Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2022 | Aug. 10, 2022 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2022 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2022 | |
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 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 Common Stock, Shares Outstanding | 14,720,033 | |
Common Stock, par value $0.001 per share | ||
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Trading Symbol | SLNH | |
Security Exchange Name | NASDAQ | |
9.0% Series A Cumulative Perpetual Preferred Stock, par value $0.001 per share | ||
Title of 12(b) Security | 9.0% Series A Cumulative Perpetual Preferred Stock, par value $0.001 per share | |
Trading Symbol | SLNHP | |
Security Exchange Name | NASDAQ |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Current Assets: | ||
Cash | $ 4,626,000 | $ 10,258,000 |
Accounts receivable | 688,000 | 531,000 |
Prepaid expenses and other current assets | 1,573,000 | 977,000 |
Deposits on equipment | 10,668,000 | 10,188,000 |
Current assets associated with discontinued operations | 3,028,000 | |
Total Current Assets | 17,555,000 | 24,982,000 |
Other assets | 1,065,000 | 1,121,000 |
Equity investment | 750,000 | 750,000 |
Property, plant and equipment, net | 87,048,000 | 44,597,000 |
Intangible assets, net | 41,178,000 | 45,839,000 |
Operating lease right-of-use assets | 323,000 | 405,000 |
Total Assets | 147,919,000 | 117,694,000 |
Current Liabilities: | ||
Accounts payable | 4,840,000 | 2,958,000 |
Accrued liabilities | 2,923,000 | 2,859,000 |
Line of credit | 1,000,000 | 1,000,000 |
Notes payable | 10,450,000 | 7,121,000 |
Current portion of debt | 7,526,000 | |
Deferred revenue | 307,000 | 316,000 |
Operating lease liability | 196,000 | 184,000 |
Income taxes payable | 2,000 | 2,000 |
Current liabilities associated with discontinued operations | 1,243,000 | |
Total Current Liabilities | 27,244,000 | 15,683,000 |
Other liabilities | 509,000 | 509,000 |
Long term debt | 3,982,000 | |
Operating lease liability | 142,000 | 237,000 |
Deferred tax liability, net | 9,476,000 | 10,277,000 |
Total Liabilities | 41,353,000 | 26,706,000 |
Stockholders’ Equity: | ||
Common stock, par value $0.001 per share, authorized 75,000,000; 15,122,661 shares issued and 14,104,145 shares issued and outstanding as of June 30, 2022 and 14,769,699 shares issued and 13,754,206 shares issued and outstanding as of December 31, 2021 | 15,000 | 15,000 |
Additional paid-in capital | 258,863,000 | 227,790,000 |
Accumulated deficit | (138,517,000) | (123,054,000) |
Common stock in treasury, at cost, 1,018,516 shares at June 30, 2022 and 1,015,493 shares at December 31, 2021 | (13,798,000) | (13,764,000) |
Total Stockholders’ Equity | 106,566,000 | 90,988,000 |
Total Liabilities and Stockholders’ Equity | 147,919,000 | 117,694,000 |
Series A Preferred Stock [Member] | ||
Stockholders’ Equity: | ||
Preferred stock, value | $ 3,000 | $ 1,000 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Jun. 30, 2022 | Dec. 31, 2021 |
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 | 15,122,661 | 14,769,699 |
Common Stock, shares outstanding | 14,104,145 | 13,754,206 |
Treasury stock, shares | 1,018,516 | 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 |
Preferred stock, shares authorized | 6,040,000 | 6,040,000 |
Preferred Stock, shares outstanding | 3,061,245 | 1,252,299 |
Preferred Stock, shares issued | 3,061,245 | 1,252,299 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Total revenue | $ 8,676,000 | $ 1,657,000 | $ 17,992,000 | $ 2,652,000 |
Operating costs: | ||||
Cost of cryptocurrency mining revenue, exclusive of depreciation | 3,596,000 | 396,000 | 6,992,000 | 650,000 |
Depreciation costs associated with cryptocurrency mining | 5,538,000 | 149,000 | 9,862,000 | 225,000 |
Total cost of cryptocurrency mining revenue | 9,134,000 | 545,000 | 16,854,000 | 875,000 |
Cost of data hosting revenue | 975,000 | 2,114,000 | ||
Operating expenses: | ||||
General and administrative expenses, exclusive of depreciation and amortization | 4,873,000 | 2,503,000 | 9,755,000 | 3,799,000 |
Depreciation and amortization associated with general and administrative expenses | 2,376,000 | 4,749,000 | ||
Total general and administrative expenses | 7,249,000 | 2,503,000 | 14,504,000 | 3,799,000 |
Impairment on fixed assets | 750,000 | 750,000 | ||
Operating loss | (9,432,000) | (1,391,000) | (16,230,000) | (2,022,000) |
Interest expense | (3,305,000) | (6,185,000) | ||
Loss on sale of fixed assets | (1,618,000) | (1,618,000) | ||
Other income, net | 3,000 | 8,000 | ||
Loss before income taxes from continuing operations | (14,355,000) | (1,388,000) | (24,033,000) | (2,014,000) |
Income tax benefit (expense) from continuing operations | 251,000 | (3,000) | 797,000 | (3,000) |
Net loss from continuing operations | (14,104,000) | (1,391,000) | (23,236,000) | (2,017,000) |
Income before income taxes from discontinued operations (including gain on sale of MTI Instruments of $7,602 for three and six months ended June 30, 2022) | 7,477,000 | 217,000 | 7,702,000 | 177,000 |
Income tax benefit from discontinued operations | 70,000 | 70,000 | ||
Net income from discontinued operations | 7,547,000 | 217,000 | 7,772,000 | 177,000 |
Net loss | $ (6,557,000) | $ (1,174,000) | $ (15,464,000) | $ (1,840,000) |
Basic (loss) earnings per common share: | ||||
Net loss from continuing operations per share (Basic) | $ (1.11) | $ (0.12) | $ (1.82) | $ (0.19) |
Net income from discontinued operations per share (Basic) | 0.54 | 0.02 | 0.56 | 0.02 |
Basic loss per share | (0.57) | (0.10) | (1.26) | (0.17) |
Diluted loss per share | ||||
Net loss from continuing operations per share (Diluted) | (1.11) | (0.12) | (1.82) | (0.19) |
Net Income from discontinued operations per share (Diluted) | $ 0.54 | $ 0.02 | $ 0.56 | $ 0.02 |
Weighted average shares outstanding (Basic and Diluted) | 14,048,253 | 11,709,851 | 13,958,437 | 10,758,641 |
Cryptocurrency Revenue [Member] | ||||
Total revenue | $ 7,497,000 | $ 1,657,000 | $ 15,309,000 | $ 2,652,000 |
Data Hosting Revenue [Member] | ||||
Total revenue | $ 1,179,000 | $ 2,683,000 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Operations (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2022 | Jun. 30, 2022 | |
Income Statement [Abstract] | ||
MTI instruments | $ 7,602 | $ 7,602 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes in Equity (Unaudited) - USD ($) $ in Thousands | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Treasury Stock [Member] | Total |
March 31, 2022 at Dec. 31, 2020 | $ 11 | $ 137,462 | $ (117,793) | $ (13,764) | $ 5,916 | |
Beginning balance (in shares) at Dec. 31, 2020 | 0 | 10,750,100 | 1,015,493 | |||
Net loss | (666) | (666) | ||||
Stock-based compensation | 34 | 34 | ||||
Issuance of shares – option exercises | 62 | 62 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period (in shares) | 77,250 | |||||
Restricted stock units vested | 49 | 49 | ||||
Stock Issued During Period, Shares, Restricted Stock Award, Gross (in shares) | 57,500 | |||||
June 30, 2022 at Mar. 31, 2021 | $ 11 | 137,607 | (118,459) | (13,764) | 5,395 | |
Ending balance (in shares) at Mar. 31, 2021 | 0 | 10,884,850 | ||||
March 31, 2022 at Dec. 31, 2020 | $ 11 | 137,462 | (117,793) | $ (13,764) | 5,916 | |
Beginning balance (in shares) at Dec. 31, 2020 | 0 | 10,750,100 | 1,015,493 | |||
Net loss | (1,840) | |||||
June 30, 2022 at Jun. 30, 2021 | $ 14 | 154,240 | (119,633) | $ (13,764) | 20,857 | |
Ending balance (in shares) at Jun. 30, 2021 | 0 | 13,715,163 | 1,015,493 | |||
March 31, 2022 at Mar. 31, 2021 | $ 11 | 137,607 | (118,459) | $ (13,764) | 5,395 | |
Beginning balance (in shares) at Mar. 31, 2021 | 0 | 10,884,850 | ||||
Net loss | (1,174) | (1,174) | ||||
Stock-based compensation | 1,005 | 1,005 | ||||
Issuance of shares – option exercises | 21 | 21 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period (in shares) | 27,650 | |||||
Restricted stock units vested | 207 | 207 | ||||
Stock Issued During Period, Shares, Restricted Stock Award, Gross (in shares) | 20,405 | |||||
Issuance of shares – stock offering | $ 3 | 15,400 | 15,403 | |||
Stock issued during period, shares, new issues (in shares) | 2,782,258 | |||||
June 30, 2022 at Jun. 30, 2021 | $ 14 | 154,240 | (119,633) | $ (13,764) | 20,857 | |
Ending balance (in shares) at Jun. 30, 2021 | 0 | 13,715,163 | 1,015,493 | |||
Net loss | (610) | (610) | ||||
Stock-based compensation | 334 | 334 | ||||
Issuance of shares – option exercises | 18 | 18 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period (in shares) | 16,500 | |||||
Stock issued during period, shares, new issues (in shares) | 806,585 | |||||
Preferred dividends distribution | (176) | (176) | ||||
Issuance of shares – preferred offering | 1 | 18,297 | 18,298 | |||
Issuance of shares – warrant exercises | 9 | 9 | ||||
Issuance of shares warrant exercises (in shares) | 1,050 | |||||
June 30, 2022 at Sep. 30, 2021 | $ 1 | $ 14 | 172,722 | (120,243) | $ (13,764) | 38,730 |
Ending balance (in shares) at Sep. 30, 2021 | 806,585 | 13,732,713 | 1,015,493 | |||
Net loss | (2,811) | (2,811) | ||||
Stock-based compensation | 648 | 648 | ||||
Issuance of shares – option exercises | 1 | 1 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period (in shares) | 2,000 | |||||
Restricted stock units vested | ||||||
Stock Issued During Period, Shares, Restricted Stock Award, Gross (in shares) | 154,426 | |||||
Stock issued during period, shares, new issues (in shares) | 445,714 | |||||
Preferred dividends distribution | (454) | (454) | ||||
Issuance of shares – preferred offering | 6,759 | 6,759 | ||||
Issuance of shares – warrant exercises | $ 1 | 4,783 | 4,784 | |||
Issuance of shares warrant exercises (in shares) | 580,560 | |||||
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 | ||||
June 30, 2022 at Dec. 31, 2021 | $ 1 | $ 15 | 227,790 | (123,054) | $ (13,764) | 90,988 |
Ending balance (in shares) at Dec. 31, 2021 | 1,252,299 | 14,769,699 | 1,015,493 | |||
Net loss | (8,906) | (8,906) | ||||
Stock-based compensation | 955 | 955 | ||||
Restricted stock units vested | ||||||
Stock Issued During Period, Shares, Restricted Stock Award, Gross (in shares) | 14,301 | |||||
Preferred dividends distribution | (749) | (749) | ||||
Issuance of shares – preferred offering | 957 | 957 | ||||
Issuance of shares – warrant exercises | 738 | 738 | ||||
Issuance of shares warrant exercises (in shares) | 89,500 | |||||
Issuance of shares- Notes conversion | 1,342 | 1,342 | ||||
Issuance of shares note conversion (in shares) | 146,165 | |||||
Warrants issued in relation to debt financing | 2,257 | 2,257 | ||||
June 30, 2022 at Mar. 31, 2022 | $ 1 | $ 15 | 233,290 | (131,960) | $ (13,764) | 87,582 |
Ending balance (in shares) at Mar. 31, 2022 | 1,319,156 | 15,019,665 | 1,015,493 | |||
March 31, 2022 at Dec. 31, 2021 | $ 1 | $ 15 | 227,790 | (123,054) | $ (13,764) | 90,988 |
Beginning balance (in shares) at Dec. 31, 2021 | 1,252,299 | 14,769,699 | 1,015,493 | |||
Net loss | (15,464) | |||||
Stock issued during period, shares, new issues (in shares) | 66,857 | |||||
Promissory note conversion to preferred shares | 15,236 | |||||
June 30, 2022 at Jun. 30, 2022 | $ 3 | $ 15 | 258,863 | (138,517) | $ (13,798) | 106,566 |
Ending balance (in shares) at Jun. 30, 2022 | 3,061,245 | 15,122,661 | 1,018,516 | |||
March 31, 2022 at Mar. 31, 2022 | $ 1 | $ 15 | 233,290 | (131,960) | $ (13,764) | 87,582 |
Beginning balance (in shares) at Mar. 31, 2022 | 1,319,156 | 15,019,665 | 1,015,493 | |||
Net loss | (6,557) | (6,557) | ||||
Stock-based compensation | 1,064 | 1,064 | ||||
Issuance of shares – option exercises | 77 | 77 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period (in shares) | 91,050 | |||||
Restricted stock units vested | ||||||
Stock Issued During Period, Shares, Restricted Stock Award, Gross (in shares) | 3,696 | |||||
Stock issued during period, shares, new issues (in shares) | 599,232 | |||||
Preferred dividends distribution | (1,382) | (1,382) | ||||
Issuance of shares – preferred offering | 1 | 8,796 | 8,797 | |||
Issuance of shares – warrant exercises | 41 | 41 | ||||
Issuance of shares warrant exercises (in shares) | 5,000 | |||||
Warrants issued in relation to debt financing | 3,060 | 3,060 | ||||
Issuance of shares-restricted stock | 23 | 23 | ||||
Stock Issued During Period, Shares, Restricted Stock Award, Gross (in shares) | 3,250 | |||||
Promissory note conversion to preferred shares | $ 1 | 13,894 | 13,895 | |||
Promissory note conversion to preferred shares (in shares) | 1,142,857 | |||||
Treasury Shares conversion | $ (34) | (34) | ||||
Treasury Shares Conversion (in shares) | 3,023 | |||||
June 30, 2022 at Jun. 30, 2022 | $ 3 | $ 15 | $ 258,863 | $ (138,517) | $ (13,798) | $ 106,566 |
Ending balance (in shares) at Jun. 30, 2022 | 3,061,245 | 15,122,661 | 1,018,516 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Operating Activities | ||
Net loss | $ (15,464) | $ (1,840) |
Net income from discontinued operations (including gain on sale of MTI Instruments of $7,602 for the six months ended June 30, 2022) | (7,772) | (177) |
Net loss from continuing operations | (23,236) | (2,017) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 14,611 | 225 |
Stock-based compensation | 1,952 | 1,039 |
Consultant stock compensation | 67 | 49 |
Deferred income taxes | (797) | |
Impairment on fixed assets | 750 | |
Amortization of operating lease asset | 100 | 76 |
Amortization on deferred financing costs and discount on notes | 5,353 | |
Loss on sale of fixed assets | 1,618 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (157) | (27) |
Prepaid expenses and other current assets | (393) | (371) |
Other long-term assets | 56 | (2) |
Accounts payable | 1,882 | 1,507 |
Deferred revenue | (9) | |
Operating lease liabilities | (98) | (73) |
Other liabilities | 61 | |
Accrued liabilities | 64 | 328 |
Net cash provided by operating activities | 1,763 | 795 |
Net cash provided by operating activities- discontinued operations | 328 | 301 |
Investing Activities | ||
