Soluna Holdings, Inc: Form 10-Q for the period ended Mar 31, 2026

Unless the context requires otherwise in these condensed consolidated financial statements, the terms “SHI,” “Soluna,” the “Company,” “we,” “us,” and “our” refer to Soluna Holdings, Inc. together with its consolidated subsidiaries, “SDI” refers to Soluna Digital, Inc., “Soluna Cloud” or “Cloud” refer to Soluna Cloud, Inc., “SEI” refers to Soluna Energy, Inc., and "Soluna Wind" refers to Soluna Wind Holding, Inc. Other trademarks, trade names, and service marks used in this Quarterly Report on Form 10-Q are the property of their respective owners.

The following discussion of our financial condition and results of operations should be read in conjunction with the Condensed Consolidated Financial Statements and the related notes thereto included in Item 1 of Part I of this Quarterly Report on Form 10-Q and the audited Consolidated Financial Statements and the related notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations for the year ended December 31, 2025 contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, as filed with the Securities and Exchange Commission (the “SEC”) on March 30, 2026 (the “Annual Report”).

In addition to historical information, the following discussion contains forward-looking statements, which involve risk and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements. Important factors that could cause actual results to differ include those set forth in Part I Item 1A-Risk Factors in our Annual Report and elsewhere in this Quarterly Report on Form 10-Q. Readers should not place undue reliance on our forward-looking statements. These forward-looking statements speak only as of the date on which the statements were made and are not guarantees of future performance. Except as may be required by applicable law, we do not undertake or intend to update any forward-looking statements after the date of this Quarterly Report on Form 10-Q. Please see “Statement Concerning Forward-Looking Statements” below.

Overview and Recent Developments

Our mission is to make renewable energy a global superpower by using computing as a catalyst.

We develop, own, and operate digital infrastructure for energy-intensive computing applications by colocating data centers with renewable energy power plants. We refer to this model as Renewable Computing™.

Renewable Computing™ is designed to address two converging market conditions: increasing curtailment of renewable energy generation and growing demand for power-intensive computing applications, including artificial intelligence (“AI”), high-performance computing (“HPC”), and Bitcoin mining. By locating our data centers near renewable generation assets, we seek to convert underutilized energy into economically productive computing capacity.

We utilize two distinct data center designs to serve different computing markets. For our Bitcoin mining and hosting business, we deploy a data center design optimized for flexible, large-scale digital asset operations. For AI and HPC workloads, we are developing an AI-ready data center design intended to support higher-density compute environments and customer requirements associated with advanced computing infrastructure.

Our facilities are managed by MaestroOS™ (“MaestroOS”), our proprietary software platform, which analyzes factors such as local power pricing, weather conditions, grid demand, and market signals to optimize operating performance and power consumption across our operating assets.

Our business model is intended to enhance the monetization of renewable generation assets while supporting scalable digital infrastructure growth. We work with renewable energy developers and power partners to access low-cost or otherwise constrained energy resources. Our data centers operate on a behind-the-meter basis, enabling them to draw electricity directly from the co-located renewable power plant and from the grid through the plant’s existing interconnection and substation infrastructure. By accessing both sources of power, our facilities are able to meet their energy needs while maintaining operating flexibility. In certain markets, our facilities also participate in demand response programs that support grid reliability.

A key element of our strategy is the colocation of data centers directly with renewable generation assets. By building behind the meter at renewable generation sites, we are able to access both on-site generation and existing grid interconnection infrastructure, which we believe can improve power economics and accelerate development timelines.

With a repeatable development approach and an expanding pipeline of projects, we are seeking to scale a differentiated digital infrastructure platform that supports renewable power utilization, flexible computing capacity, and long-term value creation.

We operate across multiple business lines and currently or plan to generate revenue from five primary sources:

• Bitcoin / Data Center Hosting Business – We provide hosting and colocation services to third-party Bitcoin mining customers at our data centers.
• Bitcoin Mining Business – We mine Bitcoin through proprietary operations and joint ventures at our data centers.
• HPC Business – Through Soluna HPC, Inc., we are developing AI-ready data center leasing and hosting capabilities for AI and HPC workloads, beginning with Project Kati 2, which is being engineered for more than 300 MW of capacity in partnership with Metrobloks, LLC ("Metrobloks").
• Demand Response Business – We leverage our data center infrastructure to provide demand response services to grid operators and utilities.
• Wind Energy Generation Business - As of April 1, 2026, with the acquisition of the wind farm in Briscoe, Texas (the "Briscoe Wind Farm"), we sell power generated from owned wind turbines and also sell renewable energy credits.

Revenue Sources

Bitcoin / Data Center Hosting Business

We provide colocation and hosting services to third-party Bitcoin mining customers at our data centers. Customers typically contract for capacity based on their power requirements. Our customer base includes several large-scale Bitcoin mining operators. Contracts generally range from 12 to 24 months in duration.

We offer three primary commercial structures:

• Fixed-Fee Model – Customers pay a fixed fee based on energy consumed.
• Profit-Share Model – Customers pay a share of the profits from their mining activity, with power costs generally passed through.
• Fixed-Fee Service Agreement Model – Customers pay a fixed fee for managed Bitcoin mining capacity and hashrate over the term of the service agreement.

For the three months ended March 31, 2026 and 2025, our Bitcoin Hosting Business accounted for approximately 71% and 40% of total revenue, respectively. Revenue in this business has been concentrated among a limited number of customers. For the three months ended March 31, 2026, three customers accounted for 74% of hosting revenue and 53% of total revenue.

As of March 31, 2026, five of our projects provide Bitcoin hosting services for a total MW capacity of approximately 137 MW.

Bitcoin Mining Business

We engage in proprietary Bitcoin mining, a process that validates transactions and secures the Bitcoin blockchain. This process uses specialized computing equipment to solve complex cryptographic algorithms. Miners compete to solve these algorithms, and the first to do so is awarded a predetermined number of newly issued Bitcoins (the “Block Reward”), together with the transaction fees associated with that block.

We participate in one or more mining pools, which are collaborative networks of miners that combine computing power to improve the probability of earning rewards. Block Rewards earned by the pool are distributed among participants based on each participant’s proportional contribution. We believe this model reduces revenue volatility as compared to operating on a solo mining basis.

Mining operations are energy-intensive and require significant computational resources. We operate data centers using both proprietary and third-party hardware and software. MaestroOS is used to optimize performance, manage power consumption, and improve operating efficiency.

Revenue from Bitcoin mining consists of Block Rewards and transaction fees and is recognized upon receipt in accordance with applicable accounting guidance. Upon receipt, digital assets are promptly converted into U.S. dollars through the Coinbase cryptocurrency exchange.

