |
Weighted average exercise price under option exercisable, ending | $ 4.10 | $ 0.89 |
The following table summarizes
The following table summarizes information for options outstanding and exercisable for the Plans as of December 31, 2021: (Details) | 12 Months Ended |
Dec. 31, 2021$ / sharesshares | |
Option 3 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Options Exercisable, Number | 716,200 |
Options Exercisable, Number | 186,200 |
Equity Option [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Options Exercisable, Number | 991,550 |
Outstanding Options, Weighted Average Exercise Price | $ / shares | $ 5.44 |
Option 1 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Options Exercisable, Number | 241,350 |
Outstanding Options, Weighted Average Remaining Contractual Life | 6 years 2 months 30 days |
Outstanding Options, Weighted Average Exercise Price | $ / shares | $ 0.84 |
Outstanding Options, Weighted Average Remaining Contractual Life | 5 years 6 months 18 days |
Option 2 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Options Exercisable, Number | 34,000 |
Outstanding Options, Weighted Average Remaining Contractual Life | 3 years 2 months 1 day |
Outstanding Options, Weighted Average Exercise Price | $ / shares | $ 1.20 |
Outstanding Options, Weighted Average Remaining Contractual Life | 3 years 2 months 1 day |
Option 3 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Outstanding Options, Weighted Average Remaining Contractual Life | 6 years 7 months 28 days |
Outstanding Options, Weighted Average Exercise Price | $ / shares | $ 7.20 |
Outstanding Options, Weighted Average Remaining Contractual Life | 4 years 4 months 9 days |
Options Held [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Outstanding Options, Weighted Average Remaining Contractual Life | 6 years 5 months 9 days |
Outstanding Options, Weighted Average Remaining Contractual Life | 4 years 9 months 7 days |
Non-vested restricted stock act
Non-vested restricted stock activity is as follows for the year ended December 31: (Details) - Restricted Stock [Member] - shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Non-vested restricted stock, balance beginning | 80,930 | |
Non-vested restricted stock granted | 362,399 | 83,930 |
Vested restricted stock | ||
Non-vested restricted stock exercised | (37,962) | |
Non-vested restricted stock forfeited/expired | 3,000 | |
Non-vested restricted stock forfeited/expired | (3,000) | |
Non-vested restricted stock, balance ending | 405,367 | 80,930 |
The weighted average fair value
The weighted average fair value price for the Company’s restricted stock activity for the Plans is as follows for each of the years ended December 31: (Details) - Restricted Stock [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted Average Exercise Price, Non-vested restricted stock, balance beginning | $ 1.48 | $ 0 |
Non-vested restricted stock granted | 12.43 | 1.46 |
Non-vested restricted stock exercised | 1.34 | 0 |
Non-vested restricted stock forfeited | 0.99 | |
Weighted Average Exercise Price, Non-vested restricted stock, balance ending | $ 11.28 | $ 1.48 |
The following is a summary of c
The following is a summary of common stock warrant activity during the year ended December 31, 2021. The Company did not have or issue any warrants during the year ended December 31, 2020. (Details) | 12 Months Ended |
Dec. 31, 2021$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares under option, ending | 991,550 |
Warrant [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares under option, beginning | |
Weighted average exercise price under option, beginning | $ / shares | |
Granted | 2,775,122 |
Granted | $ / shares | $ 12.67 |
Exercised | (581,610) |
Exercised | $ / shares | $ 8.24 |
Forfeited/ Expired | |
Forfeited/ Expired | $ / shares | |
Shares under option, ending | 2,193,512 |
Weighted average exercise price under option, ending | $ / shares | $ 13.85 |
Stock Based Compensation (Detai
Stock Based Compensation (Details Narrative) - USD ($) | Jan. 14, 2020 | Dec. 31, 2021 | Dec. 30, 2021 | Dec. 31, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock price | $ 10.76 | |||
Weighted average remaining term | 4 years 9 months 11 days | |||
Investment Committee And Ceo [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted stock grants during period | 68,930 | |||
Price per share on date of grant | $ 0.99 | |||
Equity Option [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of option shares granted | 716,200 | 50,000 | ||
Number of exercise price per share | $ 0.83 | $ 1 | ||
Weighted average exercise price shares granted (in dollars per share) | $ 7.20 | $ 0.73 | ||
Total unrecognized compensation costs - options | $ 1,900,000 | $ 78,000 | ||
Weighted-average remaining vesting period | 2 years 4 months 2 days | 2 years 6 months 18 days | ||