Purchases of equipment | (52,618) | (1,319) |
Purchases of intangible assets | (79) | |
Proceeds from disposal on equipment | 465 | |
Deposits of equipment, net | 1,603 | (6,133) |
Net cash used in investing activities | (50,629) | (7,452) |
Net cash provided by (used in) investing activities- discontinued operations | 9,025 | (17) |
Financing Activities | ||
Proceeds from preferred offering | 11,657 | |
Proceeds from common stock offering | 17,250 | |
Proceeds from notes and debt issuance | 29,736 | |
Costs of preferred offering | (1,904) | |
Costs of common stock offering | (1,495) | |
Costs of notes and short term debt issuance | (4,333) | |
Cash dividend distribution on preferred stock | (2,131) | |
Proceeds from stock option exercises | 77 | 84 |
Proceeds from common stock warrant exercises | 779 | |
Net cash provided by financing activities | 33,881 | 15,839 |
(Decrease) increase in cash-continuing operations | (14,985) | 9,182 |
Increase in cash- discontinued operations | 9,353 | 284 |
Cash – beginning of period | 10,258 | 2,630 |
Cash – end of period | 4,626 | 12,096 |
Supplemental Disclosure of Cash Flow Information | ||
Noncash equipment financing | 4,620 | |
Interest paid on NYDIG loans | 770 | |
Proceed receivable from sale of MTI Instruments | 205 | |
Notes converted to common stock | 1,342 | |
Warrant consideration in relation to promissory notes | 5,317 | |
Promissory note conversion to preferred shares | $ 15,236 | |
Purchase of miner equipment using restricted stock | (207) | |
Registration fees in prepaids and accounts payable | $ 352 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2022 | Jun. 30, 2022 | |
Statement of Cash Flows [Abstract] | ||
MTI instruments | $ 7,602 | $ 7,602 |
Nature of Operations
Nature of Operations | 6 Months Ended |
Jun. 30, 2022 | |
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. SHI currently conducts our business through our wholly-owned subsidiary, SCI. SCI is engaged in the mining of cryptocurrency through data centers that can be powered by renewable energy sources. Recently, SCI has built, and intends to continue to develop and build, modular data centers that are 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 incorporated in Delaware on January 8, 2020 as EcoChain, Inc., which operates 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”). Until the April 11, 2022 sale described below, we also operated though our wholly owned subsidiary, MTI Instruments, an instruments business 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. MTI Instruments was incorporated in New York on March 8, 2000. 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, and the development and implementation of automated manufacturing and assembly. On December 17, 2021, we announced that we had entered into a non-binding letter of intent with a potential buyer (the “Buyer”) regarding the potential sale of MTI Instruments (the “LOI”) to an unrelated third party. Pursuant to the LOI, the Buyer would acquire 100% of the issued and outstanding common stock of MTI Instruments (the “Sale”). As a result of the foregoing, the MTI Instruments business was reported as discontinued operations in our consolidated financial statements as of December 31, 2021 and prior periods included in our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on March 31, 2022 (our “Annual Report”), as well as in these consolidated financial statements as of June 30, 2022 and prior periods. On April 11, 2022, we consummated the Sale, MTI Instruments ceased to be our wholly-owned subsidiary and, as a result, we have exited the instruments business. See Note 14 for additional information on the Sale. 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.” On April 11, 2022, SHI entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) with NKX Acquiror, Inc. (the “Purchaser”), pursuant to which the Company sold on such date all of the issued and outstanding shares of capital stock of its wholly-owned subsidiary, MTI Instruments for approximately $9.25 million in cash, subject to certain adjustments as set forth in the Stock Purchase Agreement (the “Sale”). The consideration paid by the Purchaser to the Company was based on an aggregate enterprise value of approximately $10.75 million. The Company recognized a gain on sale of approximately $7.6 million. Going Concern and Liquidity The Company’s financial statements as of June 30, 2022 have been prepared using generally accepted accounting principles in the United States of America (“U.S. GAAP”) applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. As shown in the accompanying financial statements, the Company did not generate sufficient revenue to generate net income, and has negative working capital These factors, among others indicate that there is The ability to continue as a going conce rn is dependent upon the Company generating profitable operations in the future and/or obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. In the near term, management is evaluating and implementing different strategies to obtain financing to fund the Company’s expenses and growth to achieve a level of revenue adequate to support the Company’s current cost structure. Financing strategies may include, but are not limited to, stock issuance, project level equity, debt borrowings, partnerships and/or collaborations. In addition, as discussed above and further in Notes 14, and 15, the Company sold the MTI Instruments business in April 2022 to focus on developing and monetizing green, zero-carbon computing and cryptocurrency mining facilities. The Company received approximately $ 9.0 0.2 million Following June 30, 2022, to further implement management’s strategy, the Company entered into various transactions as further described in Note 17 to recapitalize and negotiate revised terms with senior secured lenders, which released collateral (thus enabling execution of the project financing strategy) and to provide a means for holders of the secured obligations to reduce their debt through the equity markets, including entering into the Addendum (as defined in Note 17) to allow the Company to convert $3.3 million in notes payable to common stock and redeem up to $6.6 million of notes payable, the issuance and sale of $5.0 million in a new series of preferred stock. In addition, also as further described in Note 17, in May 2022, entered into a structural understanding with Soluna to provide up to $35.0 million in project financing subject to various milestones and conditions precedent and following the recapitalization and restructuring discussed above, in August 2022, the Company entered into an agreement with Spring Lane for an initial funding of up to $12.5 million of the up to $35.0 million commitment for . Management will continue to evaluate different strategies to obtain financing to fund operations, but believes that these transactions, and the availability of up to $7.1 million in additional equipment financing with a third party lender, together with the Company’s cash on hand of approximately $4.6 million as of June 30, 2022 and proceeds from potential capital raising activities and/or increasing the available under our credit facilities, will allow the Company to meet its outstanding commitments relating to capital expenditures as of June 30, 2022 of $1.5 million and other operational needs. H The COVID-19 global pandemic has been unprecedented and unpredictable and the 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 our miner shipments due to disruptions in the global supply chain, the Company does not expect any material impact on our long-term strategic plans, our operations, or our liquidity due to the impacts of COVID-19. arious macroeconomic factors could adversely affect our business and the results of our operations and financial condition, including changes in inflation, interest rates and overall economic conditions. For instance, inflation could negatively impact the Company by increasing our labor costs, through higher wages and higher interest rates. If inflation or other factors were to significantly increase our business costs, our ability to develop our current projects may be negatively affected. Interest rates, the liquidity of the credit markets and the volatility of the capital markets could also affect the operation of our business and our ability to raise capital in order to fund our operations. However, the Company is actively monitoring this situation and the possible effects on our financial condition, liquidity, operations, suppliers, and the industry. |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 2. Basis of Presentation In the opinion of management, the Company’s condensed consolidated financial statements reflect all adjustments, which are of a normal recurring nature, necessary for a fair statement of the results for the periods presented in accordance with U.S. GAAP. The results of operations for the interim periods presented are not necessarily indicative of results for the full year. Certain information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in our Annual Report. The information presented in the accompanying condensed consolidated balance sheet as of December 31, 2021 has been derived from the Company’s audited consolidated financial statements. All other information has been derived from the Company’s unaudited condensed consolidated financial statements for the three and six months ended June 30, 2022 and June 30, 2021. Principles of Consolidation The condensed consolidated financial statements include the accounts of the Company and our wholly-owned subsidiary, SCI, as of June 30, 2022 and for the three and six months ended June 30, 2022 and 2021, also includes the accounts of our then wholly-owned subsidiary, MTI Instruments. All intercompany balances and transactions are eliminated in consolidation. Change in Par Value Unless otherwise noted, all capital values, share and per share amounts in the condensed consolidated financial statements have been retroactively restated for the effects of the Company’s change in par value from $0.01 to $0.001, which became effective after the redomestication to the State of Nevada on March 29, 2021. 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 and a correction of an error. Correction of an Error The Company recorded cash preferred dividend distributions of $630 thousand in the Annual Report presentation as an increase within accumulated deficit. However, in the absence of retained earnings, cash dividends should generally be charged to Additional-Paid-in Capital (“APIC”). This treatment is supported by Accounting Standards Codification (“ASC”) 480-10-S99-2, which requires accretion of redeemable preferred stock to be charged to APIC in the absence of retained earnings. As the Company did not have accumulated profit (i.e.: absence of retained earnings), the preferred cash dividends should have been charged to APIC. The following tables present the effects of the correction of the prior period error to the Condensed Consolidated Statement of Equity: Preferred Stock Common Stock Treasury Stock Shares Amount Shares Amount Additional Paid-in Capital Accumulated Deficit Shares Amount Total Stockholders’ Equity September 30, 2021 806,585 $ 1 13,732,713 $ 14 $ 172,898 $ (120,419 ) 1,015,493 $ (13,764 ) $ 38,730 Adjustment for correction of an error-Preferred dividends — — — — (176 ) 176 — — — Balance September 30, 2021-as adjusted 806,585 $ 1 13,732,713 $ 14 $ 172,722 $ (120,243 ) 1,015,493 $ (13,764 ) $ 38,730 December 31, 2021 1,252,299 $ 1 14,769,699 $ 15 $ 228,420 $ (123,684 ) 1,015,493 $ (13,764 ) $ 90,988 Adjustment for correction of an error-Preferred dividends — — — — (630 ) 630 — — — December 31, 2021-as adjusted 1,252,299 $ 1 14,769,699 $ 15 $ 227,790 $ (123,054 ) 1,015,493 $ (13,764 ) $ 90,988 |
Accounts Receivable
Accounts Receivable | 6 Months Ended |
Jun. 30, 2022 | |
Receivables [Abstract] | |
Accounts Receivable | 3. Accounts Receivable Accounts receivables consist of the following at: (Dollars in thousands) June 30, December 31, Data Hosting $ 72 450 Other receivable 616 81 Total $ 688 $ 531 The Company’s allowance for doubtful accounts was $ 0 484 Employee Receivables Certain employees have a receivable due to the Company related to the vesting of stock awards, in which $ 135 0 |
Property, Plant and Equipment
Property, Plant and Equipment | 6 Months Ended |
Jun. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | 4. Property, Plant and Equipment Property, plant and equipment consist of the following at: (Dollars in thousands) June 30, December 31, Land $ 52 $ 52 Land improvements 488 238 Buildings 7,188 5,650 Leasehold improvements 366 317 Vehicles 15 15 Computers and related software 66,773 30,890 Machinery and equipment 4,753 2,588 Office furniture and fixtures 22 22 Construction in progress 19,489 7,590 99,146 47,362 Less: Accumulated depreciation (12,098 ) (2,765 ) $ 87,048 $ 44,597 Depreciation expense was $ 5.5 149 9.9 225 The Company incurred a $ 1.6 2.1 465 During the three and six months ended June 30, 2022, the Company concluded that there were impairment indicators on property, plant and equipment associated with the S-9 miners. As a result, a quantitative impairment analysis was required as of June 30, 2022. As such, the Company reassessed its estimates and forecasts as of June 30, 2022, to determine the fair values of the S-9 miners. As a result of the analysis, as of June 30, 2022, the Company concluded the carrying amount of the property, plant and equipment associated with the S-9 miners exceeded its fair value, which resulted in impairment charges of $ 750 |
Asset Acquisition
Asset Acquisition | 6 Months Ended |
Jun. 30, 2022 | |
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, (the “Termination Agreement”), SCI paid HEL $725,000 and SHI issued to HEL 150,000 shares of our 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 within five years after the effective date of the merger, as set forth in the Merger Agreement and the schedules thereto, as set forth below . 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 to 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 our Board of Directors (the “Board”) 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 | 6 Months Ended |
