LanzaTech Global, Inc. 10-K

Item 8. Financial Statements and Supplementary Data LanzaTech Global, Inc. Index to Consolidated Financial Statements Page Report of Independent Registered Public Accounting Firm (PCAOB Firm ID # 34 ) 75 Consolidated Balance Sheets as of December 31 , 2024 and December 31, 2023 78 Consolidated Statements of Operations and Comprehensive Loss for the Years E nded December 31, 2024 and 2023 79 Consolidated Statements of Changes in Redeemable Preferred Stock and Shareholders’ Equity/ Deficit for the Years E nded December 31, 2024 and 2023 80 C onsolidated Statements of Cash Flows for the Years E nded December 31, 2024 and 2023 82 Notes to Consolidated Financial Statements 84 74 Report of Independent Registered Public Accounting Firm To the shareholders and the Board of Directors of LanzaTech Global, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of LanzaTech Global, Inc. and subsidiaries (the "Company") as of December 31, 2024 and 2023, the related consolidated statements of operations and comprehensive loss, changes in redeemable convertible preferred stock and shareholders' equity (deficit), and cash flows for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America. Going Concern The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has suffered recurring losses from operations that raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Revenue Recognition – Identification and evaluation of relevant terms and conditions in new or amended contracts with customers and application to such contracts of Accounting Standards Codification (ASC) 75 Topic 606 – Revenue From Contracts With Customers (ASC 606) - Refer to Notes 2 and 5 to the financial statements Description of Critical Audit Matter The Company earns revenue from the sale of a variety of products and services to its customers including feasibility studies, basic engineering and design services, licensing of technologies, joint development and contract research activities, biocatalysts, and CarbonSmart ethanol. The terms and conditions of the Company’s contracts with its customers vary and assessing the accounting impact of the terms and conditions of each individual contract involves a significant amount of complexity and requires a high degree of judgement as contracts may contain provisions unique to each arrangement. We determined our assessment of the Company’s identification and evaluation of relevant contract terms and conditions and application of ASC 606 to new or amended contracts was a critical audit matter because it required significant audit effort and auditor judgment. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the Company’s conclusions on the identification and evaluation of relevant contract terms and conditions and the appropriate application of ASC 606 to new or amended contracts with customers included the following, among others: – We obtained a selection of new or amended contracts with customers and performed the following procedures, among others: – Inspected the terms and conditions contained in the contract and supporting documents. – For new or amended contracts, assessed the Company’s application of ASC 606 by: – Evaluating the Company’s identification of the performance obligation or obligations in the contract. – Evaluating the Company’s conclusions regarding the timing of recognizing revenue in accordance with ASC 606. Brookfield SAFE Liability – Conversion to Equity Assumption– Refer to Notes 2 and 7 to the financial statements Description of Critical Audit Matter On October 2, 2022, the Company entered into a framework agreement (the “Brookfield Framework Agreement”) and a Simple Agreement for Future Equity (the “Brookfield SAFE Agreement”). Pursuant to the Brookfield Framework Agreement, the Company agreed to present Brookfield, on an exclusive basis, the opportunity to provide equity financing for carbon capture and transformation projects in the Company’s development pipeline once those projects meet certain defined investment criteria (“Qualifying Projects”). Pursuant to the Brookfield SAFE Agreement, the Company received $50 million (the “Initial Purchase Amount”) which is repayable in cash, plus interest, on the fifth anniversary of the Brookfield SAFE Agreement. For each $50 million of aggregate equity funding required for qualifying projects presented to Brookfield, the then-remaining amount of the Initial Purchase Amount will be reduced by $5 million and converted into LanzaTech shares at $10.00 per share. Interest on a corresponding amount will be forgiven. A key input into the valuation of the Brookfield SAFE liability is the assumption regarding the portion of the Initial Purchase Amount that will be converted to equity at $10.00 per share (and the corresponding portion of accrued 76 interest that will be forgiven) as a result of presentation of Qualifying Projects to Brookfield. The valuation of the Brookfield SAFE liability is highly sensitive to such assumption and selection of the assumption is subjective and requires a high degree of judgment by management of the Company. We identified the valuation of the Brookfield SAFE Liability as a critical audit matter because its value is highly sensitive to changes in the assumption regarding the portion of the Initial Purchase Amount that will be converted to equity (and the corresponding portion of accrued interest that will be forgiven). Evaluating this assumption required a high degree of auditor judgment and significant audit effort to evaluate the sufficiency of audit evidence relating to the Company’s estimate. How the Critical Audit Matter Was Addressed in the Audit We assessed the reasonableness of the Company’s conclusions related to the valuation of the Brookfield SAFE liability by performing audit procedures which included the following, among others: – We inspected the Brookfield Framework Agreement and obtained an understanding of its key terms, including the investment criteria that need to be met for a project to be considered a Qualifying Project. – We inspected the Company’s project development pipeline to assess the nature and quantity of projects that could be developed into Qualifying Projects. – We made selections of projects from the project development pipeline and made inquiries of management to understand the status of the project relative to meeting the investment criteria and evaluated the reasonableness of the Company’s assessment of the probability the selected project will become a Qualifying Project prior to the fifth anniversary of the Brookfield SAFE Agreement. – We performed a retrospective review on the status of the projects included in the project development pipeline to evaluate for management bias in developing its assumption. /s/ Deloitte & Touche LLP Chicago, IL April 15, 2025 We have served as the Company's auditor since 2021. 77 LANZATECH GLOBAL, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share data) December 31, 2024 2023 Assets Current assets: Cash and cash equivalents $ 43,499 $ 75,585 Held-to-maturity investment securities 12,374 45,159 Trade and other receivables, net of allowance 9,456 11,157 Contract assets 18,975 28,238 Other current assets 15,030 12,561 Total current assets 99,334 172,700 Property, plant and equipment, net 22,333 22,823 Right-of-use assets 26,790 18,309 Equity method investment 4,363 7,066 Equity security investment 14,990 14,990 Other non-current assets 6,873 5,736 Total assets $ 174,683 $ 241,624 Liabilities and Shareholders’ Equity Current liabilities: Accounts payable $ 5,289 $ 4,060 Other accrued liabilities 8,876 7,316 Warrants 3,531 7,614 Fixed Maturity Consideration and current FPA Put Option liability 4,123 — Contract liabilities 6,168 3,198 Accrued salaries and wages 2,302 5,468 Current lease liabilities 158 126 Total current liabilities 30,447 27,782 Non-current lease liabilities 30,619 19,816 Non-current contract liabilities 5,233 8,233 Fixed Maturity Consideration — 7,228 FPA Put Option liability 30,015 37,523 Brookfield SAFE liability 13,223 25,150 Convertible Note 51,112 — Other long-term liabilities 587 1,421 Total liabilities 161,236 127,153 Shareholders’ Equity Common stock, $ 0.0001 par value, 600,000,000 and 400,000,000 shares authorized; 194,915,711 and 196,642,451 shares issued and outstanding as of December 31, 2024 and December 31, 2023, respectively 19 19 Additional paid-in capital 981,638 943,960 Accumulated other comprehensive income 1,393 2,364 Accumulated deficit ( 969,603 ) ( 831,872 ) Total shareholders’ equity $ 13,447 $ 114,471 Total liabilities and shareholders' equity $ 174,683 $ 241,624 See the accompanying Notes to the Consolidated Financial Statements. 78 LANZATECH GLOBAL, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (in thousands, except share and per share data) Years Ended December 31, 2024 2023 Revenues: Contracts with customers and grants $ 22,995 $ 45,953 CarbonSmart product sales 7,943 5,337 Collaborative arrangements 5,573 5,529 Related party transactions 13,081 5,812 Total revenues 49,592 62,631 Costs and operating expenses: Contracts with customers and grants (1) 15,341 37,653 CarbonSmart product sales (1) 7,543 4,889 Collaborative arrangements (1) 2,566 2,265 Related party transactions (1) 520 172 Research and development expense 77,007 68,142 Depreciation expense 5,567 5,452 Selling, general and administrative expense 49,981 50,438 Total cost and operating expenses 158,525 169,011 Loss from operations ( 108,933 ) ( 106,380 ) Other income (expense): Interest income, net 3,162 4,572 Other expense, net ( 17,726 ) ( 29,388 ) Total other expense, net ( 14,564 ) ( 24,816 ) Loss before income taxes ( 123,497 ) ( 131,196 ) Income tax expense — — Loss from equity method investees, net ( 14,234 ) ( 2,902 ) Net loss $ ( 137,731 ) $ ( 134,098 ) Other comprehensive loss: Changes in credit risk of fair value instruments ( 1,096 ) — Foreign currency translation adjustments 124 ( 376 ) Comprehensive loss $ ( 138,703 ) $ ( 134,474 ) Unpaid cumulative dividends on preferred stock — ( 4,117 ) Net loss allocated to common shareholders $ ( 137,731 ) $ ( 138,215 ) Net loss per common share - basic and diluted $ ( 0.70 ) $ ( 0.79 ) Weighted-average number of common shares outstanding - basic and diluted 197,579,945 176,023,219 (1) exclusive of depreciation See the accompanying Notes to the Consolidated Financial Statements. 79 LANZATECH GLOBAL, INC. CONSOLIDATED STATEMENTS OF CHANGES IN REDEEMABLE CONVERTIBLE PREFERRED STOCK AND SHAREHOLDERS’ EQUITY/ DEFICIT (in thousands, except share data) Common Stock Outstanding Additional Paid-in Capital Accumulated Deficit Accumulated Other Comprehensive Income Total Shareholders' Equity Shares Amount Balance as of December 31, 2023 196,642,451 $ 19 $ 943,960 $ ( 831,872 ) $ 2,364 $ 114,471 Stock-based compensation expense — — 13,342 — — 13,342 Net loss — — — ( 137,731 ) — ( 137,731 ) Forward Purchase Agreement Settlement — — 24,084 — — 24,084 Issuance of common stock upon exercise of options and vesting of RSUs 1,199,774 — 300 — — 300 Repurchase of equity instruments — — ( 48 ) — — ( 48 ) Treasury Shares ( 2,926,514 ) — — — — — Other comprehensive income, net — — — — ( 1,096 ) ( 1,096 ) Foreign currency translation — — — — 125 125 Balance as of December 31, 2024 194,915,711 $ 19 $ 981,638 $ ( 969,603 ) $ 1,393 $ 13,447 See the accompanying Notes to the Consolidated Financial Statements. 