Good morning, everyone, and thank you for joining us at this session of WTR's Insights Conference featuring Soluna Holdings. I'm John Roy, the Managing Director here of Technology at Water Tower Research, and I'll be your host. I am pleased to be joined by the CEO, John Belizaire, and I want to thank you for coming, John. I know that you've been particularly busy. How are things going?
Things are going great, John. It's so great to be back on the show. Happy to give you an update.
Sounds good. Before we begin, please note that Soluna Holdings' safe harbor statements can be found on their website. Also, this fireside chat may not be reproduced, nor any written transcript be distributed without the express written consent of Water Tower Research. We'll aim to address investor questions submitted during today's conversation in a follow-up email or in the management series that will follow this report. Please enter your questions into the chat. Investors interested in scheduling a meeting with Soluna can indicate that interest within the conference portal. With that housekeeping all covered, let's jump right in. John, maybe you can give us a quick overview of the company.
Well, Soluna builds renewable- powered computing infrastructure by co-locating those data centers directly with energy generation assets, primarily focused on wind and solar assets around the United States, and we have a big footprint in Texas. As many of folks may know, AI is dealing with a pretty big constraint, and that constraint to growth isn't chips or capital, it's power access. What's unique about Soluna is we solve that by going to where the energy already exists rather than waiting for the grid. We recently closed the acquisition of Briscoe Wind Farm in West Texas, something we were busy doing, John. In fact, it's a concrete example of our model, where we now own the power, the land, and the compute infrastructure at Project Dorothy, a long-standing project that has been the cornerstone of building out and proving our model as a business.
The model was proven through Bitcoin mining, and we were doing that first as a mining company, then we transitioned more to a hosting company, and we're now expanding into AI and HPC, really the same infrastructure logic, if you will, or industrial logic, but a much larger market opportunity. We serve renewable energy developers as well, and those companies need to monetize their curtailed or wasted energy, and AI infrastructure and data center infrastructure is really the way to do that. As a developer, we really focus on speed- to- power and really drive investors, giving them exposure to the energy layer of AI, if you will. That's us in a nutshell.
Great. Well, you've described this transition as something as, I don't know, Soluna 2.0, right?
Yeah.
Whereas now it's AI and HPC, can you give us a little more color into the differences between a Bitcoin operation and AI/HPC?
Yeah, sure. When we started, we saw something the market hadn't fully recognized. I used to call it the dirty secret of renewable energy projects where not all the power that's generated by those projects had some place to go. We built compute infrastructure to really capture that opportunity, and Bitcoin mining was really the proving ground. It was validating the behind-the-meter co-location approach that we take, the economics, the operations, and really scaling that. That took a host of capability that we've built, proprietary software, our own data center design, construction expertise, and of course, servicing, providing service to our customers and our partners. Soluna 2.0 is really about doubling down on that expertise.
It reflects that we basically what we always believe, right, was possible where you can use the infrastructure platform, the same infrastructure that we've developed on the Bitcoin side, primarily power infrastructure, and then enhancing that with next-generation AI and HPC data center design, and integrating that into our Power platform. That really represents sort of a fundamentally larger opportunity, but more importantly, it's building on our core domain expertise, which is behind-the-meter data center infrastructure. The Briscoe acquisition is really a milestone in that evolution. We're essentially going from an energy consumer to an energy producer as well. We own the generation asset at our flagship project, and that is going to open up the opportunity to a new data center project we call Dorothy 3. Up to 300 MW we'll be building out.
We've gotten the rights to a 300 acre site to build out that project. This approach really proves out our renewable computing model, and now we're actually integrating all of that together.
Right. Dorothy 2 was fully energized at the end of 2025. Now you've bought the production for Dorothy 3.
Correct.
What's the size relative difference and kind of is it really just size, or is there any other differences between two and three?
Yeah. Three will be a completely different type of compute. It will be a bigger, more complex data center design. You'll have access to the power from the power plant, access to power from the grid, and you'll also see some on-site generation, similar to what we're doing at Kati 2. We haven't chatted in a while. Kati 2 is our core flagship AI project. Upwards of 300+ MW that we're building out through a combination of one or more power plant integration plus on-site generation. Dorothy 3 will be more like that than our traditional Bitcoin facilities, and the power and land footprint will be significantly larger. The Dorothy projects are sitting on about 30+ acres. The Dorothy 3 project will be sitting on 300+ acres, and so that gives you a sense of the size and scale of the project.
Yeah. Speaking of Kati, there really is a two-pronged strategy. You're using Kati 1, which is currently going well, I think.
Yeah.
In Kati 2, you have a partnership. Can you give us some of the color around Kati?
Yeah. Kati started as a 166 MW Bitcoin project, two phases. Phase One, 83 MW, Phase Two, 83 MW. We then transitioned Kati into a two-phase multi-compute project. Phase One is Bitcoin, and construction started last summer, where we already energized and are ramping up the site, will be fully ramped by the middle of this year. That includes a partnership with Galaxy that's taking 48 MW of that, and then we're building out a Soluna design in there. We're also partnering with Cormint to bring their modular data center technology to that site. That site is well underway, and you can go to our website and some of our channels to see pictures and what's going on there. Across the street is a large AI development project, and there we are doing the design work. We've done all of the site research and feasibility analysis.
