Soluna Holdings, Inc

1. Nature of Operations

Description of Business

Unless the context requires otherwise in these notes to the consolidated condensed 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” refers to Soluna Cloud, Inc., “SEI” refers to Soluna Energy, Inc., and "Soluna Wind" refers to Soluna Wind Holdings, Inc.

Soluna Holdings, Inc. (“SHI”) is a digital infrastructure company that specializes in transforming surplus renewable energy into computing resources. The Company’s strategy is to operate data centers co-located with wind, solar, and hydroelectric power plants, supporting compute-intensive applications, including Bitcoin mining, generative AI, and high-performance computing (“HPC”). This approach aims to create a more sustainable grid while providing cost-effective and environmentally friendly computing solutions.

Soluna Holdings, Inc. was originally incorporated in the State of New York in 1961 as Mechanical Technology, Incorporated and reincorporated in the State of Nevada on March 24, 2021. On March 23, 2021, SHI's common stock commenced trading on The Nasdaq Stock Market LLC ("Nasdaq"). Headquartered in Albany, New York, the Company changed its name from “Mechanical Technology, Incorporated” to Soluna Holdings, Inc. on November 2, 2021. On October 29, 2021, Soluna Callisto Holdings, Inc. ("Soluna Callisto") merged into Soluna Computing, Inc. (“SCI”), a private green data center development company and subsidiary of SHI. SCI subsequently sold and transferred all its assets in December 2023 to the Company. SHI conducts its business through its wholly owned subsidiary, Soluna Digital, Inc. (“SDI”). Additionally, SHI formed Soluna Cloud, Inc. (“Soluna Cloud”) on March 24, 2024, to operate cloud, colocation, and data hosting services related to high performance computing and AI. On April 2, 2024, SHI formed Soluna Energy, Inc. (“SEI”) to own and manage renewable energy power purchase agreements and land leases through a series of service subsidiaries. In January 2026, SHI formed Soluna Wind Holdings, Inc. to own and operate wind-powered energy generation facilities through its subsidiaries.

As of June 30, 2026, the Company hasfive operating projects under management. In 2021, the Company constructed a 25 MW data center and commenced operations in its Murray, Kentucky location ("Project Sophie"). The Company’s Texas site (“Project Dorothy”), located at the Briscoe wind farm, holds the potential for up to 100 MW of data center capacity. By June 2024, SHI had energized 50 MW of the site across two phases, Project Dorothy 1A and 1B. On July 22, 2024, the Company closed financing for the 48 MW data center (the “Project Dorothy 2”). Project Dorothy 2 is financed by Soluna2 SLC Fund II Project Holdco LLC, an investment vehicle of Spring Lane Capital (“SLC”) and SDI. As of June 30, 2026, SDI has 100% Class A membership and 0% Class B membership interest in Project Dorothy 2. On July 22, 2025, the Company closed financing with SLC for Project Kati 1, a data center campus in Willacy County, Texas. Project Kati 1 has a total capacity of 83 MW. As of June 30, 2026, SDI has 100% Class A membership and 13% Class B membership interest in Project Kati 1.

On April 1, 2026, the Company acquired 100% of the issued and outstanding membership interests in Briscoe Wind Farm, LLC ("Briscoe"), a 150 MW capacity wind generation project. See Note 5 for details.

2. Basis of Presentation

In the opinion of management, the Company’s condensed consolidated financial statements reflect all adjustments, which are of a normal recurring nature, necessary for a fair statement of the results for the periods presented in accordance with United States of America’s Generally Accepted Accounting Principles (“U.S. GAAP”). The results of operations for the interim periods presented are not necessarily indicative of results for the full year or for any future period.

Certain information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 (“the Annual Report”).

The information presented in the accompanying condensed consolidated balance sheet as of December 31, 2025 has been derived from the Company’s audited consolidated financial statements. All other information has been derived from the Company’s unaudited condensed consolidated financial statements for the three and six months ended June 30, 2026 and June 30, 2025.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of the Company and its subsidiaries, including the Company’s variable interest entities disclosed in Note 16. All intercompany balances and transactions are eliminated in consolidation.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash and highly liquid short-term investments with original maturities of less than three months.

Restricted Cash

Restricted cash relates to cash that is legally restricted as to withdrawal and usage or is being held for a contractual purpose and thus not available to the Company for immediate or general business use. As of June 30, 2026, the Company had restricted cash of approximately $17.9 million, of which $10.0 million was classified as current and $7.9 million was classified as non-current. As of December 31, 2025, the Company had restricted cash of approximately $12.4 million, of which $4.5 million was classified as current and $7.9 million was classified as non-current. Restricted cash consists primarily of customer deposits held for less than 12 months and amounts restricted under debt covenants; the non-current balance relates to a collateralized deposit.

Concentration of Credit Risk

Financial instruments that subject the Company to concentrations of credit risk principally consist of cash equivalents and trade accounts receivable. The Company’s trade accounts receivable are from data hosting revenue with the Company’s customers throughout the year. The Company does not require collateral and has not historically experienced significant credit losses related to receivables from individual customers or groups of customers in any particular industry or geographic area. The Company requires that hosting customers make a prepayment of the next month’s estimated expenses or make a security deposit to the Company.

The Company has cash deposits in excess of federally insured limits but does not believe them to be at risk. The Company notes that as of June 30, 2026, the cash deposits in excess of federally insured limits was approximately $130.8 million.

Deposits on equipment

As of June 30, 2026 and December 31, 2025, the Company had approximately $208 thousand and $1.4 million, respectively, in deposits on equipment that had not yet been received by the Company. Once the Company receives such equipment in a subsequent period, the Company will reclassify such balance into Property, Plant and Equipment, net.

Debt Issuance Costs

Debt issuance costs consist of costs incurred in obtaining long-term financing. These costs are classified on the condensed consolidated balance sheet as a direct deduction from the carrying amount of the related debt liability and subsequently amortized as interest expense in the condensed consolidated statement of operations using the effective interest rate method.

The Company evaluates amendments to its debt instruments in accordance with ASC 470-50, Debt - Modifications and Extinguishments(“ASC 470”) to determine whether the amendment should be accounted for as a modification or an extinguishment. An amendment may be considered modified when the terms of the new debt and original instrument are not “substantially different” (as defined in the debt modification guidance in ASC 470). Amendments that are considered modifications are accounted for prospectively as yield adjustments, based on the revised terms, and lender fees and costs directly incurred with third parties, to the extent material, are recorded as debt discount and amortized to interest expense using the effective interest rate method.

Loan Commitment assets

The Credit Agreement (see Note 10) contained a commitment from the lender for an additional tranche of debt under certain conditions. The Company incurred costs and fees to obtain a nonrevolving loan commitment. The accounting for warrants issued and fees paid to lenders in connection with a nonrevolving loan commitment are initially treated as an asset. As discussed in Credit Agreement in Note 10, the Company can draw up to $35.5 million between the first three tranches and can draw an additional $64.5 million upon subsequent approval by the lenders. The Company allocated the warrants issued and fees paid to the lenders in connection the nonrevolving loan commitment between the draws to date of $17.0 million and the remaining $18.5 million between debt issuance costs and loan commitment assets. As discussed in Note 10, the Tranche B loan commitments changed from$18.5 million to $6.0 million. Because the commitment was contractually terminated in part, the Company wrote off approximately$2.0 millionof unamortized deferred costs attributable to that reduction, which is reflected in loss on extinguishment of debt for the three and six months ended June 30, 2026. Following Amendment No. 1, a loan commitment asset of $979 thousand remained, attributable to the$6.0 million undrawn Tranche B commitment, which by its terms is available to be drawn through October 31, 2026, subject to the conditions to borrowing set forth in the Credit Agreement.

During the three months ended June 30, 2026, management concluded that the Company will not draw the remaining$6.0 million Tranche B commitment prior to its expiration on October 31, 2026. This conclusion reflects management's intent not to utilize the commitment, as well as the conditions to borrowing under the Credit Agreement, which require, among other things, that no Default or Event of Default exist on the applicable borrowing date and which, in light of the covenant matters described in Note 10, limit the periods during which the conditions to a Tranche B borrowing could be satisfied prior to expiration.

As a result, the Company determined that the period benefited by the remaining loan commitment asset had ended and wrote off the remaining balance of $979 thousand during the three and six months ended June 30, 2026. The write-off represents an acceleration of amortization arising from a change in the estimated period benefited by a deferred cost and was accounted for prospectively as a change in accounting estimate in the period of change in accordance with ASC 250-10-45-17 and ASC 835-30-35-2. The charge is recorded within interest expense and is presented in the amortization of deferred financing costs component in the condensed statement of cash flows. No amount was recognized as a loss on extinguishment of debt under ASC 470-50, because the Tranche B commitment has not been contractually terminated, reduced, or modified and remains legally available to the Borrowers through its expiration. No loan commitment asset remained as of June 30, 2026.

Revenue recognition

Refer to the Annual Report in relation to the revenue recognition of data hosting, cryptocurrency mining, and demand service revenue.

In relation to the acquisition of Briscoe in April 2026, a new revenue stream was included for the Company: Wind Energy Generation. Briscoe derives its revenue from the sale of power and renewable energy credits ("RECs"). Briscoe sells power to the wholesale market at its nodal settlement point and is recorded as the underlying energy is generated. Commencing in 2023, Briscoe sold an increasing portion of its power through a Power Purchase Agreement ("PPA") with Golden Spread Electric Cooperative, Inc. ("GSEC"). At times, Briscoe may be subject to negative pricing at its nodal settlement point when selling electricity within the wholesale market due to severe congestion on the transmission lines within the ERCOT West Hub region. Wind Energy Generation revenue is comprised of three forms of revenue:

Merchant revenue: The Company evaluated its wholesale energy revenue and determined that it does not meet the definition of a lease or a derivative and accordingly, will be accounted for under ASC 606. Under Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers ("ASC 606"), a contract's transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The Company views the sale of power as a series of distinct goods that is substantially the same and has the same pattern of transfer measured by the output method. Accordingly, the Company applied the practical expedient as the right to consideration corresponds directly to the value provided to the customer to recognize revenue at the invoice amount.

PPA revenue: The Company evaluated the GSEC PPA and determined that it does not meet the definition of a lease or a derivative and accordingly, will be accounted for under ASC 606. The Company views the sale of energy under the PPA as single performance obligation that the customer simultaneously receives and consumes as the entity performs. Revenue is recognized using an output method as the quantities are delivered to the customer. The customer is invoiced monthly an amount equal to energy multiplied by the variable market rate as published by ERCOT and all curtailed energy multiplied by a rate of $20.70/MWh. The Company applied the practical expedient available under ASC 606 as the right to consideration corresponds directly to the value provided to the customer to recognize revenue at the invoiced amount and recognizes revenue in the statements of operations when the energy is delivered. The Company notes that all the PPA revenue is eliminated in consolidation as all sales are with the Company's Dorothy entities, which in turn lowers the Company's cost of revenue.

REC revenue: Under the renewable portfolio standards in Texas, the Wind Energy System will generate a REC for each megawatt hour of energy delivered. The Company's individual REC sales reflect a fixed quantity, fixed price structure over a specified term or are sold at the spot market. The Company views REC products in these arrangements as distinct performance obligations satisfied at a point in time. Since the REC products delivered to the customers are not bundled with the power sold to ERCOT or GSEC but rather are sold at specified points under separate contractual arrangements, these RECs are recognized into revenue when delivered and invoiced under ASC 606.

Change in Presentation

Beginning on April 1, 2026, the Company began recording electricity costs incurred as part of providing performance obligations to its customers within the data hosting revenue financial statements caption and associated electricity costs within the cost of data hosting revenue, exclusive of depreciation financial statement caption on the statement of operations. These electricity costs are subsequently passed on to the customer with no mark-up. $2.4 million, $3.2 million, and $1.9 million of the comparable costs were incurred for the quarter ending June 30, 2025, March 31, 2026, and March 31, 2025, respectively.

Asset retirement obligation

With the acquisition of Briscoe in April 2026, the Company obtained an asset retirement obligation. Briscoe has a contractual obligation to remove its Wind Energy System following the expiration of its operating site leases. The leases require that, upon lease termination, the leased land be restored to an agreed-upon condition, effectively retiring the Wind Energy System. Briscoe is required to record the present value of the estimated obligation as it is incurred relating to the Wind Energy System. During the second quarter of 2026, the Company received an independent third-party decommissioning study, which was used to refine management's estimate of the timing and amount of the costs to remove the Wind Energy System and restore the leased land.