Jun. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 6. Intangible Assets Intangible assets consist of the following as of June 30, 2022: (Dollars in thousands) Intangible Accumulated Total Strategic pipeline contract $ 46,885 $ 6,251 $ 40,634 Assembled workforce 500 67 433 Patents 112 1 111 Total $ 47,497 $ 6,319 $ 41,178 Intangible assets consist of the following as of December 31, 2021: (Dollars in thousands) Intangible Accumulated Total 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 June 30, 2021. Amortization expense for the three and six months ended June 30, 2022 was approximately $ 2.4 4.7 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 ending December 31, 2022 (remainder of the year) $ 4,741 2023 9,482 2024 9,482 2025 9,482 2026 7,903 Thereafter 88 Total $ 41,178 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 7. Income Taxes During the three and six months ended June 30, 2022, the Company’s effective income tax rate on the tax benefit was 1.75 3.32 0 21% 251 797 3 In connection with the strategic contract pipeline acquired in the Soluna Callisto acquisition as further discussed in Note 5, ASC 740-10-25-51 requires the recognition of a deferred tax impact of acquiring an asset in a transaction that is not a business combination when the amount paid exceeds the tax basis on the acquisition date. As such, the Company is required to adjust the value of the strategic contract pipeline by approximately $10.9 million at inception date, in which was recorded as a deferred tax liability and this amount will be amortized over the life of the asset. For the three and six months ended June 30, 2022, the Company amortized $547 thousand and approximately $1.1 million, respectively. The Company provides for recognition of deferred tax assets if the realization of such assets is more likely than not to occur in accordance with accounting standards that address income taxes. Significant management judgment is required in determining the period in which the reversal of a valuation allowance should occur. The Company has considered all available evidence, both positive and negative, such as historical levels of income and future forecasts of taxable income amongst other items, in determining its valuation allowance. In addition, the Company’s assessment requires us to schedule future taxable income in accordance with accounting standards that address income taxes to assess the appropriateness of a valuation allowance which further requires the exercise of significant management judgment. The Company believes that the accounting estimate for the valuation of deferred tax assets is a critical accounting estimate because judgment is required in assessing the likely future tax consequences of events that have been recognized in our financial statements or tax returns. The Company based the estimate of deferred tax assets and liabilities on current tax laws and rates and, in certain cases, business plans and other expectations about future outcomes. In the event that actual results differ from these estimates or the Company adjusts these estimates in future periods, the Company may need to adjust the recorded valuation allowance, which could materially impact our financial position and results of operations. The valuation allowance was $16.5 million and $ 11.9 |
Debt
Debt | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
Debt | 8. Debt Convertible Notes Debt consists of the following Maturity Date Interest Rate June 30, 2022 December 31, 2021 Convertible Note October 25, 2022 8 % $ 13,585 $ 14,927 Less: debt discount 349 967 Less: discount from issuance of warrants 2,408 5,747 Less: debt issuance costs 424 1,092 Total convertible notes, net of discount and issuance costs $ 10,404 $ 7,121 On October 25, 2021, pursuant to a Securities Purchase Agreement (the “October 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 “October Notes”), which are, subject to certain conditions, convertible at any time by the investors, into an aggregate of 1,776,073 shares (the “October 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 “October 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 October Warrants are legally detachable and can be separately exercised immediately for five years upon issuance, subject to applicable Nasdaq rules. The Notes, subject to an original issue discount of 8% (the “October Purchasers”) Subsequent Events The fair value of the October Warrants, as of the issuance date, was $ 7.0 1.6 3.4 16.3 15.0 950 1.3 During the six months ended June 30, 2022 and year ended December 31, 2021, $13.6 million and $14.9 million, respectively, was remaining in the principal balance of the October Notes. For the six months ended June 30, 2022, approximately $1.3 million was converted into 146,165 shares of our common stock, respectively. Through June 30, 2022, a total of approximately $2.7 million was converted into 296,165 shares of our common stock, respectively. 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 20.0 2.4 The Company issued 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 (the “Third Tranche Notes” and, together with the First Tranche Notes and Second Tranche Notes, the “Notes”) along with Class D common stock purchase warrants (collectively, the “Warrants”) to purchase up to an aggregate of 1,000,000 shares of common stock of the Company, at an exercise price of $11.50 per share on April 13, 2022 The exercise of the Warrants is 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% (or, upon election of such Lender, 9.99%) of the number of shares of the common stock outstanding immediately after giving effect to the issuance of shares of common stock issuable upon such exercise, which beneficial ownership limitation may be increased or decreased up to 9.99% upon notice to the Company, provided that any increase in such limitation will not be effective until 61 days following notice to the Company. The total fair value of the Warrants, as of the issuance date, was $4.8 million and is recorded as equity with the offset recorded as debt discount against the net proceeds. The proceeds of $20.00 million were allocated between the Promissory Notes and the Warrants, in which the discount related to the warrants is being amortized based on the straight-line method through the date of Maturity. None of the Warrants have been exercised and exchanged for the Company’s common stock as of June 30, 2022. On April 29, 2022, the Company issued in a concurrent registered direct offering 1,142,857 0.001 Series A Preferred Stock”) to the Lenders, at an offering price of $17.50 per share, the same price as the public offering price of the shares of Series A Preferred Stock in the underwritten public offering, in full satisfaction of the Company’s obligations under the outstanding Notes in an aggregate amount of $20 million. The only remaining balance as of June 30, 2022 was $46 thousand in interest payable to the lenders. NYDIG Financing Maturity Dates Interest Rate June 30, 2022 NYDIG Loans #1-11 April 25, 2023 12% thru 15% $ 14,387 Less: principal payments 2,590 Less: debt issuance costs 289 Total outstanding debt 11,508 Less: current portion of debt 7,526 Total Long term debt $ 3,982 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 in aggregate equipment financing. Subsequently, the parties negotiated the specific terms of each equipment financing transaction as well as the terms upon which the investors in our October 2021 Senior Secured Convertible Notes (the “Convertible Investors”) would consent to the transactions contemplated by the Master Agreement. On January 14, 2022, the Borrower effected an initial drawdown under the Master Agreement in the aggregate principal amount of approximately $4.6 million that bore interest at 14% and will be repaid over 24 months. On January 26, 2022, the Borrower had a subsequent drawdown of $9.6 million. As part of the transactions contemplated under the Master Agreement, (i) the Company’s indirect wholly owned subsidiary, Soluna MC LLC, formerly EcoChain Block LLC (“Guarantor”), which is the owner of 100% of the equity interests of Borrower, executed a Guaranty Agreement in favor of NYDIG, as lender, dated as of December 30, 2021 (the “Guaranty Agreement”), (ii) Borrower has granted a lien on, and security interest in, all of its assets to NYDIG, as collateral agent, (iii) Guarantor entered into an equipment financing arrangement on assets purchased with the borrowed funds, (iv) Borrower will borrow from NYDIG the loans as forth in certain loan schedules (the “Specified Loans”), and (v) Borrower has executed a Digital Asset Account Control Agreement (the “ACA Wallet Agreement”) with NYDIG, as collateral agent and secured party, and NYDIG Trust Company LLC, as custodian, dated as of December 30, 2021, as well as such other agreements related to the foregoing as mutually agreed (collectively, the “NYDIG Transactions”). 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 Promptly after the date of the Consent, the Company issued warrants to purchase up to 85,000 shares of common stock to the Convertible Investor holding the largest outstanding principal amount of Notes as of the date of the Consent. Such warrants are substantially in form similar to the other Warrants held by the Convertible Investors. Such warrants are exercisable for three years from the date of the Consent at an exercise price per share of the Company’s common stock, equal to 130% of the closing price per share of the common stock as of the date of the Consent. Line of Credit On September 13, 2021, the Company entered into a $ 1.0 5.5% 1.0 |
Stockholders_ Equity
Stockholders’ Equity | 6 Months Ended |
Jun. 30, 2022 | |
Equity [Abstract] | |
Stockholders’ Equity | 9. Stockholders’ Equity Preferred Stock As of August 15, 2022, the Company has two series of preferred stock outstanding: the 25 Series B Convertible Preferred Stock 0.001 stated value equal to $100.00 (the “Series B Preferred Stock”) 3,061,245 1,252,299 Series Common Stock The Company has one class of common stock, par value $ 0.001 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 1.4 million 2.1 million Reservation of Shares The Company had reserved shares of common stock for future issuance as follows as of June 30, 2022: Stock options outstanding 898,600 Restricted stock units outstanding 773,861 Warrants outstanding 3,217,315 Common stock available for future equity awards or issuance of options 524,449 Number of common shares reserved 5,414,225 Income (Loss) per Share The Company computes basic income (loss) per common share by dividing net income (loss) 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 stock equivalents, comprised of shares issuable under outstanding investment rights, warrants and the Company’s stock-based compensation plans, and the weighted average number of shares of common stock outstanding during the reporting period. Dilutive common stock equivalents include the dilutive effect of in-the-money stock options, which are calculated based on the average share price for each period using the treasury stock method. Under the treasury stock method, the exercise price of a stock option and the amount of compensation cost, if any, for future service that the Company has not yet recognized are assumed to be used to repurchase shares in the current period. The Company notes as continuing operations was in a Net loss position for the three and six months ended June 30, 2022 and 2021, as such basic and diluted Earnings-per-share (“EPS”) is the same amount as continuing operations acts as the control amount in which would cause antidilution. Not included in the computation of earnings per share, assuming dilution, for the three and six months ended June 30, 2022, were options to purchase 898,600 3,217,315 Not included in the computation of earnings per share, assuming dilution, for the three and six months ended June 30, 2021, were options to purchase 1,010,050 15,000 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 10. Commitments and Contingencies Commitments: Leases The Company determines whether an arrangement is a lease at inception. The Company and our subsidiaries have operating leases for certain manufacturing, laboratory, office facilities and certain equipment. The leases have remaining lease terms of less than one five Lease expense for these leases is recognized on a straight-line basis over the lease term. For the three and six months ended June 30, 2022 and 2021, total lease costs are comprised of the following: (Dollars in thousands) Three Months Ended Six Months Ended 2022 2021 2022 2021 Operating lease cost $ 50 $ 38 $ 100 $ 76 Short-term lease cost — — — — Total net lease cost $ 50 $ 38 $ 100 $ 76 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. Other information related to leases was as follows: (Dollars in thousands, except lease term and discount rate) (Dollars in thousands) Six Months Ended Weighted Average Remaining Lease Term (in years): Operating leases 1.88 Weighted Average Discount Rate: Operating leases 3.83 % (Dollars in thousands, except lease term and discount rate) (Dollars in thousands) Six Months Ended Six Months Ended Supplemental Cash Flows Information: Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 98 $ 73 Non-Cash Activity Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 13 $ — Maturities of noncancellable operating lease liabilities are as follows for the six months ending June 30: (Dollars in thousands) 2022 2022 (remainder of year) $ 103 2023 164 2024 84 Total lease payments 351 Less: imputed interest (13 ) Total lease obligations 338 Less: current obligations (196 ) Long-term lease obligations $ 142 As of June 30, 2022, 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 |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 11. Related Party Transactions MeOH Power, Inc. On