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 Belizaire, CEO of Soluna Holdings, Inc., answers shareholders’ and potential investors’ most asked questions about our revenue, data center projects, and other business updates

Learn how to submit your questions, if you haven’t already, at the end of this AMA.

Michael asked: Your 2023 Power Earning Illustration presentation is based on a $26,500 BTC price. Is your revenue projection directly tied to the BTC price? With BTC over $40,000, does this increase your revenue with the same percentage growth, even with your hosting agreements? Since our discussion a few weeks ago, I have once again increased my shareholdings in Soluna, buying on price dips.

Revenue growth improves as Hashprice rises for our proprietary mining at Dorothy 1B where Hashprice has the most direct relationship to revenue and Project Sophie where our hosting agreements include a profit share component. As a reminder we own 100% of Project Sophie and we own 51% of Project Dorothy 1B.

Greg asked: Will Soluna pay a year-end dividend on the 9.0% Preferred Ticker: SLNHP?

The Company’s Board is aware that the preferred dividend obligation accumulates and expects to pay a current dividend and the accumulated dividends when the company’s earnings support such payments.  While the Board of Directors has not declared a dividend for 2023 it continues to monitor the Company’s earnings and weigh a variety of growth and operating capital needs when making dividend payment decisions.

Zach asked: What’s the latest on financing for Dorothy 2? Also, any line of sight into the timeline for Kati?

We are working with two prospective project-level investors to architect a deal to finance Dorothy 2 and beyond.  We are hoping to close this financing by the end of the first quarter of this year.  The deal we are contemplating would allow us to energize the first phase of Dorothy 2 in the second half of 2024. Kati is a 166 MW project which is progressing well.  We’ve sent all required studies to ERCOT for the planning process review.  Kati is slated to exit planning by the end of the quarter is our best guess.

Mario asked: I’m wondering what EBITDA looks like for Soluna at current and higher bitcoin prices with current operations and any further operations turned on this year. And for clarity, can you clarify the total preferred and common shares and net debt outstanding?

Similar to previous questions, revenue and EBITDA improve as Hashprice rises for our proprietary mining at Dorothy 1B where Hashprice has the most direct relationship to revenue, and Project Sophie where our hosting agreements include a profit share component. As a reminder we own 100% of Project Sophie and we own 51% of Project Dorothy 1B.

Share counts can be found in our 10-Q and 10-K filings, here.

James asked: Revenue guidance was given of $34 million for the data center side of the business – is that number separate from any/all revenue generated from BTC mining?  If so, what can shareholders expect to see from BTC mining alone?  Also, there has been some concern/discussion around the cost of revenue for Soluna being higher than the revenue itself (negative profit margin).  Is this a concern of management and if so what is the plan?

Revenue:  Our revenue is a combination of proprietary mining (Dorothy 1B), hosting revenue (Dorothy 1A), and profit sharing (Sophie).  So, to see revenue related to BTC mining alone, please focus on Project Dorothy 1B and Project Sophie.

Negative profit margin:  You must be referring to the negative gross profit in the first two quarters of 2023.  Those were transition quarters. In Q1 we closed down Project Marie, In Q2 we transitioned Project Sophie from Proprietary Mining to Hosting.             

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