Good morning. I'm Michael Toporek, Chief Executive Officer of Soluna Holdings. Thank you for joining me for our third quarter 2022 financial results review. We begin with the usual preamble. The following discussion is completely qualified by the legal disclosures on the several pages following this one. Our goal is to share with you some of our strategic thinking and financial analysis we're using to guide the growth of our business. The discussion is in line with our principles of being accountable and transparent with shareholders. We operate in a hyper-dynamic economic environment. That's a fancy way of saying things change quickly. What we're telling you here is based on our estimates and assumptions, which are our best guess. We reserve the right to revise our point of view based on new information and changes in the business environment.
Despite an uncertain dynamic environment, we have to plan and make operating and investment decisions. This presentation lays some of that out for your review. I'd like to continue with outlining our key operating principles. First is alignment of interests, transparency, and accountability. Brookstone Partners, a private equity firm that I'm affiliated with, owns just under 30% of the common equity of the company. I believe that helps align the senior decision-making, both at the board level and at the company level, regarding how we allocate capital, how we raise capital, and the general operating principles of the company. It also helps align us economically with the interests of the common shareholders. We are dedicated to high-velocity execution. That means establishing our goals, our targets, and marshaling the resources to get done quickly.
You'll also notice that since inception in this business, we've emphasized return on invested capital, measuring our returns on invested capital, and capital discipline in terms of how we run the business. We've also expressed to you a long-term strategy and vision that extends beyond crypto mining into batchable computing and other high-density computing sectors. Soluna is a solutions-oriented company. We buy curtailed energy, unsold energy from renewable power generators, and we convert it to clean, low-cost computing power. The company is taking excess energy from renewable energy sources and funneling it to powering batchable computing. For example, cryptocurrency being one of them. Soluna's market opportunity beyond crypto is what we're calling batchable computing. That's basically computing power that can be flipped on and off as resources are economically available from power generation.
The first market we're applying this to is the digital currency market. Other sectors that we believe can benefit from this type of batch computing to deliver low-cost computing resources are pharmaceutical research, for example, graphics and video processing, and all forms of scientific research, including academic and commercial scientific research. On the following set of slides is an update on our financial results. I wanted to highlight a couple of points on this quarter's performance. As we all know, the markets have been fairly challenged over the third quarter. Our revenue is down 26.6%, but Bitcoin prices were down on average 34.7%, and the average hashprice index also decreased by 34.3%.
We were able to outperform the market because of the growth in our hash rate, and we were able to mine about 12.4% additional Bitcoin for the quarter. Let's begin by digging a little deeper here. On the left panel, you'll see a graph of the Bitcoin equivalent mined. You'll see our steady march from 36 to 56 to 143, 224, 267, to hitting 300 for the Q3 . That's 5.4x year-over-year increase and a little bit over a 12% increase sequentially. We continue to optimize our miner configuration and replace some older machines with higher performance machines.
Our proprietary hash rate has also scaled up because we're getting the most we can out of the machines we have, and our peak hash rate, including hosted hash rate, is over an exahash. Looking at our performance relative to the market, on the left side, you'll see our revenue sequentially is down 26.6%. While not making light of that decrease, since it is a significant decrease, relative to both the hash price index, which is a measure of revenue and profitability for hash rate delivered, we outperformed that by 7.7%, and we also outperformed the Bitcoin price decline by 8%. The obvious reason is because we continue to get the most we can and the best performance we can out of our current fleet of machines, and that's allowed us to outperform the market.
Here I present graphically for your review our revenue trend. It's clearly affected by the decrease in Bitcoin prices. As we mentioned earlier, we have outperformed the Bitcoin price decline. If you look at our Q2 revenue, it did increase by almost 3x year-over-year. We continue to build out a substantial company. Looking at the Q3 consolidated net income, it was dominated by significant one-time non-cash items. I'll get into a table of this as we work through the presentation. The largest element of that was a $28 million write-down on fixed assets, $12 million loss as a consequence of debt extinguishment and revaluation. Also we have recently been carrying some SG&A costs as we prepare to energize Dorothy. Clearly, had Dorothy energized earlier, we wouldn't suffer some of those negative economic consequences.