December 18, 2013, MeOH Power, Inc. and the Company executed a Senior Demand Promissory Note (the “Note”) in the amount of $ 380 334 329 Legal Services During the three and six months ended June 30, 2022, the Company incurred $ 1 2 7 15 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 our 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 $ 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% 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 For the fiscal year ended December 31, 2021, the Company paid $ 245 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. The Company made one final payment to HEL in 2022 of $ 50 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 158,730 500 250 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, upon and subject to the terms and conditions of the Termination Agreement, on November 5, 2021: (1) the existing Operating and Management Agreements between HEL and SCI were terminated in all respects; and (2)(A) SCI paid HEL $ 725,000 Please see Note 5 for additional information regarding the Soluna Callisto acquisition and related transactions. Several of HEL’s equity holders 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 the 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 for the three and six months ended June 30, 2022 was $0 and $0. John Belizaire and John Bottomley, who were elected to the Board upon the effective time of SCI’s acquisition of Soluna Callisto, serve as directors of HEL. In addition, Mr. Belizaire is the beneficial owner of 1,317,567 shares of common stock of HEL and 102,380 Class Seed Preferred shares, which are convertible into 86,763 shares of common stock of HEL. These interests give Mr. Belizaire an ownership of 10.54% in HEL. Mr. Belizaire also owns an interest in HEL indirectly through his 5.0139% interest 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, William P. Phelan, Chairman of the Board, 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% |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | 12. Stock-Based Compensation 2021 Plan The Company’s 2021 Stock Incentive Plan was initially 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 and as of May 27, 2022 (as amended and restated, the “2021 Plan”). 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 unrestricted or restricted stock, and (iii) in settlement of restricted stock units shall be limited to (A) during the Company’s fiscal year ending December 31, 2021, 1,460,191 In the event that, prior to the date on which the 2021 Plan shall terminate, any Award granted under the 2021 Plan expires unexercised or unvested or is terminated, surrendered, or cancelled without the delivery of shares of common stock, or any Awards are forfeited back to the Company, then the shares of common stock subject to such Award may be made available for subsequent Awards under the terms of the 2021 Plan. During the three months ended June 30, 2022, the Company awarded 58,442 4.96 10.85 7.55 58,442 During the six months ended June 30, 2022, the Company awarded 480,207 4.96 10.85 10.03 306,500 During the three months ended June 30, 2021, the Company granted options to purchase 686,200 186,200 7.52 During the six months ended June 30, 2021, the Company granted options to purchase 716,200 186,200 7.52 During the six months ended June 30, 2021, the Company awarded 47,500 11.10 |
Effect of Recent Accounting Upd
Effect of Recent Accounting Updates | 6 Months Ended |
Jun. 30, 2022 | |
Effect Of Recent Accounting Updates | |
Effect of Recent Accounting Updates | 13. Effect of Recent Accounting Updates Accounting Updates Not Yet Effective Changes to U.S. GAAP are established by the Financial Accounting Standards Board (the “FASB”) in the form of accounting standard updates (“ASUs”) to the FASB’s Accounting Standards Codification (“ASC”). The Company considered the applicability and impact of all ASUs. ASUs not mentioned below were assessed and determined to be either not applicable or are expected to have minimal impact on our consolidated financial position or results of operations. 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 other financial assets not excluded from the scope that have the contractual right to receive cash. ASU 2018-19 clarifies that receivables arising from operating leases are accounted for using lease guidance and not as financial instruments. ASU 2019-04 clarifies that equity instruments without readily determinable fair values for which an entity has elected the measurement alternative should be remeasured to fair value as of the date that an observable transaction occurred. ASU 2019-05 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 our adoption of new accounting pronouncements or changes to our significant accounting policies that were disclosed in its consolidated financial statements for the fiscal year ended December 31, 2021 (the “2021 Fiscal Year”). |
Discontinued Operations
Discontinued Operations | 6 Months Ended |
Jun. 30, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | 14. Discontinued Operations As described in Note 1, the Company entered into a Stock Purchase Agreement with Purchaser, pursuant to which the Company sold on April 11, 2022 all of the issued and outstanding shares of capital stock of its wholly-owned subsidiary, MTI Instruments for approximately $ 9.0 Set forth below are the results of the discontinued operations: (Dollars in thousands) Three Months Ended June 30, Six Months Ended June 30, 2022 2021 (*) 2022 2021 (*) Product revenue $ 160 $ 1,647 $ 1,799 $ 2,984 Cost of sales 166 502 728 954 Research and development 30 406 398 792 General and administrative expenses 89 526 573 1,066 Other income - (4 ) - (5 ) (Loss) income from discontinued operations before gain on disposal and income taxes (125 ) 217 100 177 Pretax gain on sale of MTI Instruments 7,602 - 7,602 - Deferred tax benefit 70 - 70 - Net income from discontinued operations $ 7,547 $ 217 $ 7,772 $ 177 (*) 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 June 30, 2022 and December 31, 2021: (Dollars in thousands) June 30, December 31, 2022 2021 Assets held for sale from discontinued operations: Accounts receivable $ - $ 1,189 Inventories - 964 Prepaid expenses and other current assets - 54 Property, plant and equipment, net - 92 Deferred tax assets, net - 101 Operating lease right-of-use assets - 628 Total Assets held for sale from discontinued operations $ - $ 3,028 Liabilities held for sale from discontinued operations: Accounts payable $ - $ 136 Accrued liabilities - 479 Operating lease liability - 628 Total Liabilities held for sale from discontinued operations $ - $ 1,243 |
MTI Instruments Sale
MTI Instruments Sale | 6 Months Ended |
Jun. 30, 2022 | |
Mti Instruments Sale | |
MTI Instruments Sale | 15. MTI Instruments Sale As described in Note 1, the Company entered into a Stock Purchase Agreement with Purchaser, pursuant to which the Company sold on April 11, 2022 all of the issued and outstanding shares of capital stock of our wholly-owned subsidiary, MTI Instruments for an all-cash purchase price of $ 10.75 million The following table presents the gain associated with the sale. (Dollars in thousands) As of April 11, 2022 Consideration received $ 10,750 Plus: closing cash 1 Less: transaction costs (998 ) Less: closing indebtedness (483 ) Plus: new working capital adjustments (40 ) Adjusted consideration received 9,230 Cash 1 Accounts receivable, net 1,119 Inventories 888 Prepaid expense and other current assets 42 Operating lease right-of-use assets 579 Deferred tax assets 171 Property, plant and equipment, net 76 Total assets 2,876 Accounts payable 122 Accrued liabilities 547 Operating lease liability 579 Total liabilities 1,248 Net assets transferred 1,628 Gain on sale $ 7,602 |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2022 | |
Segment Reporting [Abstract] | |
Segment Information | 16. Segment Information The Company applies ASC 280, Segment Reporting 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 three months ended June 30, 2022 and 2021, respectively, approximately 6% 60% 41 40 53% 0% 6 71 43 29 51 0 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 general and administrative expenses. The following table details revenue and cost of revenues for the Company’s reportable segments for three and six months ended June 30, 2022 and 2021, and reconciles to net loss on the consolidated statements of operations : (Dollars in thousands) Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Reportable segment revenue: Cryptocurrency mining revenue $ 7,497 $ 1,657 $ 15,309 $ 2,652 Data hosting revenue 1,179 - 2,683 - Total segment and consolidated revenue 8,676 1,657 17,992 2,652 Reportable segment cost of revenue: Cost of cryptocurrency mining revenue, inclusive of depreciation 9,134 545 16,854 875 Cost of data hosting revenue 975 - 2,114 - Total segment and consolidated cost of revenues 10,109 545 18,968 875 Reconciling items: General and administrative expenses 7,249 2,503 14,504 3,799 Impairment on fixed assets 750 - 750 - Interest expense 3,305 - 6,185 - Loss on sale of fixed assets 1,618 - 1,618 - Other income, net - (3 ) - (8 ) Income tax (benefit) expense from continuing operations (251 ) 3 (797 ) 3 Net loss from continuing operations (14,104 ) (1,391 ) (23,236 ) (2,017 ) Income before income tax from discontinued operations (including gain on sale of MTI Instruments of $ 7,602 7,477 217 7,702 177 Income tax benefit from discontinued operations 70 - 70 - Net income from discontinued operations 7,547 217 7,772 177 Net loss $ (6,557 ) $ (1,174 ) $ (15,464 ) $ (1,840 ) Capital expenditures 27,180 1,023 52,618 1,319 Depreciation and amortization 7,914 149 14,611 225 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | 17. Subsequent Events October SPA Addendum On July 19, 2022, the Company entered into the Addendum to amend certain terms of the October SPA and the October Security Agreement. Pursuant to the Addendum, among other things, the assets of the Company related to the Company’s development site in Texas which secure the Company’s obligations under the October Security Agreement will be released in three tranches in connection with three tranches of conversions or redemptions of the October Notes. In connection with the first tranche, $1,100,000 of October Notes was converted to common stock between July 25, 2022 and August 1, 2022; in connection with the second tranche, $1,100,000 of October Notes will be converted to common stock; and in connection with the third tranche, $1,100,000 of October Notes will be converted to common stock (each, the “Required Conversion Amount”), in each case at the then in effect Conversion Price. Prior to each conversion the Conversion Price of the Note will be reduced (but not increased) to a 20% discount to the 5-day volume-weighted average price (“VWAP”) of the common stock. The Conversion Price for the first tranche is $3.75. In addition, the October Purchasers may require the Company to redeem up to $2,200,000 worth of October Notes in connection with each tranche at a rate of $1.20 for every $1.00 owed, less the amount of October Notes converted during such tranche, not including the Required Conversion Amount if the October Purchasers are unable to convert out of such amount of the Notes in each tranche. Each tranche is equal to $3,300,000 of the October Notes and the Addendum contemplates that at least $9,900,000 of the October Notes may be reduced under the terms of the Addendum. 1,950,000 Pursuant to the Addendum, the exercise price of the Class A Warrants and Class B Warrants and 85,000 warrants to purchase common stock issued to the October Purchasers on January 13, 2022 was reduced to $9.50 a share. In addition, the Company agreed to exchange the Class C Warrants for 296,013 shares of common stock, which exchanges were completed between July 25, 2022 and August 1, 2022. Except under certain circumstances, the Company is prohibited from engaging in any capital raising transactions without the consent of the October Purchasers until the Company’s obligations under the October Security Agreement have been paid in full. Series B Convertible Preferred Stock Private Placement Securities Purchase Agreement On July 19, 2022, the Company entered into a Securities Purchase Agreement (the “Series B SPA”) with an accredited investor (the “Series B Investor”) pursuant to which the Company issued to the Series B Investor 62,500 shares of Series B Preferred Stock, for a purchase price of $5,000,000, on July 20, 2022 (the “Series B Closing”), which are initially convertible into 1,155,268 shares of our common stock (the “Series B Conversion Shares”), at a price per share of $5.41 (“Conversion Price”), a 20% premium to the close of the common stock on July 18, 2022, subject to adjustment as set forth in the Certificate of Designation (as defined below) governing the terms of the Preferred Stock. In addition on July 19, 2022, the Company issued to the Series B Investor common stock purchase warrants (collectively, the “Series B Warrants”) to purchase up to an aggregate of 1,000,000 shares of common stock at an initial exercise price of $10.00 per share of common stock (the “Series B Warrant Shares” and collectively with the Series B Preferred Stock, the Series B Conversion Shares, and the Series B Warrants, the “Series B Securities”). In addition, at the Series B Closing, the Investor delivered to the Company a warrant to acquire 1,000,000 shares of common stock at an exercise price of $11.50 per share for cancellation. Until the earlier of (i) three years after the Series B Closing or (ii) if in excess of $500,000 of Series B Preferred Stock or at least 100,000 Series B Warrants remain outstanding, the Company agreed not to (a) issue any common stock, common stock equivalents, preferred stock or other equity securities at a price that is less than the highest price per share of the Series B Securities, (b) file any registration statement, with certain exceptions, or (c) enter into an equity line of credit or at the market offering. In addition, the