Mining profitability is affected by several factors, including the market price of Bitcoin, global network hash rate, mining difficulty, electricity and infrastructure costs, and mining pool fees. In addition, Bitcoin undergoes a periodic halving event, approximately every four years, that reduces the Block Reward and may adversely affect future revenue. The next Bitcoin halving event is expected in April 2028. For the three months ended March 31, 2026 and 2025, our Bitcoin Mining Business represented approximately 23% and 51% of total revenue, respectively.

As of March 31, 2026, only one of our projects provide Bitcoin self-mining for a total MW capacity of approximately 22 MWs.

High Performance Computing Business

Our HPC business is being developed through Soluna HPC, Inc. and is focused on data center leasing and hosting solutions for AI and other HPC workloads, with an initial target customer base of Hyperscalers and Neoclouds, and enterprise customers over time.

Unlike our Bitcoin mining and hosting operations, which use a data center design, our HPC business is based on an AI-ready data center design intended to support higher-density compute environments and the infrastructure requirements of AI and HPC customers.

We are currently advancing infrastructure projects intended to support AI and HPC workloads. These activities include site and feasibility studies, power and land procurement, engineering and design work, customer engagement, and evaluation of potential financing and partnership structures.

Our first planned large-scale HPC development is Project Kati 2, which is being engineered for more than 300 MW of capacity in partnership with Metrobloks. We expect Project Kati 2 to serve as the initial platform for Soluna HPC, Inc.’s leasing and hosting business. We are also advancing additional projects from our development pipeline that are in various stages of evaluation, engineering, and development.

In March 2025, we terminated our prior agreement with Hewlett Packard Enterprise Company (“HPE”), which had supported our earlier GPU-as-a-Service offering. Following that termination, we refocused our HPC strategy on the development of dedicated data center infrastructure for third-party leasing and hosting.

Demand Response Business

We provide demand response services to grid operators and utilities by using our data centers as dispatchable energy resources. In certain markets in which we operate, our data centers participate in ancillary services and other demand response programs that support grid reliability.

Under these programs, we commit to reduce a facility’s power consumption to a predetermined level when called upon by the grid operator. In return, we receive compensation for maintaining this dispatch capability, provided we satisfy applicable performance requirements. These requirements typically include minimum uptime and availability thresholds during a measurement period, which is often monthly.

For the three months ended March 31, 2026 and 2025, our Demand Response Business represented approximately 6% and 9% of total revenue, respectively.

Operations and Project Pipeline

As of March 31, 2026, we operate approximately 159 MW of capacity across three active sites located in Murray, Kentucky, Silverton, Texas, and Willacy County, Texas. An additional 47 MW is under construction at our Kati 1 project site and 100+ MW is in development at our Kati 2 project site, and as of March 31, 2026, we had over 900 MW of facilities in advanced development or near shovel-ready status. In total, our project pipeline includes approximately 4.3 gigawatts (GW) of renewable energy-powered data center developments.

A summary of our operations and project pipeline by location, are as follows (as of March 31, 2026):

We manage our data center operations using MaestroOS. MaestroOS continuously monitors and analyzes a variety of real-time signals, including local electricity prices, weather conditions, Bitcoin market metrics, and grid demand signals, to optimize facility performance. In addition, MaestroOS is used to coordinate and execute our participation in demand response programs.

We finance the development and construction of our data centers through a combination of public equity offerings, debt instruments, and partnerships with project-level capital providers. As of March 31, 2026, we had four primary project-level financing partners:

• Spring Lane Capital (“SLC”) – A private venture capital firm with approximately $450 million in assets under management, focused on sustainability-oriented infrastructure. On May 3, 2022, SLC committed $35 million to finance Soluna’s Project Dorothy 1A (“D1A”). On July 22, 2024, SLC committed an additional $30 million to support the development of Soluna's Project Dorothy 2 ("D2"). On July 22, 2025, SLC committed an initial $20.0 million for the first phase of the construction on Project Kati 1, subject to customary conditions, in which the contribution cap is $48.98 million. Subsequent to March 31, 2026, the Company acquired SLC's membership interest in D1A and currently owns 100% of the issued and outstanding membership interests of D1A. SLC retains its membership interests in D2 and Project Kati 1.
• Navitas West Texas Investments SPV, LLC (“Navitas”) – an investment vehicle organized by Navitas Global, a private equity firm focused on sustainable Bitcoin mining. On May 9, 2023, we entered into a strategic partnership with Navitas to support mining operations at Project Dorothy 1B (“D1B”).
• Galaxy Digital, LLC (“Galaxy”) – a financial services and investment management innovator in the digital asset and blockchain technology sectors. On March 12, 2025, our subsidiaries entered into a five-year term loan facility in the principal amount of $5.0 million.
• Generate Capital (“Generate”) – a leading infrastructure investment firm. On September 12, 2025, we entered into a $100.0 million credit facility with Generate, in which as of March 31, 2026, we have drawn approximately $17.0 million to fund refinancing and construction of active data center projects. On April 1, 2026, an additional $12.5 million was drawn to fund a portion of the Briscoe Wind Farm acquisition as discussed in the recent developments note below.

Project Dorothy

During 2023, we transitioned our flagship data center Project Dorothy from construction to operations. This data center is co-located with Briscoe Wind Farm, a 150 MW wind power generation facility in Silverton, Texas. The project comprises three phases: D1A (25 MW), and D1B (25 MW), and D2 (48 MW).

Project Dorothy is registered in one of the ERCOT’s Demand Response Services (“DRS”) programs. This designation positioned Project Dorothy as a contributor to grid flexibility and resilience in the Texas power market, while also enabling us to diversify our revenue streams.

Under the DRS program, we commit to maintaining a specified level of curtailment capacity—measured as load reduction availability—on a monthly basis. When called upon by ERCOT, we are required to reduce the facility’s power consumption by the committed amount. In exchange, we receive compensation for maintaining this curtailment readiness, regardless of whether an actual dispatch occurs.

Participation in the program allows us to generate incremental revenue and offset power costs at Project Dorothy, enhancing its cost-efficiency. As a result, the facility ranks among the lowest-cost operators in the sector.

Project Dorothy 1A

D1A is focused on Bitcoin Hosting for some of the industry’s hyperscale miners. As of March 31, 2026, D1A has completed all customer deployments and executed fleet upgrades across multiple hosting partners, driving measurable hashrate growth throughout the period.

D1A was constructed in partnership with SLC, a leading venture capital firm focused on sustainability solutions. As of March 31, 2026, SLC owned approximately 85% of the Class B membership interests of D1A, while we owned 15% of the Class B membership interests of D1A and 100% of the Class A membership interests of D1A.

On April 15, 2026, we acquired SLC's equity interest in D1A for $16.5 million and now own 100% of the issued and outstanding membership interests of D1A. The transaction gives us complete equity ownership of D1A, and will allow for the beginning of changing the business plan of our Dorothy projects to support AI workloads.

