x~~QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT~~ ~~OF 1934~~

¨~~TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT~~ ~~OF 1934~~

~~For the transition period from ______________________ to _______________________~~

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x☑ No ¨☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§(§232.405 of this chapter)during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files).
Yesx ☑ Noo ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of ~~“large~~"large accelerated filer,~~” “accelerated~~" "accelerated filer,~~” “smaller~~" "smaller reporting company,”" and ~~“emerging~~"emerging growth ~~company”~~company" in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the ~~Exchange~~ Act). Yes ¨☐ No x☑

~~The number~~As of May 12, 2021, the Registrant had 12,309,117 shares of common stock ~~par value of $0.01 per share, outstanding as of April 27, 2017 was 9,140,768.~~outstanding.

As of March 31, ~~2017 (Unaudited)~~2021 ( Unaudited) and December 31, ~~2016~~2020

(Dollars in thousands, except per share)

Common Stock

Treasury Stock

Shares

Amount

Additional Paid-
in Capital

Accumulated
Deficit

Shares

Amount
Total
Stockholders’
Equity
(Deficit)

January 1, 2016
6,263,975
$
63

$
135,839

$
(120,621
)
1,005,092
$
(13,754
)
$
1,527

Net loss
-

-

-

(359
)
-

-

(359
)

Stock based compensation
-

-

449

-

-

-

449

Issuance of shares – stock purchase
3,750,000

37

2,700

-

-

-

2,737

Costs of stock purchase
-

-

(201
)

-

-

-

(201
)

Issuance of shares – option exercises
12,161

-

7

-

-

-

7

Purchase of common stock for treasury
-

-

-

-

10,401

(10
)

(10
)

December 31, 2016
10,026,136
$
100

$
138,794

$
(120,980
)
1,015,493
$
(13,764
)
$
4,150

Net loss
-

-

-

(413
)
-

-

(413
)

Stock based compensation
-

-

23

-

-

-

23

Costs of stock purchase
-

-

(7
)

-

-

-

(7
)

Issuance of shares – option exercises
40,065

1

23

-

-

-

24

March 31, 2017
10,066,201
$
101

$
138,833

$
(121,393
)
1,015,493
$
(13,764
)
$
3,777

Changes to U.S. GAAP are established by the Financial Accounting Standards Board (the ~~FASB)~~"FASB") in the form of ~~ASUs~~accounting standard updates ("ASUs") to the ~~FASB’s~~FASB's Accounting Standards ~~Codification.~~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.

In ~~May 2014,~~June 2016, the FASB issued ASU ~~2014-09 (Revenue from Contracts with Customers~~2016-13 (Financial Instruments - Credit Losses (Topic ~~606)~~326))and ~~issued~~its subsequent amendments to the initial guidance ~~in August 2015, March 2016, April 2016, May 2016 and December 2016~~ within ASU ~~2015-14,~~2018-19, ASU ~~2016-08,~~2019-04, ASU ~~2016-10,~~2019-05, ASU ~~2016-12~~2019-10, ASU 2019-11 and ASU ~~2016-20,~~2020-02, respectively ~~(ASU 2014-09, ASU 2015-14, ASU 2016-08, ASU 2016-10, ASU 2016-12~~(collectively, Topic 326). Topic 326 changes how entities will measure credit losses for most financial assets and ~~ASU 2016-20, respectively,~~certain other instruments that are not accounted for at fair value through net income. This standard replaces the existing incurred credit loss model and ~~collectively, Topic 606)~~establishes a single credit loss framework based on a current expected credit loss model for financial assets carried at amortized cost, including loans and held-to- maturity debt securities. The current expected loss model requires an entity to~~clarify~~ estimate credit losses expected over the ~~principles for recognizing revenue and to develop a common revenue~~life of the credit exposure upon initial recognition of that exposure when the financial asset is originated or acquired, which will generally result in earlier recognition of credit losses. This standard for GAAP and International Financial Reporting Standards. Topic 606 supersedes nearly all existing revenue recognition guidance under GAAP. Topic 606 is principles-based and provides a five-step model to determine when and how revenue is recognized. It is possible more judgment and estimates mayalso requires expanded credit quality disclosures. For available-for-sale debt securities, entities will be required ~~within~~to record allowances rather than reduce the ~~revenue recognition process than~~carrying amount, as they do today under the other-than-temporary impairment model. This standard also simplifies the accounting model for purchased credit-impaired debt securities and loans. This standard will affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and anyother financial assets not excluded from the scope that have the contractual right to receive cash. ASU 2018-19 clarifies that receivables arising from operating leases are ~~required under existing GAAP. The core principle is~~accounted for using lease guidance and not as financial instruments. ASU 2019-04 clarifies that ~~a company should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to~~equity instruments without readily determinable fair values for which ~~the company expects to be entitled in exchange for those goods or services. To achieve that core principle,~~ an entity has elected the measurement alternative should apply the following steps: Step 1: Identify the contract(s) with a customer. Step 2: Identify the performance obligations in the contract. Step 3: Determine the transaction price. Step 4: Allocate the transaction pricebe remeasured to the performance obligations in the contract. Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation. Topic 606 also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. This standard, as amended, will be effective for the Company for annual and interim reporting periods beginning after December 15, 2017. This standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognizedfair value as of the date that an observable transaction occurred. ASU 2019-05 provides an option to irrevocably elect to measure certain individual financial assets at fair value instead of ~~initial application. Early adoption is permitted, but no earlier than calendar 2017.~~amortized cost. This standard ~~could impact~~should be applied on either a prospective transition or modified-retrospective approach depending on the timing and amounts of revenue recognized. The Company is currently evaluating the impact of this standard on its consolidated financial statements. The Company has not yet selected a transition method and in preparation for our adoption of the new standard in our 2018 fiscal year, we are obtaining representative samples of contracts and other forms of agreements with our customers in the U.S. and international locations and are evaluating the provisions contained therein in light of the five-step model specified by this standard. While we do not believe there will be a material impact to our revenues upon adoption, we are continuing to evaluate the impact to our revenues and our preliminary assessments are subject to change. We are also continuing to evaluate the provisions of Topic 606 related to costs for obtaining customer contracts.

In January 2016, the FASB issued ASU 2016-01 (Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Liabilities) the main objective of which is to enhance the reporting model for financial instruments to provide users of financial statements with more decision-useful information and address certain aspects of recognition, measurement, presentation, and disclosure of financial instruments.subtopic. This standard will be effective for the Company for annual and interim reporting periods beginning on or after December 15, ~~2017,~~2022, and while early adoption is ~~permitted.~~permitted, the Company does not expect to elect that option. The Company is currently evaluating the impact of ~~this standard but we do not expect~~ the adoption ~~of it to have a material impact on its consolidated financial statements.~~

In February 2016, the FASB issued ASU 2016-02 (Leases (Topic 842)), which requires lessees to recognize a right-of-use asset and a lease liability on their balance sheet for virtually all of their leases (other than leases that meet the definition of a short-term lease). The lease liability will be equal to the present value of lease payments and the right-of-use asset will be based on the lease liability, subject to adjustment such as for initial direct costs. For income statement purposes, this standard retains a dual model similar to ASC 840, requiring leases to be classified as either operating or finance. For lessees, operating leases will result in straight-line expense (similar to current accounting by lessees for operating leases under ASC 840) while finance leases will result in a front-loaded expense pattern (similar to current accounting by lessees for capital leases under ASC 840). While this standard maintains similar accounting for lessors as under ASC 840, this standard reflects updates to, among other things, align with certain changes to the lessee model. This standard will be effective for the Company for annual and interim reporting periods beginning on or after December 15, 2018, and early adoption is permitted. Although we have not completed our assessment, we believe adoption of this standard may have a significant impact on our consolidated balance sheets. However, we do not expect the adoption to change the recognition, measurement or presentation of lease expense within our consolidated statements of operations or the consolidated statements of cash flows. We currently expect that most of our operating lease commitments will be subject to the new standard and recognized as operating lease liabilities and right-of-use assets upon our adoption of the standard, which will increase our total assets and total liabilities that we report relative to such amounts prior to adoption. Information about our undiscounted future lease payments and the timing of those payments is in Note 8, Commitments and Contingencies.

In August 2016, the FASB issued ASU 2016-15 (Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments), which clarifies the treatment of several cash flow categories. In addition, ASU 2016-15 clarifies that when cash receipts and cash payments have aspects of more than one class of cash flows and cannot be separated, classification will depend on the predominant source or use. This standard will be effective for the Company for annual and interim reporting periods beginning after December 15, 2017, and early adoption permitted. This standard should be applied using a retrospective transition method to each period presented. The Company is currently evaluating the impact of this standard on its consolidated financial ~~statements.~~statements, including assessing and evaluating assumptions and models to estimate losses. Upon adoption of this standard on January 1, 2023, the Company will be required to record a cumulative effect adjustment to retained earnings for the impact as of the date of adoption. The impact will depend on the Company's portfolio composition and credit quality at the date of adoption, as well as forecasts at that time.