Company may buy out the rights of the Series B Investor under the preceding sentence for $10,000,000 less any Profit (as defined in the Series B SPA) the Series B Investor has earned from the Series B Securities, including pursuant to any amount paid for waiver under the following sentences. The Series B Investor has a right of first refusal with respect to the offerings described in the first sentence of this paragraph for a period of three years beginning on the later of (i) January 1, 2023 and (ii) the date the October Notes have been fully redeemed or converted. The Company can obtain the Series B Investor’s waiver to the right of first refusal by delivering to the Series B Investor 10% of the amount raised by the Company in any such offering in cash or in the same securities issued by the Company. The Series B Investor also has a right to participate in up to 35% of any such offerings for the same three year period. At the written request of the Investor, at any time after the October Notes have been fully redeemed or converted and for a period of one year thereafter, the Company agreed to file a registration statement to register the Series B Preferred Stock and the Series B Conversion Shares. The conversion of the Series B Preferred Stock and the exercise of the Series B Warrants are each subject to beneficial ownership limitations such that the Investor may not convert the Preferred Stock or exercise the Series B Warrants to the extent that such conversion or exercise would result in the Investor being the beneficial owner in excess of 4.99% (or, upon election of such Series B Investor, 9.99%) of the number of shares of the common stock outstanding immediately after giving effect to the issuance of shares of common stock issuable upon such conversion or exercise, which beneficial ownership limitation may be increased or decreased up to 9.99% upon notice to the Company, provided that any increase in such limitation will not be effective until 61 days following notice to the Company. Certificate of Designation On July 20, 2022, the Company filed a Certificate of Designations of Preferences, Rights and Limitations for the Series B Preferred Stock with the Secretary of State of Nevada (the “Certificate of Designation”) and designated 187,500 Series B 0.0001 Series B Series B The Certificate of Designation provides that the Series B In the event of the voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company, the holders of shares the Series B Preferred Stock are entitled to be paid out of the Company’s assets legally available for distribution to its stockholders, the greater of (i) the Stated Value, or (ii) the amount holder would have received if the Series B Preferred Stock was fully converted to common stock, plus any amount equal to any accumulated and unpaid dividends to the date of payment. Each share of Series B The Series B Series B Series B Series B Series B Series B The Series B Preferred Stock will, as to dividend rights and rights as to the distribution of assets upon the Company’s liquidation, dissolution or winding-up, rank senior to all classes or series of common stock and to all other capital stock issued by the Company expressly designated as ranking junior to the Series B Preferred Stock. Without the consent of the holders of the Series B Preferred Stock, the Company may not issue any capital stock that is (i) senior to the preferred stock in respect of dividend rights and rights as to the distribution of assets upon the Company’s liquidation, dissolution or winding-up, except that the Series B Preferred Stock will be parri passu with respect to the Series A Preferred Stock, or (ii) parri passu with respect to dividend rights and rights as to the distribution of assets upon the Company’s liquidation, dissolution or winding-up. Series B Warrants The Series B Series B Series B Series B Series B The Series B Series B Series B Series B Leak-Out Agreement On July 19, 2022, the Company and the Series B Series B Series B Series B Series B Series B Appointment of New Chief Financial Officer On July 28, 2022, the Board appointed Philip F. Patman, Jr. to assume the role of Chief Financial Officer, Secretary and Treasurer of the Company, effective as of August 16, 2022. Mr. Patman, 54, most recently has been Vice President and Head of Renewable Fuels M&A and Strategy at Ameresco, Inc., a cleantech technology integrator with a comprehensive portfolio of energy efficiency and renewable energy supply solutions, and has been employed by Ameresco since August 2021. Prior to that, Mr. Patman was with Huron Consulting Group, Inc., a global consultancy firm providing management consulting services to small- and mid-cap businesses primarily in the oil, gas, and diversified energy sectors, from May 2020 through June 2021, most recently serving as Managing Director. From April 2017 through March 2019, Mr. Patman was the Chief Financial Officer of VAALCO Energy, Inc. (NYSE:EGY), an oil operator that owns and operates shallow water offshore platforms in Gabon, West Africa. From 2012 to March 2017, he served PTT Exploration and Production Public Company, Ltd. (“PTTEP”), one of the largest publicly traded companies in the Kingdom of Thailand, as Senior Vice President, Business Development, for The Americas region (2012-16) and later as Senior External Advisor (2016-17); he had primary responsibility for leading PTTEP’s mergers and acquisitions activities in the US, Canada and Brazil. Cumulatively, Mr. Patman has more than 25 years of experience in finance operations, capital formation, and M&A / corporate development for companies engaged in global energy and infrastructure markets, including the above-described companies as well as AES Corporation, Franklin Templeton Investments, Globeleq Limited, Marathon Oil Corporation, and Enron Corp. Mr. Patman received a Bachelor of Arts degree in 1990 from the University of Texas at Austin through its Plan II Honors Program, and a J.D. from the University of Houston Law Center in 1993. He is currently a licensed attorney in the state of Texas. In connection with Mr. Patman’s appointment as the Company’s Chief Financial Officer, Secretary and Treasurer, the Company and Mr. Patman entered into an employment agreement (the “Agreement”), dated July 29, 2022, providing for his employment, effective as of August 15, 2022, and continuing for a two-year term, which shall continue thereafter on an “at-will” basis (the “Employment Term”). Pursuant to the Agreement, the Company has agreed to pay Mr. Patman an annual salary of $ 350,000 In addition, pursuant to the Agreement, the Company has agreed to grant to Mr. Patman, within sixty (60) calendar days following August 15, 2022, subject to certain conditions, a one-time award of a number of restricted stock units (“RSUs”) equal to $175,000, divided by the thirty (30)-day trailing volume weighted average price as of August 15, 2022. Further pursuant to the Agreement, the Company has agreed to grant to Mr. Patman, commencing in calendar year 2023 and subject to such approvals specified by the Compensation Committee, an annual equity award consisting of a number of RSUs in an amount equal to $125,000. Mr. Patman is also entitled to other benefits normally available to other similarly situated employees of the Company. Under the Agreement, the Employment Term is terminable by the Company upon 30 days’ prior written notice or by Mr. Patman upon 60 days’ prior written notice. As described in the Agreement, Mr. Patman is entitled to severance, in certain circumstances up to a total of six (6) months of base salary plus a pro-rata portion of his annual cash bonus. Spring Lane Initial Funding On May 3, 2022, SCI entered into a Bilateral Master Contribution Agreement (the “Bilateral Contribution Agreement”) with Spring Lane, pursuant to which Spring Lane agreed, pursuant to the terms and conditions of such agreement, to make one or more capital contributions to, and in exchange for equity in, SCI or one of its subsidiaries up to an aggregate amount of $ 35 On August 5, 2022, the Company entered into a Contribution Agreement (the “Dorothy Contribution Agreement”) with Spring Lane, Soluna DV Devco, LLC (“Devco”), an indirect wholly-owned subsidiary of SCI, and Soluna DVSL ComputeCo, LLC (“DVSL”) an entity formed in order to further the Company’s development project in Texas, (each, a “Party” and, together, the “Parties”) . the Dorothy Contribution Agreement, the Company committed to a capital contribution of up to approximately $26.3 million to DVSL (the “Company Commitment”), and on August 5, 2022, the Company was deemed to have contributed approximately $8.1 million, through payment of capital expenditures and development costs made on behalf of DVSL by the Company prior to August 5, 2022. Further under the Agreement, Spring Lane committed to a capital contribution of up to $12.5 million to DVSL (the “Spring Lane Dorothy Commitment”), and on August 5, 2022, Spring Lane contributed approximately $3.9 million. In exchange for their contributions, the Company and Spring Lane were issued 67.8% and 32.2% of the Class B Membership Interests in DVSL, respectively, and were admitted as Class B members of DVSL. Further pursuant to the Agreement, DVSL issued 100% of its Class A Membership Interests to Devco. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The condensed consolidated financial statements include the accounts of the Company and our wholly-owned subsidiary, SCI, as of June 30, 2022 and for the three and six months ended June 30, 2022 and 2021, also includes the accounts of our then wholly-owned subsidiary, MTI Instruments. All intercompany balances and transactions are eliminated in consolidation. |
Change in Par Value | Change in Par Value Unless otherwise noted, all capital values, share and per share amounts in the condensed consolidated financial statements have been retroactively restated for the effects of the Company’s change in par value from $0.01 to $0.001, which became effective after the redomestication to the State of Nevada on March 29, 2021. |
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 and a correction of an error. |
Correction of an Error | Correction of an Error The Company recorded cash preferred dividend distributions of $630 thousand in the Annual Report presentation as an increase within accumulated deficit. However, in the absence of retained earnings, cash dividends should generally be charged to Additional-Paid-in Capital (“APIC”). This treatment is supported by Accounting Standards Codification (“ASC”) 480-10-S99-2, which requires accretion of redeemable preferred stock to be charged to APIC in the absence of retained earnings. As the Company did not have accumulated profit (i.e.: absence of retained earnings), the preferred cash dividends should have been charged to APIC. The following tables present the effects of the correction of the prior period error to the Condensed Consolidated Statement of Equity: Preferred Stock Common Stock Treasury Stock Shares Amount Shares Amount Additional Paid-in Capital Accumulated Deficit Shares Amount Total Stockholders’ Equity September 30, 2021 806,585 $ 1 13,732,713 $ 14 $ 172,898 $ (120,419 ) 1,015,493 $ (13,764 ) $ 38,730 Adjustment for correction of an error-Preferred dividends — — — — (176 ) 176 — — — Balance September 30, 2021-as adjusted 806,585 $ 1 13,732,713 $ 14 $ 172,722 $ (120,243 ) 1,015,493 $ (13,764 ) $ 38,730 December 31, 2021 1,252,299 $ 1 14,769,699 $ 15 $ 228,420 $ (123,684 ) 1,015,493 $ (13,764 ) $ 90,988 Adjustment for correction of an error-Preferred dividends — — — — (630 ) 630 — — — December 31, 2021-as adjusted 1,252,299 $ 1 14,769,699 $ 15 $ 227,790 $ (123,054 ) 1,015,493 $ (13,764 ) $ 90,988 |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
The following tables present the effects of the correction of the prior period error to the Condensed Consolidated Statement of Equity: | The following tables present the effects of the correction of the prior period error to the Condensed Consolidated Statement of Equity: Preferred Stock Common Stock Treasury Stock Shares Amount Shares Amount Additional Paid-in Capital Accumulated Deficit Shares Amount Total Stockholders’ Equity September 30, 2021 806,585 $ 1 13,732,713 $ 14 $ 172,898 $ (120,419 ) 1,015,493 $ (13,764 ) $ 38,730 Adjustment for correction of an error-Preferred dividends — — — — (176 ) 176 — — — Balance September 30, 2021-as adjusted 806,585 $ 1 13,732,713 $ 14 $ 172,722 $ (120,243 ) 1,015,493 $ (13,764 ) $ 38,730 December 31, 2021 1,252,299 $ 1 14,769,699 $ 15 $ 228,420 $ (123,684 ) 1,015,493 $ (13,764 ) $ 90,988 Adjustment for correction of an error-Preferred dividends — — — — (630 ) 630 — — — December 31, 2021-as adjusted 1,252,299 $ 1 14,769,699 $ 15 $ 227,790 $ (123,054 ) 1,015,493 $ (13,764 ) $ 90,988 |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Receivables [Abstract] | |
Accounts receivables consist of the following at: | Accounts receivables consist of the following at: (Dollars in thousands) June 30, December 31, Data Hosting $ 72 450 Other receivable 616 81 Total $ 688 $ 531 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property, plant and equipment consist of the following at: | Property, plant and equipment consist of the following at: (Dollars in thousands) June 30, December 31, Land $ 52 $ 52 Land improvements 488 238 Buildings 7,188 5,650 Leasehold improvements 366 317 Vehicles 15 15 Computers and related software 66,773 30,890 Machinery and equipment 4,753 2,588 Office furniture and fixtures 22 22 Construction in progress 19,489 7,590 99,146 47,362 Less: Accumulated depreciation (12,098 ) (2,765 ) $ 87,048 $ 44,597 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible assets consist of the following as of June 30, 2022: | Intangible assets consist of the following as of June 30, 2022: (Dollars in thousands) Intangible Accumulated Total Strategic pipeline contract $ 46,885 $ 6,251 $ 40,634 Assembled workforce 500 67 433 Patents 112 1 111 Total $ 47,497 $ 6,319 $ 41,178 |
