What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2025-04-15 compared with 2024-02-29 · 184 added, 301 removed, 136 unchanged (78% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with our consolidated financial statements and the related notes included in Part II, Item 8 of this Annual Report, and our audited consolidated financial statements.

This discussion and analysis may contain forward-looking statements based upon current beliefs, plans and expectations that involve risks, uncertainties, and assumptions, including, but not limited to, risks and uncertainties discussed under the heading ‘Cautionary Note on Forward-Looking Statements,’ and in Part I, Item 1A “Risk Factors” included in this Annual Report .

The following discussion and analysis should be read in conjunction with the consolidated financial statements and accompanying footnotes thereto included in Part II, “Item 8-Financial Results and Supplementary Data” of this Annual Report on Form 10-K.

In this section, unless otherwise indicated or the context otherwise requires, references in this section to “LanzaTech,” the “Company,” “we,” “us,” “our” and other similar terms refer to LanzaTech Global, Inc.

4 unchanged sentences

II prior to the Business Combination.

We have elected to omit discussion on the earliest of the three years covered by the consolidated financial statements presented.

Refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations of LanzaTech NZ, Inc.

for the year ended December 31, 2022,” included as Exhibit 99.6 to our Current Report on Form 8-K/A, filed with the SEC on March 28, 2023, for reference to discussion of the fiscal year ended December 31, 2021, the earliest of the three fiscal years presented.We have elected to omit discussion on the earliest of the three years covered by the consolidated financial statements presented.

Refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations of LanzaTech NZ, Inc.

This discussion contains forward-looking statements that involve risks and uncertainties about our business and operations.

Our actual results could differ materially from those discussed in the forward-looking statements.

Factors that could cause or contribute to these differences include without limitation those discussed in this Management’s Discussion and Analysis of Financial Condition and Results of Operations and those identified in Part I, “Item 1A-Risk Factors” of this Annual Report on Form 10-K.

We are a nature-based carbon refining company that develops technology to transform waste carbon into the chemical building blocks for consumer goods such as sustainable fuels, fabrics, and packaging that people use in their daily lives.

1 unchanged sentence

Today, we are focused on taking advantage of the many uses of ethanol while capitalizing on the growing preference among major companies for renewable products and environmentally-conscious manufacturing processes.

We have also been developing the capabilities to produce single cell protein as a primary product from our gas fermentation platform.

LanzaTech performs research and development (“R&D”) services related to novel technologies and development of biocatalysts for commercial applications, mainly to produce fuels and chemicals.

We primarily employ a licensing business model whereby our customers build, own and operate facilities that use our technology, and in return, we are paid a royalty fee based on the revenue generated from the use of our technology.

We have also developed the capabilities to produce single cell protein as a primary product from our gas fermentation platform.

LanzaTech employs a licensing business model whereby our customers build, own and operate facilities that use our technology, and in return, we are paid a royalty fee based on the revenue generated from the use of our technology.

We are augmenting our technology licensing business model to incorporate incremental ownership and operatorship in the biorefining value chain, enabling greater control over development, financing, and product access.

We began operations in 2005.

In 2018, through our joint venture with Shougang LanzaTech (also referred as “SGLT” herein), we established the world’s first commercial waste gas-to-ethanol plant in China, followed by five more plants between 2021 and 2023 - three in China, one in India, and one in Belgium with others currently in development in various countries around the world.

With additional partnerships, we established two more commercial plants, one in India, and one in Belgium, respectively, and we currently have other plants in various states of development in various countries around the world.

We also perform research and development (“R&D”) services related to novel technologies and development of biocatalysts for commercial applications, mainly to produce fuels and chemicals.

Recently, the Company and LanzaJet launched CirculAir™, a new joint offering and end-to-end solution utilizing LanzaTech’s gas fermentation technology in conjunction with LanzaJet’s Alcohol-to-Jet (“ATJ”) platform to produce sustainable aviation fuel and renewable diesel from a wide range of waste feedstocks.

We have not achieved operating profitability since our formation.

Our net losses after tax were $(134.1) million for the year ended December 31, 2023 and $(76.4) million for the year ended December 31, 2022.

As of December 31, 2023 we had an accumulated deficit of $(831.9) million compared to an accumulated deficit of $(456.2) million as of December 31, 2022.

Our net losses after tax were $137.7 million for the year ended December 31, 2024 and $134.1 million for the prior year.

As of December 31, 2024 we had accumulated deficit of $969.6 million compared to an accumulated deficit of $831.9 million as of December 31, 2023.

We anticipate that we will continue to incur losses until we sufficiently commercialize our technology.

Near-term, we expect engineering services and sales of equipment packages on several projects to drive higher revenues.

Recent Developments

As previously announced, LanzaTech is focused on shifting its core operations from research and development to globally deploying the Company’s proven technology.

We are streamlining our priorities to sharpen our business focus and improve our cost structure and evaluating other liquidity enhancing initiatives, including pursuing capital raising, partnership or asset-related opportunities, and other strategic options.

On April 3, 2025, our Board received a preliminary, nonbinding proposal from Carbon Direct Capital to acquire all of the outstanding shares of the Company’s common stock for $0.02 per share (the “Take-Private Proposal”).

Carbon Direct Capital is the holder of the Company’s outstanding $40.2 million Convertible Note, excluding payment-in-kind interest from the issue date, which upon conversion, would entitle it to receive shares of common stock representing approximately 14.6% of our common stock based on the total number of shares of common stock of the Company outstanding on April 10, 2025 (see “—Liquidity and Capital Resources—Sources

and Uses of Capital” herein).

The Strategic Committee of the Board (the “Strategic Committee”) is currently reviewing, evaluating and negotiating the Take-Private Proposal in consultation with the Company’s financial advisor and legal counsel.

There is no guarantee that the Take-Private Proposal will be accepted by the Strategic Committee or the Board, that definitive documentation relating to any such transaction will be executed, or that a transaction will be consummated in accordance with that documentation, if at all.

The Business Combination

6 unchanged sentences

In connection with the consummation of the Business Combination, the combined Company was renamed “LanzaTech Global, Inc.”

Accounting Impact of the Business Combination

The Business Combination was accounted for as a reverse recapitalization.

LanzaTech NZ, Inc.

was deemed the accounting predecessor and the Company is the successor SEC registrant.

Under this method of accounting, AMCI was treated as the acquired company for financial statement reporting purposes.

For accounting purposes, LanzaTech NZ, Inc.

was deemed to be the accounting acquirer in the transaction and, consequently, the transaction was treated as a recapitalization of LanzaTech NZ, Inc.

(i.e., a capital transaction involving the issuance of stock by AMCI for the stock of LanzaTech NZ, Inc.).

Accordingly, the consolidated balance sheets and results of operations of LanzaTech NZ, Inc.

became the historical financial statements of the Company, and AMCI’s assets, liabilities and results of operations were consolidated with LanzaTech NZ Inc.’s beginning on the acquisition date.

The net assets of AMCI were recognized at carrying value, with no goodwill or other intangible assets recorded.

Basis of Presentation

LanzaTech’s consolidated financial statements were prepared in accordance with US GAAP.

LanzaTech’s consolidated financial statements were prepared in accordance with GAAP.

See Note 2 - Summary of Significant Accounting Policies to our consolidated financial statements for a full description of our basis of presentation.

1 unchanged sentence

The key elements of LanzaTech’s performance for the years ended December 31, 2024 and December 31, 2023 are summarized in the tables below:

Year Ended December 31, Change

(In thousands, except for percentages) 2023 2022 2023 vs.

Years Ended December 31,

(In thousands, except for percentages) 2024 2023 Variance

GAAP Measures:

3 unchanged sentences

One-Time Revenue (1)

37,868 57,754 (19,886) (34) %

Recurring Revenue (2)

8 unchanged sentences

__________________

(1) One-time revenue includes all other revenue other than licensing and sales of microbes and media

(2) Includes revenue from licensing and sales of microbes and media.

(3) Consists of cost of revenues from contracts with customers and grants (exclusive of depreciation), cost of revenue from collaboration agreements (exclusive of depreciation) and cost of revenue from related party transactions (exclusive of depreciation).

