Nature of Operations

12 Months Ended

Dec. 31, 2025

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of Operations

Nature of Operations

Description of Business

Unless the context requires otherwise in these notes to the Company’s consolidated financial statements (the “Consolidated Financial Statements”), the terms “SHI,”, “ the “Company,” “we,” “us,” and “our” refer to Soluna Holdings, Inc. together with its consolidated subsidiaries, “SDI” refers to Soluna Digital, Inc. and previously, “SCI” refers to Soluna Computing, Inc., formerly known as EcoChain, Inc., “Soluna Cloud” or “Cloud” refers to Soluna Cloud, Inc., and “SEI” refers to Soluna Energy, Inc.

Soluna Holdings, Inc. (“SHI”) is a digital infrastructure company that specializes in transforming surplus renewable energy into computing resources. The Company’s strategy is to operate modular data centers co-located with wind, solar, and hydroelectric power plants, supporting compute-intensive applications, including Bitcoin mining, generative AI, and high-performance computing (“HPC”). This approach aims to create a more sustainable grid while providing cost-effective and environmentally friendly computing solutions.

Soluna Holdings, Inc., was originally incorporated in the State of New York in 1961 as Mechanical Technology, Incorporated and reincorporated in the State of Nevada on March 24, 2021. Headquartered in Albany, New York, the Company changed its name from “Mechanical Technology, Incorporated” to Soluna Holdings, Inc. on November 2, 2021. On October 29, 2021, Soluna Callisto merged into Soluna Computing, Inc. (“SCI”), a private green data center development company. SHI currently conducts its business through its wholly owned subsidiary, Soluna Digital, Inc. (“SDI”). Additionally, SHI formed Soluna Cloud, Inc. (“Soluna Cloud”) on March 24, 2024, to operate cloud, colocation, and data hosting services related to high performance computing and AI. On April 2, 2024, SHI formed Soluna Energy, Inc. (“SEI”) to own and manage renewable energy power purchase agreements and land leases through a series of service subsidiaries.

Currently the Company has four operating sites under management. In 2021, the Company constructed a 25 MW data center and commenced operations in its Murray, Kentucky location ("Project Sophie"). The Company’s Texas site (“Project Dorothy”), located at a wind farm, holds the potential for up to 100 MW of power generation. By June 2024, SHI had energized 50 MW of the site across two phases, Project Dorothy 1A and 1B. As of December 31, 2025, SHI holds a 15% Class B membership interest in Soluna DVSL ComputeCo, LLC (“DVSL”), owner of Project Dorothy 1A, and a subsidiary of SHI holds a 100% Class A membership interest in DVSL. SHI also holds a 51% ownership interest in Soluna DV ComputeCo, LLC (“DVCC”), owner of Project Dorothy 1B. On July 22, 2024, the Company closed financing for the 48 MW modular data center (the “Project Dorothy 2”). Project Dorothy 2 is financed by Soluna2 SLC Fund II Project Holdco LLC, an investment vehicle of Spring Lane Capital (“SLC”) and SDI. As of December 31, 2025, SDI has a 100% Class A membership and a 0% Class B membership interest in Project Dorothy 2. On July 22, 2025, the Company closed financing with Spring Lane Capital for a 35 megawatt (MW) expansion of Project Kati in Texas with Project Kati 1. The funds and further contributions are being used for the construction of Project Kati 1 that began in the third quarter of 2025. As of December 31, 2025, SDI has 100% Class A membership and 20% Class B membership interest in Project Kati 1.

Liquidity and Capital Resources

The Company has historically incurred recurring operating losses and negative cash flows from operations. For the year ended December 31, 2025, the Company reported a net loss of $57.0 million and used $9.1 million in net cash for operating activities. As of December 31, 2025, we had total debt outstanding of approximately $26.8 million as summarized in Note 8. In addition, we had outstanding commitments related to Soluna Digital Inc. (“SDI”) of approximately $27.0 million in capital expenditures related to Project Kati. Additionally, as of December 31, 2025, the Company maintained an outstanding contract liability of approximately $19.3 million related to the termination of a prior cloud services agreement. These conditions initially raised substantial doubt about the Company’s ability to continue as a going concern.

Management’s Mitigating Plans

Management has implemented several strategic plans to mitigate these conditions, which have significantly improved the Company’s liquidity profile:

•Substantial Liquidity and Capital Markets Access: The Company dramatically improved its financial position in 2025, raising $119.4 million in net proceeds from financing activities. For further information on the

Company’s Standby Equity Purchase Agreement (“SEPA”), At-the-Market Offering Agreement (“ATM”) with H.C. Wainwright ("Wainwright"), July Securities Purchase Agreement (“July SPA”), and December Securities Purchase Agreement (“December SPA”), please refer to Note 9 for further details. The Company’s had cash on hand for available use of approximately $76.4 million as of December 31, 2025.

•Committed Equity Financing: The Company maintains a SEPA with YA II PN, LTD (“YA”), with $18.8 million in remaining capacity available at the Company’s sole discretion. Furthermore, on March 24, 2026, the Company has finalized a commercial agreement to extend this SEPA capacity to $250.0 million. See Note 17 for details on the updated SEPA.

•Project Debt and Expense Management: Management successfully closed project-level financing with Generate for commitment up to $100.0 million and is in compliance with all debt covenants. See Note 8 for details. Furthermore, management maintains strict control over discretionary Selling, General, and Administrative expenses and capital expenditures, with the proven ability to curtail expenses if funding availability changes.

•Operating Performance and Scale: Management’s 2026 operating plan forecasts growth in consolidated revenue and in adjusted EBITDA. Notably, the majority of the Company’s revenues are fixed-fee or demand-response, providing stability against cryptocurrency price volatility.

The future use of the Company’s available liquidity will be based upon the ongoing review of the funding needs of the Company’s businesses, proper allocation of its resources, and the timing of cash flow generation. To the extent that we desire to access alternative sources of capital, market conditions could adversely impact our ability to do so at that time and at terms favorable to the Company.

The Company believes that its working capital, cash position and restricted cash to be released over the next 12 months, together with other key assumptions, support the Company’s conclusion that it has sufficient capital to fund its on-going operations for a period of at least 12 months subsequent to the issuance of the accompanying consolidated financial statements. Key assumptions are based on factors such as forecasted sales and costs, debt obligations, the Company’s right to direct Wainwright to purchase shares from the Company under the ATM equity offering program, and the Company’s right to direct YA to purchase shares from the Company under the SEPA.