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 Accumulated Total 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 ending December 31, 2022 (remainder of the year) $ 4,741 2023 9,482 2024 9,482 2025 9,482 2026 7,903 Thereafter 88 Total $ 41,178 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
Debt consists of the following | Debt consists of the following Maturity Date Interest Rate June 30, 2022 December 31, 2021 Convertible Note October 25, 2022 8 % $ 13,585 $ 14,927 Less: debt discount 349 967 Less: discount from issuance of warrants 2,408 5,747 Less: debt issuance costs 424 1,092 Total convertible notes, net of discount and issuance costs $ 10,404 $ 7,121 |
NYDIG Financing | NYDIG Financing Maturity Dates Interest Rate June 30, 2022 NYDIG Loans #1-11 April 25, 2023 12% thru 15% $ 14,387 Less: principal payments 2,590 Less: debt issuance costs 289 Total outstanding debt 11,508 Less: current portion of debt 7,526 Total Long term debt $ 3,982 |
Stockholders_ Equity (Tables)
Stockholders’ Equity (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Equity [Abstract] | |
The Company had reserved shares of common stock for future issuance as follows as of June 30, 2022: | The Company had reserved shares of common stock for future issuance as follows as of June 30, 2022: Stock options outstanding 898,600 Restricted stock units outstanding 773,861 Warrants outstanding 3,217,315 Common stock available for future equity awards or issuance of options 524,449 Number of common shares reserved 5,414,225 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Lease expense for these leases is recognized on a straight-line basis over the lease term. For the three and six months ended June 30, 2022 and 2021, 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 three and six months ended June 30, 2022 and 2021, total lease costs are comprised of the following: (Dollars in thousands) Three Months Ended Six Months Ended 2022 2021 2022 2021 Operating lease cost $ 50 $ 38 $ 100 $ 76 Short-term lease cost — — — — Total net lease cost $ 50 $ 38 $ 100 $ 76 |
Other information related to leases was as follows: | Other information related to leases was as follows: (Dollars in thousands, except lease term and discount rate) (Dollars in thousands) Six Months Ended Weighted Average Remaining Lease Term (in years): Operating leases 1.88 Weighted Average Discount Rate: Operating leases 3.83 % (Dollars in thousands, except lease term and discount rate) (Dollars in thousands) Six Months Ended Six Months Ended Supplemental Cash Flows Information: Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 98 $ 73 Non-Cash Activity Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 13 $ — |
Maturities of noncancellable operating lease liabilities are as follows for the six months ending June 30: | Maturities of noncancellable operating lease liabilities are as follows for the six months ending June 30: (Dollars in thousands) 2022 2022 (remainder of year) $ 103 2023 164 2024 84 Total lease payments 351 Less: imputed interest (13 ) Total lease obligations 338 Less: current obligations (196 ) Long-term lease obligations $ 142 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
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) Three Months Ended June 30, Six Months Ended June 30, 2022 2021 (*) 2022 2021 (*) Product revenue $ 160 $ 1,647 $ 1,799 $ 2,984 Cost of sales 166 502 728 954 Research and development 30 406 398 792 General and administrative expenses 89 526 573 1,066 Other income - (4 ) - (5 ) (Loss) income from discontinued operations before gain on disposal and income taxes (125 ) 217 100 177 Pretax gain on sale of MTI Instruments 7,602 - 7,602 - Deferred tax benefit 70 - 70 - Net income from discontinued operations $ 7,547 $ 217 $ 7,772 $ 177 (*) 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 June 30, 2022 and December 31, 2021: | The following table summarizes information about assets and liabilities from discontinued operations held for sale as of June 30, 2022 and December 31, 2021: (Dollars in thousands) June 30, December 31, 2022 2021 Assets held for sale from discontinued operations: Accounts receivable $ - $ 1,189 Inventories - 964 Prepaid expenses and other current assets - 54 Property, plant and equipment, net - 92 Deferred tax assets, net - 101 Operating lease right-of-use assets - 628 Total Assets held for sale from discontinued operations $ - $ 3,028 Liabilities held for sale from discontinued operations: Accounts payable $ - $ 136 Accrued liabilities - 479 Operating lease liability - 628 Total Liabilities held for sale from discontinued operations $ - $ 1,243 |
MTI Instruments Sale (Tables)
MTI Instruments Sale (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Mti Instruments Sale | |
The following table presents the gain associated with the sale. | The following table presents the gain associated with the sale. (Dollars in thousands) As of April 11, 2022 Consideration received $ 10,750 Plus: closing cash 1 Less: transaction costs (998 ) Less: closing indebtedness (483 ) Plus: new working capital adjustments (40 ) Adjusted consideration received 9,230 Cash 1 Accounts receivable, net 1,119 Inventories 888 Prepaid expense and other current assets 42 Operating lease right-of-use assets 579 Deferred tax assets 171 Property, plant and equipment, net 76 Total assets 2,876 Accounts payable 122 Accrued liabilities 547 Operating lease liability 579 Total liabilities 1,248 Net assets transferred 1,628 Gain on sale $ 7,602 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Segment Reporting [Abstract] | |
The following table details revenue and cost of revenues for the Company’s reportable segments for three and six months ended June 30, 2022 and 2021, and reconciles to net loss on the consolidated statements of operations : | The following table details revenue and cost of revenues for the Company’s reportable segments for three and six months ended June 30, 2022 and 2021, and reconciles to net loss on the consolidated statements of operations : (Dollars in thousands) Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Reportable segment revenue: Cryptocurrency mining revenue $ 7,497 $ 1,657 $ 15,309 $ 2,652 Data hosting revenue 1,179 - 2,683 - Total segment and consolidated revenue 8,676 1,657 17,992 2,652 Reportable segment cost of revenue: Cost of cryptocurrency mining revenue, inclusive of depreciation 9,134 545 16,854 875 Cost of data hosting revenue 975 - 2,114 - Total segment and consolidated cost of revenues 10,109 545 18,968 875 Reconciling items: General and administrative expenses 7,249 2,503 14,504 3,799 Impairment on fixed assets 750 - 750 - Interest expense 3,305 - 6,185 - Loss on sale of fixed assets 1,618 - 1,618 - Other income, net - (3 ) - (8 ) Income tax (benefit) expense from continuing operations (251 ) 3 (797 ) 3 Net loss from continuing operations (14,104 ) (1,391 ) (23,236 ) (2,017 ) Income before income tax from discontinued operations (including gain on sale of MTI Instruments of $ 7,602 7,477 217 7,702 177 Income tax benefit from discontinued operations 70 - 70 - Net income from discontinued operations 7,547 217 7,772 177 Net loss $ (6,557 ) $ (1,174 ) $ (15,464 ) $ (1,840 ) Capital expenditures 27,180 1,023 52,618 1,319 Depreciation and amortization 7,914 149 14,611 225 |
Nature of Operations (Details N
Nature of Operations (Details Narrative) - USD ($) $ in Thousands | Apr. 11, 2022 | Jun. 30, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Description of stock purchase agreement | On April 11, 2022, SHI entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) with NKX Acquiror, Inc. (the “Purchaser”), pursuant to which the Company sold on such date all of the issued and outstanding shares of capital stock of its wholly-owned subsidiary, MTI Instruments for approximately $9.25 million in cash, subject to certain adjustments as set forth in the Stock Purchase Agreement (the “Sale”). The consideration paid by the Purchaser to the Company was based on an aggregate enterprise value of approximately $10.75 million. The Company recognized a gain on sale of approximately $7.6 million. | |
Received In Cash | $ 9,000 | |
Working Capital | $ 200 |
The following tables present th
The following tables present the effects of the correction of the prior period error to the Condensed Consolidated Statement of Equity: (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Dec. 31, 2021 | Dec. 31, 2020 | |
September 30, 2021 | $ 38,730 | |
Adjustment for correction of an error-Preferred dividends | ||
Balance September 30, 2021-as adjusted | 38,730 | |
Adjustment for correction of an error-Preferred dividends | ||
December 31, 2021-as adjusted | 90,988 | |
Preferred Stock [Member] | ||
September 30, 2021 | $ 1 | |
Beginning balance (in shares) | 806,585 | 806,585 |
Adjustment for correction of an error-Preferred dividends | ||
Balance September 30, 2021-as adjusted | 1 | |
Ending balance as adjusted (in shares) | 806,585 | |
Adjustment for correction of an error-Preferred dividends | ||
December 31, 2021-as adjusted | $ 1 | |
Ending balance (in shares) | 1,252,299 | 0 |
Common Stock [Member] | ||
September 30, 2021 | $ 14 | |
Beginning balance (in shares) | 13,732,713 | |
Adjustment for correction of an error-Preferred dividends | ||
Balance September 30, 2021-as adjusted | 14 | |
Adjustment for correction of an error-Preferred dividends | ||
December 31, 2021-as adjusted | $ 15 | |
Ending balance (in shares) | 14,769,699 | 10,750,100 |
Additional Paid-in Capital [Member] | ||
September 30, 2021 | $ 172,898 | |
Adjustment for correction of an error-Preferred dividends | (176) | |
Balance September 30, 2021-as adjusted | 172,722 | |
Adjustment for correction of an error-Preferred dividends | (630) | |
December 31, 2021-as adjusted | 227,790 | |
Retained Earnings [Member] | ||
September 30, 2021 | (120,419) | |
Adjustment for correction of an error-Preferred dividends | 176 | |
Balance September 30, 2021-as adjusted | (120,243) | |
Adjustment for correction of an error-Preferred dividends | 630 | |
December 31, 2021-as adjusted | (123,054) | |
Treasury Stock [Member] | ||
September 30, 2021 | $ (13,764) | |
Beginning balance (in shares) | 1,015,493 | |
Adjustment for correction of an error-Preferred dividends | ||
Balance September 30, 2021-as adjusted | (13,764) | |
Adjustment for correction of an error-Preferred dividends | ||
December 31, 2021-as adjusted | $ (13,764) | |
Ending balance (in shares) | 1,015,493 | 1,015,493 |
Accounts receivables consist of
Accounts receivables consist of the following at: (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Apr. 11, 2022 | Dec. 31, 2021 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts receivable, net | $ 688 | $ 1,119 | $ 531 |
Datahosting [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts receivable, net | 72 | 450 | |
Other Receivables [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts receivable, net | $ 616 | $ 81 |
Accounts Receivable (Details Na
Accounts Receivable (Details Narrative) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Dec. 31, 2021 | |
Financing Receivable, Past Due [Line Items] | ||
Accounts Receivable, Allowance for Credit Loss | $ 0 | $ 0 |
Other receivable | 484 | |
Employee Receivables [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Other Receivables | $ 135 | $ 0 |
Property, plant and equipment c
Property, plant and equipment consist of the following at: (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Apr. 11, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 99,146 | $ 47,362 | |
Property, plant and equipment, net | 87,048 | $ 76 | 44,597 |
Land [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 52 | 52 | |
Land Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 488 | 238 | |
Buildings [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 7,188 | 5,650 | |
Leasehold Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 366 | 317 | |
Vehicles [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 15 | 15 | |
Computers And Related Software [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 66,773 | 30,890 | |
Machinery and Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 4,753 | 2,588 | |
Office Furniture And Fixtures [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 22 | 22 | |
Construction in Progress [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 19,489 | 7,590 | |
Accumulated Depreciation [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Less: Accumulated depreciation | $ (12,098) | $ (2,765) |
Property, Plant and Equipment_2
Property, Plant and Equipment (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation | $ 5,500 | $ 149 | $ 9,900 | $ 225 |
Loss of miners disposal | 1,600 | 1,600 | ||
Net book value | 2,100 | |||
Proceeds from disposals on equipment | 465 | |||
Impairment charges | $ 750 | $ 750 |
Asset Acquisition (Details Narr
Asset Acquisition (Details Narrative) | 6 Months Ended |
Jun. 30, 2022 shares | |
Business Acquisition [Line Items] | |
Merger shares reduce | 2,970,000 |
Soluna [Member] | |
Business Acquisition [Line Items] | |
Ownership percentage | 100% |
Ownership percentage | 50% |
Merger1 [Member] | |
Business Acquisition [Line Items] | |
Merger description | 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 |
Merger description | 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 |
Merger2 [Member] | |
Business Acquisition [Line Items] | |
Merger description | 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 to 1,485,000 |
Maximum [Member] | |
Business Acquisition [Line Items] | |
Merger shares reduce | 2,970,000 |
Intangible assets consist of th
Intangible assets consist of the following as of June 30, 2022: (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible Assets | $ 47,497 | $ 47,418 |
Accumulated Amortization | 6,319 | 1,579 |
Total | 41,178 | 45,839 |
Strategic Pipeline Contract [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible Assets | 46,885 | 46,885 |
Accumulated Amortization | 6,251 | 1,562 |
Total | 40,634 | 45,323 |
