Soluna Holdings, Inc. · NASDAQ:SLNH
Soluna — Investor Presentation (October 2022)
61 slides from Soluna's investor presentation, October 2022
Slide 1: Soluna Holdings Corporate Presentation October 2022
HOLDINGS October 2022 1
Slide 2: Preamble
Preamble The following discussion is Our goal is to share with you The discussion is in line with completely qualified by the some of our strategic thinking and our principles of being legal disclosures on the slide financial analysis we are using to accountable and transparent following this one. g
Slide 3: Legal Disclosure & Disclaimer
Legal Disclosure & Disclaimer This presentation includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act that reflect our current views with respect to, among other things, our operations, business strategy, interpretation of prior development activities
Slide 4: Company Overview
Company Overview 4
Slide 5: Executive Summary
Executive Smart infrastructure company scaling from crypto mining to broader batchable computing for industries with high Summary performance computing needs Leading curtailment solutions TICKER MW DEPLOYED HASHRATE provider to the renewable SLNH / 45 95 1EH/s 2.4EH/s ** ** energy business We buy ex
Slide 6: We buy curtailed energy from renewable power plants
We buy curtailed energy from renewable power plants and convert it to clean, low-cost global computing. Excess energy from Batch-oriented renewable sources computing 6
Slide 7: How We're Solving the Curtailment Problem
How We’re Solving the Curtailment Problem Project ● Up to 150MW to be built at a wind farm in Texas Dorothy ● Power sourced “behind the meter” from wind farm and grid 150 MW Wind Farm + 50 MW Data Center +150 MW Data Center 7
Slide 8: Renewable energy wasted because the grid is inflexible
All renewable energy now being produced can’t be used because the grid is inflexible… 6.75B $ Annually lost revenue due to wasted energy* *Based $30/MWh Global Average LCOE – 2019 Lazard Report 8
Slide 9: $120B+ market opportunity
$6B+* $120B+ Digital currencies market $5B * Scientific research opportunity Our strategy is to dominate a few relatively small niche markets (crypto, scientific, etc.) by offering a truly $50B+* Artificial intelligence / zero-carbon cloud to a variety of end markets that machine learning are curren
Slide 10: Overview of Data Centers
Overview of Data Centers Built for low BTC environment due to low energy costs Marie Sophie Dorothy 20MW* 25MW* 100MW+* 10 * Data center capacity
Slide 11: Our Data Centers Are Different
Our Data Centers Are Different Purpose-built to efficiently convert curtailed renewable energy into batchable computing Physical Dimensions: Power Load: Emergency Shutdown Monitoring: 70’ x 12’ x 14’ pre-fabricated 1,200 kW Time: Full Remote Monitoring for buildings 2s Operations and Security Power
Slide 12: Among the Lowest Power Cost for Mining Operations
Soluna Offers Among the Lowest Power Cost for Mining Operations Cost of Electricity for Mining Operations ($/MWh) Global Mean $46 (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) Public Peers Source: Company filings and presentations (1) Dorothy cost of power, Sophie and Marie reduced uptime
Slide 13: Unique Interconnection Strategy
Unique Interconnection Strategy Behind-the-Meter Structure Allows Soluna's MDCs to Remain Flexible, Drawing Power from the Grid or Renewable Power Source with the Ability to Provide Ancillary Services Wind Farm HV MV Meter Meter Grid Substation Solar Farm MV 3 Meter MV LV MV Switchgear 2600 kVA 1.2
Slide 14: How we source power for the MDC
How we source CURTAILED Economic/Technical curtailment from negative LMP. power for ENERGY We purchase energy at a fixed the MDC price. MDC Energy that Energy that is sourced would have gone from the grid in excess to grid without the load. SUBTRACTIVE GRID of plant production. We purchase ENERGY EN
Slide 15: We have a large and growing pipeline
We have a large and growing pipeline We have a 2GW long-term pipeline in the US and beyond We have partnerships with large infrastructure funds and IPPs Data 20MW 25MW 100MW 200MW 75MW center Marie Sophie Dorothy Kati 2 Cynthia Capacity Operating Operating 50MW Design Design 4Q22* Powered by 15 * In
Slide 16: Project Dorothy
PROJECT DOROTHY • Up to 150MW to be built at a wind farm in Texas broken out into 2 initial 50MW phases (Dorothy 1 and Dorothy 2) • Power sourced “behind the meter” from wind farm and grid DOROTHY 1 CAPACITY DOROTHY 1 ANTICIPATED INITIAL ENERGIZATION* 50MW Q4 2022 COMPUTE POWER DEPLOYED EST. BTC MIN