(3) Adjusted EBITDA, a non-GAAP financial measure, is calculated as net loss, excluding the impact of depreciation, interest income, net, stock-based compensation, change in fair value of warrant liabilities, change in fair value of SAFE liabilities, change in fair value of the FPA Put Option liability and Fixed Maturity Consideration, transaction costs on issuance of Forward Purchase Agreement, (loss) gain from equity method investees and other one-time costs related to the Business Combination and securities registration on Form S-4 and our registration statement on Form S-1.

Adjusted EBITDA is a supplemental measure that is not a substitute for, or superior to, measures of financial performance prepared in accordance with US GAAP.

Adjusted EBITDA does not represent, and should not be considered, an alternative to net income (loss), as determined in accordance with US GAAP.

See “ Non-GAAP Financial Measures ” for additional information and reconciliation of Adjusted EBITDA to net loss, its most directly comparable US GAAP measure.

Key Non-Financial Metrics:

(in thousands of tonnes per annum)

Capacity as of December 31, 2022 150

Capacity as of December 31, 2023 244

Capacity based on LanzaTech’s technology includes capacity by customers and our cost method investee, is one of the key drivers for the Company's licensing revenues given that they are usually contracted on a percentage-of-revenue, a dollars-per-tonne, or fixed-consideration basis.

Components of Operating Results

While we have offerings in multiple market segments and operate in multiple countries, we operate and manage our business as one reportable operating segment.

Nearly all of our service offerings are delivered and supported on a global basis.

Additionally, most of our service offerings are deployed in a similar way, and we evaluate our financial information and resources and assess the performance of these resources on a consolidated basis.

We earn revenue through engineering and other services contracts, U.S.

government contracts, joint development agreements, and licensing agreements, which, together, represent a single operating segment.

Revenues can be viewed as a combination of the following:

• Biorefining which includes feasibility studies and engineering services related to basic design of commercial plants utilizing our technologies, and licensing of intellectual property and software when customers deploy our biorefining technology;

• Joint development and research services related to novel technologies and the development of biocatalysts;

• Sale of CarbonSmart products to customers.

Revenue is measured based on the consideration specified in customer contracts and excludes amounts collected on behalf of third parties.

We provide feasibility studies and basic design and engineering services used for detailed design, procurement, and construction of commercial plants that utilize our technologies, along with the sale of equipment and microbes.

The services provided are recognized as a performance obligation satisfied over time.

Revenue is recognized using the cost-to-cost input method for certain engineering services or the percentage of completion method in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers (“ASC 606”).

Revenue for the sale of microbes and media is recognized at a point in time, depending on when control transfers to the customer.

We license intellectual property to generate recurring revenue in the case of running royalties, or one-time revenue, in the case of fixed consideration royalties, when our customers deploy our technology in their biorefining plants.

When licenses are considered to be distinct performance obligations, the recognition of revenue is dependent on the terms of the contract, which may include fixed consideration or royalties based on sales or usage, in which case, the revenue is recognized when the subsequent sale or usage occurs or when the performance obligation to which some or all of the sales or usage-based royalty is allocated or has been satisfied, whichever is later.

Joint Development and Contract Research

We perform R&D services related to novel technologies and the development of biocatalysts for commercial applications, mainly to produce fuels and chemicals.

We engage in two main types of R&D services – joint development agreements, and other contract research, including projects with the U.S.

Department of Energy.

Such services are recognized as a performance obligation satisfied over time.

Revenue is recognized based on milestone completion, when payments are contingent upon the achievement of such milestones, or based on stage of contract or phase completion method when enforceable rights to payment exist.

When no milestones or stages are clearly defined, management has determined that the cost incurred, input method, is an appropriate measure of progress toward complete satisfaction of the performance obligations under ASC 606 and estimates its variable consideration under the expected value method.

Revenue is not recognized in advance of customer acceptance of a milestone, when such acceptance is contractually required.

Payments for R&D services with no contractual payments are not due from customers until a technical report is submitted;

therefore, a contract asset is recognized at milestone completion but prior to the submission of a technical report.

The contract asset represents the Company’s right to consideration for the services performed at milestone completion.

Occasionally, customers provide payments in advance of us providing services which creates a contract liability for the Company.

The contract liability represents our obligation to provide services to a customer.

We sell CarbonSmart products and intermediaries directly to customers purchased from our licensed plants using the Company's proprietary technologies.

Revenue is recognized at a point in time when control transfers to the customer, which varies depending on the shipping terms.

We generally acts as the principal in such transactions and accordingly, recognize revenue and cost of revenues on a gross basis.

Cost of Revenues

Our R&D costs associated with external projects, engineering, and other direct costs of services are related to revenue agreements with customers, related parties, and collaborative partners, and represent costs of revenue.

Costs include both internal and third-party fixed and variable costs and include materials, supplies, labor, and fringe benefits.

Research and Development Expenses

R&D expenses consist of personnel costs, external services, materials and supplies associated with internal R&D projects as well as various laboratory activities.

Indirect R&D costs include depreciation and other indirect overhead expenses.

We expect our R&D activities to increase in the future as revenue grows but decrease as a percentage of our overall cost structure.

Selling, General and Administrative Expenses

Selling, general and administrative expenses ("SG&A") consist primarily of personnel costs, costs of general corporate development activities, travel-related expenses, and other indirect overhead costs.

Our general and administrative expenses consist primarily of personnel costs for our executive, finance, corporate and other administrative functions, intellectual property and patent costs, facilities and other allocated expenses, other expenses for outside professional services, including legal, human resources, audit and accounting services, and insurance costs.

Our general and administrative expenses have increased in 2023 as a result of

becoming a public company, including additional costs relating to compliance with the rules and regulations of the SEC and stock exchange rules, legal and audit services, additional insurance, investor relations activities, and other administrative and professional services.

We expect these costs to stabilize, but remain at higher levels than they were prior to the Business Combination.

We also expect our intellectual property expenses to increase as we expand and increase protection of our intellectual property portfolio.

Other Expense, Net

Other expense, net relates to miscellaneous other income and expense and foreign currency gains and losses.

These items include the mark-to-market adjustments on all liability classified warrants, the FPA Put Option liability, the Fixed Maturity Consideration, and SAFE liabilities.

Interest income, net consists of income earned from our cash, cash equivalents and debt security investments.

Our interest income has increased following the completion of the Business Combination as we invested the net proceeds in a variety of capital preservation financial instruments, including short-term, investment-grade, interest-bearing obligations of the U.S.

government and its agencies.

Loss (Gain) from Equity Investees, Net

We hold interests in LanzaJet located in the United States, and the Shougang Joint Venture (SGLT) located in China which we have determined to be variable interest entities (“ VIEs ”) for which it has been determined we are not the primary beneficiary.

Our variable interests primarily relate to entities in which we have a non-controlling equity interest.

Although these financial arrangements resulted in holding variable interests in these entities, they do not empower us to direct the activities of the VIEs that most significantly impact the VIEs’ economic performance, therefore LanzaTech has determined it is not the primary beneficiary and does not currently consolidate these VIEs.

Through our holdings in LanzaJet, our representation on the board of directors and participation in the policy-making process, as well as the material intra-entity transactions, we have determined that we can exercise significant influence over the activities of LanzaJet.

Our interest in LanzaJet is accounted for under the equity method of accounting, with income (loss) from equity method investees, net recognized in our consolidated statements of operations and comprehensive loss and equity method investments recognized on our consolidated balance sheets.

As of September 30, 2022, we no longer have significant influence over the activities of SGLT and as a result, our investment is accounted for at cost with adjustments for observable changes in price and impairment (if any) recognized in our consolidated statements of operations and comprehensive loss.

Prior to September 30, 2022, we accounted for SGLT under the equity method of accounting, with income (loss) from equity method investees, net, including gain on dilution recognized in our consolidated statements of operations and comprehensive loss and equity method investments recognized on our consolidated balance sheet.

The Company currently has a license agreement with SGLT and a letter agreement with SGLT and Sinopec Capital Co., Ltd related to the use of our intellectual property and potential collaborations.

These agreements do not provide LanzaTech with the power to direct the activities that are most significant to the economic performance of these entities.

Current and deferred taxes are calculated based on tax rates enacted or substantively enacted at the reporting date and are recognized in profit or loss except when the tax relates to items charged or credited to other comprehensive income, in which case the tax is also recognized in other comprehensive income.

Deferred tax is recognized in respect of temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements.

