Soluna Holdings, Inc. Common Stock Water Tower Research Virtual Insights Conference

How are you doing? I am doing great, John.

Thanks for having me on this Insights conference. It is fantastic to be here, and it is also nice to see you. Haven't talked in a while.

Sure. Soluna builds data centers directly at renewable generation facilities or power plants that have excess or unused power. It is a little-known secret that over the last 20 to 25 years or so, renewable energy power plants have been built out all over the world, and that overbuild, if you will, has resulted in this challenge where some of those power plants, upwards of 50% of their power, never makes it to the grid. We go to those locations and we build our data centers behind the meter. That means the campus sits on the same side as the substation of the power plant's own assets, rather than forming a new interconnection to consume the power. That approach, that behind-the-meter approach, is our core model.

Wind and solar plants, as I said, across ERCOT and other parts of the country, have large amounts of unused or potential energy that never makes it to the grid. The energy's already built, it's already clean, and it evaporates when it's unused and being on the wrong side of the transmission infrastructure. By bringing our load to that generation point where the power already is, that allows us to get access to an interconnection point to draw power from the grid and the power plant.

That essentially bypasses the need for new transmission, and that compresses the time from years, if we did this going to a point on the grid where we were forming a new connection, that can take years to months, about 18 months in Soluna's case, which greatly reduces the time it takes to get to that power, so speed to power, and lowers the cost of that energy. The pipeline that we have, which is pretty sizable these days, is dual-focused. We've got two workloads, if you will. One is different stages of a site's life. One is building a data center that essentially does one form of compute, and now we're shifting to building a data center that does a new form of compute.

The core thesis for our business is essentially that by taking this approach, we can get access to power faster, use that power to power AI, HPC, and Bitcoin hosting, what we do today. We have 206 megawatts of this model operating today, and we have over 6.3 gigawatts in a total pipeline that we're developing in various stages.

Yeah, you are right. This summer, we announced a deal with an affiliate of Bitdeer Technologies. We are going to be deploying approximately 28 megawatts of Bitcoin equipment at Project Kati 1. That is the Bitcoin side of the Project Kati site. I think that is about close to 2 exahash. The deployment begins, actually, it is beginning this month, and it is going to be ramping in batches in the site's K1BC phase. What is notable about this particular structure is that it is a co-mining agreement, which is new for our Bitcoin platform. Soluna essentially provides the site, the power, and turnkey operations. Bitdeer provides its own miners and Pro Air equipment, and then we share in the proceeds from the mining operation. So a big shift from our fixed-fee model. Under co-mining, we participate more directly in what the infrastructure produces, which means more exposure to mining economics and, of course, the upside of that.

The key is that we are monetizing those megawatts for our platform and the partner. On Kati 1 more broadly, just a reminder perhaps for folks, it is an 83-megawatt wind-powered site in Willacy County, Texas, and it is delivering its first gross profit in the second quarter. We have provided a host of expectations on the size of the footprint, but we do not talk about revenue expectations. We expect it to be a pretty robust partnership at Kati 1.

It is. Dorothy III is the second AI campus we are developing in our pipeline. The first is Kati 2. It is the site across the street from Kati 1, the project I referred to earlier. Dorothy III is planned to be upwards of a 300-megawatt campus. Over the second quarter, right at the start of the second quarter, we completed the vertical integration of Dorothy I and II. There, we acquired the wind farm that powers the Dorothy projects on April 1st. Then we brought out all of our partners at Dorothy 1A and 1B, so we now own the generation and the computer across all of those 50 megawatts of Dorothy I. The 390 acres that you refer to, 390, give or take, plus acres that are under contract and closed on the acquisition of that, support the initial build-out of Dorothy III.