Slide 17: Illustrative Dorothy Earnings Potential
Illustrative Dorothy Earnings Potential Illustrative Monthly P&L ($ in ‘000s) Dorothy 1A 25MW Dorothy 1B 25MW Spring Lane (32% Owner) 100% Owner 100% Hosting 50% / 50% 100% Prop 100% Hosting 50% / 50% 100% Prop Cash Inflows 1,139 1,364 1,588 1,139 1,364 1,588 (-) Power Costs (630) (630) (630) (630)
Slide 18: Dorothy Gives Us Scale
Dorothy Gives Us Scale SG&A as a % of Sales (Q2 2022) Increased SG&A to Support Growth from Dorothy – Energization Normalizes SG&A Levels 67% 67% 62% 56% 51% 48% 36% 35% 29% 28% 15% 8% IREN * BTBT CORZ SLNH (w/o ** MARA MIGI CLSK GREE SLNH (w/ *** HUT * RIOT HIVE Dorothy) Dorothy) * Based on latest
Slide 19: Distinct Investment Thesis
Distinct Investment Thesis Low power cost is the key value driver: • Prospective sites must have the ability to operate between $25-27 per MWh • Assures operational profitability and ability to invest through the cycle Renewable energy generators & grid operators need flexible load capacity: • Creat
Slide 20: Soluna's Expertise
Soluna’s Expertise Implementing our modular data centers is a low-risk, low-friction process because of our five pillars of expertise. Project Energy Computing Project Data Center Development Markets Technology Finance Operations 20
Slide 21: Meet the Soluna Leadership Team
Meet the Soluna Leadership Team Michael Toporek Philip Patman Jr. Larbi Loudiyi Anna-Lynn Mancini Phillip Ng Chief Executive Officer, Chief Financial Officer VP, Power VP, Operations VP, Corporate Soluna Holdings Soluna Holdings Development John Belizaire Mary O’Reilly Dipul Patel Sam Sova Chase Sto
Slide 22: Financial Overview
D =o Financial ) é Overview
Slide 23: Recent Site Performance
Recent Site Performance CAPACITY COMPUTE DEPLOYED BTC EQUIVALENT MINED 45MW 1EH/s +18% +48% AVG. POWER COST* ANNUALIZED BTC EQUIVALENT MINED** 267 226 ~$30- 1,313BTC 35/MWh 153 ANNUALIZED REVENUE** Q2 SITE LEVEL ADJ. EBITDA MARGIN $29MM 34% Q4 2021 Q1 2022 Q2 2022 * Dorothy cost of power, Sophie and
Slide 24: How Soluna makes money
How Prop Mining High Performance Soluna Computing makes • Soluna owned Bitcoin mining • GPU Cloud – AI/ML, simulation, machines visualization, predictive analytics, • Bitcoin sold daily and deep learning money • GPU machines could be hosted or owned by Soluna Current revenue Hosting Ancillary source
Slide 25: Demonstrated Ability to Scale Profitably
Demonstrated Revenue ($ in ‘000s) 9,264 8,676 Ability to Scale 7,990 Profitably 1,657 2,368 • BTC mined in Q2 increased Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 7.5x YoY QoQ Growth +67% +43% +237% +16% (6%) • Hashrate increased 38.8x Avg. BTC Price 46,498 42,031 55,932 41,281 32,508 • From Q1 to Q2 r
Slide 26: Illustrative Pro Forma Earnings Potential
Illustrative Pro Forma Earnings Potential Illustrative August Revenue and Cash Contribution inclusive of Dorothy Energization ($ in ‘000s) Dorothy 1 Business Mix 100% Hosting 50% / 50% 100% Prop August Revenue / Cash Inflows* 2,447 2,447 2,447 (-) Edith Revenue (98) (98) (98) (+) Illustrative Monthl
Slide 27: Summary Capitalization
Summary $ in mm, except share prices Stock Price as of 10/07/2022 $ 1.75 Capitalization x Basic Shares Outstanding Market Capitalization $ 15.215 * 26.6 TICKER Fully Diluted Shares Outstanding 18.852 * Fully Diluted Common Equity Value $ 33.0 SLNH / SLNHP (+) Series A Preferred Stock @ Market $ 22.2
Slide 28: Engineered to thrive in a BTC downturn
Engineered to Right company thrive in a BTC downturn Right plan for volatile environment 28
Slide 29: Appendix
Appendix 29
Slide 30: Project Sophie
PROJECT SOPHIE CAPACITY AVG. PH DEPLOYED 25MW +52% +132% 327 215 GROSS PH/s DEPLOYED 92 ~450 Q4 2021 Q1 2022 Q2 2022 BTC EQUIVALENT MINED ANNUALIZED REVENUE (AUGUST 2022) +34% +86% $14.1MM 124 92 CASH CONTRIBUTION MARGIN EXCL. ONE 50 TIME EVENTS (Q2) 64% Q4 2021 Q1 2022 Q2 2022 30
Slide 31: Project Marie
PROJECT MARIE CAPACITY AVG. PH DEPLOYED +12% +36% 20MW 441 494 325 GROSS PH/s DEPLOYED ~550 Q4 2021 Q1 2022 Q2 2022 BTC EQUIVALENT MINED ANNUALIZED REVENUE (AUGUST 2022) +9% +54% 130 $14.1MM 120 78 CASH CONTRIBUTION MARGIN EXCL. ONE TIME EVENTS (Q2) 53% Q4 2021 Q1 2022 Q2 2022 31
Slide 32: Marie Capacity Reduction
Marie Capacity Reduction Marie facility is co-located with Marie Monthly Average MW Deployed (MW) an industrial plant in Kentucky Average MW Deployed numbers include the impact of mandatory curtailment Initial contract was signed with the expectation that the plant would deliver 25MW of capacity 19.