80 LANZATECH GLOBAL, INC. CONSOLIDATED STATEMENTS OF CHANGES IN REDEEMABLE CONVERTIBLE PREFERRED STOCK AND SHAREHOLDERS’ EQUITY/ DEFICIT (in thousands, except share data) Redeemable Convertible Preferred Stock Common Stock Outstanding Additional Paid-in Capital Accumulated Deficit Accumulated Other Comprehensive Income Total Shareholders' Equity Shares Amount Shares Amount Balance as of December 31, 2022 29,521,810 $ 480,631 2,382,358 $ — $ 24,783 $ ( 456,245 ) $ 2,740 $ ( 428,722 ) Retroactive application of recapitalization 99,626,583 — 8,039,693 1 ( 1 ) — — — Adjusted balance, beginning of period 129,148,393 480,631 10,422,051 1 24,782 ( 456,245 ) 2,740 ( 428,722 ) Share-based compensation expense — — — — 14,957 — — 14,957 RSA vesting — — 2,535,825 — — — — — Repurchase of equity instruments — — ( 771,141 ) — ( 7,650 ) — — ( 7,650 ) Net loss — — — — — ( 134,098 ) — ( 134,098 ) Issuance of common stock upon exercise of options — — 1,661,698 — 2,550 — — 2,550 Exercise of a warrant, Series C and D Preferred Stock 594,309 5,890 — — — — — — In-kind payment of preferred dividend — 241,529 — — — ( 241,529 ) — ( 241,529 ) Conversion of preferred stock into common stock ( 129,742,702 ) ( 728,050 ) 153,895,644 15 728,035 — — 728,050 Recapitalization, net of transaction expenses (Note 3) — — 28,898,374 3 236,970 — — 236,973 Forward Purchase Agreement prepayment — — — — ( 60,547 ) — — ( 60,547 ) Reclassification of warrants to equity — — — — 4,863 — — 4,863 Foreign currency translation — — — — — — ( 376 ) ( 376 ) Balance as of December 31, 2023 — $ — 196,642,451 $ 19 $ 943,960 $ ( 831,872 ) $ 2,364 $ 114,471 See the accompanying Notes to the Consolidated Financial Statements. 81 LANZATECH GLOBAL, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Years Ended December 31, 2024 2023 Cash Flows From Operating Activities: Net loss $ ( 137,731 ) $ ( 134,098 ) Adjustments to reconcile net loss to net cash used in operating activities: Share-based compensation expense 13,208 15,199 Gain on change in fair value of SAFE and warrant liabilities ( 17,887 ) ( 14,471 ) Loss on change in fair value of the FPA Put Option and the Fixed Maturity Consideration liabilities 23,510 44,300 Loss on change in fair value of Convertible Note 11,894 — Provisions for losses on trade and other receivables, net of recoveries 961 700 Depreciation of property, plant and equipment 5,592 5,452 Amortization of discount on debt security investment ( 854 ) ( 1,301 ) Non-cash lease expense 1,713 1,526 Non-cash recognition of licensing revenue ( 11,532 ) ( 1,805 ) Loss from equity method investees, net 14,234 2,902 Gain from disposal of PPE ( 25 ) — Unrealized (Gain)/loss on net foreign exchange ( 284 ) 182 Changes in operating assets and liabilities: Accounts receivable, net 557 104 Contract assets 9,162 ( 10,049 ) Accrued interest on debt investment 183 ( 266 ) Other assets ( 2,066 ) ( 2,658 ) Accounts payable and accrued salaries and wages ( 1,790 ) ( 4,991 ) Contract liabilities 311 95 Operating lease liabilities 641 ( 337 ) Other liabilities 1,143 2,220 Net cash used in operating activities ( 89,060 ) ( 97,296 ) Cash Flows From Investing Activities: Purchase of property, plant and equipment ( 5,312 ) ( 8,553 ) Proceeds from disposal of property, plant and equipment 25 — Purchase of debt securities ( 27,083 ) ( 93,858 ) Proceeds from maturity of debt securities 60,722 50,000 Purchase of additional interest in equity method investment — ( 288 ) Origination of related party loan — ( 5,212 ) Net cash provided by/(used in) investing activities 28,352 ( 57,911 ) Cash Flows From Financing Activities: Proceeds from the Business Combination and PIPE, net of transaction expenses (Note 3) — 213,381 FPA prepayment — ( 60,096 ) Proceeds from exercise of options 300 2,550 Repurchase of equity instruments of the Company ( 48 ) ( 7,650 ) Settlement of FPA ( 10,039 ) — Proceeds from issuance of Convertible Note, net 40,000 — Net cash provided by financing activities 30,213 148,185 Effects of currency translation on cash, cash equivalents and restricted cash ( 52 ) ( 404 ) Net decrease in cash, cash equivalents and restricted cash ( 30,547 ) ( 7,426 ) Cash, cash equivalents and restricted cash at beginning of period 76,284 83,710 Cash, cash equivalents and restricted cash at end of period $ 45,737 $ 76,284 82 LANZATECH GLOBAL, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Supplemental disclosure of non-cash investing and financing activities: Acquisition of property, plant and equipment under accounts payable $ 132 $ 279 Right-of-use asset additions 10,194 12,866 Non-cash partial reversal of FPA upon settlement 24,084 — Third-party issuance costs for the Convertible Note 3,169 — Reclassification of capitalized costs related to the business combination to equity — 1,514 Cashless conversion of warrants on preferred shares — 5,890 Recognition of public and private warrant liabilities in the Business Combination — 4,624 Reclassification of AM SAFE warrant to equity — 1,800 Conversion of AM SAFE liability into common stock — 29,730 Conversion of Legacy LanzaTech NZ, Inc. preferred stock and in-kind dividend into common stock — 722,160 Reclassification of FPA Warrants to equity $ — $ 3,063 See the accompanying Notes to the Consolidated Financial Statements. 83 LANZATECH GLOBAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1 — Description of the Business LanzaTech Global, Inc., formerly known as AMCI Acquisition Corp. II (“AMCI”) prior to February 8, 2023 (the “Closing Date”) was incorporated as a Delaware corporation on January 28, 2021. On March 8, 2022, LanzaTech NZ, Inc. (“Legacy LanzaTech”) entered into an Agreement and Plan of Merger (the “Merger Agreement”) with AMCI and AMCI Merger Sub, Inc. a Delaware corporation and a wholly owned subsidiary of AMCI (“Merger Sub”). On February 8, 2023, Legacy LanzaTech completed its business combination with AMCI by which Merger Sub merged with and into Legacy LanzaTech, with Legacy LanzaTech continuing as the surviving corporation and as a wholly owned subsidiary of AMCI (the “Business Combination”). The reporting entity is LanzaTech Global, Inc. and its subsidiaries (collectively referred to herein as “the Company”, “LanzaTech” “we”, “us”, “our”). For more information on the Business Combination, see Note 3 - Reverse Recapitalization . The Company is headquartered in Skokie, Illinois, USA. The Company is a nature-based carbon refining company that transforms waste carbon into the chemical building blocks for consumer goods such as sustainable fuels, fabrics, and packaging that people use in their daily lives. The Company’s customers leverage its proven proprietary gas fermentation technology platform to convert certain feedstock, including waste carbon gases, into sustainable fuels and chemicals such as ethanol. The Company performs related services such as feasibility studies, engineering services, and research and development (“R&D”) in biotechnology for commercial and government entities. The Company also purchases low carbon chemicals produced at customer facilities employing the Company’s technology and sells it under the brand name CarbonSmart. The Company has also been developing the capabilities to produce single cell protein as a primary product from its gas fermentation platform. As of December 31, 2024, licensees of the Company’s technology operated four commercial-scale ethanol plants in China, one plant in Belgium, one in the commissioning phase in India, with others currently in development in various countries. As a result of the Business Combination, the Company’s common stock trades under the ticker symbol “LNZA” and its Public Warrants trade under the ticker symbol “LNZAW” on the Nasdaq Stock Market. Prior to the consummation of the Business Combination, the Company’s common shares were listed on Nasdaq Stock Market under the symbol “AMCI” and the Public Warrants were listed on the Nasdaq Stock Market under the symbol “AMCI-W”. Public Warrants are defined and further described in Note 9 - Forward Purchase Agreement . Unless otherwise indicated, amounts in these financial statements are presented in thousands, except for share and per share amounts. Note 2 — Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation The consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”). The consolidated financial statements include the accounts of LanzaTech Global, Inc. and its wholly-owned consolidated subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. For the year ended December 31, 2023, LanzaTech had revenues of less than $100 million and as of the last business day of the Company’s second fiscal quarter in 2024 (the “Measurement Date”), the market value of its common stock that was held by non-affiliates (i.e. public float) was below $560 million. As a result, LanzaTech qualified as a “smaller reporting company” or “SRC” on the Measurement Date, as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. The Business Combination is accounted for as a reverse recapitalization as Legacy LanzaTech was determined to be the accounting acquirer under Accounting Standards Codification (“ASC”) 805, Business Combinations (“ASC 805”) based on the evaluation of the following facts and circumstances: • Legacy LanzaTech stockholders have the largest portion of voting rights ( 85.3 % at the closing of the Business Combination) in the Company; • Legacy LanzaTech’s existing senior management team comprise senior management of the Company; 84 • The operations of the Company primarily represent operations of Legacy LanzaTech; and • In comparison with AMCI, Legacy LanzaTech has significantly more revenue and total assets. For more information on the Business Combination, see Note 3 - Reverse Recapitalization . Variable Interest Entity (“VIE”) The Company makes judgments in determining whether an entity is a VIE and, if so, whether it is the primary beneficiary of the VIE and is thus required to consolidate the entity. A VIE is a legal entity that has a total equity investment that is insufficient to finance its activities without additional subordinated financial support or whose equity investors lack the characteristics of a controlling financial interest. The Company’s variable interest arises from contractual, ownership or other monetary interests in the entity, which changes with fluctuations in the fair value of the entity’s net assets. A VIE is consolidated by its primary beneficiary, the party that has both the power to direct the activities that most significantly impact the VIEs economic performance, and the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. The Company consolidates a VIE when the Company is deemed to be the primary beneficiary. The Company assesses whether or not