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Segment Information
 9 Months Ended
Sep. 30, 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 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 September 30, 2023 and 2022, approximately 0% and 4% of the Company’s cryptocurrency mining revenue was generated from Project Edith (data center located in Wenatchee, Washington), 0% and 37% from Project Marie, 3% and 59% from Project Sophie (data center located in Murray, Kentucky), and 97% and 0% from Project Dorothy (data center located in Texas), respectively. 0% and 100% of the Company’s data center hosting revenue was generated from Project Marie from hosting with customers for the three months ended September 30, 2023 and 2022, 25% and 0% of the data hosting revenue for three months ended September 30, 2023 and 2022 was generated from Project Sophie, and 75% and 0% of the data hosting revenue for the three months ended September 30, 2023 and 2022 was generated from Project Dorothy (data center located in Texas).

 

For the nine months ended September 30, 2023 and 2022, approximately 0% and 6% of the Company’s cryptocurrency mining revenue was generated from Project Edith (data center located in Wenatchee, Washington), 14% and 41% from Project Marie, and 54% and 53% from Project Sophie (data center located in Murray, Kentucky) and 32% and 0% from Project Dorothy (data center located in Texas), respectively. 5% and 100% of the Company’s data center hosting revenue was generated from Project Marie from hosting with customers for the nine months ended September 30, 2023 and 2022, 31% and 0% of the data hosting revenue for nine months ended September 30, 2023 and 2022 was generated from Project Sophie, and 64% and 0% of the data hosting revenue for the nine months ended September 30, 2023 and 2022 was generated from Project Dorothy (data center located in Texas) for the nine months ended September 30, 2023 and 2022.

 

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 and nine months ended September 30, 2023 and 2022, and reconciles to net income (loss) on the consolidated statements of operations:

 

                 
(Dollars in thousands) 

Three Months Ended

September 30,

  

Nine Months Ended

September 30,

 
   2023   2022   2023   2022 
Reportable segment revenue:                    
Cryptocurrency mining revenue  $1,786   $5,387   $5,497   $20,696 
Data hosting revenue   4,011    985    5,451    3,668 
Total segment and consolidated revenue   5,797    6,372    10,948    24,364 
Reportable segment cost of revenue:                    
Cost of cryptocurrency mining revenue, exclusive of depreciation   1,040    4,100    4,451    11,092 
Cost of data hosting revenue, exclusive of depreciation   2,150    1,078    3,181    3,192 
Cost of revenue-depreciation   1,200    6,010    2,364    15,872 
Total segment and consolidated cost of revenues   4,390    11,188    9,996    30,156 
Reconciling items:                    
General and administrative expenses   5,102    8,064    18,353    22,568 
Impairment on fixed assets   41    28,086    418    28,836 
Impairment on equity investment   -    750    -    750 
Interest expense   495    1,671    2,355    7,856 
Loss on debt extinguishment and revaluation   769    12,317    2,350    12,317 
Loss on sale of fixed assets   373    988    404    2,606 
Other expense (income), net   74    (2)   301    (2)
Income tax expense (benefit) from continuing operations   569    (547)   (524)   (1,344)
Net loss from continuing operations   (6,016)   (56,143)   (22,705)   (79,379)
Income before income tax from discontinued operations   -    (21)   -    7,681 
Income tax benefit from discontinued operations   -    -    -    70 
Net income from discontinued operations   -    (21)   -    7,751 
Net loss   (6,016)   (56,164)   (22,705)   (71,628)
(Less) Net (income) loss attributable to non-controlling interest   (646)   272    206    272 
Net loss attributable to Soluna Holdings, Inc.  $(6,662)  $(55,892)  $(22,499)  $(71,356)
                     
Capital expenditures   9,639    9,249    12,534    61,867 
Depreciation and amortization   3,579    8,388    9,498    22,999