Slide 33: Project Edith
PROJECT EDITH CAPACITY AVG. PH DEPLOYED (BTC ONLY) 3MW +19% (11%) 11 12 10 GROSS PH/s DEPLOYED 28 Incl. non-BTC mining Q4 2021 Q1 2022 Q2 2022 BTC EQUIVALENT MINED ANNUALIZED REVENUE (AUGUST 2022) $1.2MM 15 (19%) +3% 13 13 CASH CONTRIBUTION MARGIN EXCL. ONE TIME EVENTS (Q2) 48% Q4 2021 Q1 2022 Q2 20
Slide 34: Sale of GPU Miners from Project Edith
Sale of GPU Miners from Project Edith Soluna’s first facility Beta test for the value of Soluna facilities to maximize grid flexibility First-hand experience drove proprietary data center design and green energy enablement thesis Crystallizes ability to deliver robust project level ROIC Delivered ~3
Slide 35: Edith: Strong Return On Capital Investment
Edith: Strong Return On Capital Investment ~3.5x EBITDA Contribution CapEx Cumulative CF Capital ~16 months Returned $2,455 2x Capital Achieved $2,165 All Capital Returned $1,636 $1,665 $1,610 $1,467 $945 Proceeds from Sale of $666 $707 GPU Miners $579 $570 $500 $309 $310 $290 $193 $201 $104 $26 $29
Slide 36: Reconciliation of non-GAAP results to comparable GAAP measures
Reconciliation of non-GAAP results of operations to the nearest comparable GAAP measures 36
Slide 37: 2022 Q2 - Reconciliation Of Non-GAAP Results
2022 Q2 - Reconciliation Of Non-GAAP Results 37
Slide 38: 2022 Q2 - Reconciliation Of Non-GAAP Results
2022 Q2 - Reconciliation Of Non-GAAP Results Reconciliation from Cost of Cryptocurrency Revenue to Adjusted Cost of Revenue (Non-GAAP) Q2 2022 ($ in 000s) (Unaudited) Soluna Computing Edith Marie Sophie Dorothy Corporate Total Cryptocurrency revenue (GAAP) $418 $4,236 $4,022 $0 $0 $8,676 Cost of cry
Slide 39: 2022 Q2 - Reconciliation Of Non-GAAP Results
2022 Q2 - Reconciliation Of Non-GAAP Results Reconcilation from Revenue and Cost of Revenue to Contribution Margin & Cash Contribution Margin Q2 2022 ($ in 000s) (Unaudited) Soluna Computing Edith Marie Sophie Dorothy Corporate Total Cryptocurrency revenue (GAAP) $418 $4,236 $4,022 $0 $0 $8,676 Cost
Slide 40: 2022 Q2 - Reconciliation Of Non-GAAP Results
2022 Q2 - Reconciliation Of Non-GAAP Results Reconciliation from Operating (Loss) Income to Adjusted EBITDA Contribution (Non-GAAP) Q2 2022 Soluna Computing Edith Marie Sophie Dorothy Corporate Total Corporate Consolidated Net Income (Loss) (GAAP) $34 ($2,900) ($849) $139 ($4,932) ($8,509) ($5,595)
Slide 41: 2022 Q1 - Reconciliation Of Non-GAAP Results
2022 Q1 - Reconciliation Of Non-GAAP Results Reconciliation from GAAP Revenue to Non-GAAP Revenue Q1 2022 ($ in 000s) (Unaudited) Soluna Computing Edith Marie Sophie Corporate Total Cryptocurrency revenue (GAAP) $517 $4,991 $3,808 $0 $9,316 less Legacy Hosting Revenue 0 52 0 0 52 Revenue (Non-GAAP)
Slide 42: 2022 Q1 - Reconciliation Of Non-GAAP Results
2022 Q1 - Reconciliation Of Non-GAAP Results Reconciliation from Cost of Cryptocurrency Revenue to Adjusted Cost of Revenue (Non-GAAP) Q1 2022 ($ in 000s) (Unaudited) Soluna Computing Edith Marie Sophie Corporate Total Cryptocurrency revenue (GAAP) $517 $4,991 $3,808 $0 $9,316 Cost of cryptocurrency
Slide 43: 2022 Q1 - Reconciliation Of Non-GAAP Results
