Welcome to another installment of Soluna’s AMA (Ask Me Anything) series, where you — our readers and our followers on Twitter and LinkedIn — can get your questions answered.

In this Q&A, John Tunison, CFO of Soluna Holdings, Inc., answers shareholders’ and potential investors’ most-asked questions.

Learn how to submit your questions at the end of this AMA.

Terry asked: Your 10Q for the first quarter of 2024 shows that convertible debt is being converted to common stock at $3.78 per share.  With this being the case, why is the company bothering to request that stockholders approve the action at the late May 2024 annual meeting which occurs after the action has been taken?

NASDAQ rules require the company to seek shareholder approval for any issuance of stock or warrants on stock that exceeds 20% of the currently issued stock.  The 4th Amendment to the Convertible Note resulted in several warrants and conversion shares that exceeded this threshold, requiring a shareholder vote of approval.

Doug asked: When do you forecast the resumption of dividends for your Series A Preferred stock?

The Board continues to carefully evaluate the Company’s current and prospective financial and operating results as well as the interests of all of its equity holders when making a determination to pay or accrue its Series A Preferred dividends. 

Ameet asked: Are you able to unlock and monetize the environmental value via REC’s from your renewable energy generation assets?

Soluna contracts, via Power Purchase Agreements (PPA’s), with the power producer who generates these REC’s.  We have the option to purchase REC’s to offset energy that we buy from the grid.

Zach asked: What are the details behind the Dorothy 2 financing, including the management fees that will be paid to Soluna? How does the financing pipeline look for Project Kati?

We look forward to sharing additional details about the Dorothy 2 financing once we announce the closing of the financing.  It is a similar structure to Dorothy 1A, where Spring Lane Capital and Soluna will each own a share of the equity of the project which will host Bitcoin customers at the site.  There will be developer and operator fees paid to Soluna.  Details will be communicated in the future.

It is premature to discuss Project Kati financing, other than to say that we have begun the early engagement with potential financing partners, including equity and debt.

Robin: Soluna announced 166 MW of hosting potential with Project Kati, what is the estimated total revenue gain from this project assuming Bitcoin stays around 65k?

Development work continues on Project Kati, including customer mix and economics.  We will not provide specific guidance on this project yet, but you could look at the economics of our flagship Project Dorothy to have an idea of the economics of our projects.

Anonymous asked: Regarding the balance sheet and the preferred shares – can you give a summary of where you stand with those and how you are approaching those?

The company has just returned to growth again and it feels good.  Our goal is to invest cash into the growth of the company to drive earnings and continue to diversify our business.  As this cash generation improves – as it has been lately – our board will consider what is the best use of those funds.  We are focused on reducing our debt load as fast as we can; by restructuring the convertible notes.  As for the preferred shares; we’ve come up with a few ideas here we are not ready to share yet. But, stay tuned. 

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