Segment Information

3 Months Ended

Mar. 31, 2024

Segment Reporting [Abstract]

Segment Information

16. Segment Information

The Company applies ASC 280, Segment Reporting, in determining its reportable segments. The Company has two reportable segments: Cryptocurrency Mining and Data Center Hosting. The guidance requires that segment disclosures present the measure(s) used by the Chief Operating Decision Maker (“CODM”) to decide how to allocate resources and for purposes of assessing such segments’ performance. The Company’s CODM is comprised of several members of its executive management team who use revenue and cost of revenues of both reporting segments to assess the performance of the business of our reportable operating segments.

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, which is currently generated from Project Dorothy, and previously from Project Sophie and Marie. The Data Center Hosting segment generated revenue from contracts for the provision/consumption of electricity and operation of the data center from the Company’s high performance computing facilities previously at Project Marie and currently from Project Sophie and Project Dorothy.

For the three months ended March 31, 2024 and 2023, approximately 100% and 0% of the Company’s cryptocurrency mining revenue was generated from Project Dorothy 1A (data center located in Silverton, Texas), 0% and 28% from Project Marie, and 0% and 72% from Project Sophie (data center located in Murray, Kentucky), respectively. For three months ended March 31, 2024 and 2023, approximately 67% and 0% of the Company’s data center hosting revenue was generated from Project Dorothy 1B, 33% and 0% from Project Sophie, 0% and 96% from Project Marie, and 0% and 4% from Project Edith.

The Company evaluates performance based on profit or loss from operations before income taxes, accounting changes, items management does not deem relevant to segment performance, and interest income and expense. Inter-segment sales and expenses are not significant. Non-cash items of depreciation and amortization are included within both costs of sales and selling, general and administrative expenses.

The following table details revenue and cost of revenues for the Company’s reportable segments for three months ended March 31, 2024 and 2023, and reconciles to net income (loss) on the consolidated statements of operations:

(Dollars in thousands)	For the Three Months Ended March 31,
	2024			2023
Reportable segment revenue:
Cryptocurrency mining revenue	$	6,396		$	2,796
Data hosting revenue		5,278			286
Demand response service revenue		875			-
Total segment and consolidated revenue		12,549			3,082
Reportable segment cost of revenue:
Cost of cryptocurrency mining revenue, exclusive of depreciation		1,841			2,251
Cost of data hosting revenue, exclusive of depreciation		2,251			272
Cost of revenue- depreciation		1,523			625
Total segment and consolidated cost of revenues		5,615			3,148
Reconciling items:
General and administrative expenses		6,397			6,737
Impairment on fixed assets		130			209
Interest expense		424			1,374
Loss (gain) on debt extinguishment and revaluation, net		3,097			(473	)
Loss on sale of fixed assets		1			78
Other income, net		(23	)		(12	)
Income tax benefit		(548	)		(547	)
Net loss		(2,544	)		(7,432	)
(Less) Net income (loss) attributable to non-controlling interest		2,710			(370	)
Net loss attributable to Soluna Holdings, Inc.	$	(5,254	)	$	(7,062	)
Capital expenditures		524			860
Depreciation and amortization		3,926			3,002