2022 Q1 - Reconciliation Of Non-GAAP Results Reconciliation from Revenue and Cost of Revenue to Contribution Margin & Cash Contribution Margin Q1 2022 ($ in 000s) (Unaudited) Soluna Computing Edith Marie Sophie Corporate Total Cryptocurrency revenue (GAAP) $517 $4,991 $3,808 $0 $9,316 Cost of crypto
Slide 44: 2022 Q1 - Reconciliation Of Non-GAAP Results
2022 Q1 - Reconciliation Of Non-GAAP Results Reconciliation from Operating (Loss) Income to Adjusted EBITDA Contribution (Non-GAAP) Q1 2022 Soluna Computing Edith Marie Sophie Dorothy Corporate Total Corporate Consolidated Net Income (Loss) (GAAP) $217 ($46) ($172) ($351) ($3,473) ($3,825) ($5,307)
Slide 45: 2021 FY - Reconciliation Of Non-GAAP Results
2021 FY - Reconciliation Of Non-GAAP Results Reconciliation from GAAP Revenue to Non-GAAP Revenue FY 2021 ($ in 000s) (Unaudited) Soluna Computing Edith Marie Sophie Corporate Total Cryptocurrency revenue (GAAP) $3,648 $7,925 $2,772 $0 $14,345 less Legacy Hosting Revenue 0 1,335 0 0 1,335 Revenue (N
Slide 46: 2021 FY - Reconciliation Of Non-GAAP Results
2021 FY - Reconciliation Of Non-GAAP Results Reconciliation from Cost of Cryptocurrency Revenue to Adjusted Cost of Revenue (Non-GAAP) FY 2021 ($ in 000s) (Unaudited) Soluna Computing Edith Marie Sophie Corporate Total Cryptocurrency revenue (GAAP) $3,648 $7,925 $2,772 $0 $14,345 Cost of cryptocurre
Slide 47: 2021 FY - Reconciliation Of Non-GAAP Results
2021 FY - Reconciliation Of Non-GAAP Results Reconciliation from Revenue and Cost of Revenue to Contribution Margin & Cash Contribution Margin (Non-GAAP) FY 2021 ($ in 000s) (Unaudited) Soluna Computing Edith Marie Sophie Corporate Total Cryptocurrency revenue (GAAP) $3,648 $7,925 $2,772 $0 $14,345
Slide 48: 2021 FY - Reconciliation Of Non-GAAP Results
2021 FY - Reconciliation Of Non-GAAP Results Reconciliation from Operating (Loss) Income to Adjusted EBITDA Contribution (Non-GAAP) For the year ended December 31, 2021 Soluna Computing Edith Marie Sophie Corporate Total Corporate Consolidated Net Income (Loss) (GAAP) $2,179 $1,878 $514 ($3,403) $1,
Slide 49: 2021 Q4 - Reconciliation Of Non-GAAP Results
2021 Q4 - Reconciliation Of Non-GAAP Results Reconciliation from GAAP Revenue to Non-GAAP Revenue Q4 2021 ($ in 000s) (Unaudited) Soluna Computing Edith Marie Sophie Corporate Total Cryptocurrency revenue (GAAP) $864 $4,933 $2,772 $0 $8,569 less Legacy Hosting Revenue 0 579 0 0 579 Revenue (Non-GAAP
Slide 50: 2021 Q4 - Reconciliation Of Non-GAAP Results
2021 Q4 - Reconciliation Of Non-GAAP Results Reconciliation from Cost of Cryptocurrency Revenue to Adjusted Cost of Revenue (Non-GAAP) Q4 2021 ($ in 000s) (Unaudited) Soluna Computing Edith Marie Sophie Corporate Total Cryptocurrency revenue (GAAP) $864 $4,933 $2,772 $0 $8,569 Cost of cryptocurrency
Slide 51: 2021 Q4 - Reconciliation Of Non-GAAP Results
2021 Q4 - Reconciliation Of Non-GAAP Results Reconciliation from Revenue and Cost of Revenue to Contribution Margin & Cash Contribution Margin (Non-GAAP) Q4 2021 ($ in 000s) (Unaudited) Soluna Computing Edith Marie Sophie Corporate Total Cryptocurrency revenue (GAAP) $864 $4,933 $2,772 $0 $8,569 Cos