Reclassification

Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations or net assets.

3. Accounts Receivable, net

Accounts receivables consist of the following at:

The Company’s allowance for expected credit loss was $0 at June 30, 2026 and $244 thousand at December 31, 2025, respectively. The Company wrote off approximately $244 thousand against the Company's allowance during the six months ended June 30, 2026 after determining the receivable was uncollectible.

Rollforward of Allowance of Expected Credit Losses:

4. Property, Plant and Equipment, net

Property, plant and equipment consist of the following at:

Depreciation expense was approximately$3.3 million and $1.6 million for the three months ended June 30, 2026 and 2025, respectively. Depreciation expense was approximately$5.5 million and$3.1 million for the six months ended June 30, 2026 and 2025, respectively.

The Briscoe Project wind generation facility as discussed in Note 5 was measured at fair value as of April 1, 2026. The assigned fair value of approximately $51.6 million is being depreciated on a straight-line basis over fifteen years, the estimated remaining useful life of the facility.

5. Briscoe Asset Acquisition

Overview of the Transaction

On April 1, 2026 (the “Closing Date”), Soluna DV Wind SponsorCo, LLC (the “Tranche C Borrower”), a wholly owned indirect subsidiary of the Company, completed the acquisition of 100% of the issued and outstanding membership interests in Briscoe Wind Farm, LLC (“Briscoe”) pursuant to a Membership Interest Purchase Agreement (the “MIPA”) with Briscoe Wind Project Holdings I, LLC, JPM Capital Corporation, and Morgan Stanley Wind, LLC (collectively, the “Sellers”).

Through the MIPA, the Tranche C Borrower acquired an approximately 150-megawatt (“MW”) nameplate-capacity wind-powered electric generation facility (the “Briscoe Project”) located in Briscoe and Floyd Counties, Texas, adjacent to the Company's Dorothy campus in Silverton. The Briscoe Project has been in commercial operation since November 13, 2015, and consists of 81 wind turbines.

Simultaneous with the closing of the MIPA, the Sellers’ pre-existing credit facilities, subordinated notes, and tracking account liability encumbering Briscoe were repaid in full from the proceeds received from the Company, and all related liens were released. Accordingly, none of such indebtedness was assumed by the Company.

The Company evaluated the acquisition under Accounting Standards Codification (“ASC”) Topic 805, Business Combinations. Because substantially all of the fair value of the gross assets acquired is concentrated in the Briscoe Project wind generation facility and its directly associated assets—comprising a single group of similar identifiable assets—the acquisition does not meet the definition of a business under ASC 805-10-55. Accordingly, the transaction has been accounted for as an asset acquisition pursuant to ASC 805-50.

Under asset acquisition accounting, transaction costs directly attributable to the acquisition are capitalized as part of the cost of the acquired assets rather than expensed as incurred. The total acquisition cost of approximately $55.9 million, inclusive of base purchase price of $53.0 million, closing net working capital adjustments of approximately $1.4 million and capitalized out-of-pocket transaction costs of approximately $1.5 million, is allocated to the identifiable assets acquired and liabilities assumed on the basis of their relative fair values at the Closing Date. No goodwill is recognized in an asset acquisition.

Allocation of Acquisition Cost

The total acquisition cost of approximately $55.9 million has been allocated to the identifiable assets acquired and liabilities assumed as of the Closing Date based on their relative fair values, as follows:

Acquisition Financing

In connection with the closing, the Company amended its existing Credit Agreement with Generate Lending, LLC to establish a new Tranche C Loan Commitment of$12.5 million (the “Tranche C Loan”) to finance the acquisition, with a corresponding reduction of the unfunded Tranche B Loan Commitment by$12.5 million. The unamortized deferred financing costs of approximately $2.0 million associated with the $12.5 million reduction in the Tranche B Loan Commitment were written off upon execution of the amendment and are reflected as loss on extinguishment of debt in the condensed consolidated statements of operations for the three and six months ended June 30, 2026.

Debt issuance costs of approximately $977 thousand were deducted from gross proceeds, resulting in net proceeds of approximately$11.5 million. Concurrently, the Company issued to Generate Strategic Credit Master Fund I-B, L.P., an affiliate of the Lender, 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. The warrants were initially measured at fair value at approximately $1.6 million, and are classified as equity instruments; they are not subject to subsequent remeasurement. The fair value of the warrants were recorded as a discount on the Tranche C Loan, and will be amortized over the life of the Tranche C Loan. See Note 10 for details.

6. Intangible Assets, net

Intangible assets consist of the following as of June 30, 2026:

Intangible assets consist of the following as of December 31, 2025:

Amortization expense for the three months ended June 30, 2026 and 2025 was approximately $2.5 million and $2.4 million, respectively. Amortization expense for the six months ended June 30, 2026 and 2025 was approximately $4.8 million and $4.7 million, respectively.

The strategic pipeline contract relates to supply of a critical input to our digital mining and hosting business. The Company has analyzed this strategic pipeline contract similar to a permit for future benefit. The strategic pipeline contract relates to potential renewable energy datacenters that fit in the alignment of the Company structure to expand operations of the Company’s new focus in their business.

As part of the Briscoe acquisition discussed in Note 5, the Company identified an above-market PPA with GSEC, which was initially executed February 24, 2023, as an identifiable intangible asset. The PPA provides for the sale of an increasing portion of the Briscoe Project’s energy output to GSEC, commencing at 25 MW and escalating toward full project capacity. The fair value assigned to the PPA intangible asset is $2.65 million, which is being amortized on a straight-line basis over its estimated remaining useful life of 7 years, resulting in quarterly amortization expense of approximately $94 thousand.

The Company expects to record amortization expense of intangible assets over the next five years and thereafter as follows:

7. Accrued Liabilities

Accrued liabilities consist of the following at:

Contract termination liability

In June 2024, Soluna AL Cloudco, LLC (“CloudCo”), a subsidiary of Soluna Cloud, entered into an agreement (the “HPE Agreement”) with Hewlett Packard Enterprise Company (“HPE”), with an initial pre-payment of $10.3 million and a total commitment of $34 million over a 36-month period. On March 24, 2025, CloudCo notified HPE of its termination of the HPE Agreement and, on March 26, 2025, HPE notified CloudCo of its termination of the HPE Agreement for cause, effective immediately, due to CloudCo’s material breach of its payment obligations that remained uncured for more than thirty (30) days. The HPE Agreement provided the Company access to datacenter and cloud services for AI and supercomputing applications utilizing NVIDIA H100 GPUs. In accordance with the terms of the HPE Agreement, CloudCo was required to pay all of the unpaid fees that were payable over the entire term of the HPE Agreement. In accordance with the terms of the HPE Agreement, upon a termination for cause by HPE, CloudCo must pay HPE the remaining payment stream under the term of the HPE Agreement, including all upfront payments and monthly charges, plus any fees incurred for the terminated Services (as defined in the HPE Agreement). As of June 30, 2026, the outstanding contract liability is approximately $19.3 million. CloudCo has not made any additional payments under the HPE Agreement since CloudCo notified HPE of its termination of the HPE Agreement.

8. Asset Retirement Obligation

Briscoe has a contractual obligation to remove the wind energy facility and restore leased land upon expiration of the multiple land lease agreements with third-party landowners for the turbine installation sites (the "Site Leases"). The asset retirement obligation was measured at the present value of estimated future removal and restoration costs as of the Closing Date of April 1, 2026 and was recorded at $3.6 million. The measurement reflects management's current estimate of removal and restoration cost; an independent decommissioning study was completed. The obligation will accrete to its estimated future value over the remaining life of the wind facility. For the three and six months ended June 30, 2026, the accretion expense of $79 thousand was included in cost of wind energy generation revenue-depreciation and accretion expense on the condensed consolidated statements of operations.

The following is a summary of total changes in the Company's asset retirement obligation liability that was acquired on April 1, 2026 in relation to the Briscoe acquisition for the three and six months ended June 30, 2026:

Asset retirement obligation costs may increase or decrease significantly in the future as a result of changes in regulations, changes in engineering designs and technology, permit modifications or updates, changes to the Briscoe Project, inflation or other factors as actual reclamation spending occurs. Asset retirement obligation activities and expenditures generally are made over an extended period of time commencing near the end of the wind energy system life; however, certain reclamation activities may be accelerated if legally required or if determined to be economically beneficial.

9. Income Taxes

During the three and six months ended June 30, 2026, the Company’s effective income tax rate was 2.3% and 2.8%, respectively, and for the three and six months ended June 30, 2025, the Company's effective income tax rate was 7.2% and 6.4%, respectively. The projected annual effective tax rate is less than the Federal statutory rate of 21%, primarily due to the change in the valuation allowance, as well as changes to estimated taxable income for 2026 and permanent differences. For the three months ended June 30, 2026 and 2025, there was a deferred income tax benefit of $547 thousand and $615 thousand, respectively, offset with current tax expense for the three months ended June 30, 2026 and 2025 of approximately $0 thousand and $7 thousand, respectively. For the six months ended June 30, 2026 and 2025, there was a deferred income tax benefit of approximately $1.2 million and $1.1 million, respectively, offset by a $8 thousand and $12 thousand current tax expense for the six months ended June 30, 2026 and 2025, respectively.

In connection with the strategic contract pipeline acquired in the acquisition as further discussed in Note 6, ASC 740-10-25-51 requires the recognition of a deferred tax impact of acquiring an asset in a transaction that is not a business combination when the amount paid exceeds the tax basis on the acquisition date. As such, the Company is required to adjust the value of the strategic contract pipeline by approximately $10.9 million at inception date, which was recorded as a deferred tax liability, and this amount will be amortized over the life of the asset. For the three and six months ended June 30, 2026 and 2025, the Company amortized $547 thousand and $1.2 million, respectively.

The Company provides for recognition of deferred tax assets if the realization of such assets is more likely than not to occur in accordance with accounting standards that address income taxes. Significant management judgment is required in determining the period in which the reversal of a valuation allowance should occur. The Company has considered all available evidence, both positive and negative, such as historical levels of income and future forecasts of taxable income amongst other items, in determining its valuation allowance. In addition, the Company’s assessment requires us to schedule future taxable income in accordance with accounting standards that address income taxes to assess the appropriateness of a valuation allowance which further requires the exercise of significant management judgment.

The Company evaluates its tax positions in accordance with the guidance for accounting for uncertainty in income taxes. Tax benefits are recognized only when it is more likely than not that the position will be sustained upon examination by the relevant taxing authority based on the technical merits of the position. As of June 30, 2026, the Company had no material uncertain tax positions requiring recognition or disclosure in the condensed consolidated financial statements. The Company did not record any interest or penalties related to uncertain tax positions during the three or six months ended June 30, 2026.

The Company believes that the accounting estimate for the valuation of deferred tax assets is a critical accounting estimate because judgment is required in assessing the likely future tax consequences of events that have been recognized in our financial statements or tax returns. The Company based the estimate of deferred tax assets and liabilities on current tax laws and rates and, in certain cases, business plans and other expectations about future outcomes. In the event that actual results differ from these estimates, or the Company adjusts these estimates in future periods, the Company may need to adjust the recorded valuation allowance, which could materially impact our financial position and results of operations. The Company has a full valuation allowance for the deferred tax assets of $47.8 millionon June 30, 2026 and $41.8 million on December 31, 2025, respectively. We will continue to evaluate the ability to realize our deferred tax assets and related valuation allowance on a quarterly basis.

10. Debt

The following table represents total debt outstanding by agreement as of June 30, 2026:

The following table represents total debt outstanding by agreement as of December 31, 2025:

The Company notes as of June 30, 2026, there is approximately $33.1 million in debt outstanding, made up of approximately $37.9 million in principal outstanding less approximately $4.8 million in debt issuance and discounts costs remaining to be amortized over the life of the loans. The following table represents the future minimum principal payments, which excludes potential cash sweeps, due on debt as of June 30, 2026:

Amounts reflect contractual maturities. As described above, the entire outstanding balance under the Generate Credit Agreement has been classified as current as of June 30, 2026 notwithstanding its contractual amortization schedule.