the Company is the primary beneficiary of a VIE on an ongoing basis. If the Company is not deemed to be the primary beneficiary in a VIE, the Company accounts for the investment or other variable interests in a VIE in accordance with applicable GAAP. The Company holds interests in certain VIEs for which it has been determined the Company is not the primary beneficiary. The Company's variable interests primarily relate to entities in which the Company has a non-controlling equity interest. Although these financial arrangements resulted in holding variable interests in these entities, they do not empower the Company to direct the activities of the VIEs that most significantly impact the VIEs’ economic performance. The Company's interests in the VIEs are, therefore, accounted for under the equity method of accounting or at fair value (including, when applicable, the practicability exception to fair value under ASC 321-10-35). Refer to Note 6 - Investments , for further information. The Company is exposed to the VIEs’ losses and other impairment losses up to the carrying value of each investment and any amounts receivable from the VIE, less amounts payable. Refer to Note 15 - Related Party Transactions , for further details on the transactions with VIEs. Going Concern The accompanying consolidated financial statements of the Company have been prepared in accordance with GAAP and assume the Company will continue as a going concern. The going concern basis of presentation assumes that the Company will continue in operation one year after the date these financial statements are issued and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business. The Company has recurring net losses and anticipates continuing to incur losses. The Company had cash and cash equivalents of $ 43,499 , short-term held-to-maturity debt securities of $ 12,374 and accumulated deficit of $( 969,603 ) as of December 31, 2024, along with cash outflows from operations of $( 89,060 ) and net loss of $( 137,731 ) for the year ended December 31, 2024. The Company has historically funded its 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 Company’s projected capital expenditure and operating requirements under its current business plan, the Company is projecting that its existing cash and short-term held-to-maturity debt securities will not be sufficient to fund its operations through the next twelve months from the date of issuance of these consolidated financial statements. These conditions and events raise substantial doubt about the Company’s ability to continue as a going concern. The Company is focusing on streamlining its business priorities, taking actions to reduce its 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 these consolidated financial statements 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 of Directors of the Company (the “Board”) received a preliminary, nonbinding proposal from Carbon Direct Capital Management LLC (“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 $ 40,150 Convertible Note, excluding payment-in-kind interest from the issue date, which upon 85 conversion, would entitle it to receive shares of common stock representing approximately 14.6 % of the Company’s common stock based on the total number of shares of common stock of the Company outstanding on April 10, 2025. The Strategic Committee of the Board is currently reviewing, evaluating and negotiating the Take-Private Proposal in consultation with the Company’s financial advisor and legal counsel. The Company is 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 the Company’s ability to continue as a going concern. The consolidated financial statements 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. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant estimates include the fair value of equity awards granted to both employees and non-employees, valuation of common stock prior to the close of the Business Combination, revenue recognized over time, and Brookfield SAFE obligations, the FPA, the Convertible Note and the Private Placement Warrants. The Company recognizes revenue over time for certain contracts using the percentage of completion method based an input measure. Under the input method, the Company exercises judgment and estimation when selecting the most indicative measure of such performance. Most of our arrangements provide fixed consideration, however, when there are variable consideration elements, the Company estimates the transaction price and whether revenue should be constrained. Significant estimates and judgments are also used when a material right is provided to the customer. In these instances, the Company estimates the stand-alone selling price and apportions the total transaction price to this material right. Refer to the Revenue Recognition section in Note 2 - Summary of Significant Accounting Policies hereunder. Changes in facts and circumstances or additional information may result in revised estimates, and actual results may differ from these estimates. Segment Information The Company operates as one operating segment as determined in accordance with ASC Topic 280, Segment Reporting. The determination of the Company’s reportable segment is based on the fact that its chief operating decision maker (CODM), identified as the Chief Executive Officer (“CEO”) reviews financial performance and allocates resources at the consolidated level. See Note 16 - Segment for further details. Foreign Currencies The Company’s reporting currency is the U.S. Dollar. The Company has certain foreign subsidiaries where the functional currency is the local currency. All of the assets and liabilities of these subsidiaries are translated to U.S. dollars at the exchange rate in effect at the balance sheet date, income and expense accounts are translated at average rates for the period, and shareholders’ equity accounts are translated at historical rates. The effects of translating financial statements of foreign operations into the Company’s reporting currency are recognized in other comprehensive income. The Company also has foreign subsidiaries that have a functional currency of the U.S. dollar. Purchases and sales of assets and income and expense items denominated in foreign currencies are remeasured into U.S. dollar amounts on the respective dates of such transactions. Net realized and unrealized foreign currency gains or losses relating to the differences between these recorded amounts and the U.S. dollar equivalent actually received or paid are included within other expense, net in the consolidated statements of operations and comprehensive loss. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less at the time of purchase to be cash equivalents. As of December 31, 2024 and December 31, 2023 , the Company had $ 43,499 and $ 75,585 of cash and cash equivalents, respectively. 86 Restricted Cash The Company is required to maintain a cash deposit with a bank which consists of collateral on certain travel and expense programs maintained by the bank. The following represents a reconciliation of cash and cash equivalents in the consolidated balance sheets to total cash, cash equivalents and restricted cash in the consolidated statements of cash flows as of December 31, 2024 and December 31, 2023. December 31, 2024 2023 Cash and cash equivalents $ 43,499 $ 75,585 Restricted cash (presented within Other current assets) 2,238 699 Cash, cash equivalents and restricted cash $ 45,737 $ 76,284 Trade and Other Receivables Receivables are reported net of allowances for doubtful accounts. The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of customers to make required payments. The Company estimates the allowance for doubtful accounts based on a variety of factors including the length of time receivables are past due, the financial health of customers, unusual macroeconomic conditions, and historical experience. As of December 31, 2024 and December 31, 2023, the Company had a balance for doubtful accounts of $ 955 and $ 1,751 , respectively. Other Current Assets Other current assets consist of prepaid expenses, materials and supplies, inventory and other assets. Material and supplies consist of spare parts and consumables used for research and research equipment and is stated at the weighted average cost. Inventory consists of CarbonSmart products and biocatalysts to be sold to biorefining customers. Property, Plant and Equipment, net Property, plant and equipment are stated at cost and include improvements that significantly increase capacities or extend the useful lives of existing plant and equipment. Depreciation is calculated using the straight-line method over the estimated useful life of the assets. Useful lives range from three to five years for instruments and equipment, three to five years for office equipment and furniture and software, five years for vehicles and, for leasehold improvements, the shorter of the life of the improvement or the remaining term of the lease. The Company reviews the remaining useful life of its assets on a regular basis to determine whether changes have taken place that would suggest that a change to depreciation policies is warranted. Upon retirement or disposal of property, plant and equipment, the cost and related accumulated depreciation are removed from the account, and the resulting gains or losses, if any, are recorded in the consolidated statements of operations and comprehensive loss. Net gains or losses related to asset dispositions are recognized in earnings in the period in which dispositions occur. Routine maintenance, repairs and replacements are expensed as incurred. Leases The Company determines if an arrangement is a lease at inception. Lease agreements under which the Company is a lessee are evaluated to classify the lease as a finance or operating lease. Operating lease assets and liabilities are recognized at the commencement date of the lease based on the present value of lease payments over the lease term. Lease assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. As most leases do not provide an implicit interest rate, the Company uses its incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments. Leases with an initial term of 12 months or less are not recorded on the Company’s consolidated balance sheets. The Company recognizes lease expense for these leases on a straight-line basis over the lease term. The Company accounts for lease components and non-lease components as a single lease component. Impairment of Long-Lived Assets 87 The Company performs a recoverability assessment of each of its long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Indicators may include, but are not limited to, adverse changes in the regulatory environment in a jurisdiction where the Company operates, a decision to discontinue the development of a long-lived asset, early termination of a significant customer contract, or the introduction of newer technology. When performing a recoverability assessment, the Company measures whether the estimated future undiscounted