On January 1, ~~2017, we~~2021, the Company adopted ASU 2015-11 (Inventory (Topic 330): Simplifying the Measurement of Inventory), which applies to inventory that is measured using first-in, first-out (FIFO) or average cost. As required by ASU 2015-11, we measure inventory that is within scope at the lower of cost and net realizable value, which is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. Subsequent measurement was unchanged for inventory that is measured using last-in, last-out (LIFO). The Company adopted this standard on a prospective basis. The adoption of this standard did not have a material impact on its consolidated financial statements.

~~On January 1, 2017, we adopted ASU 2015-17~~2019-12 (Income Taxes (Topic 740)~~: Balance Sheet Classification of Deferred~~ - Simplifying the Accounting for Income Taxes). ~~The amendments~~This standard removes exceptions to the general principles in ~~this standard require entities that present a classified balance sheet to classify all deferred~~Topic 740 for allocating tax ~~liabilities~~expense between financial statement components, accounting basis differences stemming from an ownership change in foreign investments and assets as a noncurrent amount. The requirement that deferred tax liabilities and assets of a tax-paying component of an entity be offset and presented as a single amount was not affected by the amendments in this standard. Additionally, the amendments in this standard align the deferredinterim period income tax ~~presentation with the requirements in International Accounting Standards (IAS) 1 (Presentation of Financial Statements). The Company adopted this standard on a prospective basis.~~accounting for year-to-date losses that exceed projected losses. The adoption of this standard did not have a material impact on the ~~Company’s~~Company's consolidated financial ~~statements as its deferred tax assets and liabilities are currently in a full valuation allowance. Prior periods were not retrospectively adjusted.~~

On January 1, 2017, we adopted ASU 2016-09 (Compensation–Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting). As required by ASU 2016-09, all income tax effects of awards, including excess tax benefits, recognized on stock-based compensation expense are reflected in the condensed consolidated statements of operations as a component of the provision for income taxes on a prospective basis. As required by ASU 2016-09, all tax related cash flows recognized on stock-based compensation expense are classified as an operating activity in our condensed consolidated statements of cash flows on a prospective basis. Accordingly, prior periods have not been adjusted. Additionally, ASU 2016-09 allows companies to make a policy election to account for forfeitures either upon occurrence or by estimating forfeitures. We have elected to continue estimating forfeitures expected to occur in order to determine the amount of compensation cost to be recognized each period. See Note 6 above for additional information.

On January 1, ~~2017, we~~2021, the Company adopted ASU ~~2017-03 (Accounting Changes and Error Corrections~~2020-01 (Investments - Equity Securities (Topic ~~250) and~~321), Investments –- Equity Method and Joint Ventures (Topic 323)~~; Amendments~~, and Derivatives and Hedging (Topic 815)). This standard clarifies certain interactions between the guidance to ~~SEC Paragraphs Pursuant~~account for certain equity securities under Topic 321, the guidance to ~~Staff Announcements at~~account for investments under the ~~September 22, 2016~~equity method of accounting in Topic 323, and ~~November 17, 2016 Emerging Issues Task Force (EITF) Meetings (SEC Update)),~~the guidance in Topic 815, which ~~amends certain topics~~could change how an entity accounts for an equity security under the measurement alternative or a forward contract or purchased option to purchase securities that, upon settlement of the ~~ASC as defined~~forward contract or exercise of the purchased option, would be accounted for under the equity method of accounting or the fair value option in ~~this ASU~~accordance with Topic 825, Financial Instruments. This standard improves current GAAP by reducing diversity in practice and ~~also adds an SEC paragraph and amends other topics pursuant to an SEC Staff Announcement made at~~increasing comparability of the ~~September 22, 2016 EITF meeting.~~accounting for these interactions. The adoption of this standard did not have a material impact on the ~~Company’s~~Company's consolidated financial statements.

There have been no other significant changes in ~~our~~the Company's reported financial position or results of operations and cash flows as a result of ~~our~~its adoption of new accounting pronouncements or changes to ~~our~~its significant accounting policies that were disclosed in ~~our Annual Report on Form 10-K~~its consolidated financial statements for the fiscal year ended December 31, ~~2016.~~2020.

The Company operates in two business segments,Test and Measurement Instrumentation and Cryptocurrency. The Test and Measurement Instrumentation segment designs, manufactures, markets and services computer-based balancing systems for aircraft engines, high performance test and measurement instruments and systems, and wafer characterization tools for the semiconductor and solar industries. The Cryptocurrency segment is focused on cryptocurrency and the blockchain ecosystem. The Company's principal operations in both segments are located in North America.

The accounting policies of the Test and Measurement Instrumentation and Cryptocurrency segments are similar to those described in the summary of significant accounting policies herein and in the Annual Report. The Company evaluates performance based on profit or loss from operations before income taxes, accounting changes, items management does not deem relevant to segment performance, and interest income and expense. Inter-segment sales and expenses are not significant.

Summarized financial information concerning the Company's reportable segments is shown in the following table. The "Other" column includes corporate related items and items such as income taxes or unusual items, which are not allocated to reportable segments. In addition, segments' non-cash items include any depreciation and amortization in reported profit or loss.

The following table presents the details of "Other" segment loss:

(Dollars in thousands)	Three Months Ended March 31,
	2021
Corporate and other (expenses) income:
Salaries and benefits		(201	)
Income tax (expense) benefit		-
Other income (expense), net		(124	)
Total expense	$	(325	)

As of March 31, 2020, the only segment the Company was operating in was the Test and Measurement Instrumentation segment. EcoChain did not commence its cryptocurrency mining operations until the second quarter of 2020, therefore the only period presented above is March 31, 2021.

13. Line of Credit

On May 7, 2020, in connection with receipt of the $3.3 million United States Air Force delivery order, MTI Instruments obtained a $300 thousand secured line of credit from Pioneer Bank that will, among other things, assist with MTI Instruments' timely fulfillment of the delivery order. The line of credit may be drawn in the discretion of MTI Instruments and bears interest at a rate of Prime +1% per annum. Accrued interest is due monthly, and principal is payable over a period of 30 days following lender's demand. The line of credit is secured by the assets of MTI Instruments and is guaranteed by the Company. As of March 31, 2021 and December 31, 2020, there were no amounts outstanding under the line of credit.

14. Subsequent Events

EcoChain's wholly-owned subsidiary, EcoChain Block, LLC ("ECB") executed and entered into a purchase agreement, dated April 11, 2021, providing for the purchase of equipment that is expected to deliver throughput of 11.2 Pethash in SHA-256 Bitcoin miners and 235 Gigahash in Scrypt Litecoin miners. The total purchase price payable for these miners was $792 thousand, $585 thousand which was paid, in cash, and the remaining portion which was paid by the issuance of restricted shares of the Company's common stock having an aggregate value of $207 thousand.

On April 29, 2021, the Company closed its firm commitment underwritten public offering of 2,419,355 shares of its common stock, together with accompanying warrants to purchase up to 604,839 shares of common stock at a combined public offering price of $6.20 per unit of common stock and warrant to purchase ..25 of one share of common stock. The gross proceeds to the Company from this offering were $15 million, resulting in aggregate net proceeds, after deducting underwriting discounts and other offering expenses, of approximately $13.7 million.

On May 4, 2021, the Company by and through ECB, executed a 25-year ground lease with a power-providing cooperative ("Landlord") with respect to an existing building and certain surrounding land (the "Building Lease"), and a 25-year ground lease with Landlord with respect to certain vacant land adjacent thereto, both located in the Southeastern United States (the "Vacant Land Lease"). In addition, ECB and Landlord have entered into a Power Supply Agreement whereby Landlord has agreed to supply power to the building leased under the Building Lease and to the premises leased under the Vacant Land Lease (the "Vacant Land Premises"), some of which power, under certain circumstances, may be terminated by Landlord, on at least 6 months prior notice, any time after 12 months after the Building Commencement Date (as hereafter defined), in which case Landlord is required to reimburse ECB for all of its construction costs, subject to certain exceptions, relating to buildings and other improvements developed by ECB on the Vacant Land Premises. ECB has agreed to pay rent to Landlord of $500 thousand on the effective date of the Building Lease (such date, the "Building Commencement Date") and the sum of $4 million in periodic payments. ECB has agreed to cause MTI to issue to Landlord 100,000 shares of its common stock, in connection with the Vacant Land Lease, upon the effective date of the Vacant Land Lease, which may not occur prior the Building Commencement Date.

Item 2. 2~~Management’s~~. Management's Discussion and Analysis of Financial Condition and Results of Operations

Unless the context requires otherwise, the terms ~~“MTI,” “we,” “us,”~~"MTI," "the Company", "we," "us," and ~~“our”~~"our" refer to Mechanical Technology, Incorporated, ~~a New York Corporation, and “MTI Instruments”~~"MTI Instruments" refers to MTI Instruments, ~~Incorporated, a New York corporation~~Inc., and ~~our wholly-owned subsidiary.~~"EcoChain" refers to EcoChain, Inc.

The following discussion of our financial condition and results of operations should be read in conjunction with the Condensed Consolidated Financial Statements and the related notes thereto included in Item 1 of Part I of this Quarterly Report on Form 10-Q and the audited Consolidated Financial Statements and the related notes thereto and ~~Management’s~~Management's Discussion and Analysis of Financial Condition and Results of Operations for the year ended December 31, ~~2016~~2020 contained in our ~~2016~~ Annual Report on Form ~~10-K.~~10-K for the fiscal year ended December 31, 2020, as filed with the Securities and Exchange Commission (the "SEC") on March 31, 2021.