Let's look at the detail behind that net income number. Net income came in at -$56 million. Let's break that down and take it to an adjusted EBITDA contribution number where we're pulling out key non-cash items and certain items that are typically not included in EBITDA, for example, depreciation, interest, and taxes. We remove net income to EBITDA, which is a non-cash measure. We go from $56 million- $46 million by adjusting for the interest, tax benefit, and depreciation amortization. Let's work through some of the non-cash items that have been working through our income statement. We have stock-based compensation costs of $890,000 . We did sell some fixed assets, but that was at a loss to book value.
There was a revaluation of certain financial instruments and extinguishment of debt as a consequence of our convertible note amendment. That was also a non-cash charge of $12 million. We did take an impairment on an equity investment in our Harmattan project of $750,000. Furthermore, an impairment on some of the ASICs that we own, which again is a non-cash charge of $28 million. That gets us to an adjusted EBITDA contribution of $3.6 million. I would like to take this opportunity to communicate to you that we have been aggressively managing our SG&A costs. There have been some headcount reductions and a significant reduction in activities to the point where our run rate SG&A on a normalized basis, leaving aside extraordinary transactions or extraordinary events, is about $1.2 million a month.
We work to continue to drop that down. Some months it runs a little lower, some months a little higher, but that's a good average to look at as you look at us. I think we're going to look at our activities even more closely to try to push that down closer to $1 million a month. That's important because as we energize Dorothy, the excess cash flow begins to fall to the bottom line more quickly. The operating environment in the third quarter was dominated by a couple of factors. First, across North America, a surprise change in energy cost that ran for a couple of months for us, and it was, I believe, modest for us relative to some other industry players.
The second piece was the continued increase in hash rate, and the third piece was the ongoing lower Bitcoin prices. Despite all of that, we, our consolidated adjusted cash contribution, you know, continues to outperform others in the marketplace and has a 19% on a consolidated basis cash contribution margin. However, looking at site-level adjusted EBITDA, as a consequence of these factors, specifically the spike in power prices, our unit economics went slightly negative EBITDA in the third quarter. Though that power price spike has declined and I think the September fuel cost adjustment is down by 37%, so I would expect a much different picture for the Q4 . However, that could be offset by lower Bitcoin prices and higher difficulty.
As we gear up to energize Dorothy, I thought it was important to refresh our economic model and re-present it to you so that our investors can better understand the potential profitability of the site as we energize it. This particular information on the slide focuses on our installation of S19s. That's about the 100-terahash machines. We present to you Dorothy One A and Dorothy One B. Each of those is a 25-MW subset of the 50 MW we expect to flip on. Spring Lane Capital is a 32% owner of Dorothy One A, and Soluna is 100% owner of Dorothy One B. The scenarios we outline include 100% hosting, 50/50, and 100% prop mining.
I will focus on some of the assumptions on the bottom, which include network hash rate, our power costs, as well as our hosting price assumption. I believe that since we've actually done this, the revenue that we can get from hosting might be higher than that. Leaving that aside, the correct thing would be to do, for example, our cash flows. On the 50/50 Dorothy One A site would be $384,000 per month according to this model. That then gets added to the $565,000 from Dorothy One B on the 50/50 model. These two are added.
They're two different pieces, and as we decide which revenue model we'll go with, which also implies a different capital structure, we'll have a better understanding as to the potential monthly contribution of each of those economic units, those 25 MW units that make up Dorothy One A and Dorothy One B. As we evaluate our economic model for Dorothy, I thought it was important to you that we present putting in the Bitmain XPs, which are the new, much more power efficient, 140-terahash chips that we've been discussing with Bitmain. Again, it's the same chart presentation, Dorothy One A and Dorothy One B, running the gamut from 100% hosting, 50/50, to 100% prop mining, and this is the monthly cash contribution margin to Soluna.