net cash flows expected to be generated by the asset exceeds its carrying value. In the event that an asset does not meet the recoverability test, the carrying value of the asset will be adjusted to fair value resulting in an impairment charge. Management develops the assumptions used in the recoverability assessment based on active contracts as well as information received from third-party industry sources. The Company did not record an impairment for years ended December 31, 2024 and 2023. Equity Method Investments Investments in entities over which the Company has significant influence, but not control, are accounted for using the equity method of accounting. Gain or loss from equity method investees, net, represents the Company’s proportionate share of net income or loss of its equity method investees and any gains or losses resulting from transactions in the investee's equity. The Company’s equity method investment is assessed for impairment whenever changes in the facts and circumstances indicate a loss in value may have occurred. When a loss is deemed to have occurred and is other than temporary, the carrying value of the equity method investment is written down to fair value. In evaluating whether a loss is other than temporary, the Company considers the length of time for which the conditions have existed and its intent and ability to hold the investment. Equity Security Investments Investments in entities over which the Company has neither significant influence, nor control, are accounted for as equity security investments. For investments where the fair value is not readily determinable, the Company will account for its investment using the alternative measurement principals as permitted under ASC 321, Investments — Equity Securities . Subsequently, under the alternative measurement method, the Company will adjust the carrying value for observable changes in price and will reassess whether its investment continues to qualify for such method. Additionally, the Company will perform a qualitative assessment and recognize an impairment if there are sufficient indicators that the fair value of the investment is less than its carrying value. The changes in value and impairment charges (if any), are recorded in Other expense, net in the consolidated statements of operations and comprehensive loss. Investment securities The Company classifies investment securities according to their purpose and holding period. All investment securities are debt securities that have been classified as held-to-maturity (“HTM”) because the Company has both the ability and intent to hold the securities to maturity. HTM debt securities are comprised of U.S. Treasury bills, U.S. Treasury notes, Yankee bonds, and corporate debt. HTM debt securities are carried at amortized cost, which is original cost net of periodic principal repayments and amortization of premiums and accretion of discounts. Accrued interest receivable is recorded within trade and other receivables, net of allowance on the consolidated balance sheets. Amortization of premiums and accretion of discounts are computed using the contractual level-yield method (contractual interest method), adjusted for actual prepayments. The contractual interest method recognizes the income effects of premiums and discounts over the contractual life of the securities based on the actual behavior of the underlying assets, including adjustments for actual prepayment activities, and reflects the contractual terms of the securities without regard to changes in estimated prepayments based on assumptions about future borrower behavior. HTM securities are evaluated individually on a quarterly basis for expected credit losses. If applicable, an allowance for credit losses is recorded with a corresponding credit loss expense (or reversal of credit loss expense). The allowance for credit losses excludes uncollectible accrued interest receivable, which is measured separately. Brookfield SAFE 88 On October 2, 2022, the Company entered into a Simple Agreement for Future Equity (“SAFE”) with Brookfield (the “Brookfield SAFE”). Under the Brookfield SAFE, the Company agreed to issue to Brookfield the right to certain shares of its capital stock, in exchange for the payment of $ 50,000 (the “Initial Purchase Amount”). The Brookfield SAFE is legal form debt. As a result of the Business Combination, the Brookfield SAFE can be converted into a maximum number of shares of 5,000,000 . Management has elected to apply the Fair Value Option (“FVO”) under ASC 825, Financial Instruments . As the Brookfield SAFE is accounted for under the FVO, the Brookfield SAFE is classified as mark-to-market liability. On February 14, 2025, the Company and Brookfield terminated the Brookfield SAFE and all rights and obligations and concurrently entered into a Loan Agreement as defined in Note 19 - Subsequent Events. Warrants The Company accounts f or its warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity (“ASC 815-40”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815-40, including whether the warrants are indexed to the Company’s own common stock, among other conditions for equity classification. The Company has the following warrants (further described hereunder): Public Warrants and Private Placement Warrants classified as liability (see Note 10 - Fair Value ) and the FPA Warrants classified as equity. As part of AMCI’s initial public offering (“IPO”), AMCI issued warrants to third-party investors. Each public warrant entitles the holder to purchase one share of the Company’s common stock at an exercise price of $ 11.50 per share (the “Public Warrants”). Simultaneously with the closing of the IPO, AMCI completed the private sale of warrants. Each private sale warrant allows the holder to purchase one share of the Company’s common stock at $ 11.50 per share. Additionally, prior to the consummation of the Business Combination, AMCI issued warrants for the settlement of a working capital loan. The working capital warrants have the same terms as the private sale of warrants issued at the IPO. Warrants sold in the private sale at the IPO and the warrants issued to convert the working capital loan are collectively referred to as the “Private Placement Warrants”. On the Closing Date and as of December 31, 2024, 7,499,924 Public Warrants and 4,774,276 Private Placement Warrants remained outstanding. On March 27, 2023, the Company issued an aggregate of 2,073,486 warrants to ACM and 2,010,000 warrants to Vellar pursuant to the Forward Purchase Agreement (collectively, the “FPA Warrants”) (see Note 9 - Forward Purchase Agreement, Note 17 - Commitments and Contingencies and Note 19 - Subsequent Events for additional information). For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded at fair value as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance and adjusted to the current fair value at each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss in Other expense, net on the consolidated statements of operations and comprehensive loss . Forward Purchase Agreement On February 3, 2023, the Company entered into a FPA with ACM . On the same date, ACM partially assigned its rights under the FPA to Vellar. ACM and Vellar are together referred to as the “Purchasers”. Pursuant to the FPA, the Purchasers obtained 5,916,514 common shares (“Recycled Shares”) on the open market for $ 10.16 per share (“Redemption Price”), and such purchase price of $ 60,096 was funded by the use of AMCI trust account proceeds as a partial prepayment (“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 share price trades below $ 3.00 per share for any 50 trading days during a 60 day consecutive trading-day period or the Company is delisted. On any date following the Business Combination, the Purchasers also have 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 will owe the Company an amount equal to the Terminated Shares times the Redemption Price, which may be reduced in the case of certain dilutive events (“Reset Price”). 89 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 to the Purchasers an amount equal to the product of (x) 500,000 and (y) the Redemption Price, totaling $ 5,079 (the “Share Consideration”), which under the FPA is payable in cash. If the Purchasers were to utilize their Optional Early Termination to terminate the FPA early in its entirety, neither the Maturity Consideration nor the Share Consideration would be due to the Purchasers. The Purchasers’ Optional Early Termination economically results in the prepaid forward contract being akin to a written put option with the Purchasers’ right to sell all or a portion of the 5,916,514 common shares to the Company. The Company is entitled over the 36-month maturity period to either a return of the prepayment or the underlying shares, which the Purchasers will determine at their sole discretion. The FPA consists of three freestanding financial instruments which are accounted for as follows: 1) The total prepayment of $ 60,547 (“Prepayment Amount”), which is accounted for as a reduction to equity to reflect the substance of the overall arrangement as a net repurchase of the Recycled Shares and sale of shares to the Purchasers pursuant to a subscription agreement. 2) The “FPA Put Option” which includes both the in-substance written put option and the portion of the Maturity Consideration in excess of the Minimum Maturity Consideration (the “Variable Maturity Consideration”). The FPA Put Option is a derivative instrument the Company has recorded as a liability and measured at fair value. The initial fair value of the FPA Put Option and subsequent changes in fair value of the FPA Put Option are recorded within Other expense, net on the consolidated statements of operations and comprehensive loss. 3) The “Fixed Maturity Consideration,” which includes the minimum portion of the Maturity Consideration (the “Minimum Maturity Consideration”), calculated as 7,500,000 less 5,916,513 multiplied by $ 2.00 or $ 3,167 , and the Share Consideration. Both the Minimum Maturity Consideration and the Share Consideration are considered to be free-standing debt instruments and as both will be paid on the same terms and at the same time, these are accounted for together. The Company has elected to measure these using the FVO under ASC 825, Financial Instruments (“ASC 825”). The Fixed Maturity Consideration is recorded as a long-term liability on the consolidated balance sheets. The initial fair value of the Fixed Maturity Consideration and subsequent changes in fair value of the Fixed Maturity Consideration are recorded within other expense, net on the consolidated statements of operations and comprehensive loss. In relation to the FPA, 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 (the “VWAP Trigger Event”). On July 22, 2024, Vellar notified the Company of a VWAP Trigger Event, purporting to accelerate the FPA Maturity Date of its portion of the Recycled Shares (i.e., 2,999,000 shares) to July 22, 2024. It subsequently delivered to the Company a notice of default