Generate Credit Agreement

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. On September 12, 2025, the Borrowers borrowed approximately $12.6 million under the Credit Agreement, comprised of Tranche A-1 loans and Tranche A-3 loans, and on December 22, 2025, an additional $4.4 million was borrowed on the Tranche A-3 loan. 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. For the three and six months ended June 30, 2026, interest expense in relation to Tranche A-1, A-3, and B was approximately $703 thousand and approximately $1.5 million, respectively.

Proceeds from the Credit Agreement will be used to finance, refinance, develop and construct the Company’s Dorothy 1A, Dorothy 2 and Kati data center projects, fund a debt service reserve account, and pay fees and expenses. The loans bear interest at a variable rate based on either ABR or Term SOFR, as set forth in the Credit Agreement. The applicable interest rate for SOFR loans is equal to Term SOFR plus a margin of 10.0% per annum, and for ABR loans is equal to the ABR plus a margin of 9.0% per annum. The Credit Agreement provides for a SOFR rate floor of 3.50% per annum. The Borrowers are required to pay a commitment fee of 1.00% per annum on undrawn amounts of the Tranche B Loan Commitments and any Additional Tranche Loan Commitments. During the continuance of an event of default, a default rate applies equal to the otherwise applicable rate plus 2.0% per annum.

The loans are subject to scheduled amortization, fees, and prepayment premiums. The Credit Agreement also contains a mandatory prepayment provision, or "cash sweep," requiring a percentage of free cash flow, as defined in the Credit Agreement, to be applied to principal reduction on a periodic basis.

As of June 30, 2026, the entire outstanding principal balance is classified as current as a result of the covenant matters described under "Balance sheet classification" below. In periods in which covenant-related classification does not apply — including as of December 31, 2025 — the outstanding balance is classified between current and noncurrent liabilities based on scheduled amortization and management's estimate of cash sweep prepayments expected to be applied during the following twelve months. That estimate relies on management's internal cash flow forecast, which incorporates assumptions regarding future operating performance, capital expenditures, and working capital needs that are inherently uncertain; actual amounts prepaid under the cash sweep may differ materially from the amounts classified as current.

The obligations are guaranteed by certain Company subsidiaries and secured by first-priority liens on substantially all assets of the Borrowers and guarantors, including pledges of equity interests, security interests in deposit and other collateral accounts (subject to control agreements), and mortgages or deeds of trust on the project sites.

On April 1, 2026, in connection with the Briscoe Project Acquisition as discussed in Note 5, 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$12.5 million to finance the Briscoe Project Acquisition and adjusts the Tranche B loan commitments to be changed from$18.5 million to $6.0 million ; (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.

The unamortized deferred financing costs of approximately $2.0 million associated with the $12.5 million reduction in the Tranche B Loan Commitment were written off upon execution of the amendment and are reflected as loss on extinguishment ofdebt in the conde nsed consolidated statements of operations for the three and six months ended June 30, 2026.

As of June 30, 2026,$6.0 million of the Tranche B commitment under the Credit Agreement remained undrawn and, by its terms, available through October 31, 2026. During the second quarter of 2026, management concluded that the Company does not intend to draw the remaining Tranche B commitment. See discussion in Note 2-Loan Commitment Assets for further details. Accordingly, the Company wrote off the remaining$979 thousand loan commitment asset associated with the undrawn commitment, which is reflected in interest expense for the three and six months ended June 30, 2026.

The Tranche C loans bear interest at a variable rate based on either ABR or Term SOFR, with margins of 8.0% per annum for SOFR loans and 7.0% per annum for ABR loans. They are also subject to scheduled amortization and mandatory cash sweep prepayments. For the three and six months ended June 30, 2026, interest expense in relation to Tranche C was approximately $534 thousand.

Financial covenants

The Credit Agreement contains customary representations and warranties, affirmative and negative covenants, and events of default for financings of this type. Events of default under the Credit Agreement include, among other things, non-payment of principal, interest or fees, inaccuracy of representations and warranties, breach of covenants, cross-default to certain material indebtedness, bankruptcy and insolvency, and change of control. Upon the occurrence and during the continuance of an event of default, the lenders may declare all outstanding principal and accrued but unpaid interest under the Credit Agreement immediately due and payable and may exercise the other rights and remedies provided under the Credit Agreement and related loan documents. Negative covenants in the Credit Agreement include, among other things, restrictions on the Borrowers and guarantors with respect to incurring additional indebtedness, creating liens on assets, selling assets or making fundamental changes, making restricted payments, entering into affiliate transactions, and using loan proceeds for unauthorized purposes. The Credit Agreement also restricts investments, capital expenditures, and speculative transactions, and requires that all deposit and securities accounts be subject to control agreements. Financial covenants require (i) a minimum trailing Debt Service Coverage Ratio ("DSCR") of 1.60:1.00 and (ii) a minimum Forward Contracted DSCR measured with respect to the applicable projects in the aggregate, of not less than 1.20:1.00. The Forward Contracted DSCR is a forward-looking measure that gives credit only to revenues under executed customer contracts. Revenues that management expects to realize but that are not yet contracted, including merchant revenues, are assumed to be zero for purposes of the calculation. A failure to satisfy the Forward Contracted DSCR that remains unremedied forfive days constitutes an event of default under the Credit Agreement, following which the lenders may declare all outstanding principal and accrued interest immediately due and payable. The facility also includes customary mandatory prepayment provisions.

The Credit Agreement permits the Borrowers to cure a financial covenant failure retroactively through a specified equity contribution — a cash equity infusion received withinten business days following delivery of the quarterly compliance certificate, which is then included in the applicable covenant calculations. The Borrowers may make no more thantwo specified equity contributions in any fiscal year and no more than five over the term of the loans, and no borrowing may be requested or made during the period between a financial covenant event of default and its cure.

Covenant holidays and waivers

On August 7, 2026, the Borrowers and the Administrative Agent, on behalf of the lenders, entered into a Limited Waiver, Consent, and Amendment No. 3 to the Credit Agreement ("Amendment No. 3"). Amendment No. 3 amended the financial covenants in the Credit Agreement to provide that neither the Debt Service Coverage Ratio nor the Forward Contracted DSCR was required to be tested for the June 30, 2026 measurement date. The effectiveness of Amendment No. 3 was conditioned upon the prepayment in full of the Tranche A-1 and Tranche A-3 Loans described below, which occurred on August 10, 2026. Amendment No. 3 also waived certain administrative matters, including the timing of delivery of the April 2026 monthly operating statement, the timing of funding of the maintenance reserve account and the timing of termination of certain legacy bank accounts, and extended the deadline to satisfy certain real estate post-closing obligations relating to the Briscoe Wind Farm to October 15, 2026. As a result of Amendment No. 3 and the prepayment, no default or event of default has occurred or is continuing under the Amended Credit Agreement, and no cross-default or cross-acceleration provision under the Company's other financing arrangements has been triggered.

As amended, the Credit Agreement requires (i) a Debt Service Coverage Ratio of not less than 1.60:1.00, measured quarterly with respect to completed projects in the aggregate, excluding the Dorothy 1A and Dorothy 2 projects following the prepayment, with the Briscoe project first subject to testing on the quarterly measurement date of September 30, 2026; and (ii) a Forward Contracted DSCR of not less than 1.20:1.00, measured quarterly, from which the Briscoe project is excluded and, following the prepayment, the Dorothy 1A and Dorothy 2 projects are also excluded. Notwithstanding the prepayment, the Dorothy 1A Borrower and the Dorothy 2 Borrower remain parties to the Credit Agreement, and the pledges and security interests granted with respect to those borrowers will not be released until the termination of the Credit Agreement.

Prepayment of Tranche A-1 and Tranche A-3 Loans

On August 10, 2026, subsequent to the balance sheet date, Soluna DVSL ComputeCo, LLC and Soluna DVSL II ComputeCo, LLC prepaid in full the Tranche A-1 Loans and Tranche A-3 Loans, respectively, in the aggregate total prepayment amount of approximately $19.1 million, inclusive of accrued and unpaid interest, the applicable prepayment premium of $3.9 million, $15.2 million of the outstanding principal balance and all other amounts then due under the Amended Credit Agreement. Following the prepayment, the Forward Contracted DSCR requirement no longer applies to these borrowers; the related pledges and security interests will not be released until the Debt Termination Date under the Amended Credit Agreement.

Balance sheet classification

Because the Forward Contracted DSCR gives no credit to uncontracted revenues, the Company has concluded it is probable the Borrowers will not satisfy the covenant at measurement dates within the twelve months following June 30, 2026 absent additional contracted revenues or an amendment to the Amended Credit Agreement, and the Amendment No. 3 does not extend the Company's covenant relief for more than one year from the balance sheet date. Accordingly, the Company classified the entire $27.5 million of gross principal outstanding under the Amended Credit Agreement, net of related unamortized deferred financing costs and debt discount of $4.4 million, within the current portion of debt in the condensed consolidated balance sheet as of June 30, 2026. This includes the Tranche A-1 and Tranche A-3 Loans of $13.5 million, net of deferred financing costs, which were prepaid in full in August 2026 as described above. As of December 31, 2025, $10.2 million of these borrowings were classified as noncurrent.

The reclassification is a matter of balance sheet presentation; it did not change the carrying amount of the borrowings and had no effect on the condensed consolidated statements of operations for the three and six months ended June 30, 2026, and it does not reflect any acceleration of the obligations, demand for repayment, or change in the contractual maturity or repayment terms of the loans. The Lender has not accelerated the obligations and has granted covenant relief with respect to both the March 31, 2026 and June 30, 2026 test dates. Management expects the remaining borrowings to be repaid in accordance with their contractual amortization, cash sweep, and maturity provisions and does not consider acceleration to be probable; deferred financing costs and debt discount continue to be amortized to interest expense over the contractual term of the borrowings using the interest method. The Company may enter into discussions with the Lender regarding a potential amendment to the covenant; there can be no assurance that an amendment will be executed on acceptable terms or at all. The borrowings would be reclassified as noncurrent in a future period upon execution of an amendment or a prospective waiver extending more than one year beyond the applicable balance sheet date and a determination that compliance at measurement dates within the succeeding twelve months is probable.

Private Placement

Pursuant to the Amended Credit Agreement, on April 1, 2026, the Company issued to Generate Strategic Credit Master Fund I-B, L.P., an affiliate of the Lender and the Agent (the “Holder”), in a private placement (the “Private Placement”): (i) a pre-funded warrant (the “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 (the “Common Warrant 1”); and (iii) a common warrant to purchase up to 650,000 shares of common stock (the “Common Warrant 2” and, together with the Common Warrant 1, the “Common Warrants” and, collectively, the “Warrants”).

Pre-Funded Warrant

The Pre-Funded Warrant is exercisable immediately and expires on thefive-year anniversary of the date of issuance. The Pre-Funded Warrant is exercisable at an exercise price of $0.0001 per share of Common Stock. As of June 30, 2026, the Pre-Funded Warrant has been fully exercised.

Common Warrants

The Common Warrant 1 and Common Warrant 2 are identical except with regard to their exercise price. The Common Warrant 1 has an exercise price of $0.68 per share of Common Stock and the Common Warrant 2 has an exercise price of $0.75 per share of Common Stock. The Common Warrants are exercisable upon issuance and expire on thefive-year anniversary of their date of issuance.

The warrants were initially measured at fair value and are classified as equity instruments; they are not subject to subsequent remeasurement. The Company performed a Black-Scholes valuation on April 1, 2026 of the Pre-Funded and Common Warrants generating a fair value of approximately $1.6 million noting the below assumptions:

Green Cloud Note

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) CloudCo, (ii) Soluna Cloud, a Nevada corporation, indirect wholly owned subsidiary of the Company, and parent of CloudCo, (iii) the Company and (iv) the accredited investor named therein (the “Investor” or "Green Cloud", and collectively the “Note Parties”), CloudCo issued to the Investor a secured promissory note in a principal amount equal to $12.5 million (the “Green Cloud Note”). The Green Cloud Note accrues interest at a rate 9% per annum, subject to adjustment upon an event of default. The Green Cloud Note matures on June 20, 2027. CloudCo’s obligations under the Green Cloud Note were secured by all or substantially all of CloudCo’s assets, including pursuant to a security agreement executed and delivered by CloudCo in favor of the Investor (the “CloudCo Security Agreement”, and together with the June SPA and the Green Cloud Note, the “CloudCo Agreements”).