In addition to historical information, the following discussion contains forward-looking statements, which involve risk and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements. Important factors that could cause actual results to differ include those set forth in Part I Item 1A-Risk Factors in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2016, as filed on March 2, 2017,~~2020 and elsewhere in this Quarterly Report on Form 10-Q. Readers should not place undue reliance on our forward-looking statements. These forward-looking statements speak only as of the date on which the statements were made and are not guarantees of future performance. Except as may be required by applicable law, we do not undertake or intend to update any forward-looking statements after the date of this Quarterly Report on Form 10-Q. Please see ~~“Statement~~"Statement Concerning Forward-Looking ~~Statements”~~Statements" below.

Overview

~~MTI’s core~~MTI conducts its business ~~is conducted~~ through its wholly-owned subsidiaries, MTI Instruments ~~Inc., a wholly-owned subsidiary.~~ and EcoChain.

MTI Instruments, incorporated in New York in 2000, is ~~a supplier~~engaged in the design, manufacture, and sale of vibration measurement and system balancing solutions, precision linear displacement sensors, instruments and system solutions, ~~vibration measurement and system balancing solutions, precision tensile measurement systems~~ and wafer inspection tools, serving markets that require 1) engine balancing and vibration analysis systems for both military and commercial aircraft, 2) the precise measurements and control of products and processes in automated manufacturing, assembly, and consistent operation of complex machinery, ~~2) engine balancing~~ and ~~vibration analysis systems for both military and commercial aircraft,~~ 3) metrology tools for semiconductor and solar wafer ~~characterization,~~characterization.

EcoChain, a Delaware corporation incorporated in January 2020, is engaged in cryptocurrency mining powered by renewable energy. Related to this new core business, we made a strategic investment, and ~~4) tensile stage systems~~hold an equity position, in Soluna Technologies, Ltd. ("Soluna"), a Canadian company that develops vertically-integrated, utility-scale computing facilities focused on cryptocurrency mining and cutting-edge blockchain applications. Through Soluna, we currently operate a mining facility in Wenatchee, Washington, that houses the majority of our cryptocurrency miners, which are the cryptocurrency assets, consisting of hardware and software, that perform the computations needed to mine cryptocurrencies. We purchased additional miners in April and May 2021, and in May 2021 entered into two ground leases for ~~materials testing~~a building located in the Southeast region of the United States that will be EcoChain's second cryptocurrency mining facility, which includes surrounding land for potential additional capacity. The ground leases will not be effective until certain conditions set forth therein are met, and ~~precision linear displacement gauges all for use~~ in ~~academic and industrial research and development settings.~~the meantime the miners we purchased in April are located in this facility. We are ~~continuously working on ways~~paying the owner of that facility, at a flat fee per miner, for the space, electricity, and anything else needed for the miners to ~~increase~~operate, an arrangement known as "hosting"; this arrangement will terminate upon the effective date of the ground leases, at which time Soluna will commence operating this facility pursuant to an operations and management agreement between Soluna and EcoChain. The primary cryptocurrencies that EcoChain mines are Bitcoin and, to a lesser degree, Ethereum and LiteCoin. EcoChain recognizes revenue when its mined cryptocurrencies are transferred to its account at a cryptocurrency exchange (i.e. a platform that facilitates the exchange of cryptocurrencies for other assets, such as conventional money or other digital currencies). The applicable exchange converts the cryptocurrencies held in our ~~sales reach, including expanded worldwide sales coverage~~account to U.S. dollars daily. The Company intends to continue to grow EcoChain through acquisitions of existing cryptocurrency mining facilities and ~~enhanced internet marketing.~~ properties that can be repurposed to operate cryptocurrency mining facilities, as well as through constructing our own cryptocurrency mining facilities, along with purchases of any real property, equipment, and miners necessary to do so.

Consolidated Results of Operations

Consolidated Results of Operations for the Three Months Ended March 31, ~~2017~~2021 Compared to the Three Months Ended March 31, ~~2016.~~2020.

The following table summarizes changes in the various components of our net loss during the three months ended March 31, ~~2017~~2021 compared to the three months ended March 31, ~~2016.~~2020.

(Dollars in thousands)	Three Months Ended March 31, 2017			Three Months Ended March 31, 2016			$ Change			% Change	Three Months Ended March 31, 2021			Three Months Ended March 31, 2020			$ Change			% Change

Product revenue	$	1,297		$	1,225		$	72		5.9%	$	1,337		$	1,583		$	(246	)	(15.5)%
Cryptocurrency revenue											$	995		$	-		$	995		100.0%
Operating costs and expenses:
Cost of product revenue	$	505		$	637		$	(132	)	(20.7)%	$	452		$	527		$	(75	)	(14.2)%
Cost of cryptocurrency revenue											$	328		$	-		$	328		100.0%
Research and product development expenses	$	314		$	334		$	(20	)	(6.0)%	$	386		$	403		$	(17	)	(4.2)%
Selling, general and administrative expenses	$	887		$	834		$	53		6.4%	$	1,837		$	795		$	1,042		131.1%
Operating loss	$	(409	)	$	(580	)	$	171		29.5%	$	(671	)	$	(142	)	$	(529	)	372.5%
Other expense, net	$	(4	)	$	(6	)	$	2		33.3%
Other income, net											$	5		$	2		$	3		150.0%
Loss before income taxes											$	(666	)	$	(140	)	$	(526	)	375.7%
Income tax benefit											$	-		$	3		$	(3	)	(100)%
Net loss	$	(413	)	$	(586	)	$	173		29.5%	$	(666	)	$	(137	)	$	(529	)	386.1%

Product Revenue: Product revenue consists of revenue recognized from sales of MTI Instruments' products and the ~~MTI Instruments’ product lines.~~provision of related maintenance and repair services.

Product revenue for the three months ended March 31, ~~2017 increased~~2021 decreased by ~~$72~~$246 thousand, or ~~5.9%~~15.5%, to $1.3 million from ~~$1.2~~$1.6 million during the three months ended March 31, ~~2016. This increase~~2020. The primary reason for the decrease was ~~driven~~a $288 thousand decline in sales to customers located in Asia, consisting of decreases of $183 thousand in portable balancing systems ("PBS") revenue and $116 thousand in capacitance product line revenue. These decreases were primarily ~~by activity under the U.S. Air Force contract for engine vibration analysis systems, accessories~~a result of challenges, including time differences and ~~maintenance,~~language difficulties, related to having to conduct sales presentations and otherwise interact with customers remotely, which we ~~entered into~~have found to be less effective than in-person interactions, due to continuing COVID-19-related travel restrictions. Such travel restrictions were not in place during 2020 until mid-March, and therefore they had only a minimal impact on ~~July 1, 2016,combined with an increase in capacitance products~~product sales ~~to a European subsidiary of a U.S. company. These increases were partially offset by a decline in commercial engine balancing system shipments. For~~during the three months ended March 31, ~~2017,~~2020. There was an additional $72 thousand decrease in capacitance product line revenue from other regions primarily due to continued COVID-related restricted business activity in Europe and the ~~largest commercial customer was a U.S. Fortune 100 Company turbine engine tooling manufacturer, which accounted for 13.7% of~~Americas during the first quarter ~~2017 revenue. In 2016,~~of 2021. Further contributing to the decrease in product revenue, we had no revenue from sales of our ~~largest commercial customer was an Asian distributor,~~Proforma product line during the quarter ended March 31, 2021, which ~~accounted for 15.7%~~represents a decrease of $68 thousand versus the comparable 2020 period. This product line consists of only two high-priced products, and because they are specialty items there is significant variability in sales of these products from quarter to quarter. These decreases were partially offset by a $232 thousand increase in revenues from PBS sales in the Americas, most notably in sales to the U.S. Air Force, during the first quarter ~~2016 revenue.~~of 2021 compared to the first quarter of 2020. The percentage of our product revenue attributable to sales to the U.S. Air Force, ~~was the~~which continues to be our largest government and overall customer, increased to 17.2% for the three months ended March 31, ~~2017, accounting for 23.5% of revenue. The U.S. Army was the largest government customer~~2021 from 11.6% for the three months ended March 31, ~~2016, accounting for 1.4% of revenue.~~ 2020.

Information regarding government contracts included in product revenue is as follows:

(Dollars in thousands)		Revenues for the Three Months Ended March 31,				Contract Revenues to Date March 31,			Total Contract Orders Received to Date March 31,					Revenues for the Three Months Ended				Contract Revenues to Date Date		Total Contract Orders Received To Date
														March 31,				March 31,		March 31,
Contract ⁽¹⁾	Expiration	2017		2016		2017						Expiration		2021		2020		2021		2021

$9.35 million U.S. Air Force Systems, Accessories and Maintenance	06/30/2021 ⁽²⁾	$	227	$	—		$	1,320		$	1,429	06/30/2021	⁽²⁾	$	230	$	64	$	9,422	$	9,870

~~_________________~~____________________

(1)		~~(1)~~ Contract values represent maximum potential values at time of contract placement and may not be representative of actual results.
(2)		Date represents expiration of contract, including the exercise of option extensions.