Deferred tax assets including those relating to temporary differences, net operating loss carryforwards and tax credit carryforwards, are only recognized to the extent it is more likely than not that future taxable income will be available to utilize the temporary differences and carryforwards.

Our net operating loss carryforwards are subject to shareholder continuity rules, and may be impacted by future fundraising activities.

We maintain a valuation allowance against the full value of our net deferred tax assets because management believes the recoverability of the tax assets is not more likely than not.

Results of Operations — Year Ended December 31, 2023 Compared to Year Ended December 31, 2022

(4) Adjusted EBITDA, a non-GAAP financial measure, is calculated as net loss, excluding the impact of depreciation, interest income, net, stock-based compensation, change in fair value of warrant liabilities, change in fair value of SAFE liabilities, change in fair value of the FPA Put Option liability and Fixed Maturity Consideration, change in fair value of the Convertible Note and associated transaction costs, transaction costs on issuance of FPA, loss from equity method investees, net and other one-time costs related to the Business Combination and securities registration on Form S-4, our registration statement on Form S-1, and non-recurring regulatory matters.

Adjusted EBITDA is a supplemental measure that is not a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP.

Adjusted EBITDA does not represent, and should not be considered, an alternative to net income (loss), as determined in accordance with GAAP.

See “ Non-GAAP Financial Measures ” for additional information and reconciliation of Adjusted EBITDA to net loss, its most directly comparable GAAP measure.

Results of Operations

The results of operations presented below should be reviewed in conjunction with our consolidated financial statements and notes.

The following table sets forth our consolidated results of operations for the periods indicated:

Year Ended December 31,

2023 2022 2023 vs.

Years Ended December 31,

2024 2023 Variance

(In thousands, except for per share amounts)

8 unchanged sentences

Loss from operations (108,933) (106,380) (2,553) 2 %

Interest income, net 4,572 8 4,564 N/M

Other income (expense):

Interest income, net 3,162 4,572 (1,410) (31) %

Other expense, net (17,726) (29,388) 11,662 (40) %

(29,388) (2,757) (26,631) N/M

Total other expense, net

(24,816) (2,749) (22,067) N/M

(14,564) (24,816) 10,252 (41) %

Loss before income taxes (123,497) (131,196) 7,699 (6) %

Income tax benefit — — — N/M

(Loss) gain from equity method investees, net (2,902) 1,992 (4,894) (246) %

Loss from equity method investees, net

(14,234) $ (2,902) (11,332) 390 %

Net loss $ (137,731) $ (134,098) $ (3,633) 3 %

Other comprehensive loss:

Changes in credit risk of fair value instruments (1,096) — (1,096) nm

Foreign currency translation adjustments 124 (376) 500 (133) %

2 unchanged sentences

Weighted-average number of common shares outstanding - basic and diluted 197,579,945 176,023,219

Total revenue increased $25.3 million, or 68%, in the year ended December 31, 2023 compared to the year ended December 31, 2022.

The increase was primarily driven by engineering and other services with an increase of $16.6 million in revenue from contracts with existing customers and governmental entities whose projects have moved to the next phase of development and an increase of $3.6 million from contracts with new customers.

Add itionally, we had a $2.4 million increase in revenue from joint development agreements, a $1.3 million increase in revenue from licensing mainly driven by paid-up sublicensing fees, a $1.3 million increase in CarbonSmart revenue and a $0.1 million increase in other contract research.

Total revenue decreased $13.0 million, or 21%, in the year ended December 31, 2024, compared to the prior year.

Engineering and other services revenue decreased by $19.4 million, mainly due to a reduction of $28.8 million in revenue from projects with existing customers, which includes a decrease of $19.6 million from three large projects.

This decrease in engineering was offset by an increase from existing projects of $3.2 million and from projects with new customers of $6.2 million in 2024.

The decline in revenue from engineering was offset by an increase in revenue from licensing of $7.8 million and CarbonSmart sales of $2.6 million.

Revenues from Joint Development Agreements (“JDA”) and other contract research decreased by $2.2 million and $1.9 million, respectively.

Cost of Revenues

Cost of revenue increased $16.7 million, or 59%, in the year ended December 31, 2023 compared to the year ended December 31, 2022.

The increase is primarily driven by the higher revenue performance from engineering and other services, mostly from projects that moved to the next phase of development, and inflation in costs and wages.

Cost of revenue decreased $19.0 million, or 42%, in the year ended December 31, 2024, compared to the prior year, primarily due to the decrease in sales from engineering and other services, with a corresponding decrease in cost of sales of $19.9 million.

Similarly, the decrease in sales of JDAs and other contract research drove a decrease of $1.2 million and $0.6 million in cost of sales, respectively.

These decreases in cost of sales were offset by an increase related to CarbonSmart sales of $2.7 million.

Research and Development

R&D expense increased $15.0 million, or 28%, in the year ended December 31, 2023 compared to the year ended December 31, 2022.

This was primarily due to an increase in stock compensation expense consisting of $4.1 million in incremental expense associated with stock compensation granted in 2023 and $1.2 million resulting from the vesting of RSAs in connection with the Business Combination, an increase of $4.1 million in R&D personnel and contractors expenses to accelerate growth, an increase of $2.8 million in consumables expenses, an increase of $1.2 million in external R&D service provider costs, and an increase of $1.6 million in facilities expenses.

R&D expense increased $8.9 million, or 13%, in the year ended December 31, 2024, compared to the prior year, primarily due to an increase of $10.5 million in external R&D services related to project development costs that are not currently eligible for capitalization nor tied to revenue agreements.

Additionally, there was an increase of $0.2 million in consumables and facilities expenses, compared to the same period last year.

These increases were offset by a decrease of $1.8 million in personnel and contractors expenses related to R&D projects.

Selling, general and administrative expense

SG&A expense increased $23.6 million, or 88%, in the year ended December 31, 2023 compared to the year ended December 31, 2022.

This was primarily due to an increase of $13.0 million of external services and contractors mostly driven by one-time professional services fees related to the Business Combination, as well as $3.9 million resulting from the vesting of RSAs and one-time employee transition arrangements related to the Business Combination.

The increase is also attributed to $5.3 million in incremental expense associated with stock compensation granted in 2023, an increase of $0.7 million in bad debt expense related to an allowance for a customer receivable, and an increase of $0.7 million in facilities and consumables expenses.

SG&A expense decreased $0.5 million, or 1%, in the year ended December 31, 2024, compared to the prior year .

This was primarily due to a decrease of $0.2 million in professional fees associated with the Business Combination, a decrease of $0.2 million in personnel expenses and contractors, and a decrease of $0.5 million in bad debt expense recorded in the prior year and recovered in the current year.

These decreases were offset by an increase of $0.4 million for facilities and consumable expenses compared to the prior year .

Interest income, net

Interest income, net increased $4.6 million in the year ended December 31, 2023 compared to the year ended December 31, 2022.

The increase is primarily attributable to interest earned on higher cash balances held in savings and money market accounts subsequent to the Business Combination.

The increase is additionally attributable to the amortization of the discount and accrued interest on the held-to-maturity securities.

Interest income, net decreased $1.4 million in the year ended December 31, 2024 compared to the prior year .

This was primarily attributable to interest earned on lower cash balances held in savings and money market accounts.

Other expense, net

Other expense, net increased $26.6 million, in the year ended December 31, 2023 compared to the same period in 2022.

The increase is primarily due to an overall net loss on changes in the fair value of our financial instruments.

Other expense, net decreased $11.7 million, in the year ended December 31, 2024 compared to the prior year , due to a lower net loss from the change in fair value of our financial instruments in the year ended December 31, 2024, compared to the prior year .

Liquidity and Capital Resources

2 unchanged sentences

The following table shows the balances of our cash, cash equivalents and restricted cash as of December 31, 2024 and December 31, 2023:

(In thousands, except for percentages) December 31, 2023 December 31, 2022 2023 vs.

Years Ended December 31,

(In thousands, except for percentages) 2024 2023 Variance

Total cash, cash equivalents, and restricted cash $ 45,737 $ 76,284 $ (30,547) (40) %

As of December 31, 2023, compared to December 31, 2022, LanzaTech’s cash, cash equivalents, and restricted cash decreased by $7.4 million, or 9%, primarily due to the net loss adjusted for non-cash charges (see cash flow section below), the partial prepayment for the FPA, purchases of debt security investments, purchases of property, plant and equipment and the repurchase of equity instruments of the Company.