Aggregate intrinsic value of outstanding options | $ 5,300,000 | $ 2,600,000 | ||
Restricted Common Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares issued | 201,926 | |||
Restricted Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted stock grants during period | 362,399 | 83,930 | ||
Price per share on date of grant | $ 12.43 | $ 1.46 | ||
Weighted-average remaining vesting period | 3 years 2 months 5 days | 2 years 1 month 24 days | ||
Total unrecognized compensation costs - Restricted stock | $ 3,100,000 | $ 94,000 | ||
Restricted Stock One [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares issued | 160,473 | |||
Common Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of option shares granted | 1,460,191 | |||
Number of shares issued | 2,782,258 | |||
Plan 2012 [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares authorized | 600,000 | |||
Number of option shares granted | 25,000 | |||
Weighted average exercise price shares granted (in dollars per share) | $ 0.75 | |||
Weighted average fair value shares granted (in dollars per share) | $ 0.61 | |||
Plan 2012 [Member] | Investment Committee And Ceo [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted stock grants during period | 67,930 | |||
Plan 2014 [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares authorized | 500,000 | |||
Number of option shares granted | 25,000 | |||
Weighted average exercise price shares granted (in dollars per share) | $ 0.70 | |||
Weighted average fair value shares granted (in dollars per share) | $ 0.57 | |||
Plan 2014 [Member] | Investment Committee And Ceo [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted stock grants during period | 1,000 | |||
Plan 2014 [Member] | Mti Cfo And President [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of option shares granted | 15,000 | |||
Weighted average exercise price shares granted (in dollars per share) | $ 3.63 | |||
Stock 2021 Plan [Member] | Equity Option [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of option shares granted | 716,200 | |||
Number of option shares vested | 186,200 | |||
Number of exercise price per share | $ 7.52 | |||
Closing price percent | 1000.00% | |||
Weighted average exercise price shares granted (in dollars per share) | $ 7.08 | |||
Weighted average fair value shares granted (in dollars per share) | $ 5.04 | |||
Stock 2021 Plan [Member] | Equity Option [Member] | Third Anniversary On Or Prior Closing Date [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of option shares granted | 530,000 | |||
Stock 2021 Plan [Member] | Restricted Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted stock grants during period | 47,500 | |||
Price per share on date of grant | 11.10 | |||
Stock 2021 Plan [Member] | Restricted Stock Units (RSUs) [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted stock grants during period | 15,000 | |||
Stock 2021 Plan [Member] | Restricted Stock Units (RSUs) [Member] | Minimum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Price per share on date of grant | 11.10 | |||
Stock 2021 Plan [Member] | Restricted Stock Units (RSUs) [Member] | Maximum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Price per share on date of grant | $ 16.61 |
Lease expense for these leases
Lease expense for these leases is recognized on a straight-line basis over the lease term. For the twelve months ended December 31, total lease costs are comprised of the following: (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Operating lease cost | $ 169 | $ 86 |
Short-term lease cost | 2 | |
Total net lease cost | $ 169 | $ 88 |
Supplemental cash flows informa
Supplemental cash flows information related to leases for the twelve months ended December 31 was as follows: (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ 156 | $ 82 |
Non-Cash Activity Right-of-use assets obtained in exchange for lease obligations: | ||
Operating leases | $ 131 | $ 504 |
Supplemental balance sheet info
Supplemental balance sheet information for the twelve months ended December 31 was as follows: (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Commitments and Contingencies Disclosure [Abstract] | ||
Operating lease ROU asset | $ 405 | $ 427 |
Current operating lease liabilities | 184 | 134 |
Non-current operating lease liabilities | 237 | 297 |
Total operating lease liabilities | 421 | 431 |
ROU assets | 635 | 504 |
Asset lease expense | (230) | (77) |
ROU assets, net | $ 405 | $ 427 |
Weighted Average Remaining Lease Term (in years) | 2 years 4 months 17 days | 3 years 1 month 2 days |
Operating leases | 3.83% | 3.81% |
Maturities of operating lease l
Maturities of operating lease liabilities are as follows for the year ending December 31: (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Commitments and Contingencies Disclosure [Abstract] | ||
2022 | $ 197 | |
2023 | 159 | |
2024 | 85 | |
