Soluna Holdings (SLNH) risk factors, FY2025 10-K

Risks Relating to the Company and its Growth Strategy

1. 01Our recurring losses from operations will require additional capital to support our business and objectives and grow our business
2. 02We have incurred recurring losses since inception and, as of December 31, 2025, had an accumulated deficit of approximately $367.7 million. We anticipate operating losses to continue for the foreseeable future as we grow our business, and it is possible we will never achieve profitability57% rewritten
3. 03We have a limited operating history and we may not recognize operating income in the future
4. 04If we cannot achieve or maintain profitability, stockholders could lose all or part of their investment
5. 05On March 12, 2025, Soluna SW, LLC, a subsidiary of Soluna Digital, Inc. (“SSW”), entered into a $5 million term loan with Galaxy Digital LLC under a loan agreement that matures on March 12, 2030, with approximately $4.6 million of principal outstanding as of December 31, 202570% rewritten
6. 06Soluna AL CloudCo, LLC, a wholly owned subsidiary of Soluna Cloud, Inc. may be unable to meet its remaining obligations under the terminated HPE Agreement which could lead to a default under that agreement40% rewritten
7. 07We may be unable to refinance our indebtedness at maturity or the refinancing terms may be less favorable than the terms of our original indebtedness
8. 08Joint ventures, joint ownership and strategic partner arrangements and other projects pose unique challenges, and we may not be able to fully implement or realize synergies, expected returns or other anticipated benefits associated with such projects
9. 09We may not be able to timely complete our future strategic growth initiatives or within our anticipated costs estimates, if at all
10. 10We may have difficulty in obtaining banking services for our cryptocurrency activities
11. 11Our business plan is heavily dependent upon acquisitions and strategic alliances and our ability to identify, acquire or ally on appropriate terms, and successfully integrate and manage any acquired companies or alliances will impact our financial condition and operating results
12. 12We may finance future deals by issuing equity or convertible debt, which could dilute existing stockholders or increase leverage24% rewritten
13. 13We are subject to risks associated with our need for significant electrical power
14. 14Global economic and geopolitical events, policies and conflicts may adversely affect our business, financial condition, and results of operations
15. 15We may not be able to continue to develop our technology and keep pace with technological developments, or otherwise compete with other companies, many of which have greater resources and experience
16. 16Implementing new technology may also lead to system disruptions or fail to deliver expected benefits. If we cannot adapt effectively, our competitiveness and growth prospects could suffer
17. 17If we fail to effectively manage our growth, our business, financial condition, and results of operations could be harmed
18. 18Our new services and changes to existing services could fail to attract or retain users or generate revenue and profits, or otherwise adversely affect our business
19. 19We currently operate data centers in Texas, which generated the majority of our revenue in both 2024 and 2025. Our growth plans also focus on new projects in Texas, making our business highly dependent on the state’s regulatory environment, market conditions, and exposure to weather events or natural disasters

Risks Related to our Bitcoin Mining and Hosting Business

1. 20Our success depends on external factors affecting the Bitcoin industry
2. 21Our profitability depends on Bitcoin prices and the stability of Digital Asset markets, which are highly volatile and largely unregulated42% rewritten
3. 22A lack of trust in digital asset exchanges or their closure—whether due to fraud, government action, or business failure—can further undermine public confidence in Bitcoin, increase market volatility, and negatively impact our business. These risks may continue to evolve in ways we cannot fully anticipate33% rewritten
4. 23Volatility also affects how much revenue we realize from converting mined Bitcoin into U.S. dollars and makes financial planning more difficult. A prolonged decline in Bitcoin prices could also affect the ability of our co-hosting customers to pay for services, reducing our revenue and delaying expansion
5. 24Regulatory changes or actions may alter the nature of an investment in us or restrict the use of cryptocurrencies in a manner that adversely affects our business, prospects, or operations29% rewritten
6. 25Our interactions with a blockchain may expose us to specially designated nationals (“SDNs”) or blocked persons and new legislation or regulation could adversely impact our business or the market for cryptocurrencies
7. 26Security breaches and irreversible transactions could result in the loss of our cryptocurrencies
8. 27Our business depends on the continued demand for, and value of, cryptocurrencies—particularly Bitcoin—which is influenced by a variety of factors, including adoption, usability, and global economic and geopolitical events. However, the future of cryptocurrency as a widely used payment method remains uncertain
9. 28Because most of our and our hosted customers’ miners are designed specifically to mine Bitcoin and may not be readily adaptable to mining other cryptocurrencies, a sustained decline in Bitcoin’s value could adversely affect our business and results of operations
10. 29Our data center business could be harmed by prolonged power outages, power and fuel shortages, capacity constraints and increases in power costs
11. 30While we may use backup generators and other measures to reduce downtime, they may not always be sufficient. Additionally, as customer equipment becomes more power-intensive, total energy consumption at our facilities may exceed original design expectations, potentially limiting available capacity and future growth
12. 31Our properties may experience damages, including damages that are not covered by insurance
13. 32Our reliance on a third-party mining pool service provider for our mining revenue payouts may have a negative impact on our operations. The same may be true in the case of our hosted customers
14. 33Declining block rewards, reliance on transaction fees, and network forks could adversely affect our mining operations
15. 34If the aggregate computing power or hash rate on the Bitcoin network increases significantly, for proprietary Bitcoin mining, we may incur elevated capital expenses to maintain and upgrade our mining fleet in order to maintain market share
16. 35Climate change and evolving regulations could adversely impact our business52% rewritten
17. 36The lack of consistent regulation also creates uncertainty, especially as investor groups, policymakers, and the public increasingly scrutinize companies for their environmental practicesNew
18. 37We may be affected by price fluctuations in the wholesale and retail power markets
19. 38The development and acceptance of competing blockchain platforms or technologies may cause consumers to use alternative distributed ledgers or other alternatives
20. 39We have an evolving business model which is subject to various uncertainties