The decrease is offset by cash received from the closing of the Business Combination and PIPE financing.

As of December 31, 2024, compared to December 31, 2023, LanzaTech’s cash, cash equivalents, and restricted cash decreased by $30.5 million, or 40%, primarily due to funding the net loss adjusted for non-cash charges (see cash flow section below) and purchases of property, plant and equipment.

The decrease was offset by the proceeds from the maturity of certain debt securities and the issuance of the Convertible Note.

Debt Security Investments

2 unchanged sentences

These securities all mature within one year and will provide additional liquidity upon maturity.

As of December 31, 2023, held-to-maturity security investments

totaled $45.2 million.

The Company did not have any held-to-maturity security investments as of December 31, 2022.

As of December 31, 2024, held-to-maturity security investments totaled $12.4 million, compared to $45.2 million as of December 31, 2023.

Sources and Uses of Capital

1 unchanged sentence

Our ability to successfully develop products and expand our business depends on many factors, including our ability to meet working capital needs, the availability of equity or debt financing and, over time, our ability to generate cash flows from operations.

We manage our capital to ensure that LanzaTech can continue as a going concern while maximizing the return to stakeholders through the optimization of debt and equity balances.

Following completion of the Business Combination, the Company may change its capital risk strategy related to use of capital proceeds from the Business Combination to increase its product offerings or for business growth purposes.

As of December 31, 2023, our capital structure consists of equity (comprising issued capital, and accumulated deficit) and the Brookfield SAFE.

As of December 31, 2024, our capital structure consisted of equity (comprising issued capital, and accumulated deficit), the Brookfield SAFE and the Convertible Note.

We are not subject to any externally imposed capital requirements.

Prior to the Business Combination, LanzaTech had six outstanding series of redeemable preferred stock.

LanzaTech preferred shares were convertible at the holder’s option into shares of common stock, on a share-for-share basis, using a conversion rate determined by dividing the original issue price by the conversion price.

Each LanzaTech preferred share was automatically converted into a common share of LanzaTech on the Closing Date.

On October 2, 2022, LanzaTech entered into the Brookfield SAFE with Brookfield and received a cash payment of $50.0 million as the Initial Purchase Amount.

In exchange, the Company granted to Brookfield the right to certain shares of the Company's common stock.

Following the closing of the Business Combination, Brookfield may, at any time at its option, convert all or a portion of the Initial Purchase Amount less any amount that has already been converted or repaid into shares of common stock.

LanzaTech does not have any outstanding debt, other than the Brookfield SAFE and the FPA Put Option Liability and Fixed Maturity Consideration, which are all classified as liabilities for accounting purposes, on its consolidated balance sheets as of December 31, 2023.

On November 9, 2022, LanzaTech committed to purchase $5.5 million of Subordinated Secured Notes in a funding for LanzaJet's subsidiary Freedom Pines Fuels LLC, which occurred on May 1, 2023.

The Subordinated Secured Notes are secured by a security interest over the intellectual property owned or in-licensed by LanzaJet.

LanzaJet also provides a guarantee of any costs and expenses required to complete the initial facility and achieve commercial operation.

LanzaTech, AMCI and ACM executed the Forward Purchase Agreement on February 3, 2023.

Pursuant to the Forward Purchase Agreement, ACM obtained 5,916,514 shares of common stock on the open market for $10.16 per share (“Redemption Price”), and such purchase price of $60.1 million was funded by the use of Trust Account proceeds as a partial prepayment (“Prepayment Amount”) for the Forward Purchase Agreement redemption at the end of three years (“Maturity Date”).

ACM has the right at the end of three years to return the shares and keep the Prepayment Amount plus the fees described below, or may, at ACM’s sole discretion, partially or fully terminate this transaction over the course of the three-year term by returning cash in an amount equal to the number of shares terminated (“Terminated Shares”) multiplied by the Redemption Price, which may be reduced in the case of certain dilutive events (“Reset Price”).

At the end of the three-year term, LanzaTech is obligated to pay ACM an amount equal to the product of (1) 7,500,000 less (b) the number of Terminated Shares multiplied by (2) $2.00 (the “Maturity Consideration”).

In addition to the Prepayment Amount and the Maturity Consideration, on the Maturity Date, New LanzaTech will pay to ACM an amount equal to the product of (x) 500,000 and (y) the Redemption Price, totaling $5.1 million (the “Share Consideration”).

However, at the time, the Company may not have sufficient funds or be able to obtain financing from third parties to pay such amounts.

The Company also may not have sufficient shares authorized to pay the Maturity Consideration in shares.

Breach by the Company of any of these obligations could constitute an event of default under the Forward Purchase Agreement, which could subject the Company to financial exposure thereunder (including arising from potential indemnification claims by the Seller).

In addition, future debt or other contractual agreements may contain cross-default or cross-acceleration provisions

that could be triggered if we defaulted on our obligations to the Purchasers.

Any or all of these consequences could have material adverse impact on us.

On February 8, 2023, LanzaTech completed the Business Combination and related transactions.

The completion of the Business Combination and related transactions resulted in $153.3 million of cash proceeds to LanzaTech.

The amount released to LanzaTech is net of the transaction expenses related to the Business Combination and the amount paid to the Purchasers in relation to the Forward Purchase Agreement.

Pursuant to the Forward Purchase Agreement, the Purchasers purchased 5,916,514 Class A common shares on the open market for approximately $10.16 per share, and such purchase price of $60.1 million was deposited with the Purchasers as a partial prepayment for the Forward Purchase Agreement redemption at the end of three years.

As of December 31, 2024, LanzaTech’s outstanding debt comprised the Convertible Note, the Brookfield SAFE, the FPA Put Option liability and the Fixed Maturity Consideration, which are all classified as liabilities for accounting purposes, on its consolidated balance sheets as of December 31, 2024.

On February 14, 2025, the Company and Brookfield entered into a loan agreement and terminated the Brookfield SAFE.

Refer to Note 19 - Subsequent Events in our consolidated financial statements for further information.

On February 3, 2023, LanzaTech, AMCI and ACM ARRT H LLC (“ACM”) executed a Forward Purchase Agreement (the “FPA”).

On the same date, ACM partially assigned its rights under the FPA to Vellar Opportunity Fund SPV LLC - Series 10 (“Vellar”).

ACM and Vellar are together referred to as the “Purchasers”.

Pursuant to the FPA, the Purchasers obtained 5,916,514 shares of common stock (the “Recycled Shares”) on the open market for approximately $10.16 per share (the “Redemption Price”), and the purchase price of approximately $60.1 million was funded by the use of AMCI trust account proceeds as a partial prepayment (the “Prepayment Amount”) for the FPA redemption three years from the date of the Business Combination (the “FPA Maturity Date”).

The FPA Maturity Date may be accelerated, at the Purchasers’ discretion, if the Company’s volume-weighted average share price is below $3.00 per share for any 50 trading days during a 60 day consecutive trading-day period (the “VWAP Trigger Event”) or if the Company is delisted.

On any date following the Business Combination, the Purchasers also had the option to early terminate the arrangement in whole or in part by providing optional early termination notice to the Company (the “Optional Early Termination”).

For those shares early terminated (the “Terminated Shares”), the Purchasers would owe the Company an amount equal to the Terminated Shares times the Redemption Price, which could be reduced in the case of certain dilutive events (“Reset Price”).

At the FPA Maturity Date, the Company is obligated to pay the Purchasers an amount equal to the product of (1) 7,500,000 less the number of Terminated Shares multiplied by (2) $2.00 (the “Maturity Consideration”), which under the FPA is payable at the Company’s option in cash or shares of common stock valued at the average daily VWAP Price (as defined in the FPA) over the 30 scheduled trading days ending on the FPA Maturity Date.

In addition to the Maturity Consideration, on the FPA Maturity Date, the Company is obligated to pay the Purchasers an amount equal to the product of (x) 500,000 and (y) the Redemption Price, totaling $5.1 million (the “Share Consideration”), which under the FPA is payable in cash.

The Company’s volume-weighted average share price was below $3.00 per share for 50 trading days during the 60 day consecutive trading period ended on July 1, 2024.