We are in discussions with the U.S. Air Force regarding renewing their current contract, which is set to expire on June 30, 2021. We do not anticipate any issues with the renewal of the contact and we expect to enter into a renewed contract ~~placement and may not be representative of actual results.~~

~~(2) Date represents~~with the U.S. Air Force on or prior to the expiration of ~~contract, including~~ the ~~exercise~~current contract. As a result, we do not expect that there will be any material impact on our results of operations, cash flows, liquidity, or financial condition as a result of the ~~option extension.~~ pending expiration of our current contract with the U.S. Air Force.

Cryptocurrency Revenue: Cryptocurrency revenue consists of revenue recognized from EcoChain's cryptocurrency mining operations.

Cryptocurrency revenue was $995 thousand for the three months ended March 31, 2021. EcoChain did not commence its cryptocurrency mining operations until the second quarter of 2020, and therefore there was no cryptocurrency revenue for the three months ended March 31, 2020. This revenue represents the cash received upon the daily sale of the various cryptocurrencies mined at EcoChain's mining facility during the first quarter of 2021.

Cost of Product Revenue; Gross Margin: Cost of product revenue includes the direct material and labor cost as well as an allocation of overhead costs that relate to the manufacturing of products that we sell. ~~In addition, cost~~Cost of product revenue also includes the labor and material costs incurred for product maintenance, replacement parts, and service under our contractual obligations.

Cost of product revenue for the three months ended March 31, ~~2017~~2021 decreased by ~~$132~~$75 thousand, or ~~20.7%~~14.2%, to ~~$505~~$452 thousand from ~~$637~~$527 thousand for the three months ended March 31, ~~2016. Gross~~2020. The reason for this decrease was the decrease in product sales compared to the first quarter of 2020, as discussed above in "Product Revenue."

Cost as a percentage of product revenue was comparable quarter over quarter, with gross profit, as a percentage of product revenue, ~~increased~~decreasing just slightly to ~~61.1%~~66.2% during the first quarter of ~~2017~~2021 compared to ~~48.0%~~66.7% in the ~~2016~~comparable 2020 period. ~~The improvement~~

Cost of Cryptocurrency Revenue:Cost of cryptocurrency revenue includes direct utility costs as well as overhead costs that relate to the operations of EcoChain's cryptocurrency mining facility. Going forward, cost of cryptocurrency revenue will also include any costs related to the hosting of our miners in ~~gross profit~~third-party facilities as well as the costs of operations of any additional EcoChain cryptocurrency mining facilities, including the anticipated Southeast region facility, discussed above, once the ground leases become effective.

Cost of cryptocurrency revenue was $328 thousand for the three months ended March 31, 2021. As noted above, EcoChain did not commence cryptocurrency mining operations until the second quarter of 2020, and therefore there was no cryptocurrency revenue or associated costs during ~~2017 was attributable to lower material costs, a change in~~ the ~~product mix, and reduced charges for excess inventory stemming from improved procurement management.The decrease in~~first quarter of 2020.

We anticipate that the cost of ~~product~~cryptocurrency revenue ~~was attributable~~may increase to a greater extent than related revenues during the second quarter of 2021 as we scale up production in the new facility located in the Southeast region in the U.S. once the ground leases become effective and it becomes an EcoChain facility. While we scale up to the ~~lower material~~facility's capacity, we expect that we will be able to offset some of the costs ~~and reduced excess inventory charges responsible for~~of running the ~~improvements in~~facility by hosting miners we do not own through arrangements with the ~~profit margin.~~ owner of the facility as well as the third party through which our miners are currently hosted at this facility, though there can be no guarantee that this will be the case or the extent to which such arrangements will offset our costs.

Research and Product Development Expenses: Research and product development expenses includes the costs of materials to build development and prototype units, cash and non-cash compensation and benefits for the engineering and related staff, expenses for contract engineers, fees paid to outside suppliers for subcontracted components and services, fees paid to consultants for services provided, materials and supplies consumed, ~~facility related~~facility-related costs such as computer and network services, and other general overhead costs associated with our research and development activities, to the extent not reimbursed by our customers.

Research and product development expenses decreased ~~$20~~$17 thousand, or 4.2%, during the three months ended March 31, ~~2017~~2021 compared to the ~~comparable 2016 period~~2020 period. This decrease was primarily due to ~~decreased material spending on current development projects and reduced personnel costs.~~ the movement of a highly-compensated engineering employee from full-time to part-time status during the third quarter of 2020.

Selling, General and Administrative Expenses: Selling, general and administrative expenses includes cash and non-cash compensation, benefits and related costs in support of our general corporate functions, including general management, finance and accounting, human resources, selling and marketing, information technology, and legal services.

Selling, general and administrative expenses for the three months ended March 31, ~~2017~~2021 increased by ~~$53 thousand,~~$1.0 million, or ~~6.4%~~131.1%, to ~~$887 thousand~~$1.8 million from ~~$834~~$795 thousand for the three months ended March 31, ~~2016.~~2020. This increase was ~~the~~a result of both expenses incurred in 2021 for which there was no comparable expense in 2020 as well as from changes in a number of our traditional selling, general and administrative expenses. Expenses for which there was no comparable outlay in 2020 consisted of $451 thousand in legal fees and $170 in expenses related to investor relations matters. $271 thousand of such legal fees were related to the transaction to lease the building for EcoChain's new cryptocurrency mining facility and the surrounding land located in the Southeast region of the U.S., discussed above, including expenses related to due diligence activities. The remaining $180 thousand were corporate legal expenses, $83 thousand of which was related to the Company's reincorporation in Nevada, the preparation and adoption of its 2021 Stock Incentive Plan, and the special meeting of shareholders we held on March 25, 2021, at which the Company's stockholders approved (among another matter) the reincorporation and the adoption of the Stock Incentive Plan. In addition, $32 thousand of the increase in legal fees related to the initial listing of our common stock on The Nasdaq Stock Market LLC ("Nasdaq"), and $40 thousand of such increase was for legal assistance in connection with other SEC filings, primarily our Annual Report on Form 10-K for the year ended December 31, 2020 and Form 8-K filings, which we did not have to file during the quarter ended March 31, 2020 as we were not then subject to the filing requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Of these $451 thousand of legal fees, the Company expects that approximately $400 thousand are one-time ~~charges associated~~expenditures. Legal fees incurred in the 2020 period for which there was no comparable outlay for the 2021 period, which helped to offset some of the new legal fees incurred in the 2021 period, were $87 thousand and related to the Company's investment in Soluna.

Investor relations expenses we incurred during the quarter ended March 31, 2021, and for which there was no comparable expense during the quarter ended March 31, 2020, were $170 thousand, consisting primarily of $50 thousand for Nasdaq registration fees in connection with the initial listing of our common stock, $46 thousand related to our retention of an investor relations consulting firm to assist us with creating a ~~separation agreement~~more formal investor relations strategy given our status as an SEC reporting and Nasdaq-listed company, $39 thousand related to the special meeting, including the fees and expenses of the proxy solicitor we retained in connection therewith, and $30 thousand in fees paid to OTC Markets Group and for related press releases in connection with the quotation of our common stock being moved from the OTC Pink - Current Information tier to the OTCQB venture stage marketplace for early stage and developing companies in connection with the registration of our common stock under the Exchange Act in November 2020. Of the $170 thousand in investor relations expenses for which there was no comparable expenditures during the quarter ended March 31, 2020, we expect all but the investor relations consulting expenses, or approximately $120 thousand thereof, to be one-time expenditures.