under the FPA. On July 24, 2024, the Company filed suit against Vellar under the FPA, primarily in connection with Vellar’s sale of Recycled Shares (see Note 17 - Commitments and Contingencies). As a result, the Company reclassified the Maturity Consideration and the Share Consideration to current liabilities on the consolidated balance sheets and the FPA Put Option excluding the Variable Maturity Consideration portion, which remains in long-term liabilities (refer to Note 9 - Forward Purchase Agreement). In October 2024, ACM accelerated the FPA Maturity Date with respect to its portion of the FPA in connection with the VWAP Trigger Event, and the Company fully satisfied its obligation to ACM in accordance with the FPA’s provisions (see Note 9 - Forward Purchase Agreement) . Convertible Note 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 $ 150,000 of convertible notes. On August 6, 2024, the Company issued and sold a 90 principal amount of $ 40,150 of convertible notes to Carbon Direct Capital pursuant to the Convertible Note Purchase Agreement (the “Convertible Note”). The Company has elected the fair value option for the Convertible Note at issuance under ASC 825. Under this option, the Convertible Note is initially recognized at its fair value as a long-term liability on the consolidated balance sheets with subsequent changes in fair value reflected in earnings. Interest expense is not recognized separately; rather, the change in the fair value of the debt, inclusive of interest, market risk, and other factors affecting valuation, is recorded in the consolidated statements of operations and comprehensive loss as a component of other income (expense). However, the change in fair value attributable to the change in the instrument-specific credit risk is presented separately in other comprehensive income. Transaction costs of $ 150 were expensed as incurred and included in the consolidated statements of operations and comprehensive loss as a component of Other income (expense). See Note 8 - Convertible Note . Fair Value of Financial Instruments Fair value is defined as the exchange price that would be received for an asset or an exit price paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the Measurement Date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy defines a three-level valuation hierarchy for disclosure of fair value measurements as follows: Level 1 — Valuations based on quoted prices in active markets for identical assets or liabilities that an entity has the ability to access; Level 2 — Valuations based on quoted prices for similar assets or liabilities, quoted prices for identical assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities; and Level 3 — Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The categorization of a financial instrument within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC 820, Fair Value Measurement , approximates the carrying amounts represented in the accompanying consolidated balance sheets, primarily due to their short-term nature, except for the warrant liability. Revenue Recognition The Company recognizes revenue from exchange transactions in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”) and grants from non-customers. The Company primarily earns revenue from services related to biorefining (formerly known as carbon capture and transformation) which includes techno-economic feasibility studies and basic engineering design of commercial plants, licensing of technologies and sales of biocatalysts (microbes and media). The other two revenue streams are: (1) joint development and contract research activities to develop and optimize novel biocatalysts, related processes and technologies, and (2) supply of chemical building blocks, such as ethanol, for sustainable products made using the Company’s proprietary technologies (referred to as CarbonSmart). Revenue is measured based on the consideration specified in a contract with a customer. The Company records taxes collected from customers and remitted to governmental authorities on a net basis. The Company’s payment terms are between 30-60 days and can vary by customer type and products offered. Management has evaluated the terms of the Company’s arrangements and determined that they do not contain significant financing components. Biorefining The Company provides feasibility studies and basic design and engineering services used for detailed design, procurement, and construction of commercial plants that utilize the Company’s technologies, along with the sale of microbes and media. The services provided are recognized as a performance obligation satisfied over time. Revenue is recognized as services are rendered using the cost-to-cost input method for certain engineering services, or the labor hours input method as performance obligations are satisfied. Revenue for the sale of microbes and media is at a point in time, depending on when control transfers to the customer. 91 The Company licenses intellectual property to generate recurring revenue, in the case of running royalties, or one-time revenue, in the case of fixed consideration royalties, when its customers deploy the Company’s 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 has been satisfied, whichever is later. Joint Development and Contract Research The Company performs R&D services related to novel technologies and development of biocatalysts for commercial applications, mainly to produce fuels and chemicals. The Company engages in two main types of R&D services – joint development agreements, and contract research, including projects with the U.S. Department of Energy and other US or foreign government agencies. 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 percentage-completion method when enforceable rights to payment exist. When no milestones or phases are clearly defined, management has determined that the cost incurred, input method, is an appropriate measure of progress because services are rendered to satisfy the performance obligations. The Company 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 are typically due from customers when a milestone is completed or 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 the Company providing services which creates a contract liability for the Company. The contract liability represents the Company's obligation to provide services to a customer. Grants Grants received to perform services related to biorefining or joint development and contract research, 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 as the qualifying costs related to the grant are incurred. CarbonSmart The Company purchases ethanol from the customers who have deployed the Company’s proprietary technologies in their biorefining plants and sells it and its derivatives as CarbonSmart products. Revenue is recognized at a point in time when control transfers to the Company’s end customer, which varies depending on the shipping terms. The Company acts as the principal in such transactions and accordingly, recognizes revenue and cost of revenues on a gross basis. Amounts received for sales of CarbonSmart products are classified as revenue from sales of CarbonSmart products in the consolidated statements of operations and comprehensive loss. Collaboration Arrangements The Company has certain partnership agreements that are within the scope of ASC 808, Collaborative Arrangements , which provides guidance on the presentation and disclosure of collaborative arrangements. Generally, the classification of the transaction under the collaborative arrangements is determined based on the nature of the contractual terms of the arrangement, along with the nature of the operations of the participants. The Company’s collaborative agreements generally include a provision of R&D services related to novel technologies and biocatalysts. Amounts received for these services are classified as Revenue from collaborative arrangements in the consolidated statements of operations and comprehensive loss. The Company's R&D services are a major part of the Company's ongoing operations and therefore ASC 606 is applied to recognize revenue. Cost of Revenues The Company’s R&D, engineering, and other direct costs of services and goods related to revenue agreements with customers, related parties, and collaborative partners represent cost of revenue. Costs include both internal and third-party fixed and variable costs and include materials, supplies, labor, and fringe benefits. 92 Research and Development The Company expenses as incurred costs associated with R&D activities other than those related to revenue agreements or those eligible for capitalization under applicable guidance. Concentration of Credit Risk and Other Risks and Uncertainties Revenue generated from the Company’s contracting entities outside of the United States for the years ended December 31, 2024 and 2023 was approximately 52 % and 73 %, respectively. As of December 31, 2024 and December 31, 2023, approximately 36 % and 49 %, respectively, of trade accounts receivable and unbilled accounts receivable were due from contracting entities located outside the United States. As of December 31, 2024 and December 31, 2023, the value of property, plant, and equipment outside the United States was immaterial. The Company’s revenue by geographic region based on the contracting entities’ location is presented in Note 5 - Revenues . Our largest contracting entities represent 10% or greater of revenue and were as follows for the years ended December 31, 2024 and 2023: Years Ended December 31, 2024 2023 Customer A 25 % 6 % Customer B 13 % 38 % 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, stock-appreciation rights (“SARs”) and restricted stock issued by the Company, which vest based on either time and/or the achievement of certain market or performance conditions. The Company records forfeitures as they occur. 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. The Company estimates the fair value of service and performance-based options and SARs using a Black-Scholes option pricing model that uses assumptions including expected volatility, expected term, and the expected risk-free rate of return. The Company estimates the fair value of market-based RSUs using the Monte Carlo simulation model that uses assumptions including expected volatility, and the derived service period. The Company uses peer data to determine expected volatility and expected term. The Company estimates the fair value of RSUs based on the closing market price of its common stock on the date of measurement. Benefit Plans The Company sponsors a 401(k) defined contribution retirement plan for the benefit of its employees, substantially all of whom are eligible to participate after meeting minimum qualifying requirements. Contributions to the plan are at the discretion of the Company. For the years ended December 31, 2024 and 2023, the Company contributed $ 1,539 and $ 1,253 , respectively, to the plan, which contributions are included within Cost of Revenues, Research and 93 development expense and Selling, general and administrative expense in the consolidated statements of operations and comprehensive loss. Income Taxes The Company follows the asset and liability method of accounting for income taxes under ASC 740, Income Taxes . Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to temporary differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. Deferred income tax assets are evaluated to determine if valuation allowances are required or should be adjusted. Valuation allowances are established based on a more likely than not standard. The ability to realize deferred tax assets depends on the Company’s ability to generate sufficient taxable income within the carry back or carryforward periods provided for in the tax law for each tax jurisdiction. The Company considers the various possible sources of taxable income when assessing the realization of its deferred tax assets. The valuation allowances recorded against deferred tax assets generated by taxable losses in certain jurisdictions will affect the provision for income taxes until the valuation allowances are released. The Company’s provision for income taxes will include no tax benefit for losses incurred and no tax expense with respect to income generated in these jurisdictions until the respective valuation allowance is eliminated. The Company records uncertain tax positions on the basis of a two-step process whereby it is determined whether it is more likely than not that the tax positions will be sustained based on the technical merits of the position, and for those tax positions that meet the more likely than not criteria, the largest amount of tax benefit that is greater than 50% likely to be realized upon ultimate settlement with the related tax authority is recognized. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in income tax expense. Related Party Transactions The Company follows ASC 850-10, Related Party Transactions , for the identification of related parties and disclosure of related party transactions. Pursuant to ASC 850-10-20, related parties include: a) affiliates of the Company; b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825-10-15, to be accounted for by the equity method by the investing entity; c) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; d) principal owners of the Company; e) management of the Company; f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. Refer to Note 6 - Investments , and Note 15 - Related Party Transactions , for further information. Net Loss Per Share Basic net loss per share is computed by dividing net loss attributable to participating stock by the weighted average number of shares of participating stock outstanding during the period. Diluted net loss per share reflects potential dilution and is computed by dividing net loss attributable to participating stock by the weighted average number of shares of participating stock outstanding during the period. The dilutive effect of outstanding awards, if any, is reflected in diluted earnings per share by application of the treasury stock method or if-converted method, as applicable. Refer to Note 4 - Net Loss Per Share , for additional information. Shareholders' Equity 94 The securities of the Company are represented by common stock and preferred stock, each having $ 0.0001 par value per share. Each common share is entitled to one vote. With respect to payment of dividends and distribution of assets upon liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, all common shares shall participate pro rata in such payment whenever funds are legally available and when declared by the Board of Directors of the Company, subject to the prior rights of holders of all classes of stock outstanding. On October 2, 2024 , the Company’s stockholders approved an increase in the number of shares of common stock the Company was authorized to issue from 400,000,000 to 620,000,000 . As of December 31, 2024, the Company was authorized to issue 620,000,000 shares, of which 600,000,000 shares of capital stock are designated common stock and 20,000,000 shares are designated preferred stock. Shares issued and outstanding for common stock is presented on the Company’s consolidated balance sheets, and no shares were issued or outstanding for the preferred stock as of December 31, 2024 and 2023, respectively. Recently Adopted Accounting Pronouncements ASU 2023-07, Improvements to Reportable Segment Disclosures (“ASU 2023-07”) In November 2023, the FASB issued ASU No. 2023-07, which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. In addition, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements. The purpose of the amendments is to enable investors to better understand an entity’s overall performance and assess potential future cash flows. This ASU is effective for public companies with annual periods beginning after December 15, 2023, and interim periods within annual period beginning after December 15, 2024. The Company adopted the standard in the fourth quarter of 2024. The adoption did not have a material impact on its consolidated financial statements. Refer to “ Note 16 — Segment ” for additional information. Recently Issued Accounting Pronouncements ASU 2024-03, Disaggregation of Income Statement Expenses (“ASU 2024-03”) In November 2024, the FASB issued ASU No. 2024-03, which introduces new disclosure requirements for reporting entities to provide disaggregated information on specific expense categories within relevant income statement captions. The standard aims to enhance transparency by requiring a breakdown of expenses such as purchases of inventory, employee compensation, depreciation, intangible asset amortization, and depletion. Additionally, the ASU mandates that certain gains, losses, and reconciling items that align with existing GAAP disclosures be presented in a tabular format, allowing for a more detailed understanding of a company’s expense structure. The standard also requires narrative disclosure for selling expenses, including a description defined by management. This ASU is effective for public companies with annual periods beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027. The Company is currently evaluating the impact of this new guidance on its consolidated financial statements and related disclosures. ASU 2024-04, Induced Conversions of Convertible Debt Instruments (“ASU 2024-04”) In November 2024, the FASB issued ASU No. 2024-04, which provides guidance on the accounting for induced conversions of convertible debt instruments. The update clarifies that any additional value given to the debt holder as an inducement should be recorded as an expense at the time of conversion. This standard aims to ensure consistent financial reporting for these types of transactions. This ASU is effective for public companies with annual periods beginning after December 15, 2025, and interim periods within those annual periods, with early adoption permitted. The Company is currently evaluating the impact of this new guidance on its consolidated financial statements and related disclosures. ASU 2023-09, Improvements to Income Tax Disclosures (“ASU 2023-09”) In December 2023, the FASB issued ASU No. 2023-09, which requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The standard is intended to help investors better assess how a company’s operations and related tax risks and tax planning and operational opportunities affect the Company’s tax rate and prospects for future cash flows. ASU 2023-09 improves disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. This ASU is effective for public companies with annual periods beginning after December 15, 2024, with early 95 adoption permitted. The standard is effective for the Company starting in annual periods in 2025. The Company has not elected early adoption of ASU 2023-09 and will incorporate required disclosures in its annual financial statements for the year ending December 31, 2025. 96 Note 3 — Reverse Recapitalization On February 8, 2023, Legacy LanzaTech and AMCI consummated the merger contemplated by the Merger Agreement (see Note 1 - Description of the Business ). Immediately following the Business Combination, there were 196,222,737 shares of common stock outstanding with a par value of $ 0.0001 . Additionally, there were outstanding warrants to purchase 12,574,200 shares of common stock. As discussed in Note 2 - Summary of Significant Accounting Policies , the Business Combination was accounted for as a reverse recapitalization in accordance with GAAP. Under this method, while AMCI was the legal acquirer, it has been treated as the “acquired” company for financial reporting purposes. Accordingly, the Business Combination was treated as the equivalent of pre-combination Legacy LanzaTech issuing stock for the net assets of AMCI, accompanied by a recapitalization. The net assets of AMCI were stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination are those of pre-combination Legacy LanzaTech. Reported shares and earnings per share available to holders of the Company’s common stock and preferred shares, prior to the Business Combination, have been retroactively restated to reflect the exchange ratio established in the Business Combination (approximately one pre-combination Legacy LanzaTech share to 4.3747 of the Company’s shares). Upon closing of the Business Combination, the shareholders of AMCI, including AMCI founders, were issued 10,398,374 shares of common stock of the Company. In connection with the closing, holders of 8,351,626 shares of common stock of AMCI were redeemed at a price per share of approximately $ 10.16 . In connection with the Closing, 18,500,000 shares of common stock of the Company were issued to PIPE investors. 15,500,000 of those shares were issued at a price per share of $ 10.00 . The remaining 3,000,000 shares were issued upon conversion of the ArcelorMittal SAFE liability, initially issued in December 2021. The Company incurred $ 7,223 in transaction costs relating to the Business Combination and recorded those costs against Additional paid-in capital in the consolidated balance sheets. The number of shares of Class A common stock issued and outstanding immediately following the consummation of the Business Combination and PIPE financing were: Shares Percentage Legacy LanzaTech shares 167,324,363 85.3 % Public stockholders 10,398,374 5.3 % PIPE shares 18,500,000 9.4 % Total 196,222,737 100 % The following table reconciles the elements of the Business Combination and PIPE financing to the consolidated statements of cash flows: Recapitalization Cash - AMCI trust account 1 $ 64,090 Cash - PIPE financing 155,000 Less: Transaction costs allocated to equity ( 5,709 ) Effect of the Business Combination and PIPE financing $ 213,381 ______________ (1) The cash from the AMCI trust account is net of redemptions and the payment of pre-combination AMCI expenses. The following table reconciles the elements of the Business Combination and PIPE financing to the change in Additional paid-in capital on the consolidated statement of changes in redeemable preferred stock and shareholders' equity/deficit: 97 Recapitalization Cash - AMCI trust account $ 64,090 Public Warrants and Private Placement Warrants recorded on the Closing Date ( 4,624 ) Cash - PIPE financing 155,000 Conversion of the AM SAFE 29,730 Transaction costs allocated to equity ( 7,223 ) $ 236,973 Less: par value of shares held by PIPE investors and public stockholders ( 3 ) Total additional paid-in capital from recapitalization $ 236,970 Redeemable, Convertible Preferred Stock Prior to the Business Combination, the Company had six outstanding series of contingently redeemable convertible preferred stock. All redeemable, convertible preferred stock was converted into common shares on the Closing Date of the Business Combination on a 1 :1 basis. Immediately before the conversion, all cumulative dividends were declared, totaling a dividend payable of $ 241,529 . This dividend was paid in-kind and subsequently converted, as a result of the Business Combination, into an additional 24,152,942 common shares. After the in-kind dividend payment and the conversion, the former preferred shareholders held 153,895,644 common shares. 