On July 22, 2024, Vellar notified the Company of the satisfaction of a VWAP Trigger Event, purporting to accelerate the FPA Maturity Date of its portion of the Recycled Shares (i.e., 2,990,000 shares) to July 22, 2024.

Vellar asserts that it is entitled to:

(i) Maturity Consideration of $7.5 million (payable at the Company’s option in cash or shares of common stock valued at the average daily VWAP Price (as defined in the FPA) over 30 scheduled trading days ending on the accelerated FPA Maturity Date of July 22, 2024 of $1.91 per share) and (ii) Share Consideration of approximately $2.5 million, payable in cash, each due and payable on July 24, 2024.

On July 25, 2024, the Company received a notice from Vellar pursuant to the FPA, stating that the Company is in default of its payment obligations.

On July 30, 2024, the Company received a notice of an event of default under the FPA from Vellar that (i) designated such date as the early termination date

of the FPA and (ii) purports to result in an early termination cash payment of approximately $4.2 million becoming due to Vellar (equating to the sum of the Maturity Consideration and the Share Consideration minus the VWAP Price (as defined in the FPA) (as of July 29, 2024) of Vellar’s portion of the Recycled Shares).

On July 24, 2024, LanzaTech filed suit against Vellar, primarily in connection with Vellar’s sale of Recycled Shares, which LanzaTech alleges is in breach of the FPA’s requirement that Recycled Shares be held in a bankruptcy remote special purpose vehicle for the benefit of the Company unless the sale is notified to the Company as part of an early termination, which Vellar did not do.

The outcome of the lawsuit is uncertain, and in the event that the Company does not succeed, the Company may not have sufficient funds or be able to obtain financing from third parties to pay amounts related to the lawsuit.

See Note 17 - Commitments and Contingencies in our consolidated financial statements for further information.

On October 4, 2024, ACM delivered to the Company notice of satisfaction of the VWAP Trigger Event which accelerated the FPA Maturity Date with respect to ACM’s portion of the FPA.

On October 15, 2024 and October 21, 2024, the Company paid in cash to ACM $2.5 million in Share Consideration and $7.5 million in Maturity Consideration, respectively, and ACM subsequently returned its Recycled Shares to the Company.

As a result, the Company’s and ACM’s obligations under the FPA have been fully satisfied and settled as of December 31, 2024.

On May 9, 2024, the Company entered into an At Market Issuance Sales Agreement (the “Sales Agreement”) and a Terms Agreement (the “Terms Agreement” and, together with the Sales Agreement, the “ATM Agreements”) with B.

Riley Securities, Inc.

Riley Securities”), pursuant to which the Company may, from time to time and subject to certain conditions such as a floor price, offer and sell through or to B.

Riley Securities, as sales agent or principal, shares of the Company’s common stock, having an aggregate offering price of up to $100 million.

The shares will be offered through or to B.

Riley Securities, acting as agent in connection with agency transactions or as principal in connection with any principal transactions.

Pursuant to the Terms Agreement, the Company will have the right, but not the obligation, from time to time at its sole discretion, for as long as the Sales Agreement remains effective, to direct B.

Riley Securities on any trading day to act on a principal basis and purchase up to the maximum of the lesser of a) 50% of the prior daily trading volume, or b) approximately $0.2 million per day as long as the closing price on the day prior exceeds $1, and approximately up to $0.9 million per week, and up to $40 million per twelve-month period, subject to any applicable limitations pursuant to the rules and regulations of Nasdaq (the aggregate amount so purchased by B.

Riley Securities under the Terms Agreement, the “Commitment”), which Commitment will be included within the aggregate offering price of up to $100 million of common stock sold pursuant to the ATM Agreements;

provided, however, that only one principal sale may be requested per day unless otherwise agreed to by B.

Riley Securities.

As of December 31, 2024, the full capacity of our current ATM equity offering program remained available for issuance.

On August 5, 2024, the Company entered into a Convertible Note Purchase Agreement (the “Convertible Note Purchase Agreement”) with Carbon Direct Capital pursuant to which the Company agreed to sell and issue to Carbon Direct Capital and other purchasers in a private placement transaction (the “Private Placement”) in one or more closings up to an aggregate principal amount of $150 million of convertible notes.

On August 6, 2024, we issued and sold $40.2 million of convertible notes to Carbon Direct Capital pursuant to the Convertible Note Purchase Agreement (the “Convertible Note”).

The gross proceeds from the initial closing was approximately $40 million, before deducting estimated offering expenses.

The Convertible Note bears interest at a fixed rate of 8.00% per annum and will mature on August 6, 2029 (the “Convertible Note Maturity Date”), unless earlier redeemed or converted in accordance with its terms.

The Convertible Note is subject to mandatory conversion for shares of the Company’s common stock upon the completion by the Company of an equity financing prior to the Convertible Note Maturity Date that results in the Company receiving minimum gross proceeds in an amount that is equal to the greater of (i) $40 million and (ii) 50% of the total principal amount under the outstanding Convertible Note immediately following the final closing under the Convertible Note Purchase Agreement (a “Qualified Equity Financing”) at a conversion price equal to the lower of (i) the lowest per-share selling price per share in the Qualified Equity Financing, less a 10% discount and (ii) the Valuation Cap (as defined below).

The Convertible Note is also convertible at the option of the holder upon the completion by the Company of an equity financing prior to the Convertible Note Maturity Date that does not meet

the definition of a Qualified Equity Financing (a “Non-Qualified Equity Financing”) at a conversion price equal to the lower of (i) the lowest per-share selling price in the Non-Qualified Equity Financing and (ii) the Valuation Cap.

The Convertible Note also convertible at the option of the holders any time prior to the Convertible Note Maturity Date at a conversion price equal to the Valuation Cap of $1.25 per share.

The Valuation Cap is subject to adjustment based on the Company’s holdings in LanzaJet, and t he conversion price in all cases is subject to adjustment for stock splits, reclassifications, redesignations, subdivisions, recapitalizations, and dividends.

As of December 31, 2024, no Qualified Equity Financing nor Non-Qualifying Financing events have occurred.

In the normal course of our business, we also enter into purchase commitments or other transactions in which we make representations and warranties that relate to the performance of our goods and services.

We do not expect material losses related to these transactions.

We believe our existing cash and cash equivalents will be sufficient to fund our operations for at least the next 12 months from the date of this Annual Report.

However, our liquidity assumptions may prove to be incorrect, and we could utilize our available financial resources sooner than we currently expect.

Our future capital requirements and the adequacy of available funds will depend on many factors, including those set forth under “Risk Factors”.

If we determine that we require additional financing to meet our operating requirements, we may be unable to secure such financing on acceptable terms, or at all.

If we raise additional funds by issuing equity and/or convertible debt securities, dilution to our existing stockholders will result.

If we raise additional financing and incur indebtedness, we would be subject to increased fixed payment obligations and could also be subject to certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business.

If we are unable to obtain additional funds, we will have to reduce our operating costs, which will cause a delay or reduction in our technology development and commercialization programs.

For the years ended December 31, 2023 and 2022

Going Concern

We have recurring net losses and anticipate continuing to incur losses.

We had cash and cash equivalents of $43.5 million, short-term held-to-maturity debt securities of $12.4 million and an accumulated deficit of $(969.6) million as of December 31, 2024, along with cash outflows from operations of $(89.1) million and net loss of $(137.7) million for the year ended December 31, 2024.

We have historically funded our operations through the Business Combination, issuances of equity securities, debt financing, as well as from revenue generating activities with commercial and governmental entities.

In light of the our projected capital expenditures and operating requirements under our current business plan, we are projecting that our existing cash and short-term held-to-maturity debt securities will not be sufficient to fund our operations through the next twelve months from the date of issuance of the consolidated financial statements for the year ended December 31, 2024 included in this Annual Report.

These conditions and events raise substantial doubt about the Company’s ability to continue as a going concern.

We are focusing on streamlining our business priorities, taking actions to reduce our cost structure and evaluating other liquidity enhancing initiatives, including pursuing capital raising, partnership or asset-related opportunities, and other strategic options.

In accordance with Accounting Standards Update ("ASU") No.