Salaries and benefits expenses increased by $80 thousand during the three months ended March 31, 2021, compared to the three months ended March 31, 2020, $60 thousand of which is related to the salary and benefits of our new Chief Financial Officer and new Compliance Manager, who were hired in July 2020 and November 2020, respectively, and $20 thousand of which is related to the salary and benefits of the new President of MTI Instruments, who was originally hired as Director of Marketing in the third quarter of 2019 and promoted to Chief Operating Officer of MTI Instruments in May 2020 and President of MTI Instruments in September 2020. Stock compensation expense for Board members increased by $22 thousand due to the Company's award in March 2021 of restricted stock units and options to purchase common stock to the two Directors we added to the Board in February 2021. In addition, compared to the quarter ended March 31, 2020, we experienced an increase of $55 thousand in audit and consulting fees. Approximately half of this increase related to the audit of the Company's financial statements included in our 2020 Annal Report on Form 10-K having to be conducted in accordance with the auditing standards of the Public Company Accounting Oversight Board ("PCAOB"). During the first quarter of 2020 we did not file reports with the SEC and therefore the annual audit of our financial statements did not need to comply with PCAOB requirements, which resulted in lower audit fees for the 2020 period. The increase in consulting fees was a ~~former employee.~~ result of retaining our prior audit firm to conduct a tax review of the Company's deferred tax asset and provide other tax-related services that had previously been conducted in-house. Expenses related to the operations and management agreements between Soluna and EcoChain, pursuant to which Soluna located and obtained for EcoChain its Washington and Southeast region facilities, operates the Washington facility for EcoChain, and will operate the Southeast region facility for EcoChain, increased by $105 thousand during the quarter ended March 31, 2021 compared to the comparable 2020 period, based on the terms of these agreements as in place during the applicable periods. EcoChain intends to continue to contract with Soluna to locate and perform certain activities related to acquisition targets and operations, and therefore we expect that these expenses, while varying period to period, will generally increase going forward. These increases were partially offset by a $15 thousand decrease in spending on travel for customer visits and trade shows due to COVID-19 restrictions in place since March 2020. While, like most companies, we continue to evaluate our position with respect to travel related to in-person meetings with clients and potential clients and consider how to optimize the use of a virtual environment going forward, we have re-started a small amount of domestic business travel during the second quarter of 2021 and, based on current information about the status of the pandemic and the related vaccination effort, we expect travel-related spending to increase from current levels beginning in the second quarter of 2021, although whether such domestic business travel will increase as expected, and the amount thereof, is still subject to a number of uncertainties related to the course of the pandemic over the next several months. Further, while we expect that our sales personnel will begin to resume international travel once it is considered safe to do so, the timing and amount of such travel is dependent on conditions related to the pandemic, particularly in Asia and Europe, that remain uncertain and, as a result, we are unable at this time to predict when such travel will resume. In addition, due to travel restrictions during 2020 our other primary salesperson was able to cover the work of the open sales position during the past year, and while the other sales position remained open during 2020, we did not actively pursue retaining a replacement. That will no longer be the case, however, once travel is generally deemed safe as we expect our salespersons to conduct in-person meetings with clients and potential clients as had been the case prior to the onset of the pandemic, although the level of travel may not be as high as it was prior to the pandemic. As travel restrictions are lifted, we intend to retain a salesperson to replace the one that left, so we expect employee salaries and benefits will be higher in 2021 and for the foreseeable future than they were in 2020. We also expect an approximate 170% increase in directors' and officers' insurance expense beginning in the second quarter of 2021, primarily as a result of the addition of EcoChain's line of business and the Company becoming an SEC reporting company during the fourth quarter of 2020 and the registration of our common stock on Nasdaq.

The Company also expects selling, general and administrative expenses to continue to increase in 2021 and generally going forward as a result of its resumption of filing periodic reports, annual proxy statements, and other filings with the SEC following the effectiveness of its Form 10 registration statement in November 2020.

Operating Loss:Operating loss ~~was $409~~increased to $671 thousand for the three months ended March 31, ~~2017~~2021 from a loss of $142 thousand during the comparable 2020 period. This decrease was the result of the $1.0 million increase in selling, general and administrative expenses and a $171 thousand decrease in the product contribution margin (i.e. the aggregate incremental revenue generated from product sales after deducting the variable portion of the costs of manufacturing and selling such products) due to lower product sales during the 2021 period, partially offset by a $667 thousand increase in the cryptocurrency contribution margin.

Other Income:Other income for the three months ended March 31, 2021 was $5 thousand and was primarily related to income from the sale of EcoChain's excess equipment and interest income on operating cash balances. Other income for the three months ended March 31, 2020 was $2 thousand and was primarily related to the disposal of the tensile product line and related royalty payments and interest income on operating cash balances.

Net Loss:Net loss for the three months ended March 31, 2021 was $666 thousand compared to ~~$580~~a net loss of $137 thousand for the three months ended March 31, ~~2016.This improvement was~~ ~~a result of the factors noted above, that is, the increased sales and improvement in gross margins, combined with decreased research and development expenses.~~2020. The ~~first quarter operating loss in 2017 was also negatively impacted by $205 thousand of non-recurring severance costs associated with the departure of the prior CEO and another employee.~~

~~Other Expense:~~~~Other expense was $4 thousand~~primary reason for the ~~three months ended March 31, 2017 and related to miscellaneous bank fees compared to $6 thousand for the three months ended March 31, 2016, which was~~ ~~primarily due a $6 thousand loss recorded on the disposal of equipment.~~

~~Net Loss:~~~~Net loss was $413 thousand for the three months ended March 31, 2017 compared to a net loss of $586 thousand for the three months ended March 31, 2016. The improvement~~increase in net loss was ~~primarily attributable to~~ the increased ~~sales and improvements in gross margins, as well as the decreased research and development expenses,~~operating loss, as discussed above.

~~Management’s Plan,~~ Liquidity and Capital Resources

Several key indicators of our liquidity are summarized in the following table:

(Dollars in thousands)	Three Months Ended or As of			Three Months Ended or As of			Year Ended or As of			Three Months Ended or As of			Three Months Ended or As of			Year Ended or As of
	March 31,			March 31,			December 31,			March 31,			March 31,			December 31,
	2017			2016			2016			2021			2020			2020
Cash	$	3,189		$	336		$	3,381		$	2,722		$	1,418		$	2,630
Working capital		3,637			810			3,990			2,405			2,978			3,142
Net loss		(413	)		(586	)		(359	)
Net cash (used in) provided by operating activities		(209	)		(38	)		522
Net (loss) income											(666	)		(137	)		1,946
Net cash provided by (used in) operating activities											331			(333	)		1,622
Purchase of property, plant and equipment		—			(78	)		(136	)		(301	)		(9	)		(835	)

The Company has historically incurred significant losses (the majority, until 2012, stemming from the direct methanol fuel cell product development and commercialization programs of its former subsidiary, MeOH Power, Inc.) and had a consolidated accumulated deficit of ~~$121.4~~$118.5 million as of March 31, ~~2017.~~2021. Management believes that the Company currently has adequate resources to ~~avoid future cost-cutting measures that could adversely affect its business.~~fund current operations. As of March 31, ~~2017,~~2021, we had no debt, ~~$5 thousand in~~outstanding commitments related to EcoChain for $1.0 million for capital expenditures, and approximately ~~$3.2~~$2.7 million of cash available to fund our operations.

Based on business developments, including changes in production levels, staffing requirements, and network infrastructure improvements, we will require additional capital equipment ~~may be required~~ in the foreseeable future. WeWith respect to MTI and MTI Instruments, we expect to spend a total of approximately ~~$75~~$300 thousand on ~~capital~~computer equipment and ~~$1.4~~software and $1.6 million inon research and development ~~on MTI Instruments’ products~~ during ~~2017. We~~2021. As we have done historically, we expect to ~~fund any future~~finance these expenditures and continue funding ~~our~~their operations from our current cash position and our projected ~~2017~~2021 cash flows pursuant to ~~management’s~~management's plans. WeIf necessary, we may also seek to supplement our resources by ~~obtaining~~increasing credit facilities to fund operational working capital and capital expenditure requirements. With respect to EcoChain we expect to fund growth (additional cryptocurrency mining facilities and miners) through capital raise activities, including the approximately $13.7 million in net proceeds from our sale of shares of the Company's common stock completed in May of 2021, as well as, once such proceeds have been expended, future capital raises to the extent that we can successfully raise capital through additional securities sales. Any additional financing, if required, may not be available to us on acceptable terms or at all.

While it cannot be assured, management believes that, due in part to our current working capital level ~~recent realignment in sales~~ and projected cash requirements for operations and ~~stabilized spending,~~capital expenditures, its current available cash of approximately $2.7 million, and its projected 2021 cash flow pursuant to management's plans, the Company will have adequate resources to fund operations and capital expenditures for MTI and MTI Instruments for the year ending December 31, ~~2017~~2021 and through at least the end of the second quarter of ~~2018. However, if~~2022. As noted above, we expect to fund Capital expenditures for EcoChain through capital raises, while EcoChain's operations will be funded through its cash flows. We expect to have adequate resources to fund EcoChain's operations for the year ending December 31, 2021 and through at lease the second quarter of 2022.

If our revenue estimates are off either in timing or amount, or if cash generated from operations is insufficient to satisfy the operational working capital and capital expenditure requirements, the Company may need to implement additional steps to ensure liquidity including, but not limited to, the deferral of planned capital spending and/or delaying existing or pending product development initiatives, or the Company may be required to obtain credit facilities or other loans, if available, to fund these initiatives. ~~Such~~The Company has no other formal commitments for funding its future needs at this time and any additional financing we may require during the year ending December 31, 2021, may not be available to us on acceptable terms or at all. Any one or more of such steps, if required, could potentially have a material and adverse effect on our business, results of operations, and financial condition.

Debt

On May 7, 2020, in connection with receipt of a $3.3 million U.S. Air Force delivery order, MTI Instruments obtained a $300 thousand secured line of credit from Pioneer Bank. The line of credit may be drawn in the discretion of MTI Instruments and bears interest at a rate of Prime +1% per annum. Accrued interest is due monthly, and principal is payable over a period of 30 days following the lender's demand. The line of credit is secured by the assets of MTI Instruments and is guaranteed by the Company. As of March 31, 2021, there were no amounts outstanding under the line of credit.

We had no additional credit facilities available or debt outstanding at either March 31, ~~2017~~2021 or March 31, ~~2016.~~2020.