98 Note 4 — Net Loss Per Share Basic net loss per share is computed by dividing net loss by the weighted-average number of shares of common stock of the Company outstanding during the period. Diluted net loss per share is computed by giving effect to all common stock equivalents of the Company, including equity-classified share-based compensation, the Brookfield SAFE, and warrants, to the extent dilutive. The following table presents the calculation of basic and diluted net loss per share for the Company’s common stock (in thousands, except shares and per share amounts): Years Ended December 31, 2024 2023 Numerator: Net loss for basic and diluted earnings per common share $ ( 137,731 ) $ ( 134,098 ) Unpaid cumulative dividends on preferred stock — ( 4,117 ) Net loss allocated to common shareholders $ ( 137,731 ) $ ( 138,215 ) Denominator: Weighted-average shares used in calculating net loss per share, basic and diluted 197,579,945 176,023,219 Net loss per common share, basic and diluted (1) $ ( 0.70 ) $ ( 0.79 ) __________________ (1) In periods in which the Company reports a net loss, all common stock equivalents are excluded from the calculation of diluted weighted average shares outstanding because of their anti-dilutive effect on loss per share. As of December 31, 2024 and 2023, common stock equivalents not included in the computation of loss per share because their effect would be antidilutive included the following: December 31, 2024 2023 Options 18,658,807 16,411,978 RSUs 7,767,910 7,084,967 Convertible Note 32,000,000 — Brookfield SAFE 5,000,000 5,000,000 Warrants 16,657,686 16,657,686 Total 80,084,403 45,154,631 99 Note 5 — Revenues Disaggregated Revenue The following table presents disaggregated revenue in the following categories (in thousands): Years Ended December 31, 2024 2023 Contract Types: Licensing $ 11,297 $ 3,449 Engineering and other services 19,761 39,196 Biorefining revenue $ 31,058 $ 42,645 Joint development agreements 6,226 8,416 Contract research 4,365 6,233 Joint development and contract research revenue $ 10,591 $ 14,649 CarbonSmart product 7,943 5,337 Total Revenue $ 49,592 $ 62,631 The following table presents revenue from partners in collaborative arrangements and from grant contributions which are included in the table above as follows (in thousands): Years Ended December 31, 2024 2023 Revenue from partners in collaborative agreements included in the Joint development agreements above $ 5,573 $ 5,529 Revenue from grant contributions included in Engineering and other services above 6,403 24,146 Revenue by Geographic Location The following table presents disaggregation of the Company’s revenues by customer location for the years ended December 31, 2024 and 2023 (in thousands): Years Ended December 31, 2024 2023 North America $ 23,587 $ 17,618 Europe, Middle East, Africa (EMEA) 16,260 37,447 Asia 8,862 3,570 Australia 883 3,996 Total Revenue $ 49,592 $ 62,631 100 Contract balances The following table provides changes in contract assets and liabilities (in thousands): Current Contract Assets Current Contract Liabilities Non-current Contract Liabilities Balance as of December 31, 2023 $ 28,238 $ 3,198 $ 8,233 Additions to unbilled accounts receivable 40,771 — — Increases due to consideration received — 15,823 — Unbilled accounts receivable recognized in trade receivables ( 49,934 ) — — Decrease on revaluation on currency ( 100 ) ( 27 ) ( 313 ) Reclassification from long-term to short-term — 4,030 ( 4,030 ) Reclassification to revenue as a result of performance obligations satisfied — ( 19,543 ) — Additions due to LanzaJet sublicense — 2,687 1,343 Balance as of December 31, 2024 $ 18,975 $ 6,168 $ 5,233 The decrease in contract assets was mostly due to billing certain customers and government entities for engineering and other services that were previously recorded as contract assets. As of December 31, 2024 and December 31, 2023 the Company had $ 9,456 and $ 11,157 , respectively, of billed accounts receivable, net of allowance. The increase in current contract liabilities was primarily due to the recognition of the portion of payments in shares received in advance from LanzaJet for the remaining sublicensing performance obligation (refer to Note 6 - Investments for further details), while the decrease in non-current contract liabilities is primarily due to the reclassification to current liabilities for performance obligations that will be completed within one year. The Company expects to recognize the amounts classified as non-current within two to three years. Remaining performance obligations Transaction price allocated to the remaining performance obligations represents contracted revenue that has not yet been recognized, including unearned revenue to be recognized in future periods. Transaction price allocated to remaining performance obligations is influenced by factors such as project size, duration, contract modifications, and customer-specific acceptance rights. As of December 31, 2024, the Company had approximately $ 30,179 in contracted revenue remaining to be recognized, of which $ 22,329 is expected to be recognized in the next  twelve months . Note 6 — Investments HTM Debt Securities Held to maturity (“HTM”) debt securities are comprised of U.S. Treasury bills and corporate debt securities. HTM debt securities are classified as short-term or long-term based upon the contractual maturity of the underlying investment. December 31, 2024 (in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Accrued Interest Short-term: Corporate debt securities $ 12,374 $ 3 $ ( 6 ) $ 12,371 $ 83 Total HTM Debt Securities $ 12,374 $ 3 $ ( 6 ) $ 12,371 $ 83 101 December 31, 2023 (in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Accrued Interest Short-term: US Treasury bills and notes $ 20,423 $ 6 $ — $ 20,429 $ 14 Corporate debt securities 21,736 14 ( 33 ) 21,717 209 Yankee debt securities 3,000 — ( 8 ) 2,992 43 Total HTM Debt Securities $ 45,159 $ 20 $ ( 41 ) $ 45,138 $ 266 The Company regularly reviews HTM securities for declines in fair values that are determined to be credit related. As of December 31, 2024 and December 31, 2023, the Company did not have an allowance for credit losses related to HTM securities. Equity investments The Company’s equity investments consisted of the following (in thousands): December 31, 2024 2023 Equity Method Investment in LanzaJet $ 4,363 $ 7,066 Equity Security Investment in SGLT 14,990 14,990 Total Investment $ 19,353 $ 22,056 LanzaJet On May 13, 2020, the Company contributed $ 15,000 in intellectual property in exchange for a 37.5 % interest (“Original Interest”) of LanzaJet in connection with an investment agreement (“Investment Agreement”). The Company accounts for the transaction as a revenue transaction with a customer under ASC 606. The licensing and technical support services provided are recognized as a single combined performance obligation satisfied over the expected period of those services, beginning May 2020 through December 2025. Under the Investment Agreement, LanzaTech has a right to receive up to an aggregate of 45,000,000 additional LanzaJet shares for no additional consideration if (i) certain other LanzaJet shareholders make additional investments for the funding of the development and operation of commercial facilities that would sublicense the relevant fuel production technology from LanzaJet, or (ii) a non-LanzaJet shareholder sublicenses the Company’s technology through collaboration with LanzaJet, and LanzaTech and the LanzaJet board of directors waive the requirement on a pro-rata basis. On June 18, 2024, LanzaJet issued to LanzaTech 15,000,000 shares related to the sublicensing of the Company’s technology to a non-LanzaJet shareholder, as the first tranche of the additional consideration per the Investment Agreement. This was accounted for as revenue from contract modification with a cumulative catch-up, net of intra-entity profit elimination, and as an increase in the Company’s equity method investment in LanzaJet. As a result, LanzaTech’s ownership in LanzaJet increased to 37.01 %. During the years ended December 31, 2024 and 2023, the Company recognized revenue from this arrangement of $ 11,297 and $ 2,249 respectively, net of intra-entity profit elimination and has associated deferred revenue of $ 5,375 and $ 5,375 as of December 31, 2024 and 2023, respectively. Net intra-entity profits related to this arrangement were $ 3,703 and $ 437 for the years ended December 31, 2024 and 2023, respectively. Intra-entity profits are amortized over a 15-year period through 2034. In connection with the LanzaJet Note Purchase Agreement as described in Note 15 - Related Party Transactions , LanzaJet issued warrants that are exercisable for $ 0.01 by the holder when the related funds are drawn by LanzaJet. The warrants held by LanzaTech and other lenders meet the accounting criteria for in-substance common stock at the time the related note commitment is drawn by LanzaJet and the warrants become exercisable. LanzaTech committed proportionally fewer funds, and therefore received proportionally fewer warrants than the other investors. Accordingly, when warrants held by other investors become exercisable (and meet the criteria for in-substance common stock), LanzaTech’s ownership 102 is diluted. The Company recorded gain on dilution of $ 541 and $ 532 in the years ended December 31, 2024 and 2023, respectively. During the year ended December 31, 2024, LanzaJet drew additional funds committed in the LanzaJet Note Purchase Agreement and as a result the Company’s ownership in LanzaJet was diluted to 36.33 %. LanzaTech’s ownership is subject to further dilution if LanzaJet draws additional funds committed in the LanzaJet Note Purchase Agreement and the remaining warrants are exercisable by the holders. The carrying value of the Company’s equity method investment in