2014-15, “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40),” management has evaluated in aggregate the conditions and events that raise substantial doubt regarding the Company’s ability to continue as a going concern through the next twelve months from the date of issuance of the consolidated financial statements for the year ended December 31, 2024 included in this Annual Report and has determined that the Company’s ability to continue as a going concern is dependent on its ability to execute its business plan, raise significant amounts of additional capital and/or implement other strategic options.

On April 3, 2025, the Board received a preliminary, nonbinding proposal from Carbon Direct to acquire all of the outstanding shares of our common stock for $0.02 per share (the “Take-Private Proposal”).

The Strategic Committee is currently reviewing, evaluating and negotiating the Take-Private Proposal in consultation with our financial advisor and legal counsel.

We are actively pursuing the above actions.

However, because certain of the actions described above are subject to market and other conditions not within the Company’s control, management has concluded that these plans do not alleviate substantial doubt about our ability to continue as a going concern.

The consolidated financial statements for the year ended December 31, 2024 included in this Annual Report do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty

The following table provides a summary of our cash flows for the years ended December 31, 2024 and December 31, 2023:

Year Ended December 31, Change

(In thousands, except for percentages) 2023 2022 2023 vs.

Net cash provided by (used in):

Operating activities $ (97,296) $ (84,703) $ (12,593) 15 %

Investing activities (57,911) (10,686) (47,225) 442 %

Financing activities 148,185 50,545 97,640 N/M

Effects of currency translation (404) (178) (226) (127) %

Years Ended December 31,

(in thousands)

Net cash used in operating activities $ (89,060) $ (97,296)

Net cash provided by/(used in) investing activities 28,352 (57,911)

Net cash provided by financing activities 30,213 148,185

Effects of currency translation on cash, cash equivalents and restricted cash

Net decrease in cash, cash equivalents and restricted cash

1 unchanged sentence

Cash Flows Used in Operating Activities

For th e year ended December 31, 2023, net cash used in operating activities was $(97.3) million.

This was primarily driven by a net loss of $(134.1) million, adjusted for the loss on change in fair value of t he FPA Put Option liability and F ixed Maturity Consideration of $44.3 million, share-based compensation expense of $15.2 million, depreciation of property, plant and equipment of $5.5 million, non-cash lease expense of $1.5 million, the non-cash loss from equity method investees, net of $2.9 million, provision for losses on trade and other receivables of $0.7 million, and non-cash foreign currency exchange gain of $0.2 million.

The additional impact to net cash usage is

related to the adjustments for net cash changes in operating assets and liabilities of $(15.9) million, the gain on change of fair value of SAFE and warrant liabilities of $(14.5) million, the non-cash recognition of licensing revenue of $(1.8) million, and amortization of the discount on the debt security investment of $(1.3) million.

Fo r the year ended December 31, 2022, net cash used in operating activities was $(84.7) million.

This was primarily driven by a net loss of $(76.4) million, adjusted for share-based compensation expense of $2.5 million, depreciation of property, plant and equipment of $4.7 million, the loss from equity method investees, net of $(2.0) million, non-cash lease expense of $1.8 million and non-cash foreign currency exchange loss of $0.7 million.

The additional net cash usage is related to the adjustments for net cash changes in operating assets and liabilities of $(15.8) million, non-cash recognition of licensing revenue of $(2.2) million, and the gain on change in fair value of SAFE and warrant liabilities of $1.9 million.

Cash Flows Used in Investing Activities

For the year ended December 31, 2023, net cash used in investing activities was $(57.9) million, primarily driven by the investment in debt securities of $(93.9) million, the purchase of property, plant and equipment of $(8.6) million, the funding of the loan commitment to LanzaJet of $(5.2) million, and the purchase of additional interests in our equity method investment in the form of warrants which were accounted as in-substance common stock of $(0.3) million.

These outflows are partially offset by $50 million of maturities from the investment in debt securities

For th e year ended December 31, 2022, net cash used in investing activities was $(10.7) million, driven by the purchase of property, plant and equipment.

Cash flows used in operating activities decreased $8.2 million, or 8%, in the year ended December 31, 2024 compared to the year ended December 31, 2023.

The decrease is primarily attributable to the lower net loss, net of non-cash items in the year ended December 31, 2024 compared to the prior year.

Additionally, the Company had cash outflows of $4.7 million related to costs incurred for the Business Combination that were classified as cash flows from operating activities during the year ended December 31, 2023, which did not recur in the current year.

Cash Flows Provided by Investing Activities

In the year ended December 31, 2024, net cash provided by investing activities was $28.4 million, compared to net cash used by investing activities of $(57.9) million in the year ended December 31, 2023.

The change is primarily driven by the net cash inflows of $33.6 million from more debt securities maturing in the year ended December 31, 2024.

Cash Flows from Financing Activities

For the year ended December 31, 2023, net cash provided by financing activities was $148.2 million.

This was driven by $213.4 million in proceeds from the Business Combination and PIPE financing and proceeds of $2.6 million from the exercise of options to acquire shares of common stock of the Company.

This was partially offset by the Forward Purchase Agreement prepayment amount of $(60.1) million and by the repurchase of equity instruments of $(7.7) million.

For the year ended December 31, 2022, net cash provided by financing activities was not significant.

In the year ended December 31, 2024, net cash from financing activities was $30.2 million , compared to net cash provided by financing activities of $148.2 million in the year ended December 31, 2023.

The cash inflow in the prior year was mainly driven by $213.4 million in proceeds from the Business Combination and PIPE financing, partially offset by the FPA prepayment amount of $60.1 million .

In the year ended December 31, 2024, the cash inflow was mainly due to $40.0 million received from the Convertible Note, offset by the settlement of a portion of the FPA for $(10.0) million.

Off-Balance Sheet Arrangements

As of December 31, 2024 and December 31, 2023, we did not engage in any off-balance sheet arrangements, including the use of structured finance, special purpose entities or variable interest entities.

Critical Accounting Policies and Management Estimates

Our management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements that have been prepared in accordance with US GAAP.

Critical Accounting Estimates

Our management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements that have been prepared in accordance with GAAP.

The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosures.

5 unchanged sentences

We recognize revenue from our contracts with customers in accordance with ASC 606.

The Company also has certain partnership agreements that are within the scope of ASC 808 and contract with governmental entities that are

accounted for as grant contributions.

The Company also has certain partnership agreements that are within the scope of ASC 808 and contracts with governmental entities that are accounted for as grant contributions.

We primarily earn revenue from services related to feasibility studies and basic engineering design of commercial plants, joint development, and contract R&D activities to develop novel biocatalysts and related technologies.

5 unchanged sentences

In these instances, management estimates the stand-alone selling price and apportions the total transaction price to this material right.

We regularly reassess our estimates and assumptions and any changes in these estimates are reflected in our revenue from contracts with customers in the period in which they occur.

Most performance obligations on our non-governmental arrangements are recognized over time.

2 unchanged sentences

For arrangements with government agencies, we measure the satisfaction of performance obligations over time using the input method which requires judgment when selecting the most indicative measure of such performance.

Grant Revenue

Grants received, including cost reimbursement agreements, are assessed to determine if the agreement should be accounted for as an exchange transaction or a contribution.

An agreement is accounted for as a contribution if the resource provider does not receive commensurate value in return for the assets transferred.

Contributions are recognized as grant revenue when all donor-imposed conditions have been met.

Forward Purchase Agreement Valuation

The Company has determined that the FPA Put Option, including the Variable Maturity Consideration, within the Forward Purchase Agreement is (i) a freestanding financial instrument and (ii) a derivative (i.e., an in-substance written put option).

This derivative was recorded as a liability at fair value on the consolidated balance sheet as of the reporting date.

The fair value of the derivative was estimated using a Monte-Carlo Simulation in a risk-neutral framework.

Specifically, the future stock price is simulated assuming a Geometric Brownian Motion (“GBM”).

For each simulated path, the forward purchase value is calculated based on the contractual terms and then discounted back to present.

Finally, the value of the forward is calculated as the average present value over all simulated paths.

The methodology and main assumptions remained constant during the period in 2023.

The Company separately identified two other freestanding financial instruments in the Forward Purchase Agreement, the Share Consideration and the Minimum Maturity Consideration.

As both of these payments are for a fixed amount at the Maturity Date, we have accounted for these cash outflows as debt-like instruments.

In accordance with ASC 825, Financial Instruments , we have elected to account for these instruments under the Fair Value Option.