Assembled Workforce [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible Assets | 500 | 500 |
Accumulated Amortization | 67 | 17 |
Total | 433 | 483 |
Patents [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible Assets | 112 | 33 |
Accumulated Amortization | 1 | 0 |
Total | $ 111 | $ 33 |
Intangible assets consist of _2
Intangible assets consist of the following as of December 31, 2021: (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible Assets | $ 47,497 | $ 47,418 |
Accumulated Amortization | 6,319 | 1,579 |
Total | 41,178 | 45,839 |
Strategic Pipeline Contract [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible Assets | 46,885 | 46,885 |
Accumulated Amortization | 6,251 | 1,562 |
Total | 40,634 | 45,323 |
Assembled Workforce [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible Assets | 500 | 500 |
Accumulated Amortization | 67 | 17 |
Total | 433 | 483 |
Patents [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible Assets | 112 | 33 |
Accumulated Amortization | 1 | 0 |
Total | $ 111 | $ 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 | Jun. 30, 2022 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2022 (remainder of the year) | $ 4,741 |
2023 | 9,482 |
2024 | 9,482 |
2025 | 9,482 |
2026 | 7,903 |
Thereafter | 88 |
Total | $ 41,178 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2022 | Jun. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expenses | $ 2.4 | $ 4.7 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||||
Rate of income tax expense (benefit) | 1.75% | 3.32% | |||
Rate of income tax expense 1 (benefit) | 0% | ||||
Federal statutory rate | 21% | ||||
Deferred income tax benefit | $ 797,000 | $ 797,000 | |||
Income tax expense | $ 251,000 | $ (3,000) | $ 797,000 | $ (3,000) | |
Description of income tax | As such, the Company is required to adjust the value of the strategic contract pipeline by approximately $10.9 million at inception date, in which was recorded as a deferred tax liability and this amount will be amortized over the life of the asset. For the three and six months ended June 30, 2022, the Company amortized $547 thousand and approximately $1.1 million, respectively. | ||||
Deferred Tax Assets, Valuation Allowance | $ 11,900,000 |
Debt consists of the following
Debt consists of the following (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Dec. 31, 2021 | |
Short-Term Debt [Line Items] | ||
Interest rate | 8% | |
Convertible notes | $ 13,585 | $ 14,927 |
Less: debt discount | 349 | 967 |
Less: discount from issuance of warrants | 2,408 | 5,747 |
Less: debt issuance costs | 424 | 1,092 |
Total convertible notes, net of discount and issuance costs | $ 10,404 | $ 7,121 |
Convertible Notes Payable [Member] | ||
Short-Term Debt [Line Items] | ||
Maturity date | Oct. 25, 2022 |
NYDIG Financing (Details)
NYDIG Financing (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Dec. 31, 2021 | |
Debt Disclosure [Abstract] | ||
Interest rate | 12% thru 15% | |
Loans payable | $ 14,387 | |
Less: principal payments | 2,590 | |
Less: debt issuance costs | 289 | |
Total outstanding debt | 11,508 | |
Less current portion of debt | 7,526 | |
Total Long term debt | $ 3,982 |
Debt (Details Narrative)
Debt (Details Narrative) - USD ($) | 2 Months Ended | 3 Months Ended | 6 Months Ended | |||||
Feb. 22, 2022 | Oct. 25, 2021 | Sep. 13, 2021 | Mar. 03, 2022 | Jun. 30, 2022 | Jun. 30, 2022 | Apr. 29, 2022 | Dec. 31, 2021 | |
Short-Term Debt [Line Items] | ||||||||
Original issue discount | 8% | |||||||
Fair value of warrants | $ 7,000,000 | |||||||
Amortized debt discount | $ 1,600,000 | 3,400,000 | ||||||
Face amount | 16,300,000 | 16,300,000 | ||||||
Purchase price | $ 15,000,000 | |||||||
Debt amortized | 950,000 | |||||||
Debt issuance costs | $ 1,300,000 | |||||||
Description of debt instrument | During the six months ended June 30, 2022 and year ended December 31, 2021, $13.6 million and $14.9 million, respectively, was remaining in the principal balance of the October Notes. For the six months ended June 30, 2022, approximately $1.3 million was converted into 146,165 shares of our common stock, respectively. Through June 30, 2022, a total of approximately $2.7 million was converted into 296,165 shares of our common stock, respectively. | |||||||
Discription of warrants | The total fair value of the Warrants, as of the issuance date, was $4.8 million and is recorded as equity with the offset recorded as debt discount against the net proceeds. The proceeds of $20.00 million were allocated between the Promissory Notes and the Warrants, in which the discount related to the warrants is being amortized based on the straight-line method through the date of Maturity. None of the Warrants have been exercised and exchanged for the Company’s common stock as of June 30, 2022. | |||||||
Discription of leanders | the Lenders, at an offering price of $17.50 per share, the same price as the public offering price of the shares of Series A Preferred Stock in the underwritten public offering, in full satisfaction of the Company’s obligations under the outstanding Notes in an aggregate amount of $20 million. The only remaining balance as of June 30, 2022 was $46 thousand in interest payable to the lenders. | |||||||
Unsecured lines of credit | $ 1,000,000 | |||||||
Interest rate | 5.50% | |||||||
Line of credit maximum amount | $ 1,000,000 | |||||||
Series A Preferred Stock [Member] | ||||||||
Short-Term Debt [Line Items] | ||||||||
Preferred stock value | $ 3,000 | $ 3,000 | $ 1,142,857 | $ 1,000 | ||||
Preferred stock par value | $ 0.001 | |||||||
Tranche One [Member] | ||||||||
Short-Term Debt [Line Items] | ||||||||
Aggregate principal amount | $ 7,600,000 | |||||||
Description of aggregate purchase price | The Company issued 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 (the “Third Tranche Notes” and, together with the First Tranche Notes and Second Tranche Notes, the “Notes”) along with Class D common stock purchase warrants (collectively, the “Warrants”) to purchase up to an aggregate of 1,000,000 shares of common stock of the Company, at an exercise price of $11.50 per share on April 13, 2022 | |||||||
Tranche Two [Member] | ||||||||
Short-Term Debt [Line Items] | ||||||||
Aggregate financing value | $ 20,000,000 | |||||||
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 “October Notes”), which are, subject to certain conditions, convertible at any time by the investors, into an aggregate of 1,776,073 shares (the “October 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 “October 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 October Warrants are legally detachable and can be separately exercised immediately for five years upon issuance, subject to applicable Nasdaq rules. | |||||||
Promissory Notes [Member] | ||||||||
Short-Term Debt [Line Items] | ||||||||
Aggregate principal amount | $ 2,400,000 |
The Company had reserved shares
The Company had reserved shares of common stock for future issuance as follows as of June 30, 2022: (Details) | Jun. 30, 2022 shares |
Equity [Abstract] | |
Stock options outstanding | 898,600 |
Restricted stock units outstanding | 773,861 |
Warrants outstanding | 3,217,315 |
Common stock available for future equity awards or issuance of options | 524,449 |
Number of common shares reserved | 5,414,225 |
Stockholders_ Equity (Details N
Stockholders’ Equity (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | Mar. 31, 2021 | |
Class of Stock [Line Items] | ||||||
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | $ 0.001 | |||
Warrants outstanding | 3,217,315 | 3,217,315 | ||||
Options [Member] | ||||||
Class of Stock [Line Items] | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 898,600 | 1,010,050 | 898,600 | 1,010,050 | ||
Restricted Stock Units [Member] | ||||||
Class of Stock [Line Items] | ||||||
Warrants outstanding | 3,217,315 | 15,000 | 3,217,315 | 15,000 | ||
Dividend [Member] | ||||||
Class of Stock [Line Items] | ||||||
Dividends | $ 1,400,000 | $ 2,100,000 | ||||
Series A Cumulative Preferred Stock [Member] | ||||||
Class of Stock [Line Items] | ||||||
Preferred Stock, Liquidation Preference Per Share | $ 25 | $ 25 | ||||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | ||||
Preferred Stock, Shares Issued | 3,061,245 | 3,061,245 | 1,252,299 | |||
Preferred Stock, Shares Outstanding | 3,061,245 | 3,061,245 | 1,252,299 | |||
Series A Preferred Stock [Member] | ||||||
Class of Stock [Line Items] | ||||||
Preferred Stock, Liquidation Preference Per Share | $ 25 | $ 25 | $ 25 | |||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | $ 0.001 | |||
Preferred Stock, Shares Issued | 3,061,245 | 3,061,245 | 1,252,299 | |||
Preferred Stock, Shares Outstanding | 3,061,245 | 3,061,245 | 1,252,299 | |||
Preferred Stock, Participation 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 |
Lease expense for these leases
Lease expense for these leases is recognized on a straight-line basis over the lease term. For the three and six months ended June 30, 2022 and 2021, total lease costs are comprised of the following: (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Operating lease cost | $ 50 | $ 38 | $ 100 | $ 76 |
Short-term lease cost | ||||
Total net lease cost | $ 50 | $ 38 | $ 100 | $ 76 |
Other information related to le
Other information related to leases was as follows: (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Operating Lease, Weighted Average Remaining Lease Term | 1 year 9 months 18 days | ||
Operating Lease, Weighted Average Discount Rate, Percent | 3.83% | ||
Cash paid for amounts included in the measurement of lease liabilities: | |||
Operating cash flows from operating leases | $ 98 | $ 73 | |
Non-Cash Activity Right-of-use assets obtained in exchange for lease obligations: | |||
Operating leases | $ 13 |
Maturities of noncancellable op
Maturities of noncancellable operating lease liabilities are as follows for the six months ending June 30: (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Apr. 11, 2022 | Dec. 31, 2021 |
Commitments and Contingencies Disclosure [Abstract] | |||
2022 (remainder of year) | $ 103 | ||
2023 | 164 | ||
2024 | 84 | ||
Total lease payments | 351 | ||
Less: imputed interest | (13) | ||
Total lease obligations | 338 | ||
Less: current obligations | (196) | $ (579) | $ (184) |
Long-term lease obligations | $ 142 | $ 237 |
Commitments and Contingencies_2
Commitments and Contingencies (Details Narrative) - USD ($) $ in Thousands | Jun. 30, 2022 | Mar. 31, 2021 |
Loss Contingencies [Line Items] | ||
Litigation accrual | $ 358 | |
Minimum [Member] | ||
Loss Contingencies [Line Items] | ||
Lessee, Operating Lease, Remaining Lease Term | 1 year | |
Maximum [Member] | ||
Loss Contingencies [Line Items] | ||
Lessee, Operating Lease, Remaining Lease Term | 5 years |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||
Oct. 29, 2021 | Mar. 23, 2020 | Jan. 13, 2020 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | Mar. 31, 2021 | |
Related Party Transaction [Line Items] | |||||||||
Cash Paid | $ 725,000 | $ 245 | |||||||
Professional fees | $ 1 | $ 7 | $ 2 | $ 15 | |||||
Payments to Acquire Investments | $ 237 | ||||||||
Investment percentage | 20% | 20% | |||||||
Payments To Acquire Investments1 | $ 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 for the three and six months ended June 30, 2022 was $0 and $0. | ||||||||
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. | ||||||||
Harmattan Energy Ltd [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Payments to Acquire Investments | $ 50 | ||||||||
Soluna [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Cash 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] | |||||||||
Payments to Acquire Investments | $ 250 | ||||||||
Investment Shares Purchased | 158,730,000 | ||||||||
Soluna [Member] | M E O H Power Inc [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Cash Paid | 380 | ||||||||
Soluna [Member] | Operating And Management Agreement3 [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Cash Paid | 544 | $ 221 | |||||||
Me O H Power [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Promissory note available to convert | $ 334 | 334 | $ 329 | ||||||
H E L [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Payments to Acquire Investments | $ 750 | ||||||||
Investment percentage | 1.79% | 1.79% |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details Narrative) - $ / shares | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Common stock subject vesting | 58,442 | 186,200 | 306,500 | 186,200 | |
Restricted Stock [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Stock Issued During Period, Shares, New Issues | 58,442 | 480,207 | |||
Restricted Stock [Member] | Stock2021 Plan [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | $ 7.52 | $ 7.52 | |||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period | 716,200 | ||||
Restricted Stock [Member] | Stock2021 Plan [Member] | Minimum [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | $ 4.96 | $ 4.96 | |||
Restricted Stock [Member] | Stock2021 Plan [Member] | Maximum [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | 10.85 | 10.85 | |||
Equity Option [Member] | Stock2021 Plan [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Number of option shares granted | 686,200 | ||||
Share Based Compensation Arrangement By Share Based Payment Award Options Grants In Period Weighted Average Grant Date Fair Value1 | $ 7.55 | $ 10.03 | |||
Restricted Stock Units (RSUs) [Member] | Stock2021 Plan [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | $ 11.10 | $ 11.10 | |||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period | 47,500 | ||||
Common Stock [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Number of option shares granted | 1,460,191 | ||||
Stock Issued During Period, Shares, New Issues | 2,782,258 |
Set forth below are the results
Set forth below are the results of the discontinued operations: (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | ||||
Product revenue | $ 160 | $ 1,647 | $ 1,799 | $ 2,984 |
Cost of sales | 166 | 502 | 728 | 954 |
Research and development | 30 | 406 | 398 | 792 |