You can clearly see that the cash contribution margin as a consequence of running this faster, more energy efficient chip is significantly higher. The key element to this is going to be the capital cost of this chip relative to the capital cost of the 100 MW chip, and that'll be a game time decision we make just a few weeks before we energize. We'll base that decision on pricing we get from Bitmain and others in the marketplace on chips and on potential hosting contracts. As I mentioned in our earlier discussion of net income, we're being very careful with our SG&A costs, and I wanted to present to you a bridge from our Q3 2021 SG&A to our Q3 2022 SG&A.
Before I get into that detail, again, as we put in our press release, we have had a meaningful reduction in headcount. We continue to monitor all SG&A expenses for what I'll call non-essential expenses that don't result in a more immediate payback while balancing the need to make some expenditures to allow our business to have a growth path going forward. Looking at Q3 2021 SG&A, there was about $2.3 million in that. As we staffed up for a new facility, there was additional wages and benefits and stock grants that came with that, and there were certain legal expenses that came with Project Dorothy moving forward and the convertible debt amendment. In addition, there were consulting and professional services that came as a consequence of those complex transactions, including Dorothy. There was a change in D&O expense and other insurance expenses.
In addition, there was a $274,000 change in office IT, software, and miscellaneous costs. Part of that was offset by a decrease of $575,000 in operations and management or O&M fees we would have had to pay under our prior outside management regime. In this next section, I'll spend a little time with you reviewing the results of our facilities. Let's begin with Sophie's review. In the Q3 , we had about $1 million in cash contribution margin. The facility continued to perform well given the current operating environment, getting from the July margin of call it 30%- 36% in September.
Again, we had those, the July and August change in electricity costs, which you can see reflected in our numbers of $6.11 and $6.81 in July and August, and then a return to $4.51 , which begins to put us on track to more historical norms. Our Sophie facility also began to return more towards its June level of profitability, driven by a reduction in power cost as well as a new hosting agreement. The cash contribution margin returned to $202,000, which is a little bit less than the June number but significantly less than April and May when Bitcoin prices were significantly higher. As I discussed on a prior page, looking at some of these operating metrics for a moment, the biggest variable that's moved around is the Bitcoin price, to no surprise.
In April, the realized Bitcoin price was $41,000, May $31,000, June $24,000. By September, it was $20,000. Our Bitcoin equivalent mined did go up as a consequence of our efforts to optimize our own hash rate and the hash rate of our hosting customer, but clearly not enough to offset the Bitcoin price decline. Looking at the company's consolidated non-GAAP historical financials for the quarter, you'll see that within the quarter, especially in September, we began to bounce back in terms of profitability to something closer to the June level. Although given the challenged Bitcoin pricing, it is still meaningfully below the June level, but it is recovered from the July-August level where we had that spike in energy power. Energy power has not yet returned to April and May levels, but it's well on its way.
However, the recent Bitcoin pricing does obviously challenge our top line to some extent. Just looking at some of the consolidated operating metrics, I would just turn your attention to the Q3 Bitcoin equivalent mined. We mined about 300 Bitcoin for the quarter. That's up from the Q2 , and we continue to manage our hash rate well, and I'm extremely pleased with the work that the team is doing to optimize our assets. However, it just doesn't make up for Bitcoin going from $24,000- $21,000, bouncing around to $22,000 and down to $19,000 at the very end of the September quarter relative to the Q2 that looked at an average Bitcoin price versus. I'm sorry, relative to the Q2 that looked at an average Bitcoin price about $32,000.
For the Q3 , we saw an average Bitcoin price about $21,000. That's a meaningful difference in revenue, and that's not one that we could overcome simply by optimizing our equipment mix, but it helps. I wanted to thank you for joining me today and reviewing the details of our Q3 report. Should you have any questions, please feel free to reach out to us directly through our website or to our investor relations people at MZ Group. Thank you again for your time. Behind this, you'll see appendices of more detailed information, specifically a reconciliation of non-GAAP results of operations to the nearest comparable GAAP measures. Thanks again.