As the terms and conditions of these payments are the same, they are accounted for together on the consolidated balance sheet as the Fixed Maturity Consideration.

The fair value of the Fixed Maturity Consideration was estimated within the same Monte-Carlo simulation as the FPA Put Option to effectively model the potential acceleration of the Maturity Date and the corresponding acceleration in the payment of the Fixed Maturity Consideration.

The methodology and main assumptions remained constant during the period in 2023.

Stock-Based Compensation

In exchange for certain employee and director services, compensation is given in the form of equity-based awards.

The Company accounts for equity-based compensation in accordance with ASC 718, Compensation – Stock Compensation.

Accordingly, equity-classified awards are recorded based on the grant date fair value and expensed over the requisite service period for the respective award.

Liability-classified awards are remeasured at the end of each reporting period and expensed based on the percentage of requisite service that has been rendered.

The Company’s equity-based awards include stock option awards, restricted stock units (“RSUs”), stock-appreciation rights (“SARs”) and restricted stock (“RSAs”) issued by the Company, which vest based on either time and/or the achievement of certain market or performance conditions.

We have elected not to estimate forfeitures which means compensation expenses may be reversed in the period in which forfeiture occurs.

Compensation expense is recognized in the Company’s consolidated statements of operations and comprehensive loss, primarily within research and development expenses.

For awards with only service conditions that have a graded vesting schedule, the Company recognizes compensation cost on a straight-line basis over the requisite service period for the entire award.

For awards with market or performance conditions that have a graded vesting schedule, the Company recognizes compensation cost on a straight-line basis over the requisite service period for each tranche of the award.

Compensation expense resulting from performance awards is recognized over the requisite service period when it is probable that the performance condition will be met.

The recognized compensation expense for performance awards is adjusted based on an estimate of awards ultimately expected to vest.

We mostly apply judgment for stock-based awards with performance conditions, because compensation expense is recognized only when it is probable the performance conditions will be met (i.e.

occurrence of a liquidity event).

Management determined that the occurrence of the liquidity event is probable when the event is consummated, as such, compensation expense related to the RSAs was recorded at the time of the Business Combination.

We estimate the fair value of service and performance-based options and SARs using a Black-Scholes option pricing model, which requires the use of highly subjective assumptions including:

• Expected Term — We have opted to use the “simplified method” for estimating the expected term of plain-vanilla options and SARs, whereby the expected term equals the arithmetic average of the vesting term and LanzaTech’s contractual term of the option (generally 10 years).

We use peer data to estimate the expected term of options and SARs that do not have plain-vanilla characteristics.

• Risk-Free Interest Rate — The risk-free rate assumption is based on the U.S.

Treasury zero-coupon instruments with maturities similar to the expected term of LanzaTech’s stock options and SARs.

• Expected Dividend — We have not issued any dividends and do not anticipate issuing dividends on LanzaTech’s common stock.

As a result, we have estimated the dividend yield to be zero.

• Expected Volatility — Due to our limited operating history and a lack of company-specific historical and implied volatility data, we have based our estimate of expected volatility on the historical volatility of a group of similar companies that are publicly traded.

The historical volatility data was computed using the daily closing prices for the various companies' shares during the equivalent period of the estimated expected term of the stock-based awards.

Changes in the assumptions above can have an impact on the result of the valuation.

We estimate the fair value of market-based RSUs using the Monte Carlo simulation model that uses assumptions including expected volatility, and the derived service period.

Please refer to the expected volatility discussion above.

We estimate the fair value of the RSAs and RSUs with only service conditions using the fair value of common stock on the date of measurement.

Convertible Note

The Company has elected to measure the Convertible Note using the fair value option under ASC 825.

The fair value of the Convertible Note is remeasured at each reporting date using a binomial lattice model.

This model incorporates transaction details such as stock price, contractual terms, conversions scenarios, dividend yield, risk-free rate, adjusted equity volatility, credit rating, market credit spread, and estimated yield.

We regularly reassess our estimates and assumptions as new information becomes available.

Any changes in these estimates are reflected in our financial statements in the period in which they occur.

The effective debt yield and volatility involve unobservable inputs classified as Level 3 of the fair value hierarchy.

The sensitivity of the fair value calculation to these methods, assumptions, and estimates included could create materially different results under different conditions or using different assumptions.

Brookfield SAFE Valuation

Under the Brookfield SAFE, we agreed to issue to Brookfield the right to certain shares of Legacy LanzaTech’s capital stock, in exchange for the payment of $50.0 million.

The Brookfield SAFE was classified as a liability on our consolidated balance sheets as of December 31, 2024 and 2023.

The Company elected to record the instrument using the fair value option under ASC 825.

The Brookfield SAFE was issued on October 2, 2022.

As of its issuance date, the Company determined the fair value was equal to the investment amount of $50 million based on the orderly nature of the transaction.

The value as of December 31, 2022 remained the same due to the proximity of the valuation date to the issuance date (i.e., less than two months) and the absence of events which would indicate a change in expected payoffs to the investor.

As of December 31, 2023, the Company expects to present sufficient projects to Brookfield to result in the Brookfield SAFE being automatically converted into shares.

We determined this by evaluating the pipeline of

potential Brookfield projects in various stages of development, and determining the likelihood that a sufficient number of projects should meet the criteria for investment prior to maturity of the note.

Since the liquidity price is not expected to change during the life of the Brookfield SAFE, the number of shares that Brookfield receives is fixed.

Based on this expectation, the company determined the fair value of the Brookfield SAFE using the as-converted value, which is calculated as the initial purchase amount, divided by the liquidity price, times the stock price, resulting in an estimated fair value of $25 million recorded on the consolidated balance sheet as of December 31, 2023.

Preferred Stock Warrant Liabilities

Warrants to purchase shares of redeemable convertible preferred stock were classified as liabilities on our consolidated balance sheets as of December 31, 2022.

These warrants were recognized at fair value with subsequent changes recorded in other income (expense), net, in the statements of operations and comprehensive loss.

We utilized the Black-Scholes option-pricing model, which incorporates management’s assumptions and estimates, to value the preferred stock warrants.

Estimates and assumptions impacting the fair value measurement include the fair value per share of the underlying redeemable convertible preferred stock, the remaining contractual term of the warrants, risk-free interest rate, expected dividend yield and expected volatility of the price of the underlying preferred stock.

We determined the fair value per share of the underlying preferred stock by taking into consideration our most recent issuance of our preferred stock with additional factors deemed relevant, because at the time we were a private company and lacked company-specific historical and implied volatility information of our stock.

We determined the remaining contractual term based on the contract term of the warrants adjusted for the probability of a liquidity event.

Expected stock volatility was based on the historical volatility of publicly traded peer companies for a similar remaining contractual term.

In connection with the closing of the Business Combination, all warrants to purchase preferred stock were exercised on a cashless basis for shares of preferred stock, which were converted at the closing of the Business Combination into shares of common stock.

Immediately before the exercise of these warrants, the associated warrant liability was marked-to-market a final time.

After the preferred stock warrants were exercised and converted, the estimates used in the periodic valuation of the preferred stock warrants were no longer considered critical.

Common Stock Valuation

Prior to the Business Combination, there was no public market for our equity instruments and the estimated fair value of our shares of common stock was determined by management and approved by the LanzaTech Board as of the grant date.

The LanzaTech Board considered our most recently available independent third-party valuation of the common stock and additional objective and subjective factors that it believed were relevant at the date of the grant.

The valuation of our common stock is one of the key inputs in the valuation of our preferred stock warrant instruments as of December 31, 2022, which are classified as liabilities in our consolidated balance sheet and fully exercised in 2023 at the close of the Business Combination.

Additionally, the valuation of common stock is one of the key inputs in the valuation of share-based compensation granted prior to the close of the Business Combination.

The independent third-party valuations of the common stock were performed in accordance with the guidance outlined in the AICPA Practice Aid, Valuation of Privately-Held Company Equity Securities Issued as Compensation (“AICPA’s Practice Aid”).

The specialist considered all objective and subjective factors, including management’s best estimate of our business condition, prospects, and operating performance at each valuation date.