For the three months ended June 30, 2026 and June 30, 2025, the Company incurred approximately $240 thousand and $354 thousand in interest expense in relation to the Green Cloud Note, respectively, which includes interest paid on the note and amortization of deferred financing costs. For the six months ended June 30, 2026 and June 30, 2025, the Company incurred approximately $498 thousand and $744 thousand in interest expense in relation to the Green Cloud Note, respectively, which includes interest paid on the note and amortization of deferred financing costs.

June SPA Modification

On March 21, 2025, the Note Parties entered into a Modification Agreement (the “Modification Agreement”) to, among other things:

(i)provide for the deposit of 1,000,000 shares (the “Escrow Shares”) of the common stock into an escrow account maintained by Northland Securities, Inc., pursuant to an escrow agreement (as further described below),

(ii)provide for the issuance to the Investor of penny warrants to purchase shares of the Company’s common stock. The number of penny warrants (exercise price at $0.01) shall equal $1.25 million divided by the 5-day VWAP of the Company’s common stock at time of issuance. The warrants will be issued at the time the Investor removes its lien on the property of the Company. As of the date of these condensed financial statements, the lien has not yet been removed and the warrants have not been issued,

(iii)amend the payment schedule of the Green Cloud Note to provide (a) for each of the six scheduled payments occurring after the earlier of the effectiveness of a registration statement for the resale of the Escrow Shares and the Conversion Shares (as defined below) or the date that the Escrow Shares and the

Conversion Shares may be sold pursuant to Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”), without any information requirements, the amount of principal and interest payable on such date shall be reduced by 50% (the aggregate amount of the six months of such reductions, the “Specified Amount”) and (b) if the aggregate amount of payments on the Amended Green Cloud Note applied from the proceeds of the sale of the Escrow Shares on or prior to the last six scheduled payments is less than the Specified Amount (such difference, the “Make Whole Amount”), than the amount of each of the remaining scheduled payments shall be increased by an amount equal to the Make Whole Amount divided by the number of remaining scheduled payments,

(iv)modify the Green Cloud Note such that the Green Cloud Note is now convertible into up to 2,500,000 shares of the Company’s common stock based (“Conversion Shares”) on a conversion price of $5.00,

(v)amend the Green Cloud Note to provide that the Company will be a direct co-obligor with CloudCo under the Green Cloud Note; and

(vi)amend the SPA to allow the Company to organize or incorporate any subsidiary, over which the Company shall have voting or beneficial control, which is being formed with the intent to engage in a business or line of business substantially similar to that of Soluna Cloud or the Company, without first paying all of the principal and interest due under the Note and without first obtaining Investor’s prior written consent (collectively, the “June SPA Modification”).

The joint-and-several liability arrangement is between the Company and CloudCo. While no written agreement has been created to establish the amount that each entity agrees to pay under the obligation, the nature of the relationship is such that the Company has taken a significant role in the economics of the Green Cloud Note. The Company expects to make any necessary payments on behalf of CloudCo in order to prevent default on the Green Cloud Note because the Investor has a lien on all property and assets of the Company in connection with the Green Cloud Note. Based on quantitative analysis performed by the Company, it was determined that the terms of the debt instrument before and after the June SPA Modification were not substantially different. Accordingly, the June SPA Modification was accounted for as a debt modification.

Subsequently, the Company and the Investor mutually agreed that the 1,000,000 Escrow Shares would instead be issued directly to the Investor and, on April 29, 2025, the Company issued 1,000,000 shares of common stock to the Investor. When the Investor sells the 1,000,000 shares in the open market (after either SEC registration effectiveness or pursuant to SEC Rule 144), the net cash proceeds from the sale of shares will be applied to the outstanding principal balance of the note up to $4.00 per share, and any excess proceeds over $4.00 per share will be retained by the Investor. The Investor had until March 31, 2026 (the “Sales Period”) to sell the 1,000,000 shares to reduce the outstanding principal balance, or would have to return the shares. Prior to March 31, 2026, the Company's Board of Directors approved an extension of the Sales Period in order to renegotiate the application of the 1,000,000 shares. As of the date of these condensed financial statements, no modification of the agreement has been made.

July 2024 Additional Secured Note

On July 12, 2024, the Company, CloudCo, Soluna Cloud, and the Investor entered into a First Amendment to the Note Purchase Agreement (the “June SPA Amendment”). This amendment allows CloudCo to issue additional secured promissory notes totaling $1.25 million (the “Additional Notes”) to new accredited investors (the “Additional Investors”). These Additional Notes are subject to the same terms and conditions as the June SPA financing.

On October 1, 2024, CloudCo, Soluna Cloud and the Company entered into assignment and assumption agreements (the “Assignment Agreements”) with the Additional Investors with respect to an aggregate of $1.25 million of notes issued by CloudCo. Pursuant to the Assignment Agreements, the Company will be able to purchase such notes for a purchase price of $750 thousand, or 60% of face value. The assignment and assumption will be effective once all conditions of the agreement are met including fulfilling the purchase price. The notes will be paid to the note holders from an escrow that is funded in installments from the 2024 SEPA (as defined below) funding. The transfer is not effective until payment from the escrow is made. On March 14, 2025, the Company fulfilled the purchase obligations, and assumed the Additional Notes through payment of $750 thousand through principal and 50% interest payments and use of 20% 2024 SEPA funds. The Company recorded a gain on extinguishment of the July 2024 Additional Secured Notes of approximately $551 thousand for the six months ended June 30, 2025. For the six months ended June 30, 2025, the Company incurred approximately $33 thousand in interest expense in relation to the July Additional Secured Note.

Galaxy Loan

On March 12, 2025, Soluna SW LLC (the “SW Borrower”), a Delaware limited liability company and subsidiary of Soluna SW Holdings LLC (“SW Holdings”, and together with the SW Borrower, the “SW Loan Parties”), a subsidiary of SDI, a Nevada corporation and wholly owned subsidiary of Company, entered into a Loan Agreement (the “Galaxy Loan Agreement”) with SW Holdings and Galaxy Digital LLC (the “Lender”).

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 as defined within the Galaxy Loan Agreement has occurred and is continuing. The Term Loan Facility matures on March 12, 2030 and includes scheduled payments over afive-year term. For the three months ended June 30, 2026 and June 30, 2025, the Company incurred approximately $197 thousand and $236 thousand in interest expense in relation to the Term Loan Facility, which includes interest paid on the note and amortization of deferred financing costs. For the six months ended June 30, 2026 and June 30, 2025, the Company incurred approximately $406 thousand and $277 thousand in interest expense in relation to the Term Loan Facility, which includes interest paid on the note and amortization of deferred financing costs.

The SW Borrower may voluntarily prepay all or part of the Term Loan Facility at any time together with accrued and unpaid interest on the principal amount to be prepaid up to the date of prepayment. The SW Borrower shall prepay all or part of the Term Loan Facility with 100% of the Net Cash Proceeds (as defined therein) received upon the occurrence of (i) an Asset Sale or Casualty Event (each as defined therein), (ii) an Equity Issuance (as defined therein), (iii) an issuance or incurrence of Indebtedness (as defined therein), or (iv) an Extraordinary Receipt (as defined therein), each subject to certain exceptions. In addition, certain principal payments are subject to the payment of a premium amount equal to 50% of the remaining amount of interest payable on such principal amount through the scheduled maturity date, if paid on or prior to the 30-month anniversary of the closing date, and 25% of the remaining amount of interest payable on such principal amount through the scheduled maturity date, if paid after the 30-month anniversary of the closing date.

The Galaxy Loan Agreement includes certain restrictions (subject to certain exceptions outlined in the Galaxy Loan Agreement) on the ability of the SW Loan Parties and their subsidiaries to undertake certain activities, including to incur indebtedness and liens, enter into sale or lease-back transactions, merge or consolidate with other entities, dispose or transfer their assets, pay dividends or make distributions, make investments, make Restricted Payments (as defined therein), enter into burdensome agreements or transact with affiliates. In addition, the SW Loan Parties are subject to three financial covenants – a minimum debt service coverage ratio, a minimum current ratio, and cash in customer deposit account must equal or be greater than related customer liabilities. As of the date of these condensed consolidated financial statements, the Company is in compliance with all covenants in relation to the Galaxy Loan Agreement.

Yorkville Securities Purchase Agreement and Promissory Note

On April 15, 2026, the Company entered into a Securities Purchase Agreement (the “SPA”) with YA II PN, LTD. (the “Lender”), pursuant to which the Company issued to the Lender a Promissory Note (the “Note”) payable to the Lender, providing for an unsecured loan in the aggregate principal amount of up to $12.0 million (the “Principal Amount”). The outstanding Principal Amount will mature on May 15, 2027 (the “Maturity Date”) and bears interest at a rate per annum of 5%, based on a 365-day year, which interest rate shall increase to a rate per annum of 18% upon the occurrence of an Event of Default (as defined in the Note) for so long as such event remains uncured. Under the Note, the Company is required to make monthly payments (“Amortization Payments”) of $1.2 million per month, beginning sixty (60) days after closing until the Note is repaid in full. Each Amortization Payment shall include a 5% premium of the principal amount of such payment. In connection with the issuance, the Company incurred $625 thousand of deferred financing costs (legal fees) and issued warrants with an allocated fair value of approximately$1.6 million. Both amounts were recorded as a direct reduction of the carrying amount of the Note.

The Company may, upon at least one Business Day’s prior written notice to the Lender, prepay the outstanding Principal Amount and an additional 5% of such Principal Amount (solely in respect of a redemption in full), and any accrued and unpaid interest, at any time prior to the Maturity Date. If the Company consummates a financing transaction, or series of financing transactions within a thirty (30) day period, with aggregate gross proceeds in excess of $20.0 million (excluding any (i) transaction with the Lender or its affiliates, (ii) sales under the At the Market Offering Agreement entered into between the Company and H.C. Wainwright & Co., LLC on April 29, 2025, (iii) issuance under the Standby Equity Purchase Agreement entered into between the Company and the Lender on August 12, 2024 or the Standby Equity Purchase Agreement entered into between the Company and the Lender on March 24, 2026, or (iv) exercises of options, warrants, or convertible securities outstanding as of April 15, 2026), then, unless waived by the Lender, the Company shall be required to redeem the Note in an amount equal to (a)20% of the outstanding Principal Amount and (b) all accrued and unpaid interest on the Note.

During the period from May 20, 2026 through June 12, 2026, the Company redeemed the Note in full through three payments: (i)$9.6 million of principal (80% of the original balance) plus approximately $56 thousand of accrued interest on May 20, 2026; (ii)$1.2 million of principal on June 9, 2026; and (iii) a final payment on June 12, 2026 of$1.2 million of principal, a $60 thousand redemption premium (5% of the principal redeemed in full), and approximately $7 thousand of accrued interest. Each partial redemption was accounted for as a partial extinguishment under ASC 470-50-40-2, under which a pro-rata portion of the then-unamortized deferred financing costs and warrant discount was written off to loss on extinguishment of debt. The June 12, 2026 payment fully extinguished the Note; the carrying value of the Note and all related debt discount was $0 as of that date.

The transaction resulted in total charges of approximately$2.4 million, consisting of interest expense of approximately $390 thousand (cash interest of approximately $63 thousand, time-based amortization of deferred financing costs of approximately $92 thousand, and time-based amortization of the warrant discount of approximately $235 thousand) and a loss on extinguishment of debt of approximately$2.0 million (pro-rata write-off of deferred financing costs of approximately $600 thousand, pro-rata write-off of the warrant discount of approximately$1.4 million, and the approximately $60 thousand redemption premium).

Private Placement

Pursuant to the SPA, the Company issued to the Lender in a private placement (the “Private Placement”) a common warrant (the “Warrant”) to purchase up to 2,400,000 shares of common stock. The Warrant has an exercise price of $1.06 per share of common stock, is exercisable upon issuance and expires on the twelve-month anniversary of its date of issuance. The Warrant was initially measured at fair value and is classified as an equity instrument; it is not subject to subsequent remeasurement. The Company performed a Black-Scholes valuation of the Warrant on April 15, 2026, generating a fair value of approximately $1.6 million noting the below assumptions:

The Lender fully exercised the Warrant in May 2026.