Risks Related to our HPC/AI Business

1. 40We may be unable to secure, develop, finance, construct, commission and operate HPC and AI data center projects on the timetable or economics we expectNew
2. 41Our HPC and AI data center business is subject to rapid changes in customer requirements, technology standards and infrastructure design, which may increase costs, delay development or make our facilities less competitiveNew
3. 42We may be unable to procure, install or integrate specialized equipment required for HPC and AI workloads, including electrical, cooling, networking and other long-lead-time components, on acceptable terms or at allNew
4. 43Tariffs, trade restrictions, import duties, export controls and other changes in trade policy may increase our capital costs, disrupt our supply chain and adversely affect the development and operation of our data centersNew

Risks Related to our Company Generally

1. 44Our business has and is expected to continue to have significant customer concentration 21% rewritten
2. 45Failure to attract, grow and retain a diverse and balanced customer base, including key magnet customers, could harm our business and operating results
3. 46We are heavily dependent on our senior management, and a loss of a member of our senior management team could cause the market prices of our securities to suffer
4. 47We depend upon third-party suppliers for power, and we are vulnerable to service failures and price increases by such suppliers and to volatility in the supply and price of power in the open market
5. 48Our confidentiality agreements with employees and others may not adequately prevent disclosure of our trade secrets and other proprietary information, which could limit our ability to compete
6. 49We may not be able to compete with other companies, some of which have greater resources and experience
7. 50Our business model depends upon the demand for data centers
8. 51Insiders continue to have substantial control over the Company
9. 52We are subject to complex environmental, health and safety laws and regulations that may expose us to significant liabilities for penalties, damages or costs of remediation or compliance
10. 53We could incur significant costs related to environmental matters, including from government regulation, private litigation, and existing conditions at some of our properties80% rewritten
11. 54Comprehensive Environmental Response, Compensation, and Liability Act of 1980, can hold current or past property owners liable for contamination, regardless of fault, and these costs can be significantNew
12. 55Provisions in our Articles (as defined below), our Bylaws (as defined below), and Nevada law may discourage a takeover attempt even if a takeover might be beneficial to our stockholders

General Risk Factors

1. 56Defending against such claims could result in legal costs or require us to modify our offerings or obtain licenses, which may not always be feasible or cost-effective. Although we believe this risk is currently low, any disputes could potentially impact our operations or financial condition if they were to arise
2. 57We rely heavily on complex information systems—both internal and from third-party providers—to run our operations, manage data, and support our customers and employees. These systems store sensitive information, including personal and financial data, and are critical to our day-to-day activities
3. 58Our risk management process may not identify all risks that we are subject to and will not eliminate all risk
4. 59Our officers and directors are indemnified against certain conduct that may prove costly to defend
5. 60We incur significant costs as a result of operating as a public company
6. 61Certain natural disasters or other external events, including climate change or mechanical failures, could harm our business, financial condition, results of operations, cash flows, and prospects
7. 62We may become involved in litigation arising in the ordinary course of our business that may materially adversely affect us46% rewritten
8. 63If we fail to maintain effective internal controls, we may not be able to report financial results accurately or on a timely basis, or to detect fraud, which could have a material adverse effect on our business or share price
9. 64If our estimates or judgments relating to our critical accounting policies are based on assumptions that change or prove to be incorrect, our results of operations could fall below the expectations of investors, resulting in a decline in the market price of our common stock
10. 65Public health crises, such as pandemics, epidemics, or widespread outbreaks of infectious disease, have had, and could in the future have, an adverse effect on our business, financial condition, and results of operations
11. 66Changes in accounting rules and regulations, or interpretations thereof, could result in unfavorable accounting charges or require us to change our compensation policies

Risks Related to Our Securities

1. 67The market price of our securities are likely to be volatile, which may cause investment losses for our shareholders29% rewritten
2. 68We have issued, and may continue to issue, new shares of our common stock, which has a dilutive effect on existing stockholdersNew
3. 69Because there has been limited precedent set for financial accounting of Bitcoin and other cryptocurrency assets, the determination that we have made for how to account for cryptocurrency assets transactions may be subject to change
4. 70If we are not able to comply with the applicable continued listing requirements or standards of Nasdaq, Nasdaq could delist our common stock or Series A Preferred Stock or broker-dealers may be discouraged from effecting transactions in shares of our securities59% rewritten
5. 71If we are unable to maintain our Nasdaq listings, our securities may be delisted and quoted on over-the-counter (OTC) markets instead. This would likely reduce the liquidity, market price, and visibility of our stock, and could make it more difficult for investors to sell their shares
6. 72The rights of holders of our Series A Preferred Stock and Series B Preferred Stock (as defined below) rank senior to the rights of the holders of our common stock
7. 73We do not anticipate paying dividends on our common stock, and investors may lose the entire amount of their investment
8. 74If securities or industry analysts do not publish research or reports about our business, or if they issue an adverse or misleading opinion regarding our stock, our stock price and trading volume could decline

Risks Related to the SEPA

1. 75Substantial blocks of our common stock may be sold into the market as a result of our being party to the SEPA and you may experience immediate and substantial dilution in the net tangible book value per share of our common stock
2. 76The price of our common stock could decline if there are substantial sales of shares of our common stock, if there is a large number of shares of our common stock available for sale, or if there is the perception that these sales could occur
3. 77It is not possible to predict the actual number of shares we will sell under the SEPA, or the actual gross proceeds resulting from those sales