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Segment Information
 3 Months Ended
Mar. 31, 2023
Segment Reporting [Abstract]  
Segment Information

17. Segment Information

 

The Company applies ASC 280, Segment Reporting, in determining its reportable segments. The Company has two reportable segments: Cryptocurrency Mining and Data Center Hosting. The Company notes that previously there was an additional segment: Test and Measurement Instrumentation, however as discussed in Note 1, the Company sold MTI Instruments in April 2022, and therefore has classified as discontinued operations. The guidance requires that segment disclosures present the measure(s) used by the Chief Operating Decision Maker (“CODM”) to decide how to allocate resources and for purposes of assessing such segments’ performance. The Company’s CODM is comprised of several members of its executive management team who use revenue and cost of revenues of both reporting segments to assess the performance of the business of our reportable operating segments.

 

No operating segments have been aggregated to form the reportable segments. The Company does not allocate all assets to the reporting segments as these are managed on an entity-wide basis. Therefore, the Company does not separately disclose the total assets of its reportable operating segments.

 

The Cryptocurrency Mining segment generates revenue from the cryptocurrency the Company earns through its mining activities. The Data Center Hosting segment generates revenue from contracts for the provision/consumption of electricity and operation of the data center from the Company’s high performance computing facility in Calvert City, Kentucky.

 

 

For the three months ended March 31, 2023 and 2022, approximately 0% and 7% of the Company’s cryptocurrency mining revenue was generated from Project Edith (data center located in Wenatchee, Washington), 28% and 44% from Project Marie, and 72% and 49% from Project Sophie (data center located in Murray, Kentucky), respectively. 96% and 100% of the Company’s data center hosting revenue was generated from Project Marie from hosting with customers for the three months ended March 31, 2023 and 2022, and 4% of the data hosting revenue for the three months ended March 31, 2023 was generated from Project Edith.

 

The Company evaluates performance based on profit or loss from operations before income taxes, accounting changes, items management does not deem relevant to segment performance, and interest income and expense. Inter-segment sales and expenses are not significant. Non-cash items of depreciation and amortization are included within both costs of sales and selling, general and administrative expenses.

 

The following table details revenue and cost of revenues for the Company’s reportable segments for three months ended March 31, 2023 and 2022, and reconciles to net income (loss) on the consolidated statements of operations:

 

   2023   2022 
     
(Dollars in thousands)  For the Three Months Ended March 31, 
   2023   2022 
Reportable segment revenue:          
Cryptocurrency mining revenue  $2,796   $7,812 
Data hosting revenue   286    1,504 
Total segment and consolidated revenue   3,082    9,316 
Reportable segment cost of revenue:          
Cost of cryptocurrency mining revenue, inclusive of depreciation   2,924    7,721 
Cost of data hosting revenue   214    1,138 
Total segment and consolidated cost of revenues   3,138    8,859 
Reconciling items:          
General and administrative expenses   6,747    7,255 
Impairment on fixed assets   209    — 
Impairment on equity investment   -    — 
Interest expense   1,374    2,881 
Gain on debt revaluation   (473)   — 
Loss on sale of fixed assets   78    — 
Other income, net   (12)   — 
Income tax (benefit) expense from continuing operations   (547)   (547)
Net loss from continuing operations   (7,432)   (9,132)
Income before income tax from discontinued operations   —    226 
Income tax benefit from discontinued operations   —    — 
Net income from discontinued operations   —    226 
Net loss   (7,432)   (8,906)
(Less) Net loss attributable to non-controlling interest   370    — 
Net loss attributable to Soluna Holdings, Inc.  $(7,062)  $(8,906)
           
Capital expenditures   860    25,438 
Depreciation and amortization   3,002    6,697