Equipment Loan Agreement

On May 16, 2024, SDI SL Borrowing – 1, LLC, an affiliate of the Company (the “SDI Borrower”), entered into a loan agreement (the “Equipment Loan Agreement” or the “Loan”) with Soluna2 SLC Fund II Project Holdco LLC (the “Lender”, and collectively, the “Parties”). As further amended on February 28, 2025, the Equipment Loan Agreement provides for the Company to borrow, from time to time, up to $4.0 million, to be used to purchase necessary equipment for the progression of Project Dorothy 2 and Project Kati. Any loans made under the Equipment Loan Agreement have a maturity date of May 16, 2027 and will bear interest at a rate of 15% per annum. The Equipment Loan Agreement includes customary covenants for loans of this nature including financial reporting, monthly updates, event reporting, as well as conduct of business. In addition, the Equipment Loan Agreement contains a multiple on invested capital (“MOIC”) provision, which requires the Company 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.

Land Purchase Loan

On October 1, 2025, Soluna2 Kati Project Holdco LLC ("Kati Lender") provided the SDI Borrower with a loan in the amount of $1.075 million under the Equipment Loan Agreement to fund the purchase of land in support of the Project Kati Phase 2 construction. Pursuant to a letter agreement between SLC and the Company, the land purchase loan bears no interest and is subject to a 1.00x MOIC, together with a right of first refusal granted to SLC. The interest free nature of the loan required the Company to record a discount for approximately $226 thousand at issuance. On June 10, 2026, the SDI Borrower repaid the loan in full of approximately $1.1 million. Due to the extinguishment of debt, the Company recorded a loss on extinguishment of debt in relation to the acceleration of the discount being amortized of approximately $132 thousand. For the three and six months ended June 30, 2026, approximately$26 thousand and $94 thousand had been amortized and recorded within Interest Expense. No further obligations remain on the Equipment Loan Agreement as of June 30, 2026.

Unamortized debt issuance costs associated with the Equipment Loan Agreement were $58 thousand and $64 thousand within Prepaid expenses and other current assets as of June 30, 2026 and December 31, 2025 and $0 and $25 thousand within Other assets on the consolidated balance sheet as of June 30, 2026 and December 31, 2025. Approximately $14 thousand and $30 thousand in relation to the debt issuance costs have been amortized and recorded within Interest Expense for the three and six months ended June 30, 2026.

11. Stockholders’ Equity

Preferred Stock

The Company had two series of preferred stock outstanding: the Series A Preferred Stock, par value $0.001 per share (the “Series A Preferred Stock”), with a $25.00 liquidation preference; and the Series B Convertible Preferred Stock, par value $0.0001 per share (the “Series B Preferred Stock”). As of June 30, 2026 and December 31, 2025, there were 4,920,045 and 4,928,545 shares of Series A Preferred Stock issued and outstanding, and as of June 30, 2026 and December 31, 2025, there was 0 and 62,500 shares of Series B Preferred Stock issued and outstanding.

Series A Preferred Stock

The Series A Preferred Stock is notconvertible into or exchangeable into common stock of the Company, except upon the occurrence of a delisting event or change of control. Per the Company’s Certificate of Designations, Preferences and Rights of 9.0% Series A Cumulative Perpetual Preferred Stock (“Series A Certificate of Designations”), if there is an occurrence of delisting or change of control, the holders of Series A Preferred Stock will have the right to convert the number of preferred A shares into a number of common shares by the lesser of (a) the sum of the $25.00 liquidation preference per share of Series A Preferred Stock plus the amount of any accumulated and unpaid dividends divided by the closing price of the common stock on ten consecutive trading days preceding a delisting event, or (b) the share cap of 0.2817 shares of common stock per share of Series A Preferred Stock .

Series B Preferred Stock

On July 19, 2022, the Company entered into a Securities Purchase Agreement (the “Series B SPA”) with an accredited investor (the “Series B Investor”) pursuant to which the Company sold to the Series B Investor 62,500 shares of Series B Preferred Stock, for a purchase price of $5,000,000. The shares of Series B Preferred Stock are initially convertible, subject to certain conditions, into 46,211 shares of common stock, at a price per share of $135.25 per share, a 20% premium to the closing price of the common stock on July 18, 2022, subject to adjustment as set forth in the Certificate of Designations of Preferences, Rights and Limitations for the Series B Preferred Stock (“Series B Certificate of Designations”). On October 1, 2024, the Company agreed, as a condition of awaiver of the Series B Investor’s right of first refusal and participation rights in connection with the SEPA, to reduce the conversion price to $5.00 upon stockholder approval, which was obtained on November 15, 2024. The sale of common stock as a result of conversion of Series B Preferred Stock and exercise of 140,000 warrants that the Series B Investor held was subject to a 12-month lockup, followed by a 12 month leak out where the holder may not sell shares during the lockup period and may sell up to 1/12th of total conversion and warrant exercise shares per month during the leak out.

Effective on February 5, 2026, per the terms of the Series B Certificate of Designations and Lock-Up and Leak-Out Agreement, the conversion price was adjusted to$0.96, and therefore can result in a conversion of 6,510,416 shares of common stock. It is noted that the conversion of shares is in a leak out period of 12 months from February 6, 2026 to February 6, 2027 in which the holder may sell up to 1/12th of total conversion and warrant exercises during such leak out period. Through an acceleration agreement of the leak out period, as of June 30, 2026, the 62,500 Series B shares had been converted to 6,510,416 shares of common stock. Effective June 23, 2026, the Company filed a Certificate of Withdrawal of the Series B Preferred Stock with the Secretary of State of the State of Nevada and terminated the designation of the Series B Preferred Stock. At the time of the filing of the Withdrawal of Designation, no shares of Series B Preferred Stock were outstanding. The Withdrawal of Designation was effective upon filing and eliminated from the Company’s Articles of Incorporation, as amended, all matters set forth in the previously-filed Certificate of Designation with respect to the previously designated Series B Preferred Stock.

Common Stock

The Company has one class of common stock, par value $0.001 per share. Each share of the Company’s common stock is entitled toone vote on all matters submitted to stockholders. As of June 30, 2026 and December 31, 2025, there were 225,821,479 and 102,531,089 shares of common stock outstanding, respectively.

Dividends

Pursuant to the Certificate of Designations, Preferences and Rights of 9.0% Series A Cumulative Perpetual Preferred Stock of the Company, dividends, when, as and if declared by the Board (or a duly authorized committee of the Board), will be payable monthly in arrears on the final day of each month, beginning August 31, 2021. The Board of Directors had not declared any Series A Preferred Stock dividends beginning October 2022 through June 30, 2026, as such the Company has accumulated approximately $29.6 million of dividends in arrears on the Series A Preferred Stock through December 31, 2025, and an additional $2.8 million and $5.5 million of dividends in arrears for the three and six months ended June 30, 2026, for a total of approximately $35.1 million.

The Company’s Series B Preferred Stock included a 10% accruing dividend compounded daily for 12 months from the original issue date of July 20, 2022, and annually thereafter, that may be paid in cash or stock at the Company’s option at the earlier of (i) the date the Series B Preferred Stock is converted, or (ii) the Series B Dividend Termination Date.

Effective October 1, 2024, the dividend payment obligation has been modified to be annual. The amendment resulted in annual dividend payments going forward. As a result of the amendment, the Company would be obligated to make annual dividend payments for the period starting from July 2023 as per the Series B Preferred Consent and Waiver, however, the board of directors has not yet declared any dividends for that period. As such, the Company has accumulated approximately $1.6 million dividends in arrears in relation to the Series B Preferred Stock through December 31, 2025 and an additional$180 thousand for the three months ended March 31, 2026, for a total of approximately $1.8 million as of March 31, 2026. On May 8, 2026, the board of directors declared and authorized payment of the dividend in arrears and further accrued dividends for a total of approximately $2.1 million, which was fully paid by June 30, 2026. For the three and six months ended June 30, 2026,$251 thousand and $431 thousand of the Series B dividends were included in the calculation of net loss per share as discussed below. As the Series B Preferred Stock has been fully converted as of

June 30, 2026, there are no further dividend payment obligations in relation to Series B Preferred Stock. See analysis of the Series B Preferred Stock below:

Standby Equity Purchase Agreement

On August 12, 2024, the Company entered into the Standby Equity Purchase Agreement (the "2024 SEPA") with YA II PN, LTD., a Cayman Islands exempt limited company (“YA”). Pursuant to the terms of the 2024 SEPA, the Company agreed to issue and sell to YA, from time to time, and YA agreed to purchase from the Company, up to $25 million of shares of the Company’s common stock (the “2024 SEPA Shares”). On November 12, 2024, the Company filed a registration statement on Form S-1 (File No. 333-282559) with the SEC for the resale by YA of 3,000,000 2024 SEPA Shares, which was declared effective by the SEC on February 5, 2025. During the year ended December 31, 2025, the Company had issued and sold 3.0 million shares of common stock to YA pursuant to the 2024 SEPA for aggregate net proceeds to the Company of approximately $6.2 million. On April 15, 2026, the Company filed a registration statement on Form S-1 (File No. 333-295052) with the SEC for resale by YA of 26,512,815 shares of common stock to cover any of the remaining 2024 SEPA Shares. For the three and six months ended June 30, 2026,10,237,605 shares of common stock were issued to YA pursuant to the 2024 SEPA for aggregate net proceeds of approximately $18.9 million, exhausting the$25 million.

On March 24, 2026, the Company entered into a Standby Equity Purchase Agreement (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. Pursuant to the 2026 SEPA, we issued to YA a commitment fee of $250 thousand through issuance of 335,976 shares of common stock (the “Commitment Shares”). The commitment fee was recorded within Other financing expense on the condensed financial statements for the six months ended June 30, 2026. No shares other than the Commitment Shares have been issued to YA in relation to the 2026 SEPA for the three and six months ended June 30, 2026.

ATM Agreement

On April 29, 2025, the Company entered into the At the Market Offering Agreement ("ATM Agreement" or "ATM”) with H.C. Wainwright & Co., LLC ("Wainwright"), as sales agent, pursuant to which the Company may offer and sell, from time to time, through Wainwright, up to $87.65 million of shares of common stock. The Company will pay Wainwright a commission of 3.0% of the aggregate gross proceeds from each sale of shares and has agreed to provide Wainwright with customary indemnification and contribution rights. During the year ended December 31, 2025, the Company sold 23,591,162 shares of common stock pursuant to the ATM Agreement for net proceeds of $34.2 million, after deducting sales agent commissions and legal fees.

On March 9, 2026, the Company filed a shelf registration statement on Form S-3 (File No. 333-294152) with the U.S. Securities and Exchange Commission (the “SEC”) which was declared effective by the SEC on March 30, 2026, and the accompanying base prospectus included therein, as supplemented by the prospectus supplement, dated April 1, 2026, filed with the SEC. Based on this prospectus, 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. During the three and six months ended June 30, 2026, the Company sold 74,174,213 shares of common stock pursuant to the ATM Agreement for net proceeds of $113.5 million after deducting sales agent commissions and legal fees. Subsequent to June 30, 2026 and through the date of the issuance of these condensed consolidated financial statements, the Company has issued 18,769,096 shares of common stock pursuant to the ATM Agreement for net proceeds of approximately $23.6 million.

Reservation of Shares

The Company had reserved common shares for future issuance as follows as of June 30, 2026:

Loss per Share

The Company computes basic loss per common share by dividing net loss by the weighted average number of common shares outstanding during the reporting period. Diluted loss per share reflects the potential dilution, if any, computed by dividing loss by the combination of dilutive common share equivalents, comprised of shares issuable under outstanding investment rights, warrants and the Company’s share-based compensation plans, and the weighted average number of common shares outstanding during the reporting period. Dilutive common share equivalents include the dilutive effect of in-the-money stock options, which are calculated based on the average share price for each period using the treasury stock method. Under the treasury stock method, the exercise price of a stock option and the amount of compensation cost, if any, for future service that the Company has not yet recognized are assumed to be used to repurchase shares in the current period.