Backlog, Inventory and Accounts Receivable

At March 31, ~~2017,~~2021, our order backlog was ~~$518~~$408 thousand compared to ~~$349~~$555 thousand at December 31, ~~2016.~~2020. The ~~increase~~decrease in backlog from December ~~2016~~2020 was due to orders ~~for capacitance systems~~being received at the end of December that ~~per the customers’ request, will not be delivered until the third quarter of this year, and engine balancing systems under the U.S. Air Force contract that~~were shipped in ~~early April.~~ the first quarter.

Our inventory turnover ratios and average accounts receivable days outstanding for the trailing 12 month periods and their changes at March 31, ~~2017~~2021 and ~~2016~~2020 are as follows:

	2017	2016	Change		2021	2020	Change
Inventory turnover	2.5	2.2	0.3		2.3	2.2	0.1
Average accounts receivable days outstanding	38	50	(12	)	40	41	(1	)

~~The current twelve-month inventory turns have improved due to a 5% decline in average inventory balances corresponding to U.S. Air Force activity and improved procurement management.~~

The average accounts receivable days’ outstanding decreased twelve days during the last 12 months due to a proportionate increase in U.S. government sales, which tend to pay within 30 days, which is significantly shorter than the payment cycle for commercial customers.

~~Off-Balance Sheet Arrangements~~

~~We have no off balance sheet arrangements.~~

Critical Accounting Policies and Significant Judgments and Estimates

The above discussion and analysis of our financial condition and results of operations ~~are~~is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. Note 2, Accounting Policies, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, ~~2016~~2020 includes a summary of our most significant accounting policies. There have been no material changes to the critical accounting policies previously disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2020. The preparation of these condensed consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosure of assets and liabilities. On an ongoing basis, we evaluate our estimates and judgments, including those related to revenue recognition, inventories, income taxes and stock-based compensation. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Periodically, our management reviews our critical accounting estimates with the Audit Committee of our Board of Directors.

Statement Concerning Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended ~~(Securities Act)~~(the "Securities Act"), and Section 21E of the ~~Securities~~ Exchange ~~Act of 1934, as amended (Exchange Act).~~Act. Any statements contained in this Form 10-Q that are not statements of historical fact may be forward-looking statements. When we use the words ~~“anticipate,” “estimate,” “plans,” “projects,” “continuing,” “ongoing,” “expects,” “management~~"anticipate," "estimate," "plans," "projects," "continuing," "ongoing," "expects," "management believes,~~” “we~~" "we believe,~~” “we~~" "we intend,~~” “should,” “could,” “may,” “will”~~" "should," "could," "may," "will" and similar words or phrases, we are identifying forward-looking statements. Such forward-looking statements include, but are not limited to, statements regarding:

~~management’s~~management's strategy and planned initiatives, including anticipated growth;
management's belief that it will have adequate resources to fund ~~the Company’s~~MTI's and MTI Instruments' operations and capital expenditures and EcoChain's operations for the year ending December 31, ~~2017~~2021 and through the end of the second quarter of ~~2018;~~
~~projected taxable income and the ability to use deferred tax assets (currently held at a full valuation allowance);~~2022;
the expected impact of recent accounting updates;
our expectations regarding the ~~expectation~~renewal of our contract with the U.S. Air Force that ~~future cost-cutting measures will be avoided;~~is set to expire on June 30, 2021 and the expected impact thereof;
the expected impact on costs once the ground leases with respect to EcoChain's anticipated new Southeast U.S. region facility become effective, including the possibility of hosting miners for third parties to offset costs;
our expectations regarding increases in certain selling, general and administrative expenses, including from increased business travel going forward;
potential acquisitions by EcoChain;
our expected use of proceeds from our recent common stock offering;
our expectations with respect to pending legal proceedings;
future capital expenditures and spending on research and development; and
expected funding of future cash expenditures.

Forward-looking statements involve risks, uncertainties, estimates and assumptions that may cause our actual results, performance or achievements to be materially different from those expressed or implied by forward-looking statements. Important factors that could cause these differences include the following:

the course of the COVID-19 pandemic in the United States and internationally, particularly in Asia and, to a lesser extent, in Europe, and the related uncertainty of the U.S. and global economy as a result thereof;
sales revenue growth may not be achieved or maintained;

the dependence of our business on a small number of customers and potential loss of government contracts - particularly in light of potential cuts that may be imposed as a result of U.S. government budget appropriations;
our lack of long-term purchase commitments from our customers and the ability of our customers to cancel, reduce, or delay orders for our products;

our inability to build and maintain relationships with our customers;
our inability to develop and utilize new products and technologies that address the needs of our customers;
our inability to retain existing or obtain new credit facilities;
the cyclical nature of the electronics and military industries;
~~the uncertainty of the U.S. and global economy, including as a result of the United Kingdom’s impending exit from the European Union;~~
the impact of future exchange rate fluctuations;
failure of our strategic alliances to achieve their objectives or perform as contemplated and the risk of cancellation or early termination of such alliance by either party;
the loss of services of one or more of our key employees or the inability to hire, train, and retain key personnel;

risks related to protection and infringement of intellectual property;
our occasional dependence on sole suppliers or a limited group of suppliers;

~~our ability to generate income to realize the tax benefit of our historical net operating losses;~~

risks related to the limitation of the use, for tax purposes, of our net historical operating losses in the event of certain ownership changes;
the risks related to the volatility in the EcoChain business and cryptocurrency mining facilities, including that they may not achieve or maintain profitability in our expected timeframe or at all depending on numerous uncertainties, including the costs of operation, the future price of cryptocurrencies and fluctuations in such prices, government and quasi-government regulation of cryptocurrencies and their use, restrictions on or regulation of access to and operation of blockchain networks or similar systems, and the availability and popularity of other forms or methods of buying and selling goods and services, including government-backed cryptocurrencies;
risks related to scaling EcoChain's cryptocurrency operations to larger-scale (multiple) cryptocurrency mining operations;
the general risk that ~~potential deterioration in~~ the ~~relationships between the United States~~EcoChain business may not be successful;
uncertainty regarding EcoChain's ability to consistently monetize cryptocurrency;
fluctuating valuations of cryptocurrency; and ~~other countries might impact our foreign customers’ willingness to conduct business with U.S. companies like MTI; and~~
other factors discussed under the heading ~~“Risk Factors”~~"Risk Factors" in this report and in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2016.~~2020.

Forward-looking statements speak only as of the date they are made. You should not put undue reliance on any forward-looking statements. We assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions, or changes in other factors affecting forward-looking information, except to the extent required by applicable securities laws. If we do update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

Item 3.3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

Item 4. Controls and Procedures

The ~~certification~~certifications of our Chief Executive Officer and Chief Financial ~~Officer~~Officers are attached as ~~Exhibit~~Exhibits 31.1 and 31.2 to this Quarterly Report on Form 10-Q include, in paragraph 4 of such certification, information concerning our disclosure controls and procedures and internal control over financial reporting. Such certification should be read in conjunction with the information contained in this Item 4 for a more complete understanding of the matters covered by such certification.

(a) Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of ~~MTI’s~~MTI's disclosure controls and procedures as of March 31, ~~2017.~~2021. The term ~~“disclosure~~"disclosure controls and procedures,”" as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the U.S. Securities and Exchange ~~Commission’s~~Commission's (the ~~“SEC”~~"SEC") rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the ~~company’s~~company's management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. We recognize that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and we necessarily apply our judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of March 31, ~~2017,~~2021, our Chief Executive Officer and our Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

(b) Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during our fiscal quarter ended March 31, ~~2017~~2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

At any point in time, we may be involved in various lawsuits or other legal proceedings. Such lawsuits could arise from the sale of products or services or from other matters relating to our regular business activities, compliance with various governmental regulations and requirements, or other transactions or circumstances.

We have been named as a party in the December 19, 2019 United States Environmental Protection Agency ("EPA") Demand Letter regarding the Malta Rocket Fuel Area Superfund Site ("Site") located in Malta and Stillwater, New York, in connection with an alleged release of hazardous materials into the environment. The EPA is seeking reimbursement of response costs from all named parties in the amount of approximately $358 thousand plus interest in connection with the investigation and disposal activities associated with the various drum caches discovered at the Site, issuance of the Explanation of Significant Differences ("ESD") of the Site, and implementation of the work contemplated by the ESD. We consider the likelihood of a material adverse outcome with respect to this matter to be remote and do not currently anticipate that any expense or liability that we may incur as a result of this matter in the future will be material to the Company's business or financial condition. Further, we are not presently involved in any other litigation that we believe ~~there are any such proceedings presently pending. See Note 8, Commitments and Contingencies,~~is likely, individually or in the aggregate, to have a material adverse effect on our ~~condensed~~ consolidated financial ~~statements for further information.~~condition, results of operations or cash flows.

Item 1A. Risk Factors

Part II, Item 1A (Risk Factors) of our most recently filed Annual Report on Form 10-K with the SEC, filed on March ~~2, 2017,~~31, 2021, sets forth information relating to important risks and uncertainties that could materially adversely affect our business, financial condition and operating results. Except as to the risk factors set forth below and to the extent that information disclosed elsewhere in this Quarterly Report on Form 10-Q relates to such risk factors (including, without limitation, the matters described in Part I, Item 2 ~~(Management’s~~(Management's Discussion and Analysis of Financial Condition and Results of Operations –- Statement Concerning Forward Looking Statements), there have been no material changes to our risk factors disclosed in our most recently filed Annual Report on Form 10-K. ~~However, those~~Those risk factors continue to be relevant to an understanding of our business, financial condition and operating results, however, and, accordingly, you should review and consider such risk factors in making any investment decision with respect to our securities.