Project Dorothy 1B

D1B is focused on proprietary Bitcoin Mining. D1B is co-owned by Navitas, which owns approximately 49% of the membership interests of D1B, while we own the remaining 51% of the membership interests. In 2025, fleet consolidation and reinvestment at D1B resulted in the deployment of 1,000 upgraded S19 XP miners.. In March 2026, we started 3.3 MWs of Bitcoin Hosting at D1B, in addition to the Bitcoin Mining at this project.

Project Dorothy 2

D2 is a 48 MW expansion of the Company’s Dorothy campus, which construction and commissioning were completed in 2025. D2 is fully contracted with a mix of new and existing customers, including Blockware, Compass Mining, and a large-scale mining partner, and generates revenue through Bitcoin hosting and participation in demand response programs. D2 features a superior financial waterfall structure and enhanced management and development fees for Soluna compared to D1A, allowing us to benefit from improved income once the facility is operational.

Project Dorothy 3

Project Dorothy 3 is our next planned renewable-powered AI computing campus, advancing on 300 new acres adjacent to D1 and D2 in West Texas. Built on a foundation of vertically integrated wind generation and behind-the-meter infrastructure, Project Dorothy 3 is designed to support high-performance computing and generative AI workloads at scale.

Project Grace

Project Grace is a 2 MW project located at the D2 focused on an AI pilot. The Company is collaborating with Siemens at Project Grace, a leading technology company in electrification, automation and digitalization, to develop solutions addressing power demand fluctuations associated with AI workloads. In March 2026, we began technical simulations with our Siemens to confirm that the selected technology solution meets ERCOT grid stability and low-voltage ride-through requirements for AI load integration.

Project Sophie

Project Sophie is a 25 MW data center, based in Murray, Kentucky connected to the grid (“Sophie”). The project has a Power Purchase Agreement (“PPA”) that requires the curtailment of the site during certain hours of the day to help balance the Kentucky grid. We own 100% of the facility, which was completed in 2021.

Sophie is focused on Bitcoin Hosting of multiple large customers. The data center generates revenue via a combination of fixed services fees and profit share, while energy cost is passed through. During 2025, Sophie completed three consecutive expansion agreements with long-standing hyperscale mining customers, reflecting sustained demand and high satisfaction with our hosting customers. In addition, Sophie closed a new 3.3 MW partnership with KULR Technology Group in October 2025, diversifying the customer base and expanding the site's renewable-powered computing footprint.

Project Kati 1

Project Kati 1 is the first phase of the Company’s data center campus under development in Willacy County, Texas, co-located with a 272.6 MW wind farm. Project Kati 1 comprises 83 MW dedicated to Bitcoin hosting. Construction began on September 18, 2025, and on July 22, 2025, the Company finalized a contribution agreement with SLC for the initial 35 MW of capacity, with initial energization beginning in the first quarter of 2026. Project Kati 1 started operating in February 2026, and completed 48MWs of construction on April 1, 2026, filled by Galaxy Digital, Inc.

Project Kati 2

Project Kati 2 is the second phase of development at the Company’s Kati site in Willacy County, Texas, and is focused on supporting AI and high-performance computing workloads. The project is being advanced through a joint venture with Metrobloks to develop an initial phase of 100 MW+ CIT (and upwards of 350MW CIT) of AI and HPC capacity, with the potential to expand to a larger multi-hundred-megawatt deployment. The campus is designed to leverage behind-the-meter integration with renewable energy and support customers requiring large-scale, high-density compute infrastructure with accelerated time to power. Discussions began in December 2025 with potential customers for the data center campus. In March and April of 2026 those discussions continue several additional potential customers. The final stages of the design RFP were completed in April 2026 and design work is set to begin in May 2026.

Project Rosa

We are developing Project Rosa in Snyder, Texas, which is expected to be up to 187 MW of data center capacity for AI and Bitcoin Hosting and other computing-intensive applications. It will be co-located with a 242.5 MW wind farm. We have signed term sheets for both power and land purchase agreements in connection with this project.

Project Hedy

We have signed a term sheet for power for Project Hedy, a new 120 MW data center co-located with a 200 MW wind farm in South Texas. The wind farm is owned by a new power partner–a multinational conglomerate that focuses on developing and managing sustainable infrastructure solutions, with a strong emphasis on renewable energy, water management, and services, aiming to contribute to a low-carbon economy and a better planet.

Project Ellen

We have signed a term sheet for power for Project Ellen, a new 100 MW data center co-located with a 145 MW wind farm in South Texas. The wind farm is owned by a new power partner—a leader in renewable energy and sustainable infrastructure both in the U.S. and internationally. Project Ellen will be developed in two 50MW phases, leveraging wind energy to drive sustainable computing at scale.

Project Annie

We have signed a term sheet for power for Project Annie, a new 74 MW data center which will be co-located with a 114 MW solar farm in Northeast Texas. The solar farm is owned by a new power partner–a leader in renewable energy and sustainable infrastructure both in the U.S. and internationally.

Project Fei

We have signed a term sheet for power for Project Fei, a 100 MW data center in development which will be co-located with a 240 MW utility-scale solar farm, Soluna’s second solar-based project to date. Being developed in partnership with a global leader in energy infrastructure investment, Project Fei will convert underutilized solar energy into clean, high-performance computing power. The project is currently advancing through land acquisition, power contract negotiation, and ERCOT interconnection planning.

Project Gladys

We have signed a term sheet for power for Project Gladys, a 150 MW facility in development which will be co-located with a 226 MW wind farm and developed in partnership with a prominent U.S.-based independent power producer managing over $40 billion in assets and more than 80 energy facilities nationwide. The project is currently advancing through land acquisition, power contract negotiation, and ERCOT interconnection planning.

Our Growth Strategy

In 2026, we are focused on advancing the following key initiatives:

• Grow Pipeline: Expand Soluna’s Renewable Computing(™) pipeline by advancing projects in our 4.3 GW+ power pipeline to shovel-ready status and securing behind-the-meter access to curtailed energy resources. Enable scalable capacity with accelerated speed to power.
• Develop AI: Advance Project Kati 2 with Metrobloks to shovel-ready and tenant-ready, in addition to advancing Project Dorothy 3 to shovel-ready and tenant-ready. Build a pipeline of AI-ready campuses designed for rapid deployment from the 4.3GW+ pipeline through joint ventures.
• Optimize Projects: Energize Project Kati 1. Enhance profitability across operating data centers through higher uptime, operational efficiency, and disciplined cost management, thereby strengthening long-term asset value and improving overall customer satisfaction.
• Capital Formation: Executing a disciplined capital strategy to fund pipeline growth, AI data center development, and construction. Leveraging project-level financing and strategic capital partnerships to scale data center development while maintaining balance sheet flexibility.