Other significant factors included:

• The rights, preferences, and privileges of our preferred stock as compared to those of our common stock, including the liquidation preferences of our preferred stock;

• Our results of operations, and financial position;

• Arms-length transactions involving recent rounds of preferred stock financings;

• The lack of liquidity of our common stock;

• Our stage of development and business strategy and the material risks related to our business and industry;

• The valuation of publicly traded companies in relevant industry sectors, as well as recently completed mergers and acquisitions of peer companies;

• The likelihood of achieving a liquidity event, such as an initial public offering or a sale of our company, given prevailing market conditions;

In valuing our common stock, the fair value of our business was determined using an option pricing model to backsolve the value of the security from our most recent round of financing which implies a total equity value as well as a per-share common stock value at the valuation date.

Following the Business Combination, the fair market value of the common stock will be determined based on the quoted market price of the common stock.

After the close of the Business Combination which established a public market for our common stock, the estimates used in the valuation of our common stock were no longer considered critical.

The Brookfield SAFE was terminated on February 14, 2025.

Refer to Note 19 - Subsequent Events in our consolidated financial statements for further information.

As of December 31, 2024, we expected to present projects to Brookfield to result in the Brookfield SAFE liability being automatically converted into shares at 75% with the remaining portion to be outstanding until maturity.

We determined the value of the conversion portion, by evaluating the pipeline of potential Brookfield projects in various stages of development, and determining the likelihood that a sufficient number of projects should meet the criteria for investment prior to maturity of the note.

Since the liquidity price was not expected to change during the life of the Brookfield SAFE, the number of shares that Brookfield would receive was fixed.

With respect to the maturity portion, the Brookfield SAFE would not automatically be converted prior to maturity and at maturity, the holder could either convert or receive the remaining principal and interest in cash.

To determine the fair value of the maturity portion, we use the Black-Scholes option pricing model.

The main key inputs to this model is the strike price which is the stated strike price grown at the compounded interest rate until

maturity, the stock price which is the current value of the shares that Brookfield would receive at conversion, the risk-free rate and the expected volatility.

Filing Status

The market value of LanzaTech’s common stock that was held by non-affiliates (i.e.

public float) exceeded $700 million as of the last business day of the Company’s 2023 second fiscal quarter which resulted in the following changes to LanzaTech’s filing status:

• LanzaTech became a large accelerated filer as of 12/31/2023.

• LanzaTech lost emerging growth company status as of 12/31/2023.

• LanzaTech no longer qualified as an smaller reporting company as of the last business day of the Company’s second fiscal quarter.

LanzaTech continued to use the scaled disclosures permitted for SRCs through this Form 10-K, and must begin providing non-scaled larger company disclosures in its quarterly report on Form 10-Q for the first quarter of 2024.

LanzaTech’s revenue was less than $100 million for the year ended December 31, 2023, and the market value of its common stock that was held by non-affiliates (i.e.

public float) did not exceed $560 million as of the last business day of the Company’s second fiscal quarter in 2024, which resulted in the following changes to LanzaTech’s filing status:

• LanzaTech is no longer a large accelerated filer and qualified as a non-accelerated filer as of December 31, 2024.

• LanzaTech qualified as a smaller reporting company as of the last business day of the Company’s second fiscal quarter.

LanzaTech uses certain scaled disclosures as permitted for smaller reporting companies in this Form 10-K, including presenting only the two most recent fiscal years of audited financial statements.

The use of reduced disclosure obligations in this Form 10-K may also make comparison of LanzaTech’s financial statements with other public companies difficult or impossible.

2 unchanged sentences

Non-GAAP Financial Measures

To supplement our financial statements presented in accordance with US GAAP and to provide investors with additional information regarding our financial results, we have presented adjusted EBITDA, a non-GAAP financial measure.

Adjusted EBITDA is not based on any standardized methodology prescribed by US GAAP and is not necessarily comparable to similarly titled measures presented by other companies.

We define adjusted EBITDA as our net loss, excluding the impact of depreciation, interest income, net, stock-based compensation, change in fair value of warrant liabilities, change in fair value of SAFE liabilities, change in fair value of the FPA Put Option liability and Fixed Maturity Consideration, transaction costs on issuance of Forward Purchase Agreement, (loss) gain from equity method investees and other one-time costs related to the Business Combination and securities registration on Form S-4 and our registration statement on Form S-1.

To supplement our financial statements presented in accordance with GAAP and to provide investors with additional information regarding our financial results, we have presented Adjusted EBITDA, a non-GAAP financial measure.

Adjusted EBITDA is not based on any standardized methodology prescribed by GAAP and is not necessarily comparable to similarly titled measures presented by other companies.

We define Adjusted EBITDA as our net loss, excluding the impact of depreciation, interest income, net, stock-based compensation, change in fair value of warrant liabilities, change in fair value of SAFE liabilities, change in fair value of the FPA Put Option liability and Fixed Maturity Consideration, change in fair value of the Convertible Note and associated transaction costs, transaction costs on issuance of FPA, loss from equity method investees, net and other one-time costs related to the Business Combination and securities registration on Form S-4, our registration statement on Form S-1, and non-recurring regulatory matters.

We monitor and have presented in this Annual Report Adjusted EBITDA because it is a key measure used by our management and the Board to understand and evaluate our operating performance, to establish budgets, and to develop operational goals for managing our business.

We believe Adjusted EBITDA helps identify underlying trends in our business that could otherwise be masked by the effect of certain expenses that we include in net loss.

Accordingly, we believe adjusted EBITDA provides useful information to investors, analysts, and others in

understanding and evaluating our operating results and enhancing the overall understanding of our past performance and future prospects.

Adjusted EBITDA is not prepared in accordance with US GAAP and should not be considered in isolation of, or as an alternative to, measures prepared in accordance with US GAAP.

There are a number of limitations related to the use of adjusted EBITDA rather than net loss, which is the most directly comparable financial measure calculated and presented in accordance with US GAAP.

Accordingly, we believe Adjusted EBITDA provides useful information to investors, analysts, and others in understanding and evaluating our operating results and enhancing the overall understanding of our past performance and future prospects.

Adjusted EBITDA is not prepared in accordance with GAAP and should not be considered in isolation of, or as an alternative to, measures prepared in accordance with GAAP.

There are a number of limitations related to the use of Adjusted EBITDA rather than net loss, which is the most directly comparable financial measure calculated and presented in accordance with GAAP.

For example, Adjusted EBITDA:

(i) excludes stock-based compensation expense because it is a significant non-cash expense that is not directly related to our operating performance;

(ii) excludes depreciation expense and, although this is a non-cash expense, the assets being depreciated and amortized may have to be replaced in the future;

(ii) excludes depreciation expense and, although this is a non-cash expense, the assets being depreciated and amortized

may have to be replaced in the future;

(iii) excludes gain or losses on equity method investee;

2 unchanged sentences

In addition, other companies may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison.

The following table reconciles adjusted EBITDA to net loss, the most directly comparable financial measure calculated and presented in accordance with US GAAP.

The following table reconciles Adjusted EBITDA to net loss, the most directly comparable financial measure calculated and presented in accordance with GAAP:

Reconciliation of Net Loss to Adjusted EBITDA

Year Ended December 31,

Years Ended December 31,

(In thousands) 2024 2023

2 unchanged sentences

Interest income, net

(3,162) (4,572)

Stock-based compensation expense and change in fair value of SAFE and warrant liabilities (1)

Change in fair value of the FPA Put Option and Fixed Maturity Consideration liabilities

Transaction costs on issuance of Forward Purchase Agreement 451 —

Loss (gain) from equity method investees, net

Change in fair value of the FPA Put Option and Fixed Maturity Consideration liabilities (net of interest accretion reversal)

23,283 44,300

Change in fair value of Convertible Note and related transaction costs

Transaction costs on issuance of FPA

Loss from equity method investees, net

One-time costs related to the Business Combination, initial securities registration and non-recurring regulatory matters (2)

3 unchanged sentences

(1) Stock-based compensation expense represents expense related to equity compensation plans.

(2) Represents costs incurred related to the Business Combination that do not meet the direct and incremental criteria per SEC Staff Accounting Bulletin Topic 5.A to be charged against the gross proceeds of the transaction, but are not expected to recur in the future, as well as costs incurred subsequent to deal close related to our securities registration on Form S-4 and our registration statement on Form S-1.Regulatory matters includes fees related to non-recurring items during the year ended December 31, 2023.

Regulatory matters includes fees related to non-recurring items during the year ended December 31, 2023.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis