Soluna Holdings, Inc. · NASDAQ:SLNH
Soluna — Investor Presentation (September 2022)
72 slides from Soluna's investor presentation, September 2022
Slide 1: August 2022 Flash
HOLDINGS COMPUTING August 2022 Flash September 2022 1
Slide 2: Preamble
Preamble The following discussion is completely qualified by the legal disclosures on the several pages following this one Our goal is to share with you some of our strategic thinking and financial analysis we are using to guide the growth of our business The discussion is in line with our principle
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: Legal Disclosure & Disclaimer
Legal Disclosure & Disclaimer The material in this presentation has been prepared by Soluna and is general background information about Soluna’s activities, current as at the date of this presentation and is provided for information purposes only. It should be read in conjunction with Soluna’s perio
Slide 5: Legal Disclosure & Disclaimer
Legal Disclosure & Disclaimer Use of Projections and Illustrations This presentation contains certain financial forecasts and illustrations. Neither Soluna’s [nor Soluna Holdings] independent auditors have studied, reviewed, compiled or performed any procedures with respect to the projections for th
Slide 6: Key Operating Principles
Key Operating Principles 25%(1) (1) Calculated as a percent of total undiluted shares 6
Slide 7: We buy curtailed energy from renewable power
We buy curtailed energy from renewable power plants and convert it to clean, low-cost global computing. Excess energy from Batch-oriented Computing renewable sources like cryptocurrency mining 7 7
Slide 8: The opportunity beyond crypto is $40B
The $10B Digital currencies opportunity $5B beyond Pharma research crypto is $40B Batchable Graphics/video processing Computing $40B Scientific research 8
Slide 9: Agenda
Agenda In this presentation, we will be covering the following items: Business Update Flash August 2022 Results 9
Slide 10: Business Update
Business Update 10
Slide 11: Engineered to thrive in a BTC downturn
Engineered Right to thrive in company a BTC downturn Right plan for volatile environment 11
Slide 12: Soluna Status Report
Soluna Status Report Dorothy 50MW o Construction is nearly complete – ~$5 million of capex remaining, a portion of which will be funded by Spring Lane o Awaiting ERCOT approval – active discussions to assess potential gating items o 50MW doubles Soluna’s operating footprint Focus on Liquidity to Sup
Slide 13: What Could Turning on Dorothy Do for Financial Results?
What Could Turning on Dorothy Do for Financial Results? Illustrative Monthly P&L ($ 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) (6
Slide 14: 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% 33% 28% 15% 8% IREN * BTB T CORZ SLNH (w/o ** MARA MIGI CLSK GREE SLNH (w/ *** HUT * RIOT HIVE Dorothy) Dorothy) * Based on latest
Slide 15: Adjustments to Support Dorothy Buildout
Adjustments to Support Dorothy Buildout Capital structure contemplated Dorothy energization at the end of Q2 As a result of BTC declines, power cost increases, and ERCOT-related Dorothy energization delays adjustments have been necessary Rescheduled noteholder maturity to better match maturity with
Slide 16: 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 17: 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 $310 $290 $193 $201 $104 $26 $29 FY 2
Slide 18: Marie Hosting Contract Historical Results
Marie Hosting Contract Historical Results $ in (000's) Q3 21 Q4 21 Q1 22 Q2 22 Jul 22 Total Revenue 349 1,729 1,452 1,179 353 5,062 (-) Electricity/Direct Costs (184) (890) (1,086) (975) (443) (3,579) Cash Contribution Margin 166 839 366 203 (90) 1,483 % Margin 47% 49% 25% 17% -26% 29% (-) Rent* (73
Slide 19: Hosting Update – Improved Terms
Hosting Update – Improved Terms Cash Contribution Margin* Hosting Operations to Date August ’21 – July ’22 ($ in millions) • Structured prior to moves in power markets and Bitcoin price : 30%+ • Fixed fee + profit share ase ed Incre Impli 1.99 • Economics became challenged as Bitcoin prices declined
Slide 20: Power Cost Update
Power Cost Update FUEL COST ADJUSTMENT (“FCA”) PERCENT CHANGE RELATIVE TO JUNE FCA Updates on Sophie and Marie Power Costs JUNE FCA: $2.704 FCA has averaged 1.5 cents - 2.0 cents per kWh for the last seven years; the FCA in July 43% July and August were at unprecedented levels* − July: 3.873 − Augus
Slide 21: September Declines Still Anticipated
September Declines Still Anticipated Illustrative Normalized Cash Contribution Margin August pricing remained elevated August Revenue $2,447 at unprecedented levels (-) June Electricity / Direct Costs with 5% Increase (1,257) We understand from members of (-) August Overhead Costs (313) the utility
Slide 22: Facility Results Review
Facility Results Review We will review each facility Then look at the consolidated results 22
Slide 23: August Business Summary
August Business Summary Flat BTC Production Despite Volatile Market o BTC equivalent mined increased 6% despite average BTC prices increasing only 4% from July to August o Peak hashrate remained above 1 EH/s Cash Contribution Margins Remain Healthy o 20% Consolidated cash contribution margins despit
Slide 24: Path to 2.5 EH/s Scale
Path to 2.5 EH/s Scale Consolidated Hashrate (SHA-256, PH/s) Subject to Project Finance Process + Ercot 2,616 800 1,816 800 1,016 897 869 876 1,537 856 696 714 733 567 616 737 737 403 608 604 613 606 316 364 439 452 519 312 126 198 277 255 252 257 235 215 288 265 263 250 280 280 280 Oct 2021 Nov 202
Slide 25: Sophie
Sophie Average August PH/s increased by 3% to 381.74 PH/s versus July PH/S of 371.53 o Ramp up of installed machines continues Adjusted Cash Contribution Margin (Non-GAAP) in August was $353 thousand versus $366 thousand in July o The decrease in 4% of margin was largely due to an increase in energy
Slide 26: Sophie: Non-GAAP Historical Financials
Sophie: Non-GAAP Historical Financials For more information on these non-GAAP financial measures, please see the section captioned “Reconciliation of non-GAAP results of operations to the nearest comparable GAAP measures”. To supplement our consolidated financial statements, which are prepared and p
Slide 27: Marie
Marie Average hashrate in August was 464.4, compared to 493.8 in July o The decrease was due to seasonal factors including TVA curtailments, weather related hash rate reductions, outages and a transformer malfunction that has been resolved o Average prop hashrate for the first half of September is b
Slide 28: Marie: Non-GAAP Historical Financials
Marie: Non-GAAP Historical Financials(A) (A) Marie excludes pass-through revenue and expenses from Legacy Hosting customers. Electricity/Direct Costs reduced by Marie “Prepaid Lease Cost” August 2021 onward.. For details on legacy hosting, see appendix. For more information on these non-GAAP financi
Slide 29: Marie: Operating Metrics
Marie: Operating Metrics(A) (A) Marie excludes pass-through revenue and expenses from Legacy Hosting customers. Electricity/Direct Costs reduced by Marie “Prepaid Lease Cost” August 2021 onward. For details on legacy hosting, see appendix. For more information on these non-GAAP financial measures, p
Slide 30: Edith
Edith Sale of GPU Miners at the Edith Facility closed in September valuing the assets at $790k o $500k upfront, $290k in the form of a promissory note due in March 2023 which will pay 20% annualized interest on a monthly basis Adjusted Cash Contribution Margin (Non-GAAP), at $29 thousand for August
Slide 31: Edith: Non-GAAP Historical Financials
Edith: Non-GAAP Historical Financials For more information on these non-GAAP financial measures, please see the section captioned “Reconciliation of non-GAAP results of operations to the nearest comparable GAAP measures”. To supplement our consolidated financial statements, which are prepared and pr
Slide 32: Site Consolidation
Site Consolidation Average BTC mined increased by 6% versus July Combined installed hashrate increased by 19% to 1 EH/s over average 856.1 PH/s average in August Sites stable even in lower BTC price environment 12% 6% 8% (2%) 19% 6% 1% * (30 days) (31 days) (31 days) Note: Jun -Aug 2022 Hashrate is
Slide 33: Consolidated Soluna Computing Non-GAAP Historical Financials
Consolidated Soluna Computing Non-GAAP Historical Financials(A) (A) Marie excludes pass-through revenue and expenses from Legacy Hosting customers. Electricity/Direct Costs reduced by Marie “Prepaid Lease Cost” August 2021 onward. For details on legacy hosting, see appendix. For more information on
Slide 34: Consolidated Soluna Computing Operating Metrics
Consolidated Soluna Computing Operating Metrics(A) (A) Marie excludes pass-through revenue and expenses from Legacy Hosting customers. Electricity/Direct Costs reduced by Marie “Prepaid Lease Cost” August 2021 onward. For details on legacy hosting, see appendix. For more information on these non-GAA
Slide 35: Appendix
Appendix 35
Slide 36: Our data centers are named after catalyzers
Our data centers are named after catalyzers Edith Clarke was a pioneer in electrical engineering & power transmission. She was a first in so many ways. The first woman to earn an MSc degree at MIT in 1919. The first woman employed as an electrical engineer at General Electric in 1921. The first full
Slide 37: Marie: Impact of forced shutdown
Marie: Impact of forced shutdown ($ in 000s) Marie - March (5 Days) Marie - April (8 Days) Estimate Shutdown Estimate Estimate Shutdown Estimate Mar 22 Impact* Pro-Forma Mar 22 Impact* Pro-Forma Revenue (Non-GAAP) $1,637 $319 $1,956 $1,567 $531 $2,098 Prop Mining 1,191 249 1,440 1,192 430 1,621 Host
Slide 38: Consolidated Non-GAAP Historical Financials With Legacy Hosting
Consolidated Soluna Computing Non-GAAP Historical Financials With Legacy Hosting For more information on these non-GAAP financial measures, please see the section captioned “Reconciliation of non-GAAP results of operations to the nearest comparable GAAP measures”. To supplement our consolidated fina
Slide 39: Consolidated Operating Metrics With Legacy Hosting
Consolidated Operating Metrics With Legacy Hosting For more information on these non-GAAP financial measures, please see the section captioned “Reconciliation of non-GAAP results of operations to the nearest comparable GAAP measures”. To supplement our consolidated financial statements, which are pr
Slide 40: Marie: Non-GAAP Historical Financials With Legacy Hosting
Marie: Non-GAAP Historical Financials With Legacy Hosting For more information on these non-GAAP financial measures, please see the section captioned “Reconciliation of non-GAAP results of operations to the nearest comparable GAAP measures”. To supplement our consolidated financial statements, which
Slide 41: Reconciliation of non-GAAP results to nearest comparable GAAP measures
Reconciliation of non-GAAP results of operations to the nearest comparable GAAP measures 41
Slide 42: 2022 August YTD - Reconciliation Of Non-GAAP Results
2022 August YTD - Reconciliation Of Non-GAAP Results 42
Slide 43: 2022 August YTD - Reconciliation Of Non-GAAP Results
2022 August YTD - Reconciliation Of Non-GAAP Results 43
Slide 44: 2022 August YTD - Reconciliation Of Non-GAAP Results
2022 August YTD - Reconciliation Of Non-GAAP Results 44
Slide 45: 2022 Q2 - Reconciliation Of Non-GAAP Results
2022 Q2 - Reconciliation Of Non-GAAP Results 45
Slide 46: 2022 Q2 - Reconciliation Of Non-GAAP Results
2022 Q2 - Reconciliation Of Non-GAAP Results 46
Slide 47: 2022 Q2 - Reconciliation Of Non-GAAP Results
2022 Q2 - Reconciliation Of Non-GAAP Results 47
Slide 48: 2022 Q2 - Reconciliation Of Non-GAAP Results
2022 Q2 - Reconciliation Of Non-GAAP Results Note: Adjusted EBITDA with Legacy Hosting Customer can be calculated by excluding the “Prepaid Lease Cost”, “Legacy Hosting Contribution Margin” and “One Time Projects and Events Adjustment” lines from the schedule above. 48
Slide 49: 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 $9,316 less Legacy Hosting Revenue 0 52 0 0 52 Revenue (Non-GAAP)
Slide 50: 2022 Q1 - Reconciliation Of Non-GAAP Results
2022 Q1 - Reconciliation Of Non-GAAP Results Reconciliation from Cost of Cryptocurrency Revenue to Adjusted Cost of Revenue (Non-GAAP) Q1 2022 ($ in 000s) (Unaudited) Soluna Computing Edith Marie Sophie Corporate Total Cryptocurrency revenue (GAAP) $517 $4,991 $3,808 $0 $9,316 Cost of cryptocurrency
Slide 51: 2022 Q1 - Reconciliation Of Non-GAAP Results
2022 Q1 - Reconciliation Of Non-GAAP Results Reconciliation from Revenue and Cost of Revenue to Contribution Margin & Cash Contribution Margin Q1 2022 ($ in 000s) (Unaudited) Soluna Computing Edith Marie Sophie Corporate Total Cryptocurrency revenue (GAAP) $517 $4,991 $3,808 $0 $9,316 Cost of crypto
Slide 52: 2022 Q1 - Reconciliation Of Non-GAAP Results
2022 Q1 - Reconciliation Of Non-GAAP Results Note: Adjusted EBITDA with Legacy Hosting Customer can be calculated by excluding the “Prepaid Lease Cost”, “Legacy Hosting Contribution Margin” and “One Time Projects and Events Adjustment” lines from the schedule above. 52
Slide 53: 2021 FY - Reconciliation Of Non-GAAP Results
2021 FY - Reconciliation Of Non-GAAP Results Reconciliation from GAAP Revenue to Non-GAAP Revenue FY 2021 ($ in 000s) (Unaudited) Soluna Computing Edith Marie Sophie Corporate Total Cryptocurrency revenue (GAAP) $3,648 $7,925 $2,772 $0 $14,345 less Legacy Hosting Revenue 0 1,335 0 0 1,335 Revenue (N
Slide 54: 2021 FY - Reconciliation Of Non-GAAP Results
2021 FY - Reconciliation Of Non-GAAP Results Reconciliation from Cost of Cryptocurrency Revenue to Adjusted Cost of Revenue (Non-GAAP) FY 2021 ($ in 000s) (Unaudited) Soluna Computing Edith Marie Sophie Corporate Total Cryptocurrency revenue (GAAP) $3,648 $7,925 $2,772 $0 $14,345 Cost of cryptocurre
Slide 55: 2021 FY - Reconciliation Of Non-GAAP Results
2021 FY - Reconciliation Of Non-GAAP Results Reconciliation from Revenue and Cost of Revenue to Contribution Margin & Cash Contribution Margin (Non-GAAP) FY 2021 ($ in 000s) (Unaudited) Soluna Computing Edith Marie Sophie Corporate Total Cryptocurrency revenue (GAAP) $3,648 $7,925 $2,772 $0 $14,345
Slide 56: 2021 FY - Reconciliation Of Non-GAAP Results
2021 FY - Reconciliation Of Non-GAAP Results Reconciliation from Revenue and Cost of Revenue to Adjusted EBITDA (Non-GAAP) FY 2021 ($ in 000s) (Unaudited) Soluna Computing Edith Marie Sophie Corporate Total Cryptocurrency revenue (GAAP) $3,648 $7,925 $2,772 $0 $14,345 Cost of cryptocurrency revenue
Slide 57: 2021 Q4 - Reconciliation Of Non-GAAP Results
2021 Q4 - Reconciliation Of Non-GAAP Results Reconciliation from GAAP Revenue to Non-GAAP Revenue Q4 2021 ($ in 000s) (Unaudited) Soluna Computing Edith Marie Sophie Corporate Total Cryptocurrency revenue (GAAP) $864 $4,933 $2,772 $0 $8,569 less Legacy Hosting Revenue 0 579 0 0 579 Revenue (Non-GAAP
Slide 58: 2021 Q4 - Reconciliation Of Non-GAAP Results
2021 Q4 - Reconciliation Of Non-GAAP Results Reconciliation from Cost of Cryptocurrency Revenue to Adjusted Cost of Revenue (Non-GAAP) Q4 2021 ($ in 000s) (Unaudited) Soluna Computing Edith Marie Sophie Corporate Total Cryptocurrency revenue (GAAP) $864 $4,933 $2,772 $0 $8,569 Cost of cryptocurrency
Slide 59: 2021 Q4 - Reconciliation Of Non-GAAP Results
2021 Q4 - Reconciliation Of Non-GAAP Results Reconciliation from Revenue and Cost of Revenue to Contribution Margin & Cash Contribution Margin (Non-GAAP) Q4 2021 ($ in 000s) (Unaudited) Soluna Computing Edith Marie Sophie Corporate Total Cryptocurrency revenue (GAAP) $864 $4,933 $2,772 $0 $8,569 Cos
Slide 60: 2021 Q4 - Reconciliation Of Non-GAAP Results