Recent Developments

Briscoe Wind Farm Acquisition

On April 1, 2026, Soluna DV Wind SponsorCo, LLC (the “Tranche C Borrower”), a wholly owned indirect subsidiary of the Company, entered into a Membership Interest Purchase Agreement (the “Briscoe MIPA”) with Briscoe Wind Project Holdings I, LLC, JPM Capital Corporation, and Morgan Stanley Wind LLC (collectively, the “Briscoe Sellers”), pursuant to which the Tranche C Borrower acquired 100% of the issued and outstanding equity interests in Briscoe Wind Farm, LLC, a Delaware limited liability company (the “Briscoe Project Company”), from the Briscoe Sellers. The Briscoe Project Company owns an approximately 150 MW nameplate capacity wind generation project located in Briscoe and Floyd counties, Texas (the “Briscoe Project”). The closing of the acquisition (the “Briscoe Project Acquisition”) occurred simultaneously with the execution of the Briscoe MIPA on April 1, 2026. The aggregate closing payment under the Briscoe MIPA was approximately $53,000,000.

The acquisition is expected to be immediately accretive, with substantial forward looking growth in revenue and Adjusted EBITDA. With this acquisition, Soluna achieves full vertical integration for Project Dorothy, owning both the renewable energy source and the data center infrastructure it powers. The closing positioned the Company to unlock development of Project Dorothy 3, a planned renewable-powered AI campus expansion on 300 new acres adjacent to the existing site with potential capacity of up to 300 MW+.

Credit and Guaranty Agreement and Consent and Amendment No. 1

On September 12, 2025, the Company caused its subsidiaries Soluna DVSL ComputeCo, LLC , Soluna DVSL II ComputeCo, LLC , and Soluna KK I ComputeCo, LLC (collectively, the “Existing Borrowers”) to enter into a Credit and Guaranty Agreement (the “Credit Agreement”) with Generate Lending, LLC, as administrative agent and collateral agent (the “Agent”), and Generate Strategic Credit Master Fund I-A, L.P. (the “Lender”). The Credit Agreement provides for senior secured term loan commitments in an aggregate principal amount of up to $35.5 million, comprised of (i) Tranche A-1 ($5.5 million), (ii) Tranche A-3 ($11.5 million), and (iii) Tranche B ($18.5 million). In addition, the Credit Agreement permits the Existing Borrowers to request one or more Additional Tranche Loan Commitments (as defined in the Credit Agreement), in the aggregate amount of up to $64.5 million, subject to the approval of the Lender and the Agent, for project-level financing of eligible projects.

Also on April 1, 2026, in connection with the Briscoe Project Acquisition, the Company caused the Existing Borrowers and the Tranche C Borrower (collectively, the “Borrowers”) to enter into Consent and Amendment No. 1 to the Credit Agreement and Amendment No. 1 to the Pledge Agreement (the “Amendment”, and the Credit Agreement, as amended by the Amendment, the “Amended Credit Agreement”) with the Agent and the Lender. The Amendment became effective on April 1, 2026 (the “First Amendment Effective Date”).

Under the Amended Credit Agreement: (i) Tranche A-1 and Tranche A-3 loan commitments finance the Dorothy 1A Project and the Dorothy 2 Project, respectively; and (ii) Tranche B loan commitments finance the development and construction of the Kati Project.

Among other changes, the Amendment: (i) adds the Tranche C Borrower as a new borrower and guarantor; (ii) establishes Tranche C loan commitments of $12,500,000 to finance the Briscoe Project Acquisition; (iii) adds the Briscoe Project Company as a guarantor following the acquisition; and (iv) includes the Briscoe Project as a new project under the Amended Credit Agreement.

Pursuant to the Amended Credit Agreement, the Company issued to Generate Strategic Credit Master Fund I-B, L.P., an affiliate of the Lender and the Agent, in a private placement: (i) a pre-funded warrant to purchase up to 700,000 shares of common stock; (ii) a common warrant to purchase up to 1,350,000 shares of common stock; and (iii) a common warrant to purchase up to 650,000 shares of common stock.

Project Dorothy 1A Acquisition

On April 15, 2026, we acquired SLC's equity interest in D1A for $16.5 million. The transaction gives us complete equity ownership of D1A, and marks the second major step in the Company’s vertical integration of the Dorothy campus, following the $53 million acquisition of the Briscoe Wind Farm earlier in April. With full ownership of D1A and Briscoe providing 150 megawatts of owned renewable power, we are positioning ourselves to convert the Dorothy campus to AI computing as Dorothy 3 development advances and opens the door to bringing new equity partners onto the site on terms aligned with the Company’s AI-first strategy.

The $16.5 million acquisition will be paid in cash in two installments: $6 million at closing, with the balance due in July 2026. To finance a portion of the transaction, we signed an unsecured promissory note with a lender in the principal amount of $12 million, maturing on May 15, 2027, which closed concurrently with the acquisition

Consolidated Results of Operations (unaudited)

Consolidated Results of Operations (unaudited) for the Three Months Ended March 31, 2026 Compared to the Three Months Ended March 31, 2025.

The following table summarizes changes in the various components of our net loss during the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

(Dollars in thousands)

51

The following table summarizes the balances for the project sites for cryptocurrency mining revenue, data hosting revenue, high-performance computing service revenue, demand response revenue, cost of cryptocurrency mining revenue, exclusive of depreciation, cost of data hosting revenue, exclusive of depreciation, cost of high-performance computing services, and cost of depreciation during the three months ended March 31, 2026:

(Dollars in thousands)

52

The following table summarizes the balances for the project sites for cryptocurrency mining revenue, data hosting revenue, high-performance computing service revenue, demand response revenue, cost of cryptocurrency mining revenue, exclusive of depreciation, cost of data hosting revenue, exclusive of depreciation, cost of high-performance computing services, and cost of depreciation during the three months ended March 31, 2025:

(Dollars in thousands)

Cryptocurrency Mining Revenue: Cryptocurrency mining revenue declined for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The decline was due to decrease in average hashprice by 36% quarter over quarter, in addition to a decline in the average price of Bitcoin resulting in lower revenues, as well as the number of Bitcoin mined decreased 12% quarter over quarter.

Data Hosting Revenue: Hosting revenue increased for the three months ended March 31, 2026, compared to the same period in 2025. This increase was primarily driven by the ramped-up energization and resulting revenue contribution from the D2 and Kati facility during the first quarter of 2026, whereas both sites did not generate revenue in the first quarter of 2025.

Demand Response Service: Demand response service revenue increased during the three months ended March 31, 2026, compared to the same period in 2025, which was due to D2 becoming operational in the second quarter of 2025, and as such no revenue was generated from the site during the first quarter of 2025.

Cost of Cryptocurrency Mining Revenue, exclusive of depreciation: Cost of cryptocurrency mining revenue includes direct utility costs, site overhead expenses, and overhead costs attributable to the operations of our cryptocurrency mining facilities in Texas.

The decrease in the cost of cryptocurrency mining revenue for the three months ended March 31, 2026, compared to the same period in 2025, was primarily driven by lower electricity consumption and associated operating expenses, reflecting a reduction in total power utilization during the period.

Cost of Data Hosting Revenue, exclusive of depreciation: Cost of data hosting revenue includes direct utility costs, site overhead expenses, and overhead costs attributable to the operations of data hosting facilities in Kentucky and Texas.

Cost of data hosting increased for the three months ended March 31, 2026, compared to the same period in 2025. This increase was primarily driven by the initial energization of the D2 facility during the second quarter of 2025 and the subsequent increase in MWs capacity and associated operating costs in the first quarter of 2026, in addition to the initial energization of Project Kati during the first quarter of 2026.

Cost of Data Hosting Revenue- depreciation: Cost of data hosting revenue-depreciation increased mainly due to D2 becoming energized during fiscal year 2025, and Project Kati beginning initial energization in the first quarter of 2026.

General and Administrative Expenses, exclusive of depreciation and amortization: General and administrative expenses, exclusive of depreciation and amortization include cash and non-cash compensation, benefits, and related costs in support of our general corporate operations, including general management, finance and accounting, human resources, marketing, information technology, corporate development, and legal services.

• Stock-based compensation expense was approximately $10.1 million for the three months ended March 31, 2026, compared to $1.8 million for the three months ended March 31, 2025, representing an increase of approximately $8.3 million. Approximately $182 thousand of the increase relates to equity awards issued to board advisors, officers and employees during 2026. Approximately $8.5 million of the increase relates to equity awards issued to directors, officers and employees during 2025 subsequent to March 31, 2025, in which those awards get recognized for a full quarter of expense for the three months ended March 31, 2026 versus not being expensed for the three months ended March 31, 2025. The increase also includes approximately $51 thousand related to changes in the vesting terms of certain grants. These increases were partially offset by approximately $411 thousand related to the cessation of vesting for certain prior-year grants and the forfeiture of grants during the year related to termed individuals.
• Salaries and employee benefits increased by approximately $655 thousand compared to the prior quarter period. The increase was driven by recruitment costs associated with the search and onboarding of a new Chief Financial Officer, accrual for incentive based compensation, increased employee benefits premiums and plan costs, and additional payroll taxes and benefit loadings attributable to cost-of-living adjustments applied to senior executive compensation and incremental headcount added during the period.
• Professional and legal fees increased approximately $994 thousand for the three months ended March 31, 2026, primarily due to legal expenses incurred in connection with the acquisition of the Briscoe wind farm, in addition to consulting expenses incurred due to facilities inspection costs incurred in connection with the Briscoe wind farm acquisition, the addition of financial software administrative consulting engagements, interim Chief Financial Officer services engaged during the current year, and incremental costs associated with business development activities.
• All other fluctuations within general and administrative expenses for the period were not material to the overall results of operations.

Depreciation and Amortization associated with general and administrative expenses: Depreciation and amortization expense was comparable for the three months ended March 31, 2026, and 2025, totaling approximately $2.4 million in each period. The expense primarily relates to amortization of the strategic pipeline contract acquired in October 2021.

Interest expense: Interest expense for the three months ended March 31, 2026 was approximately $1.5 million compared to the $838 thousand for the three months ended March 31, 2025. See table below noting the difference mainly relates to the new loans entered into in fiscal year 2025 (Generate loan and Galaxy loan), which includes amortization of deferred financing costs, offset by the NYDIG ABL LLC ("NYDIG") equipment financing loan that was settled in September 2025.

(Dollars in thousands)

Gain on Debt Extinguishment and Revaluation, net: We did not recognize a gain on debt extinguishment for the three months ended March 31, 2026. For the three months ended March 31, 2025, we recognized a gain of approximately $551 thousand. The gain was in relation to the fulfillment of the Assignment and Assumption Agreement for the July Securities Purchase Agreement additional loan on March 14, 2025.

Fair value adjustment, net: We did not recognize a fair value adjustment for the three months ended March 31, 2026. For the three months ended March 31, 2025, we recognized a loss of approximately $118 thousand in fair value adjustments in relation to timing of the August 12, 2024 Standby Equity Purchase Agreement ("2024 SEPA")draws to when the shares were issued.

Other financing expense: Other financing expenses totaled approximately $564 thousand for the three months ended March 31, 2026, primarily related to commitment and structuring fees associated with the March 24, 2026 Standby Equity Purchase Agreement ("2026 SEPA") of $275 thousand, as well as SEC and FINRA filing fees of approximately $289 thousand for shelf registration occurred in the first quarter of 2026. For the three months ended March 31, 2025, other financing expense was approximately $201 thousand in relation to consent fees for the 2024 SEPA draws.

Net (loss) income attributable to non-controlling interest: We incurred a net loss attributable to non-controlling interest for the three months ended March 31, 2026 of approximately $436 thousand compared to net income attributable to non-controlling interest for the three months ended March 31, 2025 of $202 thousand a change of approximately $638 thousand increase in net loss attributable to non-controlling interest. The increase in net loss attributable to non-controlling interest was mainly attributable to Project Kati 1 just starting energization in the first quarter of 2026, whereas no costs were associated for the first quarter of 2025, in addition to the decline in cryptocurrency mining as noted above for D2. These declines were offset by Project Dorothy 2 as it was in a full quarter of site energization and generating revenue, whereas in the first quarter of 2025, the project was just generating costs as it was yet energized.

Non-GAAP Measures

To supplement our consolidated condensed financial statements included in this quarterly report presented under U.S. generally accepted accounting principles (“GAAP”), we are presenting certain non-GAAP financial measures. We are providing these non-GAAP financial measures to disclose additional information to facilitate the comparison of past and present operations by providing perspective on results absent one-time or significant non-cash items. We utilize these measures in the business planning process to understand expected operating performance and to evaluate results against those expectations. We believe that these non-GAAP financial measures, when considered together with our GAAP financial results, provide management and investors with an additional understanding of our business operating results regarding factors and trends affecting our business and provide a reasonable basis for comparing our ongoing results of operations.

These non-GAAP financial measures are provided as supplemental measures to our performance measures calculated in accordance with GAAP and therefore, are not intended to be considered in isolation or as a substitute for comparable GAAP measures. Further, these non-GAAP financial measures have no standardized meaning prescribed by GAAP and are not prepared under any comprehensive set of accounting rules or principles. Because of the non-standardized definitions of non-GAAP financial measures, we caution investors that the non-GAAP financial measures as used by us in this quarterly report have limits in their usefulness to investors and may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by other companies. Further, investors should be aware that when evaluating these non-GAAP financial measures, these measures should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. In addition, from time to time in the future there may be items that we may exclude for purposes of our non-GAAP financial measures, and we may in the future cease to exclude items that we have historically excluded for purposes of our non-GAAP financial measures. Likewise, we may determine to modify the nature of the adjustments to arrive at our non-GAAP financial measures. Investors should review the non-GAAP reconciliations provided below and not rely on any single financial measure to evaluate our business.