We have a master plan, which is a 7x 50 building design. We are using our clustering approach, where we will source power from Las Majadas, the current wind farm. We're going to actually source more power from there, so we're going to increase the footprint of power consumption from that project. We will add other projects that are nearby within transmission distance that can get us power to that site. We're also going to build an on-site generation facility using gas generation. There's a high Dth gas line not too far away from the site, and so we're sourcing engines and so forth to build out there. You'll see some updated announcements there. We started marketing the site to neoclouds and hyperscalers and have gotten some pretty robust demand there.
In the process of diligence or commercial negotiations with a number of parties, we've gone from initially a small Bitcoin footprint scale. That Bitcoin footprint will be over 200 MW of Bitcoin sometime this year. We're jumping with both feet into AI to expand our pipeline and start with our first project with Kati 2, and then you'll see Dorothy 3 come right after it.
Yeah, I know the pipeline size is a moving target as every day things change.
Yeah.
My latest number I heard was 4.3 GW in the pipeline.
Yeah.
Project Grace and several others are going into the queue.
Mm-hmm.
What does the roadmap for 2026 look like in terms of gigawatts to be really energized?
We focus on sort of the doubling concept every year, so we will double certainly the size of our Bitcoin operation over 200 MW. We ended last year 223 MW. On the AI side, the goal is to start construction of those projects. Those projects take a lot longer to build. Think contract plus 12 months, typically. You'll see those energizing in 2027 and beyond. We do have plans to bring shovel-ready more Bitcoin projects that are smaller, more nimble. The Cormint relationship will allow us to deploy and build those faster and more robustly and on a faster pace, allowing us to scale that footprint too, to bring more cash flows, profits that can then feed the AI business on the other side. That's what you'll see this year.
You'll see big announcements on our AI front, big milestones there, new projects developing, and a pipeline expanding. Right now, we can point to two AI projects in the pipe that combined are about 600 MW. We want to get those numbers into the gigawatts range as well.
Excellent. Now, you reported not too long ago, 2025 numbers, I think it was March 30th.
Mm-hmm.
Obviously, there were some headwinds in the business in terms of the hash price and Bitcoin revenue.
Mm-hmm.
You still were able to grow your unrestricted cash to $76 million, and then you added, I think, Generate Capital to the list of partners.
Can you talk about some of the financing sides and kind of where that's going to go, because obviously, to build all these projects, it takes capital?
Yeah. Last year was great. I'd say last year was generally transformational for Soluna. We went from a company that was very challenged in terms of its ability to raise capital, to raising over $142 million in capital, doubling our operating capacity through the use of that capital, as you mentioned, our pipeline getting to 4.3 GW. We entered the year with $10.5 million in cash and closed with $88 million, so more than 7x or 750% increase in cash. That was made possible by growing the footprint of our partnerships on the project-level side. We added Generate, which is backing us with over $100 million in credit support. In fact, they went in with us on the Briscoe acquisition, so we're using that facility and putting capital to work for them and us.
We added Galaxy Digital, which supported us on some project refinancings to unlock some cash for us to build out and continue development on our AI projects. This year, our goal is really to expand that network of partners, if you will, on the project-level side. As Kati 2 reaches its leasing milestone, we'll begin capital formation at the project level, which will include debt and equity. We have a series of tools now that we can use to raise capital in the capital markets. We have a much larger shelf. We have published a billion-plus shelf, and we don't expect to use all of that anytime soon. Most people are saying they're concerned about us using all of that. We're talking about the next three years of capital deployment because of these large AI projects that we're working on.
Being able to show that we can raise capital to support alongside the debt that will be used to finance these projects is part of why we're putting those tools in place. We continue to have the SEPA. We put a bigger SEPA in place as well. There's lots of different tools we have. I call it sort of the overall Soluna tool belt for capital formation is expanding and getting more robust, and we're attracting some legendary both climate and infrastructure and digital infrastructure partners at this point.
Now, the Briscoe acquisition made you more vertical than you have been in the past.
Mm-hmm.
Is that something you're looking to repeat, or is that just you'll take that opportunity when and if it comes up, and it's appropriate? How does that strategy go together?
We do see vertical integration as a strategic opportunity for the company. We're finding that some of our IPPs' eyebrows were raised when they saw that Briscoe announcement and have reached out to us about processes they're going to be running on some of their projects. We find that to be a compelling potential repeat. Either we're doing it ourselves or we're doing it with a partner to essentially turn these power assets that perhaps may be underutilized into these new digital infrastructure platforms. We're going to prove that you can do that. Well, in a way, we've already proven it, right? We've just proven it at an arm's length.
Right
We've built out this model. By vertically integrating, we are essentially opening up new opportunities for the company that allow us to have control over the power and the compute side, essentially getting the world to convergence. I know we've talked about the fact that power is compute these days, and compute is power. They're becoming one and the same. We think over the next decade or so, they will be one and the same, and we'd like to be part of making that true, and that ultimately will drive down costs for compute. It will drive down the strain on the grid as it relates to this new type of compute. We believe that it'll be a way to make this type of new compute more sustainable and scalable going forward.
Yeah. Well, it definitely helps with power distribution. There's no doubt about that.
Indeed
That's a slam dunk.
Indeed. Yeah.
Well, John, we're running out of time, unfortunately. I want to thank you so much, and I appreciate you joining me here for this session at the Insights Conference. I want to thank everyone for participating as well. Please take a look for additional content on Soluna Holdings on our website. That's www.watertowerresearch.com. For those with further questions or wishing to meet with the company, either one, please reflect that in the conference portal. Our next conference session will be starting soon, and we invite you to stay with us.
Thanks, John.