2021 Q4 - Reconciliation Of Non-GAAP Results Reconciliation from Revenue and Cost of Revenue to Adjusted EBITDA (Non-GAAP) Q4 2021 ($ in 000s) (Unaudited) Soluna Computing Edith Marie Sophie Corporate Total Cryptocurrency revenue (GAAP) $864 $4,933 $2,772 $0 $8,569 Cost of cryptocurrency revenue (GA
Slide 61: 2021 Q3 - Reconciliation Of Non-GAAP Results
2021 Q3 - Reconciliation Of Non-GAAP Results Reconciliation from GAAP Revenue to Non-GAAP Revenue Q3 2021 ($ 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) $905
Slide 62: 2021 Q3 - Reconciliation Of Non-GAAP Results
2021 Q3 - Reconciliation Of Non-GAAP Results Reconciliation from Cost of Cryptocurrency Revenue to Adjusted Cost of Revenue (Non-GAAP) Q3 2021 ($ in 000s) (Unaudited) Soluna Computing Edith Marie Sophie Corporate Total MTII Corporate Consolidated Product revenue (GAAP) $0 $0 $0 $0 $0 $1,949 $0 $1,94
Slide 63: 2021 Q3 - Reconciliation Of Non-GAAP Results
2021 Q3 - Reconciliation Of Non-GAAP Results Reconciliation from Revenue and Cost of Revenue to Contribution Margin & Cash Contribution Margin (Non-GAAP) Q3 2021 ($ in 000s) (Unaudited) Soluna Computing Edith Marie Sophie Corporate Total MTII Corporate Consolidated Product revenue (GAAP) $0 $0 $0 $0
Slide 64: 2021 Q3 - Reconciliation Of Non-GAAP Results
2021 Q3 - Reconciliation Of Non-GAAP Results Reconciliation from Operating (Loss) Income to Adjusted EBITDA Contribution (Non-GAAP) Q3 2021 ($ in 000s) (Unaudited) Soluna Computing Edith Marie Sophie Corporate Total MTII Corporate Consolidated Net (Loss) Income (GAAP) $581 $259 ($217) ($1,089) ($466
Slide 65: 2021 Q2 - Reconciliation Of Non-GAAP Results
2021 Q2 - Reconciliation Of Non-GAAP Results Reconciliation from Cost of Cryptocurrency Revenue to Adjusted Cost of Revenue (Non-GAAP) Q2 2021 ($ in 000s) (Unaudited) Soluna Computing Edith Marie Sophie Corporate Total MTII Corporate Consolidated Product revenue (GAAP) $0 $0 $0 $0 $0 $1,647 $0 $1,64
Slide 66: 2021 Q2 - Reconciliation Of Non-GAAP Results
2021 Q2 - Reconciliation Of Non-GAAP Results Reconciliation from Revenue and Cost of Revenue to Contribution Margin (Non-GAAP) Q2 2021 ($ in 000s) (Unaudited) Soluna Computing Edith Marie Sophie Corporate Total MTII Corporate Consolidated Product revenue (GAAP) $0 $0 $0 $0 $0 $1,647 $0 $1,647 Crypto
Slide 67: 2021 Q2 - Reconciliation Of Non-GAAP Results
2021 Q2 - Reconciliation Of Non-GAAP Results Reconciliation from Operating (Loss) Income to Adjusted EBITDA Contribution (Non-GAAP) Q2 2021 ($ in 000s) (Unaudited) Soluna Computing Edith Marie Sophie Corporate Total MTII Corporate Consolidated Net (Loss) Income (GAAP) $554 $321 ($38) ($126) $710 ($2
Slide 68: 2021 Q1 - Reconciliation Of Non-GAAP Results
2021 Q1 - Reconciliation Of Non-GAAP Results Reconciliation from Cost of Cryptocurrency Revenue to Adjusted Cost of Revenue (Non-GAAP) Q1 2021 ($ in 000s) (Unaudited) Soluna Computing Edith Marie Sophie Corporate Total MTII Corporate Consolidated Product revenue (GAAP) $0 $0 $0 $0 $0 $1,337 $0 $1,33
Slide 69: 2021 Q1 - Reconciliation Of Non-GAAP Results
2021 Q1 - Reconciliation Of Non-GAAP Results Reconciliation from Revenue and Cost of Revenue to Contribution Margin (Non-GAAP) Q1 2021 ($ in 000s) (Unaudited) Soluna Computing Edith Marie Sophie Corporate Total MTII Corporate Consolidated Product revenue (GAAP) $0 $0 $0 $0 $0 $1,337 $0 $1,337 Crypto
Slide 70: 2021 Q1 - Reconciliation Of Non-GAAP Results
2021 Q1 - Reconciliation Of Non-GAAP Results Reconciliation from Operating (Loss) Income to Adjusted EBITDA Contribution (Non-GAAP) Q1 2021 ($ in 000s) (Unaudited) Soluna Computing Edith Marie Sophie Corporate Total MTII Corporate Consolidated Operating (Loss) Income (GAAP) $566 ($287) ($170) ($48)
Slide 71: The future of renewable energy is computing.
The future of renewable energy is computing. 71
Slide 72: Learn more at solunacomputing.com
Learn more at solunacomputing.com 72
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