With respect to our new cryptocurrency mining operations in the Southeast region of the U.S., we will rely on the landlord to sell us the power required for our operations until the ground leases we have entered into with respect this facility become effective, and any failure of the landlord to supply such power, whether as a result of its failure to pay the Tennessee Valley Authority ("TVA") or otherwise, would materially impact our operations.

EcoChain Block, a wholly-owned subsidiary of EcoChain, entered into a Power Supply Agreement in connection with the ground leases executed in May 2021 with respect to EcoChain's new facility located in the Southeast region of the U.S., as discussed above. Under the terms of the Power Supply Agreement, EcoChain Block, a wholly-owned subsidiary of EcoChain, will purchase the power for its cryptocurrency mining operations from the landlord, who purchases such power directly from the TVA. The rates payable by EcoChain Block to the landlord will be the same pre-negotiated rates the landlord pays the TVA for such power, which rates are lower than the rates that EcoChain could obtain directly from the TVA at this time. The landlord's failure to provide power to EcoChain, as a result of the termination of such power supply to the landlord by the TVA, as a result of the landlord's failure to pay the TVA for such power, or otherwise, would, in all likelihood, result in our inability to obtain the power we need for our cryptocurrency mining operations, unless and until we were able to obtain such power directly from the TVA, which would result in a significant interruption to EcoChain's business. Further, there can be no assurance that EcoChain Block would be able to negotiate a power supply agreement with the TVA on equally favorable terms as the Landlord, if at all.

The properties subject to the ground leases are subject to possible forfeiture to the U.S. government, and, if seized, would, in all likelihood, require us to spend significant funds to maintain our cryptocurrency mining rights.

In August 2020, the United States Department of Justice's Money Laundering & Asset Recovery Section ("DOJ"), together with the U.S. Attorney's Office for the Southern District of Florida, filed civil asset forfeiture complaints against parties related to the Landlord in connection with certain real properties, including the real properties that are the subject of the ground leases (the "Subject Properties"). The complaints, which are all currently pending before a federal judge, alleged that the funds used by the landlord Owners to purchase the Subject Properties were traceable to the proceeds of a bank fraud purportedly committed internationally in Ukraine by the landlord. Though the DOJ has not filed a civil forfeiture action against the Subject Properties, the complaint the government submitted in support of its asset forfeiture requests against certain properties, including the Subject Properties, included a description of the Ukrainian bank fraud and the various properties located in the United States that the DOJ believes were purchased with the proceeds of that international bank fraud, including the Subject Properties. In the event that the Subject Properties are seized by the U.S. government, EcoChain Block may be required to negotiate with the U.S. government for the supply of power that EcoChain was receiving from the landlord pursuant to the Power Supply Agreement. Additionally, the U.S. government, in all likelihood, would place the Subject Properties for sale at an auction, or otherwise, and we would likely be required to purchase the Subject Properties to assure the continuation of our cryptocurrency mining operations at such facility, all of which would require our expenditure of significant funds and could have a material adverse impact on our results of operations.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

~~None~~On January 12, 2021, the Company issued 10,000 shares of common stock, valued at $49,900, to PCG Advisory, Inc. in consideration for its public relations-related consulting services. Such shares were issued to PCG Advisory, Inc. pursuant to an exemption from the registration requirements of the Securities Act by virtue of Section 4(a)(2) of the Securities Act because: (i) the shares of common stock were offered and sold only to an accredited investor; and (ii) PCG Advisory, Inc. represented, and the Company believes, that it had such knowledge and experience in financial and business matters that it was capable of evaluating the merits and risk of an investment in the Company, and PCG Advisory, Inc. had access to the type of information about the Company that would normally be provided in a prospectus of an SEC registration statement. Further, there was no general solicitation or general advertising related to this issuance of shares.

On March 25, 2021, the Company granted to its directors under the Company's 2021 Stock Incentive Plan: (i) options to purchase 30,000 shares of common stock, at an exercise price of $11.10 per share; (ii) 47,500 shares of restricted stock; and (iii) 15,000 restricted stock units. These grants were all made pursuant to an exemption from the registration requirements of the Securities Act by virtue of Section 4(a)(2) of the Securities Act, as each such director is an accredited investor, represented to the Company, and the Company believes, that he or she has such knowledge and experience in financial and business matters that he or she was capable of evaluating the merits and risk of an investment in the Company, and had access to the type of information about the Company that would normally be provided in a prospectus of an SEC registration statement.

Item 3. Defaults Upon Senior Securities

None

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

On January 18, 2017, Kevin G. Lynch resigned as President and Chief Executive Officer as well as Chairman of the Board of the Company. Mr. Lynch will remain on the Company’s Board of Directors. In conjunction with his resignation, Mr. Lynch and the Company entered into a separation agreement (dated February 1, 2017). The Company’s Board of Directors appointed Frederick W. Jones, our current Chief Financial Officer, as President and Chief Executive Officer. Mr. Jones will remain our Chief Financial Officer as well.None

~~For additional information about the departure of Mr. Lynch and the appointment of Mr. Jones, please see the Company’s Current Reports on Form 8-K filed on January 24, 2017 and February 8, 2017.~~

Item 6. Exhibits

Exhibit No.	Description
~~10.1+~~10.1#	~~Separation Letter Agreement between Mechanical Technology, Incorporated and Kevin G Lynch (Incorporated by reference from Exhibit 10.25 of the Company’s Form 8-K Report filed February 8, 2017).~~

~~10.2+~~	~~Side Letter Agreement dated March 29, 2017, amending the Option Exercise and Stock Transfer Restriction Agreement~~Industrial Power Contract by and between ~~Mechanical Technology, Incorporated~~EcoChain, Inc. and ~~E. Dennis O’Connor.~~

~~10.3+~~	~~Side Letter Agreement~~West Kentucky Rural Electric Cooperative Corporation, dated ~~March 29, 2017, amending the Option Exercise and Stock Transfer Restriction Agreement by and between Mechanical Technology, Incorporated and Walter L. Robb.~~as of February 22, 2021

31.1	~~Rule 13a-14(a)/15d-14(a)~~ Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 ~~of Frederick W. Jones~~
31.2	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification ~~Pursuant to 18 U.S.C. Section 1350, as Adopted~~of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 ~~of Frederick W. Jones~~
32.2	Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*	XBRL Instance Document

101.SCH*	XBRL Taxonomy Extension Schema Document

101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*	XBRL Taxonomy Definition Linkbase Document

101.LAB*	XBRL Taxonomy Extension Label Linkbase Document

101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document

All other exhibits for which no other filing information is given are filed herewith.

~~+ Represents management contract~~

# Certain portions of this exhibit have been omitted pursuant to Item 601(b)(10) of Regulation S-K. Such information is both not material and is the information that the registrant customarily and actually treats as private or ~~compensation plan or arrangement.~~confidential. The omitted information is identified in the exhibit with brackets and "**".

* Submitted electronically herewith. Attached as Exhibit 101 are the following materials from the ~~Company’s~~Company's Quarterly Report on Form 10-Q for the quarter ended March 31, ~~2017,~~2021, formatted in eXtensible Business Reporting Language (XBRL) and tagged as blocks of text and including detailed tags: (i) Condensed Consolidated Balance Sheets at March 31, ~~2017~~2021 and December 31, ~~2016;~~2020; (ii) Condensed Consolidated Statements of Operations for the Three Months Ended March 31, ~~2017~~2021 and ~~2016;~~2020; (iii) Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, ~~2017~~2021 and ~~2016;~~2020; and (iv) related notes.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Mechanical Technology, Incorporated
Date: May 4, ~~2017~~17, 2021	By:	/s/ ~~Frederick W. Jones~~Michael Toporek
		~~Frederick W. Jones~~Michael Toporek Chief Executive Officer ~~and~~

	By:	/s/ Jessica L. Thomas
		Jessica L. Thomas Chief Financial Officer

☑		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2021
OR
☐		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____to _____

~~New York~~Nevada	~~000-06890~~	14-1462255
(State or other jurisdiction	(I.R.S. Employer
of incorporation or ~~organization)~~organization	~~(Commission File Number)~~	~~(I.R.S. Employer~~ Identification No.)

Title of each class	Trading Symbol	Name of each exchange on which registered

Common Stock ($0.001 par value)	MKTY	The Nasdaq Stock Market LLC


Large accelerated filer ¨☐	Accelerated filer ¨☐
Non-accelerated filer ¨ ~~(Do not check if a smaller reporting company)~~☑	Smaller reporting company x
	☑ Emerging growth company ¨☐

PART I. FINANCIAL INFORMATION	2

*Item 1. Financial Statements*	2

Condensed Consolidated Balance Sheets
As of March 31, ~~2017~~2021 (Unaudited) and December 31, ~~2016~~2020	2

Condensed Consolidated Statements of Operations (Unaudited)
For the Three Months Ended March 31, ~~2017~~2021 and ~~2016~~2020	3

Condensed Consolidated Statements of Changes in Equity
For the Year Ended December 31, ~~2016~~2020 and the Three Months Ended March 31, ~~2017~~2021 (Unaudited)	4

Condensed Consolidated Statements of Cash Flows (Unaudited)
For the Three Months Ended March 31, ~~2017~~2021 and ~~2016~~2020	5

Notes to Condensed Consolidated Financial Statements (Unaudited)	6

*Item 2. ~~Management’s~~Management's Discussion and Analysis of Financial Condition and Results of Operations*	13
15
*Item 3. Quantitative and Qualitative Disclosures About Market Risk*	17
21
*Item 4. Controls and Procedures*	17 21

PART II. OTHER INFORMATION	1823
Item 1. Legal Proceedings
*~~Item 1.~~ 23* ~~Legal Proceedings~~	18
Item 1A. Risk Factors	23
***~~Item 1A.~~~~Risk Factors~~*	18

*Item 2.*Unregistered Sales of Equity Securities and Use of Proceeds	18 24
Item 3. Defaults Upon Senior Securities	24
Item 4. Mine Safety Disclosures	24
Item 5. Other Information	24
Item 6. Exhibits	24

*~~Item 3.~~*~~Defaults Upon Senior Securities~~SIGNATURES	18

*~~Item 4.~~*~~Mine Safety Disclosures~~	18
26

(Dollars in thousands, except per share)	Three Months Ended
	March 31,
	2021			2020

Product revenue	$	1,337		$	1,583
Cryptocurrency revenue		995			-
Total revenue		2,332			1,583
Operating costs and expenses:
Cost of product revenue		452			527
Cost of cryptocurrency revenue		328			-
Research and product development expenses		386			403
Selling, general and administrative expenses		1,837			795
Operating (loss)		(671	)		(142	)
Other income, net		5			2
(Loss) before income taxes		(666	)		(140	)
Income tax benefit		-			3
Net (loss)	$	(666	)	$	(137	)

Net loss per share (Basic and Diluted)	$	(.07	)	$	(.01	)

Weighted average shares outstanding (Basic and Diluted)		9,796,863			9,570,677

(Dollars in thousands, except per share)	Common Stock									Treasury Stock
	Shares	Amount		Additional Paid-in Capital			Accumulated Deficit			Shares	Amount			Total Stockholders' Equity

January 1, 2020	10,586,170	$	10	$	137,326		$	(119,739	)	1,015,493	$	(13,764	)	$	3,833

Net loss	-		-		-			(137	)	-		-			(137	)

Stock based compensation	-		-		12			-		-		-			12

March 31, 2020	10,586,170		10		137,338			(119,876	)	1,015,493		(13,764	)		3,708

Net income	-		-		-			602		-		-			602

Stock based compensation	-		-		12			-		-		-			12

June 30, 2020	10,586,170		10		137,350			(119,274	)	1,015,493		(13,764	)		4,322

Net income	-		-		-			1,507		-		-			1,507

Stock based compensation	-		-		11			-		-		-			11

September 30, 2020	10,586,170		10		137,361			(117,767	)	1,015,493		(13,764	)		5,840

Net loss	-		-		-			(26	)	-		-			(26	)

Stock based compensation	-		-		19			-		-		-			19

Issuance of shares - option exercises	83,000		-		83			-		-		-			83

Issuance of shares - restricted stock	80,930		1		(1	)		-		-		-			-

December 31, 2020	10,750,100	$	11	$	137,462		$	(117,793	)	1,015,493	$	(13,764	)	$	5,916

Net loss	-		-		-			(666	)	-		-			(666	)

Stock based compensation	-		-		34			-		-		-			34

Issuance of shares - option exercises	77,250		-		62			-		-		-			62

Issuance of shares - restricted stock	57,500		-		49			-		-		-			49

March 31, 2021	10,884,850	$	11	$	137,607		$	(118,459	)	1,015,493	$	(13,764	)	$	5,395

(Dollars in thousands)	Three Months Ended March 31,
	2021			2020
Operating Activities
Net loss	$	(666	)	$	(137	)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation		93			22
Stock based compensation		34			12
Consultant stock compensation		25			-
Provision (recovery) for excess and obsolete inventories		(1	)		(4	)

Changes in operating assets and liabilities:
Accounts receivable		195			(228	)
Inventories		(95	)		(17	)
Prepaid expenses and other current assets		(585	)		(1	)
Other long-term assets		(2	)		-
Accounts payable		1,214			56
Operating lease, net		1			-
Accrued liabilities		118			(36	)
Net cash provided by (used in) operating activities		331			(333	)

Investing Activities
Purchases of equipment		(301	)		(9	)
Purchase of stock in equity investment		-			(750	)
Net cash used in investing activities		(301	)		(759	)

Financing Activities
Proceeds from stock option exercises		62			-
Net cash provided by financing activities		62			-
Increase (decrease) in cash		92			(1,092	)
Cash - beginning of period		2,630			2,510
Cash - end of period	$	2,722		$	1,418


Supplemental Disclosure of Cash Flow Information
Non-cash transactions:
Consultant stock compensation in prepaids and other assets		24			-

(Dollars in thousands, except per share)	Three Months Ended
	March 31,
	2017			2016

Product revenue	$	1,297		$	1,225
Operating costs and expenses:
Cost of product revenue		505			637
Research and product development expenses		314			334
Selling, general and administrative expenses		887			834
Operating loss		(409	)		(580	)
Other expense, net		(4	)		(6	)
Net loss	$	(413	)	$	(586	)

Loss per share (Basic and Diluted)	$	(.05	)	$	(.11	)
Weighted average shares outstanding (Basic and Diluted)		9,024,782			5,253,301

(Dollars in thousands)	Three Months Ended March 31,
	2017			2016
Operating Activities
Net loss	$	(413	)	$	(586	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		20			20
Loss on disposal of equipment		—			6
Bad debt recovery		—			(21	)
Stock based compensation		23			46
Provision for excess and obsolete inventories		7			153
Changes in operating assets and liabilities:
Accounts receivable		(73	)		277
Inventories		83			(145	)
Prepaid expenses and other current assets		1			(4	)
Accounts payable		127			190
Accrued liabilities		16			26
Net cash used in operating activities		(209	)		(38	)
Investing Activities
Purchases of equipment		—			(78	)
Net cash used in investing activities		—			(78	)
Financing Activities
Costs of stock purchase		(7	)		—
Purchases of common stock for treasury		—			(10	)
Proceeds from stock option exercises		24			—
Net cash provided by (used in) financing activities		17			(10	)
Decrease in cash		(192	)		(126	)
Cash – beginning of period		3,381			462
Cash – end of period	$	3,189		$	336

(Dollars in thousands)	March 31, 2017		December 31, 2016		March 31, 2021		December 31, 2020

U.S. and State Government	$	163	$	103	$	1	$	2
Commercial		791		778		722		909
Allowance for doubtful accounts		—		—
Other						57		64
Total	$	954	$	881	$	780	$	975

Stock options outstanding	351,500	~~1,080,613~~
Restricted stock units outstanding	15,000
Common stock available for future equity awards or issuance of options		~~67,161~~1,378,816
Number of common shares reserved		~~1,147,774~~1,745,316

(Dollars in thousands, except lease term and discount rate) (Dollars in thousands)	Three Months Ended March 31, 2021			Three Months Ended March 31, 2020

Weighted Average Remaining Lease Term (in years):
Operating leases		3.38			4.67

Weighted Average Discount Rate:
Operating leases		5.13	%		5.85	%

Supplemental Cash Flows Information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	93		$	56

Non-Cash Activity Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	-		$	-

(Dollars in thousands)	Three Months Ended March 31,						Three Months Ended March 31,
	2017			2016			2021			2020
Balance, January 1	$	14		$	16		$	22		$	16
Accruals for warranties issued		3			3			4			4
Accruals for pre-existing warranties								-			-
Settlements made (in cash or in kind)		(1	)		(2	)		(1	)		(1	)
Balance, end of period	$	16		$	17		$	25		$	19

(Dollars in thousands)		Test and Measurement Instrumentation			Cryptocurrency		Other			Condensed Consolidated Totals
Three months ended March 31, 2021
Product revenue	$	1,337		$	-	$	-		$	1,337
Cryptocurrency revenue		-			995		-			995
Research and product development expenses		386			-		-			386
Selling, general and administrative expenses		540			563		734			1,837
Segment profit / (loss) from operations before income taxes		(402	)		61		(325	)		(666	)
Segment profit / (loss)		(402	)		61		(325	)		(666	)
Total assets		2,504			3,091		3,786			9,381
Capital expenditures		5			296		-			301
Depreciation and amortization		17			76		-			93

(Dollars in thousands)	March 31, 2017			December 31, 2016		March 31, 2021		December 31, 2020

Land						$	52	$	-
Leasehold improvements	$	39	$		39		262		262
Computers and related software		1,068			1,068		1,847		1,603
Machinery and equipment		892			892		890		885
Office furniture and fixtures		25			25		39		38
		2,024			2,024		3,090		2,788
Less: Accumulated depreciation		1,884			1,864		2,034		1,941
	$	140	$		160	$	1,056	$	847