The following table sets forth the reconciliation of the numerators and denominators of the basic and diluted per share computations for operations for the three and six months ended June 30, 2026 and June 30, 2025:

Because the Company reported a Net loss for both the three and six months ended June 30, 2026 and 2025, loss from continuing operations serves as the "control number" in determining whether potential common shares are dilutive or antidilutive. As a result, all potentially dilutive securities were antidilutive in each period presented, and basic and diluted net loss per share are the same. For the three and six months ended June 30, 2026, the following potentially dilutive securities were excluded from the computation of diluted earnings per share because their effect would have been antidilutive: options to purchase 2,565 shares of the Company’s common stock,2,414,339 nonvested restricted stock units,48,621,656 nonvested restricted stock awards, and 24,300,344 outstanding warrants (excluding penny warrants, which are included in the basic weighted-average share count due to their nominal exercise price).

Not included in the computation of earnings per share, assuming dilution, for the three and six months ended June 30, 2025, were options to purchase 2,645 shares of the Company’s common stock,209,885 nonvested restricted stock units,6,827,943 nonvested restricted stock awards, and 2,347,135 outstanding warrants not exercised which excludes penny warrants that can be potentially exercised. These potentially dilutive items were excluded because the calculation of incremental shares resulted in an anti-dilutive effect.

12. Commitments and Contingencies

Commitments:

Leases

The Company determines whether an arrangement is a lease at inception. The Company has operating and financing leases for certain land, office facilities and certain equipment. The leases have remaining lease terms of approximatelytwo years totwenty-two years. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The Briscoe Project as discussed in Note 5 operates under multiple land lease agreements with third-party landowners for the turbine installation sites (the “Site Leases”). The Site Leases were remeasured as of the Closing Date of April 1, 2026 in accordance with ASC 842. Right-of-use assets of $3.9 million and corresponding lease liabilities of $4.0 million were recognized, reflecting the present value of remaining minimum lease payments discounted at the applicable rate as of the Closing Date. The weighted-average remaining lease term as of the Closing Date is approximately 19.7 years.

Lease expense for these leases is recognized on a straight-line basis over the lease term. For the three and six months ended June 30, 2026 and June 30, 2025, total lease costs are comprised of the following:

Short-term leases are leases having a term of twelve months or less. The Company recognizes short-term leases on a straight-line basis and does not record a related asset or liability for such leases.

Other information related to leases was as follows:

Maturities of noncancellable operating and financing lease liabilities are as follows as of June 30, 2026:

As of June 30, 2026, there were no additional operating or financing lease commitments that had not yet commenced.

Soluna Holdings, Inc. Commitments:

As of June 30, 2026, the Company was contractually committed for approxim ately $8.2 million of capital expenditures, primarily related to infrastructure builds, equipment procurement, and labor associated with the Company’s Project Kati datacenters, in addition to Briscoe Wind Farm. These capital expenditures are expected to occur over the current year.

Contingencies:

Spring Lane Capital Contingency

The Company has a potential contingency associated with an agreement with SLC of up to $250 thousand which would be reduced by a proportion of funding received from SLC up to the $45.0 million aggregate contribution cap. The Company considers the probability of a payment for the contingency to be remote.

Legal

We are subject to legal proceedings, claims and liabilities which arise in the ordinary course of business. When applicable, we accrue for losses associated with legal claims when such losses are probable and can be reasonably estimated. These accruals are adjusted as additional information becomes available or circumstances change. Legal fees are charged to expense as they are incurred.

13. Related Party Transactions

HEL Transactions

As discussed in the Company’s 2023 Annual Report and all agreements included as exhibits and defined within the 2023 Annual Report, on October 29, 2021, the Company completed the Soluna Callisto acquisition pursuant to the merger agreement (the “Merger Agreement”). The purpose of the transaction was for SCI to acquire substantially all of the assets (other than those assets physically located in Morocco) formerly held by Harmattan Energy, Ltd. (“HEL”), which assets consisted of SCI’s existing pipeline of certain cryptocurrency mining projects that HEL previously transferred to SCI, which was formed expressly for this purpose, and to provide SCI with the opportunity to directly employ or retain the services of four individuals whose services it had retained through HEL prior to the merger. As a result of the merger, each share of common stock of Soluna Callisto issued and outstanding immediately prior to the effective time of the merger, other than shares owned by the Company or any of our subsidiaries, was cancelled and converted into the right to receive a proportionate share of the Merger Consideration.

In connection with the Soluna Callisto acquisition, effective as of October 29, 2021, upon and subject to the terms and conditions of the Termination Agreement, on November 5, 2021: (1) the existing Operating and Management Agreements between HEL and SCI were terminated in all respects; and (2)(A) SCI paid HEL $725 thousand, (B) SHI issued to HEL the Termination Shares, and (C) HEL and SHI entered into an Amended and Restated Contingent Rights Agreement that, among other things, amended the existing Contingent Rights Agreement by and between HEL and SHI, dated January 13, 2020, to provide SHI the right to invest directly in certain cryptocurrency mining opportunities being pursued by HEL. SHI filed a registration statement with the SEC to register the resale of the Termination Shares on February 14, 2022.

Due to conditions being met within the Merger Agreement in relation to energization and retention of employees, the Company has advised SCI US Holdings LLC, a Delaware limited liability company, who is the sole Effective Time Holder (as defined in the Merger Agreement) of the right to receive the Merger Shares and that 19,800 Merger Shares were issued on May 26, 2023,39,600 Merger Shares were issued on October 10, 2023, and 17,820 Merger Shares were issued on October 8, 2025. On February 6, 2026, the Company issued an additional 10,692 Merger Shares, due to the 18 MW of energization being met. SCI US Holdings LLC has consented to the issuance of such Merger Shares as required under the Merger Agreement and has directed the Company to issue such Merger Shares to its affiliate, HEL. The remaining 30,888 Merger Shares were issued on June 24, 2026 with the energization of D2, and therefore closes out the 118,800 Merger Shares available for issuance, and no further Merger Shares remain available pursuant to the terms of the Merger Agreement as of June 30, 2026.

Four of the Company’s directors have various affiliations with HEL. The Company notes that the only transaction with HEL for the year ended December 31, 2025 and three and six months ended June 30, 2026 was in relation to the issuance of Merger Shares noted above.

The Company owned approximately 1.79% of HEL, calculated on a converted fully diluted basis, as of June 30, 2026 and December 31, 2025. The Company’s equity investment of HEL was fully impaired in fiscal year 2024, as such the equity investment is valued at $0 for both June 30, 2026 and December 31, 2025. The Company may enter into additional transactions with HEL in the future.

14. Stock-Based Compensation

The Company currently issues awards under the Soluna Holdings, Inc. Third Amended and Restated 2021 Stock Incentive Plan, as amended (the “2021 Plan”), and the Soluna Holdings, Inc. Amended and Restated 2023 Stock Incentive Plan, as amended (the “2023 Plan”). There were no amendments to the 2021 Plan or the 2023 Plan during the three and six months ended June 30, 2026. For further details regarding our stock-based compensation plans and the methods and assumptions used in the determination of the fair value of stock-based awards, refer to our Annual Report on Form 10-K filed with the SEC on March 30, 2026.

During the three months ended June 30, 2026, the Company awarded the following under the 2021 Plan.

During the three months ended June 30, 2026, the Company awarded the following under the 2023 Plan:

During the six months ended June 30, 2026, the Company awarded the following under both the 2021 and 2023 Plan:

12,888,557 of the restricted stock awards vest at separation from the Company,1,373,000 of the restricted stock awards vest 33% on December 1, 2026,33% on December 1, 2027, and 34% on December 1, 2028.7,622,278 of the restricted stock awards vest 33% on June 1, 2027,33% on June 1, 2028, and 34% on June 1, 2029. 50,000 of the restricted stock units vest 25% on April 1, 2026 and the remaining 75% in equal quarterly installments over the next 24 months with the first quarterly vesting on June 20, 2026. 485,000 of the restricted stock units vest 33% on January 1, 2027,33% on January 1, 2028, and 34% on January 1, 2029. 1,281,250 of the restricted stock units vest 33% on March 9, 2027,33% on March 9, 2028, and 34% on March 9, 2029.140,000 of the restricted stock units vest 33% on March 24, 2027,33% on March 24, 2028, and 34% on March 24, 2029.35,000 of the restricted stock units vest 33% on June 1, 2027,33% on June 1, 2028, and 34% on June 1, 2029.

During the three and six months ended June 30, 2025, the Company awarded the following under the 2021 Plan:

1,201,312 of the restricted stock awards vest at separation from the Company,939,371 of the restricted stock awards vest 33% on June 1 ,2026,33% on June 1, 2027 and 34% on June 1, 2028, and 32,000 of the restricted stock units vest 33% on June 3, 2026,33% on June 3, 2027 and 34% on June 3, 2028.

During the three and six months ended June 30, 2025, there wereno awards granted under the 2023 Plan.

Share-based compensation expense recognized in the Condensed Consolidated Statements of Operations is based on awards ultimately expected to vest, therefore, awards are reduced for estimated forfeitures. The accounting standard requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company will recognize the compensation expense on a straight-line basis over the service period for the entire awards. As of June 30, 2026 and December 31, 2025, the awards from the Plans are presented within the stockholders’ equity section of the Company’s condensed balance sheet.

Total share-based compensation expense, related to the Company’s share-based awards, recognized for the three and six months ended June 30, was comprised as follows:

15. Effect of Recent Accounting Updates

Accounting Updates Effective for fiscal year 2026

Changes to U.S. GAAP are established by the Financial Accounting Standards Board (the “FASB”) in the form of accounting standard updates (“ASUs”) to the FASB’s Accounting Standards Codification (“ASC”). The Company considered the applicability and impact of all ASUs. ASUs not mentioned below were assessed and determined to be either not applicable or are expected to have minimal impact on our consolidated financial position or results of operations.

Debt with Conversion and Other Options

In November 2024, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2024-04, Debt - Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments. ASU 2024-04 clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion to improve relevance and consistency. The new standard is effective for the Company for its annual periods beginning after December 15, 2025 and interim periods within those annual reporting periods, with early adoption permitted. The Company notes that the adoption of this guidance did not have an impact on its condensed financial statements, and the Company will review any new debt agreements with conversion options.

Measurement of Credit Losses for Accounts Receivable and Contract Assets

In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The amendments provide a practical expedient and, if applicable, an accounting policy election to simplify the measurement of credit losses for certain receivables and contract assets. The amendments are effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted in any interim or annual period in which financial statements have not yet been issued or made available for issuance. The Company has adopted this amendment and did not have an impact on its financial position, results of operations, or cash flows.

Accounting Updates Not Yet Effective

Improvements to Comprehensive Income- Expense Disaggregation

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40)(“ASU 2024-03”). ASU 2024-03 requires, in the notes to the financial statements, disclosures of specified information about certain costs and expenses specified in the updated guidance. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is evaluating the impact the updated guidance will have on its disclosures.

Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity

In May 2025, the FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity. The amendments provide guidance on identifying the accounting acquirer in transactions involving a variable interest entity. The amendments are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual periods. Early adoption is permitted as of the beginning of an interim or annual reporting period. The Company is currently evaluating the impact of this amendment and does not expect that the adoption of this guidance will have a material impact on its financial position, results of operations, or cash flows.

16. Variable Interest Entities

Dorothy 2

On July 22, 2024 (the “Effective Date”), SHI closed financing for the Dorothy 2 project. This project involves Soluna Digital, Inc. (the “Developer”) and Soluna DVSL II ComputeCo, LLC (“DVSL II”), a special purpose vehicle initially owned solely by the Developer. They are collaborating on the development, design, procurement, and construction of a 48 MW data center (the “Project Dorothy 2”) in Silverton, Texas. This facility is owned by DVSL II and operated by Soluna US Services, LLC, and may engage in cryptocurrency, batch processing, and other non-crypto related activities. It is adjacent to two other company data center projects at the same site.