EBITDA and Adjusted EBITDA

In addition to financial measures calculated in accordance with GAAP, we also use “EBITDA” and “Adjusted EBITDA.” “EBITDA” is defined as earnings before interest, taxes, and depreciation and amortization. “Adjusted EBITDA” is defined as EBITDA adjusted for stock-based compensation costs, gain on sale of fixed assets, gain on debt extinguishment, fair value adjustments, and other non-cash activity. Management believes that EBITDA and Adjusted EBITDA results in a performance measurement that represents a key indicator of our business operations of cryptocurrency mining, hosting customers engaged in cryptocurrency mining, demand service revenue, and high-performance computing services.

We believe EBITDA and Adjusted EBITDA can be important financial measures because they allow management, investors, and the Board to evaluate and compare our operating results, including our return on capital and operating efficiencies, from period-to-period by making such adjustments. Non-GAAP financial measures are subject to material limitations as they are not in accordance with, or a substitute for, measurements prepared in accordance with GAAP. For example, we expect that stock-based compensation costs, which is excluded from the non-GAAP financial measures, will continue to be a significant recurring expense over the coming years and is an important part of the compensation provided to certain employees, officers, and directors. Similarly, we expect that depreciation and amortization of fixed assets will continue to be a recurring expense over the term of the useful life of the assets.

EBITDA and Adjusted EBITDA are provided in addition to and should not be considered to be substitutes for, or superior to net income, the comparable measure calculated in accordance with GAAP. Further, EBITDA and Adjusted EBITDA should not be considered as alternatives to revenue growth, net income, or any other performance measure calculated in accordance with GAAP, or as alternatives to cash flow from operating activities as a measure of our liquidity. EBITDA and Adjusted EBITDA have limitations as analytical tools, and you should not consider such measures either in isolation or as substitutes for analyzing our results as reported under GAAP.

Reconciliations of EBITDA and Adjusted EBITDA to net loss, the most comparable GAAP financial metric, for historical periods are presented in the table below:

(Dollars in thousands)

Adjusted EBITDA decreased for the three months ended March 31, 2026 compared to March 31, 2025 primarily driven by increases in general and administrative expenses, exclusive of depreciation and amortization, of approximately $1.9 million for the comparable period. The general and administrative expense increase was driven by increases in 2026 legal and consulting expenses incurred in relation to the Briscoe Acquisition and increases in salaries and benefits in relation to headcount and other compensation related matters. In addition, there was increases in other financing expenses due to SEC registration and FINRA fees applied in the first quarter of 2026. The increases in expenses, were offset in part due to increase in gross profit excluding cost of sales- depreciation of approximately $1.5 million. With the energization of D2 and Project Kati 1, the Company saw revenue growth in those project sites, in addition to less costs incurred in relation to energy costs.

The following table represents the Adjusted EBITDA activity between each three-month period from January 1, 2026 through March 31, 2026.

(Dollars in thousands)

The following table represents the Adjusted EBITDA activity between each three-month period from January 1, 2025 through December 31, 2025.

(Dollars in thousands)

58

Liquidity and Capital Resources

Several key indicators of our liquidity are summarized in the following table:

(Dollars in thousands)

As of March 31, 2026, we had a consolidated accumulated deficit of approximately $385.2 million and we had positive working capital of approximately $38.8 million. As of March 31, 2026, we had total debt outstanding of approximately $26.0 million as summarized further below in the Debt table. In addition, we had outstanding commitments related to Soluna Digital Inc. (“SDI”) of approximately $8.2 million in capital expenditures related to Project Kati. In addition, due to CloudCo’s termination of the HPE Agreement on March 24, 2025, and HPE’s termination of the HPE Agreement on March 26, 2025, and the acceleration of the remaining unpaid amounts of the contract in accordance with Section 8(h)(ii) of the HPE Agreement, we have recognized a liability for the remainder of the HPE Agreement on the balance sheet of our subsidiary, CloudCo, of approximately $19.3 million. As of March 31, 2026, we had $68.6 million of cash available to fund our operations.

Based on business developments, including changes in production levels, staffing requirements, and network infrastructure improvements, we will require additional capital equipment in the foreseeable future. We are focused on developing and monetizing green cryptocurrency mining facilities, as well as facilities capable of hosting customers engaged in cryptocurrency mining, and data centers to provide specialized AI Cloud and colocation services.

In 2025 and 2026, we had the following capital raise activities:

• At the Market Offering Agreement (the “ATM Agreement”) with H.C. Wainwright & Co., LLC (“Wainwright”), as sales agent, pursuant to which we may offer and sell, from time to time, through Wainwright, up to $87.65 million. As of December 31, 2025, we had drawn approximately $34.2 million in net proceeds pursuant to the ATM Agreement. No draws were done for the three months ended March 31, 2026. On March 9, 2026, the Company filed a shelf registration statement on Form S-3 which was subsequently declared effective in which the Company may offer and sell shares of the Company’s common stock having an aggregate offering price up to $500 million from time to time through Wainwright. Subsequent to March 31, 2026 and through the date of the issuance of these condensed financial statements, the Company has issued 36,820,572 shares of common stock for net proceeds of approximately $52.2 million.
• 2024 SEPA with YA II PN, LTD., a Cayman Islands exempt limited company (“YA”). In accordance with the terms of the 2024 SEPA, YA has agreed to purchase up to $25 million in aggregate gross purchase price of newly issued fully paid shares of our common stock from time to time subject to the limits and the conditions of the 2024 SEPA. As of December 31, 2025, approximately $6.2 million has been drawn on the 2024 SEPA. On March 24, 2026, the Company entered into another the 2026 SEPA with YA. In accordance with the terms of the 2026 SEPA, YA has agreed to purchase up to an aggregate of $250.0 million of shares of common stock (the “2026 SEPA Shares”) from time to time subject to the limits and the conditions of the 2026 SEPA. No shares have been drawn as of March 31, 2026 and through the date of the issuance of these condensed financial statements.
• In July 2025, we entered into a securities purchase agreement pursuant to which we received gross proceeds of $5.0 million from a public offering of common stock. In connection with this offering, we issued warrants, and as of December 31, 2025, we received approximately $10.0 million in gross proceeds from the exercise of such warrants.
• In December 2025, we entered into a securities purchase agreement pursuant to which we received gross proceeds of approximately $32.0 million from a public offering of common stock.

For 2026, we plan to continue funding operations, including operating deficits, from operating cash flows and cash flow debt and equity financings, including the ATM Agreement, 2024 SEPA, additional borrowings from the Generate loan facility for the Briscoe Wind Farm acquisition, the unsecured promissory note with YA for the membership interest purchase of D1A, and others to be closed as needed consistent with management’s plans.

The Company is dependent on 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 issuances, project level equity, debt borrowings, partnerships and/or collaborations. If the Company is unable to meet its financial obligations, it could be forced to restructure or refinance, seek additional equity capital or sell its assets. The Company might then be unable to obtain such financing or capital or sell its assets on satisfactory terms. There can be no assurance that additional financing will be available to the Company when needed or, if available, that it can be obtained on commercially reasonable terms. If the Company is not able to obtain the additional financing on a timely basis, if and when it is needed, it will be forced to delay or scale down some or all of its development activities or perhaps even cease the operation of its business.

Operating Activities

Net cash used in operations was approximately $6.4 million during the three months ended March 31, 2026. The Company had a net loss for the three months ended March 31, 2026 of approximately $17.9 million. Non-cash items mainly included approximately $2.2 million of depreciation expense, $2.4 million of amortization expenses, and $10.2 million of stock compensation expenses. The other non-cash items were not material. The change in asset and liabilities of $3.3 million mainly relates to increases in prepaid expenses and other current assets of $1.5 million in relation to prepaid utility expense for Project Kati, and timing of energy deposits, in addition to an increase in accounts payable of $2.1 million related to legal and fixed asset invoices not paid. The other changes in assets and liabilities were not material.

Net cash used by operations was approximately $177 thousand during the three months ended March 31, 2025. The Company had a net loss for the three months ended March 31, 2025 of approximately $7.4 million. Non-cash items included approximately $1.5 million of depreciation expense, and $2.4 million of amortization expenses, and $1.8 million of stock compensation expenses. These non-cash items were offset with a deferred tax benefit of $437 thousand and gain on extinguishment of debt of approximately $551 thousand. The change in asset and liabilities of $1.9 million mainly relates to decrease in other long term assets of $1.6 million in relation to receipt of the Briscoe deposit in January 2025. The other changes in assets and liabilities of approximately $500 thousand mainly related to decrease in accounts receivable due to timing and amounts billed related to March services, an increase in accounts payable related to timing and billing amounts of invoices, including increases in legal fees, an increase in interest payable in relation to NYDIG loan and Galaxy loan, offset with payment made to HPE in January and payment of sales and use tax.

Investing Activities

Net cash used in investing activities during the three months ended March 31, 2026 was approximately $6.2 million consisting mainly of capital expenditures of $2.6 million, which consist of additions to property, plant, and equipment mainly for Project Kati offset with transfers from deposits on equipment, and $3.6 million deposit on equipment purchases.

Net cash used in investing activities during the three months ended March 31, 2025 was approximately $3.6 million consisting mainly of capital expenditures and deposits on equipment for D2.

Financing Activities

(Dollars in thousands)

Net cash provided by financing activities was approximately $9.7 million for the three months ended March 31, 2026 consisting mainly of contributions from SLC for non-controlling interest of Project Kati of $10.9 million, offset with payments on debt of approximately $1.0 million to the Green Cloud Secured Note (as defined below), Generate debt, and Galaxy principal debt costs.

Net cash provided by financing activities was approximately $7.8 million for the three months ended March 31, 2025 consisting mainly of $5.0 million of debt issuance proceeds from Galaxy, $2.0 million of net proceeds from 2024 SEPA draws, and $4.3 million of contributions from non-controlling interest, offset with cash distributions to non-controlling interest members of approximately $1.5 million and payments on debt and deferred financing costs of approximately $2.0 million regarding the Green Cloud Secured Note, First Amendment to the Note Purchase Agreement dated July 12, 2024, Navitas term loan, and for deferred financing costs.

Debt

The following balances are presented net of unamortized debt issuance costs of approximately $2.7 million and $2.9 million as of March 31, 2026 and December 31, 2025, respectively.

(Dollars in thousands)

61

On September 12, 2025, the Company caused its subsidiaries Soluna DVSL ComputeCo, LLC (“Dorothy 1A Borrower”), Soluna DVSL II ComputeCo, LLC (“Dorothy 2 Borrower”), and Soluna KK I ComputeCo, LLC (“Tranche B Borrower” and collectively with Dorothy 1A Borrower and Dorothy 2 Borrower, the “Borrowers”) to enter into a Credit and Guaranty Agreement (the “Credit Agreement”) with Generate Lending, LLC, as administrative agent and collateral agent (the “Agent”), and Generate Strategic Credit Master Fund I-A, L.P. (the “Lender”). The Credit Agreement provides for senior secured term loan commitments in an aggregate principal amount of up to $35.5 million, comprised of (i) Tranche A-1 ($5.5 million), (ii) Tranche A-3 ($11.5 million), and (iii) Tranche B ($18.5 million). In addition, the Credit Agreement permits the Borrowers to request one or more Additional Tranche Loan Commitments (as defined in the Credit Agreement), in the aggregate amount of up to $64.5 million, subject to the approval of the Lender and the Agent, for project-level financing of eligible projects. As of March 31, 2026, the Borrowers borrowed approximately $17 million under the Credit Agreement, comprised of Tranche A-1 loans and Tranche A-3 loans. The Company can draw upon Tranche B from September 12, 2025 until October 31, 2026, subject to the conditions set forth in the Credit Agreement. The maturity date for the Tranche A and Tranche B loans is the earlier of (i) payment of outstanding principal, interest, and fees and (ii) September 12, 2030. Additional Tranche Loan Commitments will have maturity dates as set forth in their respective amendments to the Credit Agreement. As of March 31, 2026, the outstanding principal balance is approximately $15.8 million. The Company has obtained a limited waiver in connection with diligence requests. As of the date of these condensed consolidated financial statements, the Company is in compliance with all covenants in relation to the Generate Credit Agreement.

On March 12, 2025, the SW Borrower, a Delaware limited liability company and subsidiary of SW Holdings, itself a subsidiary of SDI, a Nevada corporation and wholly owned subsidiary of the Company, entered into the Galaxy Loan Agreement with SW Holdings and Galaxy. The Galaxy Loan Agreement provides for a term loan facility in the principal amount of $5.0 million (the “Term Loan Facility”). The Term Loan Facility bears interest at a rate of 15.0% per annum, subject to an increase of 5.0% (for a total of 20.0%) in the event an Event of Default has occurred and is continuing. The Term Loan Facility matures on March 12, 2030 and includes scheduled payments over a five-year term. As of March 31, 2026, the outstanding principal balance is approximately $4.5 million as we were compliant with all debt covenants.

On June 20, 2024, pursuant to the terms and subject to the conditions of a Note Purchase Agreement (the "June SPA") by and among (i) Soluna AL CloudCo, LLC, a Delaware limited liability company ("CloudCo") and indirect wholly owned subsidiary of the Company, (ii) Soluna Cloud, Inc., a Nevada corporation, indirect wholly owned subsidiary of the Company, and parent of CloudCo ("Soluna Cloud"), (iii) the Company and (iv) the accredited investor named therein (the "Investor"), CloudCo issued to the Investor a secured promissory note in a principal amount equal to $12.5 million (the

“Green Cloud Secured Note”). The Green Cloud Secured Note accrues interest at a rate 9.0% per annum, subject to adjustment upon an event of default. The Green Cloud Secured Note matures on June 20, 2027. In relation to the Green Cloud Secured Note, as of March 31, 2026, the Company had an outstanding principal balance of approximately $7.3 million.

On May 16, 2024, the SL Borrowing – 1, LLC, an affiliate of the Company (the “SDI Borrower"), entered into a loan (the "Equipment Loan Agreement" and the "Loan") with Soluna2 SLC Fund II Project Holdco LLC (the "Lender"). The Equipment Loan Agreement provides for the SDI Borrower to borrow, from time to time, up to $4.0 million, as further amended on February 28, 2025, to be used to purchase necessary equipment for the progression of D2 and Project Kati. Any loans made under the Equipment Loan Agreement have a maturity date of May 16, 2027 and bear interest at a rate of 15% per annum. The Equipment Loan Agreement includes customary covenants for loans of this nature, as well as a multiple on invested capital provision ("MOIC"), which requires us to pay, in addition to principal and interest, an amount equal to the difference of (i) the greater of (a) the principal amount of the Loan being repaid plus all interest previously paid or simultaneously being paid to Lender in respect of such principal of the Loan, and (b) the principal amount of the Loan being repaid multiplied by three, minus (ii) the sum of the principal amount of the Loan being repaid plus all interest previously paid or simultaneously being paid to Lender in respect of such principal of the Loan. On October 1, 2025, the Borrower, and Soluna2 Kati Project Holdco LLC ("Kati Lender"), entered into a borrowing request of $1.1 million to cover the purchase of land to support construction of Project Kati Phase 2 under the terms of the Equipment Loan Agreement. For the land purchase, the MOIC payment was revised to replace 3.00 with 1.00. The $1.1 million remains outstanding as of March 31, 2026.

Critical Accounting Policies and Significant Judgments and Estimates

The above discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. Note 2, Accounting Policies, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2025 includes a summary of our most significant accounting policies. There have been no material changes to the critical accounting policies previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025. The preparation of these condensed consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosure of assets and liabilities. On an ongoing basis, we evaluate our estimates and judgments, including those related to revenue recognition, income taxes, fair value measurements, and stock-based compensation. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Periodically, our management reviews our critical accounting estimates with the Audit Committee of our Board of Directors.

Statement Concerning Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Exchange Act. Any statements contained in this Form 10-Q that are not statements of historical fact may be forward-looking statements. When we use the words “anticipate,” “estimate,” “plans,” “projects,” “continuing,” “ongoing,” “expects,” “management believes,” “we believe,” “we intend,” “should,” “could,” “may,” “will” and similar words or phrases, we are identifying forward-looking statements. Such forward-looking statements include, but are not limited to, statements regarding:

• the availability of financing opportunities, risks associated with economic conditions, dependence on management and conflicts of interest;
• the ability to service debt obligations and maintain flexibility in respect of debt covenants;
• economic dependence on regulated terms of service and electricity rates;
• the speculative and competitive nature of the technology sector;
• ability of the Company to attract and retain hosted customers for its hosting operations;
• dependency in continued growth in blockchain and cryptocurrency usage;
• lawsuits and other legal proceedings and challenges;
• conflict of interests with directors and management;
• government regulations;
• The growth of the Briscoe Wind Farm acquisition that occurred on April 1, 2026;
• The ability of the Company to construct and complete the anticipated expansion of its data centers; and
• other risks and uncertainties discussed under the heading “Risk Factors” in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

Forward-looking statements speak only as of the date they are made. You should not put undue reliance on any forward-looking statements. We assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions, or changes in other factors affecting forward-looking information, except to the extent required by applicable securities laws. If we do update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

(a) Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Exchange Act, and the rules and regulations thereunder, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As required by Rule 13a-15(b) under the Exchange Act, our management, under the supervision and with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of March 31, 2026. Based on such evaluation, our principal executive officer and principal financial officer have concluded that, as of March 31, 2026, our disclosure controls and procedures were effective at the reasonable assurance level.

Material Weakness in Internal Control and Plan for Remediation

As disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025, management identified a material weakness in our internal control over financial reporting that remained open as of March 31, 2026 related to control activities over balance sheet classification and presentation. Specifically, errors were identified related to (i) the classification of current and long-term debt, (ii) a lease classification and valuation, and (iii) an overstatement in deposits on equipment and current liabilities.

Remediation:

Our Board of Directors and management take internal control over financial reporting and the integrity of our financial statements seriously. Management continues to work to improve its controls related to our material weaknesses. The remediation actions include: (i) enhancing design and documentation related to complex transactions and control activities, and (ii) developing robust review procedures to ensure the proper recording and reporting of the complex transactions. To achieve the timely implementation of the above, management has commenced the following actions and will continue to assess additional opportunities for remediation on an ongoing basis:

• Implement more robust internal policies and procedures relating to balance sheet presentations, with a specific focus on establishing reliable controls over lease accounting to ensure the accuracy of financial reporting.

We cannot provide any assurance that these remediation efforts will be successful or that our internal control over financial reporting will be effective as a result of these efforts. In addition, we continue to evaluate and work to improve our internal control over financial reporting related to the identified material weakness, management may determine to take additional measures to address control deficiencies or determine to modify the remediation plan described above. We believe as of March 31, 2026, our condensed financial statements are fairly stated in all material respects in accordance with generally accepted accounting principles in the United States of America.

(b) Changes in Internal Control Over Financial Reporting

Other than the remediation efforts that are in process, there have been no changes in our internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during our fiscal quarter ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

The material weaknesses cannot be considered remediated until the applicable remedial controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively. Therefore, to remediate our existing material weaknesses, we require additional time to complete the implementation and testing of our remediation plans and demonstrate the effectiveness of our remediation efforts.

Part II, Item 1A (Risk Factors) of our most recently filed Annual Report on Form 10-K with the SEC, filed on March 30, 2026, sets forth information relating to important risks and uncertainties that could materially adversely affect our business, financial condition and operating results. There have been no material changes to our risk factors disclosed in our most recently filed Annual Report on Form 10-K. Those risk factors continue to be relevant to an understanding of our business, financial condition and operating results, however, and, accordingly, you should review and consider such risk factors in making any investment decision with respect to our securities.