Total lease payments | 441 | |
Less: imputed interest | (20) | |
Total operating lease liabilities | 421 | $ 431 |
Less: current obligations | 184 | 134 |
Long-term lease obligations | $ 237 | $ 297 |
Commitments and Contingencies_2
Commitments and Contingencies (Details Narrative) $ in Thousands | Dec. 31, 2021USD ($) |
Loss Contingencies [Line Items] | |
Litigation accrual | $ 358,000 |
Minimum [Member] | |
Loss Contingencies [Line Items] | |
Lease term | 1 year |
Maximum [Member] | |
Loss Contingencies [Line Items] | |
Lease term | 5 years |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) $ in Thousands | Oct. 29, 2021 | Mar. 23, 2020 | Jan. 13, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2021 |
Related Party Transaction [Line Items] | ||||||
Company paid | $ 725,000 | $ 245 | $ 77 | |||
Professional fees | 19 | 95 | ||||
Cost of investments | 237 | |||||
Investment percentage | 20.00% | |||||
Aggregate purchase price | $ 500 | |||||
Chief Executive Officer [Member] | Michael Toporek [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Description of director 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. | |||||
Chief Executive Officer [Member] | Matthew E Lipman [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Description of director owns | 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 through December 31, 2021, were $19.9 million and $0, respectively. | |||||
Chief Executive Officer [Member] | Mr Belizaire [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Description of director owns | 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 of 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. | |||||
Soluna [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Company paid | $ 65,000 | 350,000 | ||||
Acquire additional assets | 112 | |||||
Description of agreement | Technologies Investment I, LLC, a Delaware limited liability company that owns, on a fully diluted basis, 57.9% | |||||
Soluna [Member] | Class A Preferred Shares [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Cost of investments | $ 250 | |||||
Investment shares purchased | 79,365 | 158,730 | ||||
Soluna [Member] | Operating And Management Agreement 3 [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Company paid | 380 | |||||
Soluna [Member] | Operating And Management Agreement 2 [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Company paid | 221 | 150 | ||||
Soluna [Member] | Operating And Management Agreement 4 [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Company paid | 38,000 | |||||
Soluna [Member] | Operating And Management Agreement 5 [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Company paid | 544 | |||||
Me O H Power [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Promissory Note available to convert | 329 | $ 321 | ||||
H E L [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Cost of investments | $ 750 | |||||
Investment percentage | 1.79% |
Set forth below are the results
Set forth below are the results of the discontinued operations: (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | [1] | |
Discontinued Operations and Disposal Groups [Abstract] | |||
Product revenue | $ 7,147 | $ 9,004 | |
Cost of sales | 2,358 | 2,669 | |
Research and development | 1,525 | 1,491 | |
Selling, general, and administrative | 2,198 | 1,752 | |
Other income, net | 21 | 4 | |
Income tax benefit | 40 | 60 | |
Net income from discontinued operations | $ 1,127 | $ 3,156 | |
[1] | Reclassified to conform with the current period presentation |
The following table summarize_2
The following table summarizes information about assets and liabilities from discontinued operations held for sale as of December 31, 2021 and 2020: (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Assets held for sale from discontinued operations: | ||
Accounts receivable | $ 1,189 | $ 916 |
Inventories | 964 | 828 |
Prepaid expenses and other current assets | 54 | 45 |
Property, plant and equipment, net | 92 | 125 |
Deferred tax assets, net | 101 | 60 |
Operating lease right-of-use assets | 628 | 776 |
Total Assets held for sale from discontinued operations | 3,028 | 2,750 |
Liabilities held for sale from discontinued operations: | ||
Accounts payable | 136 | 108 |
Accrued liabilities | 479 | 356 |
Operating lease liability-current | 628 | 182 |
Operating lease liability-noncurrent | 594 | |
Total Liabilities held for sale from discontinued operations | $ 1,243 | $ 1,240 |
MTI Instruments sells its produ
MTI Instruments sells its products on a worldwide basis with its principal markets listed in the table below where information on product revenue is summarized by geographic area for the Company as a whole for each of the years ended December 31: (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | ||
Product revenue | $ 7,147 | $ 9,004 | [1] |
Total product revenue | 7,147 | 9,004 | |
UNITED STATES | |||
Product revenue | 4,582 | 6,670 | |
A S E A N [Member] | |||
Product revenue | 1,864 | 1,510 | |
EMEA [Member] | |||
Product revenue | 576 | 713 | |
CANADA | |||
Product revenue | $ 125 | $ 111 | |
[1] | Reclassified to conform with the current period presentation |
Discontinued Operations-Held _3
Discontinued Operations-Held for Sale (Details Narrative) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Percentage of product revenues | 35.90% | 25.90% |
M T I Instruments [Member] | ||
Percentage of product revenues | 18.50% | 42.90% |
UNITED STATES | M T I Instruments [Member] | ||
Percentage of product revenues | 9.10% |
The following table details rev
The following table details revenue and cost of revenues for the Company’s reportable segments (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 30, 2021 | Dec. 31, 2020 | Dec. 30, 2020 | |
Revenue from External Customer [Line Items] | ||||
Revenues | $ 14,345 | $ 595 | ||
Other income (expense) | 11 | 100 | ||
Net loss from continuing operations | (6,388) | (1,210) | ||
Income tax (expense) benefit from discontinued operations-held for sale | 40 | 60 | ||
Net loss | (5,261) | 1,946 | ||
Reportable Subsegments [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Revenues | 14,345 | 595 | ||
Cost of revenue | 8,070 | 405 | ||
Research and development expenses | 10,751 | 1,832 | ||
Interest Expense, Other | (1,879) | |||
Other income (expense) | 11 | 100 | ||
Income tax (expense) benefit from continuing operations | (44) | 332 | ||
Net loss from continuing operations | (6,388) | (1,210) | ||
Income from discontinued operations-held for sale before income tax | 1,087 | 3,096 | ||
Income tax (expense) benefit from discontinued operations-held for sale | 40 | 60 | ||
Net income (discontinued operations-held for sale) | 1,127 | 3,156 | ||
Net loss | (5,261) | 1,946 | ||
Capital expenditures | 45,792 | 805 | ||
Depreciation and amortization | 3,703 | 81 | ||
Cryptocurrency Revenue [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Revenues | 10,932 | 595 | ||
Cost of revenue | 5,626 | 405 | ||
Data Hosting Revenue [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Revenues | 3,413 | $ 3,413 | ||
Cost of revenue | $ 2,444 |
Segment Information (Details Na
Segment Information (Details Narrative) | 12 Months Ended |
Dec. 31, 2021Number | |
Segment Reporting Information [Line Items] | |
Number of reportable segments | 2 |
Percentage of revenue | 41.00% |
Calvert City [Member] | |
Segment Reporting Information [Line Items] | |
Percentage of revenue | 25.00% |
Murray [Member] | |
Segment Reporting Information [Line Items] | |
Percentage of revenue | 100.00% |
Cryptocurrency [Member] | |
Segment Reporting Information [Line Items] | |
Percentage of revenue | 34.00% |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Feb. 22, 2027 | Feb. 22, 2022 | Jan. 14, 2022 | Dec. 31, 2021 |
Subsequent Event [Line Items] | ||||
Debt Instrument, Interest Rate, Effective Percentage | 8.00% | |||
Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Aggregate Financing Value | $ 9,600,000 | |||
Description of tranche maturity | the Second Tranche Notes have a maturity date of March 10, 2027 and Third Tranche will have a maturity date five years from the date of issuance (each a “Maturity Date”), upon which dates the Notes shall be payable in full, and accrue interest at a rate of two percent (2%) per annum. | |||
Subsequent Event [Member] | Common Stock [Member] | ||||
Subsequent Event [Line Items] | ||||
Aggregate Purchase Price | $ 500,000,000 | |||
Investors [Member] | ||||
Subsequent Event [Line Items] | ||||
Aggregate Financing Value | $ 14,400,000 | |||
Investors [Member] | Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Aggregate Financing Value | $ 4,600,000 | |||
Debt Instrument, Interest Rate, Effective Percentage | 4.99% | 14.00% | ||
Debt Instrument, Description | the Company issued to certain institutional lenders (the “Lenders”) promissory notes in an aggregate principal amount of $7.6 million for an aggregate purchase price of $7.6 million (collectively, the “First Tranche Notes”). The Notes were issued as the first tranche of an aggregate financing of $20.0 million. On March 10, 2022, the Company has issued to the lenders a second tranche of an aggregate principal amount of $2.4 million (the “Second Tranche Notes”). The Company expects to issue to the Lenders a third tranche of promissory notes in an aggregate principal amount of $10.0 million for an aggregate purchase price of $10.0 million | |||
Investors [Member] | Subsequent Event [Member] | Common Stock [Member] | ||||
Subsequent Event [Line Items] | ||||
Investment Shares Purchased | 85,000 | |||
Investors [Member] | Subsequent Event [Member] | Purchase Agreement [Member] | ||||
Subsequent Event [Line Items] | ||||
Aggregate principal amount | $ 3,000,000,000 |