Slide 52: 2021 Q4 - Reconciliation Of Non-GAAP Results
2021 Q4 - Reconciliation Of Non-GAAP Results Reconciliation from Operating (Loss) Income to Adjusted EBITDA Contribution (Non-GAAP) Q4 2021 Soluna Computing Edith Marie Sophie Dorothy Corporate Total Corporate Consolidated Net Income (Loss) (GAAP) $478 $1,585 $938 ($89) ($2,842) $70 ($3,507) ($3,437
Slide 53: 2021 Q3 - Reconciliation Of Non-GAAP Results
2021 Q3 - Reconciliation Of Non-GAAP Results Reconciliation from GAAP Revenue to Non-GAAP Revenue Q3 2021 ($ in 000s) (Unaudited) Soluna Computing Edith Marie Sophie Corporate Total MTII Corporate Consolidated Product revenue (GAAP) $0 $0 $0 $0 $0 $1,949 $0 $1,949 Cryptocurrency revenue (GAAP) $905
Slide 54: 2021 Q3 - Reconciliation Of Non-GAAP Results
2021 Q3 - Reconciliation Of Non-GAAP Results Reconciliation from Cost of Cryptocurrency Revenue to Adjusted Cost of Revenue (Non-GAAP) Q3 2021 ($ in 000s) (Unaudited) Soluna Computing Edith Marie Sophie Corporate Total MTII Corporate Consolidated Product revenue (GAAP) $0 $0 $0 $0 $0 $1,949 $0 $1,94
Slide 55: 2021 Q3 - Reconciliation Of Non-GAAP Results
2021 Q3 - Reconciliation Of Non-GAAP Results Reconciliation from Revenue and Cost of Revenue to Contribution Margin & Cash Contribution Margin (Non-GAAP) Q3 2021 ($ in 000s) (Unaudited) Soluna Computing Edith Marie Sophie Corporate Total MTII Corporate Consolidated Product revenue (GAAP) $0 $0 $0 $0
Slide 56: 2021 Q3 - Reconciliation Of Non-GAAP Results
2021 Q3 - Reconciliation Of Non-GAAP Results Reconciliation from Operating (Loss) Income to Adjusted EBITDA Contribution (Non-GAAP) Q3 2021 ($ in 000s) (Unaudited) Soluna Computing Edith Marie Sophie Corporate Total MTII Corporate Consolidated Net (Loss) Income (GAAP) $581 $259 ($217) ($1,089) ($466
Slide 57: 2021 Q2 - Reconciliation Of Non-GAAP Results
2021 Q2 - Reconciliation Of Non-GAAP Results Reconciliation from Cost of Cryptocurrency Revenue to Adjusted Cost of Revenue (Non-GAAP) Q2 2021 ($ in 000s) (Unaudited) Soluna Computing Edith Marie Sophie Corporate Total MTII Corporate Consolidated Product revenue (GAAP) $0 $0 $0 $0 $0 $1,647 $0 $1,64
Slide 58: 2021 Q2 - Reconciliation Of Non-GAAP Results
2021 Q2 - Reconciliation Of Non-GAAP Results Reconciliation from Revenue and Cost of Revenue to Contribution Margin (Non-GAAP) Q2 2021 ($ in 000s) (Unaudited) Soluna Computing Edith Marie Sophie Corporate Total MTII Corporate Consolidated Product revenue (GAAP) $0 $0 $0 $0 $0 $1,647 $0 $1,647 Crypto
Slide 59: 2021 Q2 - Reconciliation Of Non-GAAP Results
2021 Q2 - Reconciliation Of Non-GAAP Results Reconciliation from Operating (Loss) Income to Adjusted EBITDA Contribution (Non-GAAP) Q2 2021 ($ in 000s) (Unaudited) Soluna Computing Edith Marie Sophie Corporate Total MTII Corporate Consolidated Net (Loss) Income (GAAP) $554 $321 ($38) ($126) $710 ($2
Slide 60: The future of renewable energy is computing.
The future of renewable energy is computing. 60
Slide 61: Learn more at solunacomputing.com
Learn more at solunacomputing.com 61
Soluna Holdings — Investor Presentation (October 2022) on 6ix