Project Dorothy 2 is financed by Soluna2 SLC Fund II Project Holdco LLC, an investment vehicle of SLC with a capital contribution of up to $29.98 million, and the Developer, as the parent company of DVSL II, with an initial capital contribution of up to $4.6 million. As of the Effective Date, the Company and the Developer became co-owners of DVSL II. In exchange for contributions to DVSL II, the Company and SLC were initially issued 42% and 58% of the Class B Membership Interests in DVSL II respectively, and were admitted as Class B members of DVSL II. Further, DVSL II issued 100% of its Class A Membership Interests to SDI. In relation to distributions, once ERCOT Achievement Date has been met ( date on which SLC and the Company have mutually agreed upon the parameters for power trading or demand response program in the ERCOT market) until the Target Return Date (last day of quarter in which the Class B members achieve an 18% internal rate of return), the Class A members will obtain 7.5% of the distributable cash with the remaining 92.5% being distributed to the Class B members on a pro-rata basis. After the Target Return Date is met,50% of distributable cash will be allocated to the Class A members and 50% allocated to the Class B members in accordance with their membership interests.

Project Dorothy 2 allows the Developer to invest in DVSL II, with the total ownership of the Developer and its affiliates capped at 49% of the Class B Membership Interests. This investment can occur within 30 days after the Effective Date (treated equally to the initial Investor), from day 31 to 180 days after the Effective Date (subject to a purchase price formula with a 20% discount rate), or after 180 days with the initial Investor’s approval.

On May 16, 2024, the Company secured $1.0 million in financing from SLC for equipment and machinery for Project Dorothy 2 through an Equipment Loan Agreement (the “ELA”) between SDI SL Borrowing - 1, LLC (the “Borrower”) and SLC. On that date, SLC lent the Borrower $720,000 to purchase medium voltage cables and low voltage switchboards. This debt was later assigned to DVSL II on the Effective Date. Subsequently, the borrowing amount was paid in full by issuing SLC Class B Membership Interests in the Dorothy 2 project valued at three times the borrowing amount (i.e., $2.16 million).

On April 4, 2025, the Company transferred its Class B Membership to SLC, resulting in 0% Class B Membership Interests held by the Company. SDI still retains 100% Class A Membership Interests in DVSL II as of June 30, 2026. The Company concluded that it is the primary beneficiary of DVSL II and consolidates the entity.

The Company evaluated this legal entity under ASC 810, Consolidations and determined that this entity is a variable interest entity ("VIE"), as the equity holders as a group do not have the characteristics of a controlling financial interest. Even though SLC has all of the Class B membership, the Company holds all the Class A membership, which gives it the ability to control the significant decisions made in the ordinary course of business. The Company has the right to receive benefits that could potentially be significant to the VIE through its Class A membership interest, as it is eligible to receive 50% of distributions upon SLC obtaining a specified internal rate of return. The non-controlling shareholders do not hold substantive participating rights, voting rights or liquidation rights.

In September 2025, the Company agreed to terms of a debt facility with Generate under a Credit and Guaranty Agreement, as discussed in Note 10. Several events occurred in connection with the debt facility, [1] the Company completed a restructuring of the subsidiaries that comprise “Project Dorothy 1A” and “Project Dorothy 2” (herein referred to as the “Dorothy Restructuring”), [2] Soluna DVSL ComputeCo LLC, Soluna DVSL II ComputeCo LLC, and Soluna KK I ComputeCo LLC entered into a First Priority Leasehold Deed of Trust (the “Deed of Trust”) with Generate which provides Generate with the power of sale and right of entry and possession of the Trust Property.

Following the Dorothy Restructuring, Project Dorothy 2 consists of Soluna DVSL II JVCo, LLC (“DVSL II JVCo”), which has Class A units owned by the Developer and Class B units owned by SLC. DVSL II JVCo is then the sole parent of Soluna DVSL II HoldCo, LLC (“DVSL II HoldCo”), which is the sole owner of DVSL II ComputeCo. The total ownership of Project Dorothy 2 remains such that the Developer holds all Class A units and that SLC holds all Class B units.

The Company noted that [1] there is no substantive change to the ascending view of the organizational chart since the Company (through the Developer and newly created DVSL II JVCo and DVSL II ComputeCo) beneficially own the Class A units (i.e., managing units) of DVSL II and [2] there are no substantive kick-out rights that exist within Project Dorothy 2 that would cause the Developer to not have the ability to direct the activities that most significantly impact the economic performance of DVSL II. In addition, the entity’s obligation to absorb losses and right to receive benefits has not changed. As such, Soluna would continue to consolidate the entity since a change in control has not occurred following the execution of Credit Agreement and Deed of Trust.

The amount of the assets and liabilities (including intercompany and related party balances that are eliminated in consolidation) was as follows for DVSL II JVCo:

Kati 1

On July 22, 2025 (the “Effective Date”), Soluna Digital, Inc. (“SDI”), a subsidiary of the Company, finalized a contribution agreement and operating agreement for Project Kati, a 166 MW facility located in Willacy County, Texas, which is expected to be delivered intwo phases of 83 MW each. This project involves SDI as the Developer, Soluna KKSL JVCo LLC (the “KKSL JVCo”), a special purpose vehicle initially owned solely by SDI, and Soluna2 Kati Project Holdco LLC (“Spring Lane”). This facility is owned by KKSL JVCo, and operated by Soluna US Services, LLC, and may engage in cryptocurrency, batch processing, and other non-crypto related activities.

Currently, Project Kati 1 is financed by Soluna2 Kati Project Holdco LLC, an investment vehicle of SLC with a capital contribution cap of up to $48.98 million. In exchange for contributions to KKSL JVCo, SDI was issued 100% of Class A Membership Units in KKSL JVCo, and SLC was initially issued 100% of the Class B Membership Interests in KKSL JVCo and admitted as a Class B member of KKSL JVCo. Further, SDI and SLC entered into a Developer Investment Side Letter that allowed SDI to invest into KKSL JVCo up to 49% of ownership in the Class B Membership Interests through January 31, 2026. SDI had contributed to KKSL JVCo through the period, and as of June 30, 2026, SDI holds 100% of the

Class A membership interests and 13% of the Class B membership interest in Project Kati 1, while SLC holds the remaining 87% of the Class B membership interests.

In relation to distributions, until the Target Achievement Date (date at which Class B members achieve a 16% of IRR), (i) first, the Distributable Cash received by the Company shall be distributed ninety-two and five tenths percent (92.5%) to the Class B Members on a pro rata basis, and seven and five tenths percent (7.5%) to the Class A Member, until each of the Class B Members has received its Target Return; (ii) second, after the Target Achievement Date, the portion of Distributable Cash received by the Company shall be distributed fifty percent (50%) to the Class A Member (or its respective assigns), and fifty percent (50%) to the Class B Members (or their respective assigns), pro rata in accordance with their Membership Interests.

The Company evaluated this legal entity under ASC 810, Consolidations and determined that this entity is a VIE, as the equity holders as a group do not have the characteristics of a controlling financial interest. Even though SLC has all of the Class B membership, SDI holds all the Class A membership, which gives it the ability to control the significant decisions made in the ordinary course of business. The Company has the right to receive benefits that could potentially be significant to the VIE through its Class A membership interest, as it is eligible to receive 50% of distributions upon SLC obtaining a specified internal rate of return. The non-controlling shareholders do not hold substantive participating rights, voting rights or liquidation rights.

Included within other liabilities, related party is an intercompany loan with SDI of approximately $8.3 million, which is eliminated from the Company's consolidated condensed financial statements. The amount of the assets and liabilities (including intercompany and related party balances that are eliminated in consolidation) was as follows for KKSL JVCo:

Kati 2

On June 3, 2026, Soluna HPC KK II HoldCo, LLC (the "Soluna Member"), an indirect wholly owned subsidiary of the Company, entered into the limited liability company agreement of Soluna MB KK II JVCo, LLC ("Kati 2 JVCo") with DC Kati Venture LLC (the "Metrobloks Member"), an affiliate of Metrobloks, LLC. Kati 2 JVCo was formed on May 22, 2026 to acquire, own and develop, through two wholly owned subsidiary land companies, a multi-phase data center campus in Willacy County, Texas, marketed as "Project Kati 2." The campus is planned in two phases: a Phase I development of approximately 100 MW of critical IT load on property already owned by Kati 2 JVCo, and a Phase II development of approximately 250 MW of critical IT load on property to be acquired under a purchase and sale agreement assigned to Kati 2 JVCo’s Phase II land company at closing.

The Soluna Member holds 100% of the Class A Interests of Kati 2 JVCo and serves as its sole manager. The Metrobloks Member holds 100% of the Class B Interests, which are profits interests carrying no voting rights and an initial capital account of zero. Distributions are made first to repay any default loans, second to return capital contributions to the members, third to provide the members a 14% internal rate of return on their capital contributions, fourth in an amount equal to $100 thousand per megawatt of the project’s contracted generating capacity to the Soluna Member, and thereafter 50% to each member.

As of the effective date, the Soluna Member’s funded capital contribution to Kati 2 JVCo was approximately $6.7 million, consisting of the Phase I property contributed at its cost of $1.1 million, approximately $3.6 million of other pre-formation development costs and fees, and $2.0 million of cash. The Soluna Member has committed to contribute an additional approximate $19.1 million to fund the acquisition of the Phase II property and, subject to approval by the manager, up to an additional $2.0 million to fund operating expenses of Kati 2 JVCo as they become due. The Metrobloks Member made no capital contribution and, other than a reinvestment obligation that arises only upon the transition to the vertical phase of the project, has no obligation to contribute capital. Kati 2 JVCo has no third-party debt outstanding, and its activities have been financed entirely by capital contributions from the Soluna Member. Development of the campus is expected to require substantial financing from third parties, which the joint venture agreement contemplates would be arranged in connection with a future contribution of the project property to a development entity.

The Company concluded that Kati 2 JVCo is a VIE because its total equity investment at risk is not sufficient, by design, to permit it to finance its activities without additional subordinated financial support. In reaching that conclusion, the Company considered that Kati 2 JVCo holds undeveloped land and capitalized development costs that do not generate revenue; that it cannot complete the acquisition of the Phase II property without the Soluna Member’s unfunded capital commitment; and that the development of the campus is expected to be financed through third-party arrangements that have not been obtained. The Company also determined that the Class B Interests are not equity investment at risk, because they were issued for no capital contribution, carry an initial capital account of zero, do not participate in losses and carry no deficit restoration obligation. The equity investment at risk therefore consists solely of the Class A Interests held by the Soluna Member.

The Company concluded that it is the primary beneficiary of Kati 2 JVCo and consolidates the entity. The Soluna Member, as sole manager and holder of all of the voting interests, has the exclusive authority to direct the activities that most significantly impact Kati 2 JVCo’s economic performance, including the acquisition and development of the project properties, the procurement of power, the negotiation of customer contracts, the management of construction and operations, and all financing decisions. The rights held by the Metrobloks Member — consultation rights with respect to the selection of investors and the terms of major debt financing in connection with a future development-entity transaction, an approval right over agreements with affiliates of the Company that are both non-arm’s-length and $500 thousand or more per annum, and a consent right over amendments to the distribution provisions that would affect it disproportionately — are protective rights that do not convey the ability to direct the significant activities of Kati 2 JVCo. The Soluna Member also has the obligation to absorb losses of, and the right to receive benefits from, Kati 2 JVCo that could potentially be significant, through its capital contributions and its priority and residual participation in distributions.

The Soluna Member’s contribution of the Phase I property and related development costs, each of which the Company already controlled, was accounted for as a transaction among entities under common control, and those assets were recorded at their historical carrying amounts. The Company separately evaluated the simultaneous issuance of the Class B Interests to the Metrobloks Member, for which no capital contribution was made, to determine whether the interests were granted in exchange for services and therefore within the scope of ASC 718. Based on the terms of the joint venture agreement, the terms of the design services management agreement between the Company and Metrobloks, LLC — under which the services within its scope are compensated solely in cash — and the contemporaneous record of the negotiations, including the 50/50 ownership structure agreed at the term-sheet stage, the Company concluded that the Class B Interests were issued in respect of the Metrobloks Member’s position as a venture partner and not as compensation for services.

Accordingly, the non-controlling interest attributable to the Class B Interests was recorded at zero upon formation, and no share-based payment cost was recognized. Income and loss will be attributed to the non-controlling interest in accordance with the profit allocation provisions of the joint venture agreement; because the Class B Interests are profits interests with an initial capital account of zero, no income is attributable to the non-controlling interest until the distribution thresholds described above have been satisfied.