General and administrative expenses | 89 | 526 | 573 | 1,066 |
Other income | (4) | (5) | ||
(Loss) income from discontinued operations before gain on disposal and income taxes | (125) | 217 | 100 | 177 |
Pretax gain on sale of MTI Instruments | 7,602 | 7,602 | ||
Deferred tax benefit | 70 | 70 | ||
Net income from discontinued operations | $ 7,547 | $ 217 | $ 7,772 | $ 177 |
The following table summarizes
The following table summarizes information about assets and liabilities from discontinued operations held for sale as of June 30, 2022 and December 31, 2021: (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Assets held for sale from discontinued operations: | ||
Accounts receivable | $ 1,189 | |
Inventories | 964 | |
Prepaid expenses and other current assets | 54 | |
Property, plant and equipment, net | 92 | |
Deferred tax assets, net | 101 | |
Operating lease right-of-use assets | 628 | |
Total Assets held for sale from discontinued operations | 3,028 | |
Liabilities held for sale from discontinued operations: | ||
Accounts payable | 136 | |
Accrued liabilities | 479 | |
Operating lease liability | 628 | |
Total Liabilities held for sale from discontinued operations | $ 1,243 |
Discontinued Operations (Detail
Discontinued Operations (Details Narrative) $ in Millions | 6 Months Ended |
Jun. 30, 2022 USD ($) | |
M T I Instruments [Member] | |
Short-Term Debt [Line Items] | |
Stock purchase agreement | $ 9 |
The following table presents th
The following table presents the gain associated with the sale. (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Apr. 11, 2022 | Dec. 31, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Mti Instruments Sale | |||||
Consideration received | $ 10,750 | ||||
Plus: closing cash | 1 | ||||
Less: transaction costs | (998) | ||||
Less: closing indebtedness | (483) | ||||
Plus: new working capital adjustments | (40) | ||||
Adjusted consideration received | 9,230 | ||||
Cash | $ 4,626 | 1 | $ 10,258 | $ 12,096 | $ 2,630 |
Accounts receivable, net | 688 | 1,119 | 531 | ||
Inventories | 888 | ||||
Prepaid expense and other current assets | 1,573 | 42 | 977 | ||
Operating lease right-of-use assets | 323 | 579 | 405 | ||
Deferred tax assets | 171 | ||||
Property, plant and equipment, net | 87,048 | 76 | 44,597 | ||
Total assets | 147,919 | 2,876 | 117,694 | ||
Accounts payable | 4,840 | 122 | 2,958 | ||
Accrued liabilities | 2,923 | 547 | 2,859 | ||
Operating lease liability | 196 | 579 | 184 | ||
Total liabilities | $ 41,353 | 1,248 | $ 26,706 | ||
Net assets transferred | 1,628 | ||||
Gain on sale | $ 7,602 |
MTI Instruments Sale (Details N
MTI Instruments Sale (Details Narrative) | Apr. 11, 2022 USD ($) |
Mti Instruments Sale | |
Purchase price | $ 10,750,000 |
The following table details rev
The following table details revenue and cost of revenues for the Company’s reportable segments for three and six months ended June 30, 2022 and 2021, and reconciles to net loss on the consolidated statements of operations : (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Revenue from External Customer [Line Items] | ||||
Total segment and consolidated revenue | $ 8,676 | $ 1,657 | $ 17,992 | $ 2,652 |
Income (Loss) from Continuing Operations, Net of Tax, Attributable to Parent | (23,236) | (2,017) | ||
MTI instruments | 7,602 | 7,602 | ||
Income Tax Expense (Benefit), Continuing Operations, Discontinued Operations | 70 | 70 | ||
Net Income (Loss) Attributable to Parent | (6,557) | (1,174) | (15,464) | (1,840) |
Depreciation, Depletion and Amortization, Nonproduction | 2,376 | 4,749 | ||
Reportable Subsegments [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total segment and consolidated revenue | 8,676 | 1,657 | 17,992 | 2,652 |
Total segment and consolidated cost of revenues | 10,109 | 545 | 18,968 | 875 |
Research and Development Expense | 7,249 | 2,503 | 14,504 | 3,799 |
Impairment loss on fixed assets | 750 | 750 | ||
Interest Expense1 | 3,305 | 6,185 | ||
Gain (Loss) on Disposition of Intangible Assets | 1,618 | 1,618 | ||
Other General Expense | 3 | 8 | ||
Other General Expense | (3) | (8) | ||
Income Tax Expense Benefit Continuing Operations Operations Extraordinary Items | (251) | 3 | (797) | 3 |
Income (Loss) from Continuing Operations, Net of Tax, Attributable to Parent | (14,104) | (1,391) | (23,236) | (2,017) |
Income (Loss) from Individually Significant Component Disposed of or Held-for-sale, Excluding Discontinued Operations, Attributable to Parent, before Income Tax | 7,477 | 217 | 7,702 | 177 |
Income Tax Expense (Benefit), Continuing Operations, Discontinued Operations | 70 | 70 | ||
Net Income Discontinued Operationsheld For Sale | 7,547 | 217 | 7,772 | 177 |
Net Income (Loss) Attributable to Parent | (6,557) | (1,174) | (15,464) | (1,840) |
Payments to Acquire Productive Assets | 27,180 | 1,023 | 52,618 | 1,319 |
Depreciation, Depletion and Amortization, Nonproduction | 7,914 | 149 | 14,611 | 225 |
Cryptocurrency Revenue [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total segment and consolidated revenue | 7,497 | 1,657 | 15,309 | 2,652 |
Total segment and consolidated cost of revenues | 9,134 | 545 | 16,854 | 875 |
Data Hosting Revenue [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total segment and consolidated revenue | 1,179 | 2,683 | ||
Total segment and consolidated cost of revenues | $ 975 | $ 0 | $ 2,114 |
Segment Information (Details Na
Segment Information (Details Narrative) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
East Wenatchee [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Concentration Risk, Percentage | 41% | 40% | 43% | 29% |
Calvert [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Concentration Risk, Percentage | 53% | 0% | 51% | 0% |
Cryptocurrency Revenue [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Concentration Risk, Percentage | 6% | 60% | 6% | 71% |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | 6 Months Ended | ||||
Aug. 05, 2022 | Jul. 29, 2022 | Jul. 19, 2022 | Jun. 30, 2022 | Jul. 20, 2022 | |
Subsequent Event [Line Items] | |||||
Warrant or Right, Reason for Issuance, Description | The total fair value of the Warrants, as of the issuance date, was $4.8 million and is recorded as equity with the offset recorded as debt discount against the net proceeds. The proceeds of $20.00 million were allocated between the Promissory Notes and the Warrants, in which the discount related to the warrants is being amortized based on the straight-line method through the date of Maturity. None of the Warrants have been exercised and exchanged for the Company’s common stock as of June 30, 2022. | ||||
Spring Lane [Member] | |||||
Subsequent Event [Line Items] | |||||
Intial funding for project | $ 35,000,000 | ||||
Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
Other commitments description | the Dorothy Contribution Agreement, the Company committed to a capital contribution of up to approximately $26.3 million to DVSL (the “Company Commitment”), and on August 5, 2022, the Company was deemed to have contributed approximately $8.1 million, through payment of capital expenditures and development costs made on behalf of DVSL by the Company prior to August 5, 2022. Further under the Agreement, Spring Lane committed to a capital contribution of up to $12.5 million to DVSL (the “Spring Lane Dorothy Commitment”), and on August 5, 2022, Spring Lane contributed approximately $3.9 million. | ||||
Subsequent Event [Member] | Spring Lane [Member] | |||||
Subsequent Event [Line Items] | |||||
Other commitments description | the Company and Spring Lane were issued 67.8% and 32.2% of the Class B Membership Interests in DVSL, respectively, and were admitted as Class B members of DVSL. Further pursuant to the Agreement, DVSL issued 100% of its Class A Membership Interests to Devco. | ||||
Subsequent Event [Member] | Chief Executive Officer [Member] | |||||
Subsequent Event [Line Items] | |||||
Share-Based Payment Arrangement, Expense | $ 350,000 | ||||
Terms of agreement discription | In addition, pursuant to the Agreement, the Company has agreed to grant to Mr. Patman, within sixty (60) calendar days following August 15, 2022, subject to certain conditions, a one-time award of a number of restricted stock units (“RSUs”) equal to $175,000, divided by the thirty (30)-day trailing volume weighted average price as of August 15, 2022. Further pursuant to the Agreement, the Company has agreed to grant to Mr. Patman, commencing in calendar year 2023 and subject to such approvals specified by the Compensation Committee, an annual equity award consisting of a number of RSUs in an amount equal to $125,000. Mr. Patman is also entitled to other benefits normally available to other similarly situated employees of the Company. | ||||
Common Class B [Member] | Certificate Of Designation [Member] | Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
Preferred Stock, Shares Authorized | 187,500 | ||||
Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | ||||
Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
Securities purchase agreement description | On July 19, 2022, the Company entered into a Securities Purchase Agreement (the “Series B SPA”) with an accredited investor (the “Series B Investor”) pursuant to which the Company issued to the Series B Investor 62,500 shares of Series B Preferred Stock, for a purchase price of $5,000,000, on July 20, 2022 (the “Series B Closing”), which are initially convertible into 1,155,268 shares of our common stock (the “Series B Conversion Shares”), at a price per share of $5.41 (“Conversion Price”), a 20% premium to the close of the common stock on July 18, 2022, subject to adjustment as set forth in the Certificate of Designation (as defined below) governing the terms of the Preferred Stock. | ||||
Description of purchase agreement | In addition on July 19, 2022, the Company issued to the Series B Investor common stock purchase warrants (collectively, the “Series B Warrants”) to purchase up to an aggregate of 1,000,000 shares of common stock at an initial exercise price of $10.00 per share of common stock (the “Series B Warrant Shares” and collectively with the Series B Preferred Stock, the Series B Conversion Shares, and the Series B Warrants, the “Series B Securities”). | ||||
Description of purchase agreement conversion | In addition, at the Series B Closing, the Investor delivered to the Company a warrant to acquire 1,000,000 shares of common stock at an exercise price of $11.50 per share for cancellation. | ||||
Securities purchase agreementterms | Until the earlier of (i) three years after the Series B Closing or (ii) if in excess of $500,000 of Series B Preferred Stock or at least 100,000 Series B Warrants remain outstanding, the Company agreed not to (a) issue any common stock, common stock equivalents, preferred stock or other equity securities at a price that is less than the highest price per share of the Series B Securities, (b) file any registration statement, with certain exceptions, or (c) enter into an equity line of credit or at the market offering. In addition, the Company may buy out the rights of the Series B Investor under the preceding sentence for $10,000,000 less any Profit (as defined in the Series B SPA) the Series B Investor has earned from the Series B Securities, including pursuant to any amount paid for waiver under the following sentences. The Series B Investor has a right of first refusal with respect to the offerings described in the first sentence of this paragraph for a period of three years beginning on the later of (i) January 1, 2023 and (ii) the date the October Notes have been fully redeemed or converted. The Company can obtain the Series B Investor’s waiver to the right of first refusal by delivering to the Series B Investor 10% of the amount raised by the Company in any such offering in cash or in the same securities issued by the Company. The Series B Investor also has a right to participate in up to 35% of any such offerings for the same three year period. | ||||
October S P A Addendum [Member] | Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
Amount of deposite | $ 1,950,000,000 | ||||
Warrant or Right, Reason for Issuance, Description | Pursuant to the Addendum, the exercise price of the Class A Warrants and Class B Warrants and 85,000 warrants to purchase common stock issued to the October Purchasers on January 13, 2022 was reduced to $9.50 a share. In addition, the Company agreed to exchange the Class C Warrants for 296,013 shares of common stock, which exchanges were completed between July 25, 2022 and August 1, 2022. | ||||
Additional Funding Agreement Terms [Member] | October S P A Addendum [Member] | Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
Other commitments description | In connection with the first tranche, $1,100,000 of October Notes was converted to common stock between July 25, 2022 and August 1, 2022; in connection with the second tranche, $1,100,000 of October Notes will be converted to common stock; and in connection with the third tranche, $1,100,000 of October Notes will be converted to common stock (each, the “Required Conversion Amount”), in each case at the then in effect Conversion Price. Prior to each conversion the Conversion Price of the Note will be reduced (but not increased) to a 20% discount to the 5-day volume-weighted average price (“VWAP”) of the common stock. The Conversion Price for the first tranche is $3.75. | ||||
Debt Instrument, Redemption, Description | In addition, the October Purchasers may require the Company to redeem up to $2,200,000 worth of October Notes in connection with each tranche at a rate of $1.20 for every $1.00 owed, less the amount of October Notes converted during such tranche, not including the Required Conversion Amount if the October Purchasers are unable to convert out of such amount of the Notes in each tranche. Each tranche is equal to $3,300,000 of the October Notes and the Addendum contemplates that at least $9,900,000 of the October Notes may be reduced under the terms of the Addendum. |