The following table presents the amounts and classification of the assets and liabilities of Kati 2 JVCo (including intercompany and related party balances that are eliminated in consolidation):

The assets of Kati 2 JVCo may be used only to settle obligations of Kati 2 JVCo, and the creditors of Kati 2 JVCo have no recourse to the general credit of the Company. The Company’s exposure to loss is limited to its funded capital contribution and the unfunded capital commitments described above. The Company has not provided financial support to Kati 2 JVCo that it was not contractually required to provide, and it is not otherwise obligated to provide such support.

The acquisition of the Phase II property had not closed as of June 30, 2026, and the related approximate $19.1 million capital contribution had not been funded as of that date.

Dorothy 1A

Soluna DVSL JVCo, LLC (the "Dorothy 1A Project Company") owns a wind-powered data center campus in Silverton, Texas focused on bitcoin hosting. Prior to April 15, 2026, Soluna Digital Inc., a wholly owned subsidiary of the Company (the "Purchaser"), held the Class A Membership Interests in the Dorothy 1A Project Company and Soluna SLC Fund I Projects Holdco LLC (the "Seller"), an affiliate of Spring Lane Capital, held 85.4% of the issued and outstanding Class B Membership Interests. The Company consolidated the Dorothy 1A Project Company as its primary beneficiary under ASC 810, Consolidation, and reflected the Seller's Class B interest as a noncontrolling interest on the Company's consolidated balance sheet.

On April 15, 2026, the Purchaser entered into a Membership Interests Purchase Agreement with the Seller, pursuant to which the Purchaser acquired 85.4% of the issued and outstanding Class B Membership Interests in the Dorothy 1A Project Company for aggregate consideration of $16.5 million. At closing, the Purchaser paid $6.0 million in cash to the Seller; an additional $10.5 million was paid as of June 30, 2026.

Upon closing, the Purchaser owns 100% of the issued and outstanding membership interests of the Dorothy 1A Project Company. Because the Company was already the primary beneficiary of the Dorothy 1A Project Company and consolidated it prior to this transaction, the acquisition of the remaining noncontrolling interest was accounted for as an equity transaction. No gain or loss was recognized in the consolidated statements of operations. The carrying amount of the noncontrolling interest was derecognized, and the difference between the consideration paid and the carrying value of the noncontrolling interest was recorded as an adjustment to additional paid-in capital attributable to the Company.

Following the closing, the Dorothy 1A Project Company continues to be consolidated as a wholly owned indirect subsidiary of the Company, and is no longer subject to VIE analysis.

Dorothy 1B

Soluna DV ComputeCo, LLC (the "Dorothy 1B Project Company") is focused primarily on proprietary bitcoin mining and data center hosting. Prior to May 19, 2026, the Purchaser held 51% of the issued and outstanding membership interests in the Dorothy 1B Project Company, and Navitas West Texas Investments SPV, LLC (the "Seller"), an affiliate of Navitas Advisors, LLC, held the remaining 49%. The Company consolidated the Dorothy 1B Project Company as its primary beneficiary under ASC 810, Consolidation, and reflected the Seller's 49% interest as a noncontrolling interest on the Company's consolidated balance sheet.

On May 19, 2026, the Purchaser entered into a Membership Interests Purchase Agreement (the "MIPA") with Navitas West Texas Investments SPV, LLC (the "Seller") and Navitas Advisors, LLC, pursuant to which the Purchaser acquired 49% of the issued and outstanding membership interests in the Dorothy 1B Project Company for aggregate cash consideration of approximately $8.8 million, paid in full at closing. The closing of the acquisition occurred simultaneously with the execution of the MIPA on May 19, 2026.

Upon closing, the Purchaser owns 100% of the issued and outstanding membership interests in the Dorothy 1B Project Company. Because the Company was already the primary beneficiary of the Dorothy 1B Project Company and consolidated it prior to this transaction, the acquisition of the remaining noncontrolling interest was accounted for as an equity transaction. No gain or loss was recognized in the consolidated statements of operations. The carrying amount of the noncontrolling interest was derecognized, and the difference between the consideration paid and the carrying value of the noncontrolling interest was recorded as an adjustment to additional paid-in capital attributable to the Company.

Following the closing, the Dorothy 1B Project Company continues to be consolidated as a wholly owned indirect subsidiary of the Company and is no longer subject to VIE analysis.

17. Segment Information

The Company applies ASC 280, Segment Reporting, in determining its reportable segments. The Company has adopted ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures(ASU 2023-07), which requires disclosure of incremental segment information on an annual and interim basis, primarily through enhanced disclosures of significant segment expenses. Operating segments are aggregated into a reportable segment if the operating segments have similar quantitative economic characteristics and if the operating segments are similar in the following qualitative characteristics: (i) nature of products and services; (ii) nature of production processes; (iii) type or class of customer for their products and services; (iv) methods used to distribute the products or provide services; and (v) if applicable, the nature of the regulatory environment. The Company’s reportable segments are identified based on the types of service performed. The Company hasfour reportable segments: Cryptocurrency Mining, Data Center Hosting, Wind Energy Generation which was created on April 1, 2026 in relation to the Briscoe acquisition discussed in Note 5, and High-Performance Computing. In the third quarter of 2024, the Company initiated Soluna Cloud Services, a new business line to provide high performance computing services to support generative AI workstreams but decided to exit active provision of these services during the first quarter of 2025 and will focus in the future on provision of colocation services at our datacenters to host customers in the AI generative space.

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 composed of several members of its senior leadership team directed by the CEO and CFO who use revenue and cost of revenues which formulate gross profit (loss), as well as total general and administrative expenses of the reporting segments to assess the performance of the business of our reportable operating segments and allocate resources. Operating profit (loss) is used to evaluate actual results against expectations, which are based on comparable prior results, current budget, and current forecast. Non-cash items of depreciation and amortization are included within both costs of sales and general and administrative expenses, however only depreciation through the Company’s site levels are evaluated for segment performance.

In the adoption of ASU 2023-07, the most significant provision was for the Company to disclose significant segment expenses (i.e.: costs of revenue) that are regularly provided to the CODM. Utility costs, wages and benefit related costs, facility and equipment costs, and depreciation costs at the site level were determined to be significant segment expenses. The CODM only reviews general and administrative expenses by site level as a whole, and not by significant expenses. 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 Bitcoin mining activities, which is currently generated from Project Dorothy and Project Kati. The Data Center Hosting segment generated revenue from hosting services provided to third-party Bitcoin mining customers at the Company’s data centers, which are currently generated from Project Sophie, Project Dorothy, and Project Kati. The Wind Energy Generation segment which was created with the Briscoe acquisition, sells power generated from owned wind turbines and also sells renewable energy credits. The High-Performance Computing Services segment may generate revenue from either the sale or lease of HPC assets (such as Project Ada which leased GPUs), or from HPC/AI data centers to be leased to third-party HPC/AI customers. This segment began generating revenue in December 2024, as Project Ada worked to build its customer base. With the termination of the HPE Agreement, revenue was minimal for the six months ended June 30, 2025, and no revenue was generated for the three and six months ended June 30, 2026.

The Company includes demand response revenue as a reconciling item of revenue and is not included within thefour reportable segments. The Company utilizes its data centers to deliver demand response services to grid operators or utilities. Under these arrangements with a grid operator, the Company agrees to be available to ramp down a registered data center’s power consumption to a specific target level. In exchange, the grid pays the Company a fee for this dispatch right, provided the Company can perform within certain parameters. The Company can be providing any type of service at the data centers whether it be Cryptocurrency Mining, Data Center Hosting, or AI to generate demand response service revenue.

The following table details revenue, cost of revenues, and other operating costs for the Company’s reportable segments for three months ended June 30, 2026 and 2025, and reconciles to net loss on the consolidated statements of operations:

For the three months ended June 30, 2026

(b) Intersegment eliminations primarily reflect the elimination of revenue recognized by Briscoe Wind Farm, LLC on electricity sales that are delivered, through regulated cooperative intermediaries acting as pass-through agents, to the Company's Dorothy data centers, and the corresponding elimination of the related power cost recognized by the data center operations, as these transfers represent intra-entity transactions following the Company's acquisition of Briscoe on April 1, 2026.

For the three months ended June 30, 2025

The following table presents the reconciliation of segment operating income to net loss before taxes:

(b)The reconciling general and administrative expense, exclusive of depreciation and amortization represent corporate and unallocated general and administrative expenses for the three months ended June 30, 2026 and 2025.

The following table details revenue, cost of revenues, and other operating costs for the Company’s reportable segments for six months ended June 30, 2026 and 2025, and reconciles to net income (loss) on the consolidated statements of operations:

For the six months ended June 30, 2026

(b) Intersegment eliminations primarily reflect the elimination of revenue recognized by Briscoe Wind Farm, LLC on electricity sales that are delivered, through regulated cooperative intermediaries acting as pass-through agents, to the Company's Dorothy data centers, and the corresponding elimination of the related power cost recognized by the data center operations, as these transfers represent intra-entity transactions following the Company's acquisition of Briscoe on April 1, 2026.

For the six months ended June 30, 2025

The following table presents the reconciliation of segment operating income (loss) to net income (loss) before taxes:

(b)The reconciling general and administrative expense, exclusive of depreciation and amortization represent corporate and unallocated general and administrative expenses for the six months ended June 30, 2026 and 2025.

Concentrations

During the three months ended June 30, 2026 and June 30, 2025, aside from the Bitcoin Mining revenue generated as a result of the Company’s participation in a mining pool, the demand response program, and the Wind Energy Generation revenue from the Briscoe acquisition, each of four customers contributed more than 10% of the Company’s total consolidated revenue constituting approximately 67% for the three months ended June 30, 2026, and each of three customers contributed more than 10% of the Company’s total consolidated revenue constituting approximately 40% of the Company’s total consolidated revenue for the three months ended June 30, 2025.

For the three and six months ended June 30, 2026 and 2025, the majority of the Company’s cryptocurrency mining revenue was generated from Project Dorothy 1B (data center located in Silverton, Texas), with minimal activity for the three and six months ended June 30, 2026 at Project Kati 1.

For the three months ended June 30, 2026 and June 30, 2025, approxim ately 22% and 53% of the Company’s data center hosting revenue was generated from Project Dorothy 1A,19% and 40% from Project Sophie,38% and 7% from Project Dorothy 2,3% and 0% from Project Dorothy 1B, and 18% and 0%from Project Kati 1, respectively.

During the six months ended June 30, 2026 and June 30, 2025, aside from the Bitcoin Mining revenue generated as a result of the Company’s participation in a mining pool, the demand response program, and the Wind Energy Generation revenue from the Briscoe acquisition, each of four customers contributed more than 10% of the Company’s total consolidated revenue constituting approximately 63% for the six months ended June 30, 2026, and each of three customers contributed more than 10% of the Company’s total consolidated revenue constituting approximately 37% of the Company’s total consolidated revenue for the six months ended June 30, 2025.

For the six months ended June 30, 2026 and June 30, 2025, approximately 25% and 55% of the Company’s data center hosting revenue was generated from Project Dorothy 1A,19% and 41% from Project Sophie,41% and 4% from Project Dorothy 2,2% and 0% from Project Dorothy 1B, and 13% and 0% from Project Kati 1, respectively.

18. Subsequent Events

Subsequent to June 30, 2026 and through the date of issuance of these condensed consolidated financial statements, the Company has issued 18,769,096 shares of common stock pursuant to the ATM Agreement for net proceeds of approximately $23.6 million. See Note 11.

On August 7, 2026, the Borrowers entered into the Amendment No. 3, under which the DSCR and the Forward Contracted DSCR were not required to be calculated for the June 30, 2026 measurement date, conditioned upon the prepayment in full of the Tranche A-1 and Tranche A-3 Loans. Amendment No. 3 became effective upon satisfaction of the conditions set forth within the agreement, including but not limited to the occurrence of prepayment of the Tranche A-1 Loan and the Tranche A-3 Loan. On August 10, 2026, Soluna DVSL ComputeCo, LLC and Soluna DVSL II ComputeCo, LLC prepaid in full the Tranche A-1 Loans and Tranche A-3 Loans, respectively, for an aggregate prepayment amount of approximately $19.1 million, inclusive of accrued and unpaid interest, a prepayment premium of approximately $3.9 million, $15.2 million of the outstanding principal balance and all other amounts then due under the Amended Credit Agreement. See Note 10.