LanzaJet as of December 31, 2024 and 2023 was approximately $ 2,100 and $ 3,400 less than its proportionate share of its equity method investees’ book values, respectively. The basis differences are largely the result of a difference in the timing of recognition of variable consideration to which the Company is entitled in exchange for its contribution of intellectual property to LanzaJet as discussed above. The variable consideration the Company may receive will be in the form of additional ownership interests and the majority of the basis difference will be reversed in connection with recognition of that variable consideration. In connection with a sublicense agreement to LanzaJet under the Company’s license agreement with Battelle Memorial Institute (“Battelle”), LanzaTech remains responsible for any failure by LanzaJet to pay royalties due to Battelle. The fair value of LanzaTech’s obligation under this guarantee was immaterial as of December 31, 2024 and 2023. The following table presents summarized aggregated financial information of our equity method investment: Years Ended December 31, 2024 2023 Selected Statement of Operations Information (1) : Revenues $ 13,477 $ 4,542 Gross profit 5,209 2,526 Net loss ( 43,743 ) ( 14,881 ) Net loss attributable to the Company $ ( 14,775 ) $ ( 3,432 ) Years Ended December 31, 2024 2023 Selected Balance Sheet Information (2) : Current assets $ 79,060 $ 79,843 Non-current assets 271,019 185,720 Current liabilities ( 29,069 ) 44,145 Non-current liabilities $ ( 303,352 ) $ 175,899 __________________ (1) The income statement amounts reflect LanzaJet’s activity for the years ended December 31, 2024 and 2023. (2) The balance sheet information reflects LanzaJet as of December 31, 2024 and 2023. SGLT On September 28, 2011, the Company contributed RMB 25,800 (approx. $ 4,000 ) in intellectual property in exchange for 30 % of the registered capital of Beijing Shougang LanzaTech Technology Co., LTD (“SGLT”). Since then, the Company’s interest in SGLT’s registered capital has decreased to approximately 9.31 % as a result of investment by new investors. The Company accounts for its investment in equity securities of SGLT using the alternative measurement principles as permitted under ASC 321, Investments - Equity Securities, because SGLT's fair value is not readily determinable. For the years ended December 31, 2024 and 2023 , there was no change in the recorded amount of the investment in SGLT. As of December 31, 2024 and 2023, there were no impairments of equity investments. During the years ended December 31, 2024 and 2023, the Company received no dividends from equity investments. See Note 15 - Related Party Transactions , for information on revenues, accounts receivable, contract assets and purchases and open accounts payable with the Company’s equity investments. 103 Note 7 — Brookfield SAFE On October 2, 2022, the Company entered into the Brookfield SAFE. Under the Brookfield SAFE, the Company agreed to issue to Brookfield the right to certain shares of its capital stock, in exchange for the payment of $ 50,000 (the “Initial Purchase Amount”). The Brookfield SAFE is legal form debt. As a result of the Business Combination, the Brookfield SAFE can be converted into a maximum number of shares of 5,000,000 . Management has elected to apply the Fair Value Option ("FVO") under ASC 825, Financial Instruments . As the Brookfield SAFE is accounted for under the FVO, the Brookfield SAFE is classified as a mark-to-market liability. On the fifth anniversary of the Brookfield SAFE, LanzaTech is required to repay in cash the Initial Purchase Amount less any Non-Repayable Amount (the “Remaining Amount”), as well as interest on such Remaining Amount of 8.0 percent, compounded annually. For each $ 50,000 of aggregate equity funding required for qualifying projects presented to Brookfield in accordance with the Brookfield Framework Agreement (discussed below), the Remaining Amount will be reduced by $ 5,000 (such cumulative reductions the “Non-Repayable Amount”) and converted into LanzaTech Shares at $ 10.00 per share, which was the share price paid by the PIPE investors in the Business Combination. Interest on the corresponding amount will be forgiven. Each project presented must meet certain criteria in order to be considered a qualifying project. Additionally, 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 LanzaTech capital stock at the same $ 10.00 per share price. The Brookfield SAFE has not yet converted as a qualifying financing has not yet occurred and no qualified project investments have been presented to Brookfield as of December 31, 2024. As of December 31, 2024 and 2023, the fair value of the Brookfield SAFE was $ 13,223 and $ 25,150 respectively and was recorded within Brookfield SAFE liability on the consolidated balance sheets. On February 14, 2025, the Company and Brookfield terminated the Brookfield SAFE and all rights and obligations, and concurrently entered into a Loan Agreement as defined in Note 19 - Subsequent Events. The Framework Agreement, as described below remains in full effect. Brookfield Framework Agreement On October 2, 2022, LanzaTech entered into a framework agreement with Brookfield (the “Brookfield Framework Agreement”). Under such agreement, LanzaTech agreed to exclusively offer Brookfield the opportunity to acquire or invest in certain projects to construct commercial production facilities employing carbon capture and transformation technology in the U.S., the European Union, the United Kingdom, Canada or Mexico for which LanzaTech is solely or jointly responsible for obtaining or providing equity financing, subject to certain exceptions. LanzaTech agreed to present Brookfield with projects that over the term of the agreement require equity funding of at least $ 500,000 in the aggregate. With respect to projects acquired by Brookfield, LanzaTech is entitled to a percentage of free cash flow generated by such projects determined in accordance with a hurdle-based return waterfall. Brookfield has no obligation under the Brookfield Framework Agreement to invest in any of the projects. There had been no investments in projects as of December 31, 2024 or 2023. Note 8 — Convertible Note On August 5, 2024, the Company entered into the Convertible Note Purchase Agreement pursuant to which the Company agreed to sell and issue to Carbon Direct Capital and other purchasers in a private placement transaction in one or more closings up to an aggregate principal amount of $ 150,000 of convertible notes. On August 6, 2024, the Company issued and sold $ 40,150 principal amount of convertible notes to Carbon Direct Capital pursuant to the Convertible Note Purchase Agreement. The gross proceeds from the initial closing are approximately $ 40,000 , before deducting estimated offering expenses. The Convertible Note bears interest at a fixed rate of 8.00 % per annum, which interest will be added to the outstanding principal amount of the Convertible Note on the last day of the applicable interest period (beginning on the date of issuance and ending on and including the earlier of (x) the anniversary date of such issuance and (y) the maturity date, the “Interest Period”); provided, however, that the Company is permitted to pay all interest payable during an Interest Period in cash pursuant to prior written notice to the Convertible Note holder. 104 The Convertible Note 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, par value $ 0.0001 per share, 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) $ 40,000 and (ii) 50 % of the total principal amount under the outstanding convertible notes 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 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 is also convertible at the option of the holder 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 had occurred. The Company elected the fair value option to account for the Convertible Note. See Note 10 - Fair Value for further details on the liability recorded as of December 31, 2024 and associated losses in the change of its fair value for the year ended December 31, 2024. The Company incurred $ 3,169 of related transaction costs, which were included with other accrued liabilities of the consolidated balance sheets as of December 31, 2024 and selling, general and administrative expense of the consolidated statements of operations and comprehensive loss for the year ended December 31, 2024. 105 Note 9 — Forward Purchase Agreement The FPA consists of the Prepayment Amount, the FPA Put Option and the Fixed Maturity Consideration. The Prepayment Amount of $ 60,547 is presented as a reduction to Additional paid-in capital in the Company’s consolidated balance sheets. Expensed transaction costs, representing the stock acquisition fees, in the amount of $ 451 were recorded in Other expense, net on the consolidated statements of operations and comprehensive loss in the year ended December 31, 2023. On July 22, 2024, Vellar purported to accelerate the FPA Maturity Date with respect to its portion of the Recycled Shares (i.e., 2,999,000 shares) to July 22, 2024 in connection with the VWAP Trigger Event. It subsequently delivered to the Company a notice of default under the FPA. On July 24, 2024, the Company filed suit against Vellar under the FPA, primarily in connection with Vellar’s sale of Recycled Shares (see Note 17 - Commitments and Contingencies). 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 $ 2,539 in Share Consideration and $ 7,500 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. The Fixed Maturity Consideration was valued at $ 4,123 as of December 31, 2024, which represents the fair value of the fixed portion of the Share Consideration and the Minimum Maturity Consideration and classified as current in the consolidated balance sheets. As of December 31, 2023, the Fixed Maturity Consideration was valued at $ 7,228 and was classified as non-current liability in the consolidated balance sheets. The FPA Put Option was valued at $ 30,015 as of December 31, 2024 and $ 37,523 in December 31, 2023 and were classified as non-current liability in the consolidated balance sheets. In January 2025, Vellar exercised all of its 2,010,000 FPA Warrants, see Note 17 - Commitments and Contingencies and Note 19 - Subsequent Events for further details. 106 Note 10 — Fair Value The following table presents the Company’s fair value hierarchy for its assets and liabilities measured at fair value as of December 31, 2024 and December 31, 2023 (in thousands): December 31, 2024 Level 1 Level 2 Level 3 Total Assets: Cash equivalents $ 30,136 $ — $ — $ 30,136 Total assets $ 30,136 $ — $ — $ 30,136 Liabilities: Convertible Note $ — $ — $ 51,112 $ 51,112 FPA Put Option liability — — 30,015 30,015 Fixed Maturity Consideration and current portion of the FPA Put Option — — 4,123 4,123 Brookfield SAFE liability — — 13,223 13,223 Private Placement Warrants — — 1,432 1,432 Public Warrants 2,099 — — 2,099 Total liabilities $ 2,099 $ — $ 99,905 $ 102,004 December 31, 2023 Level 1 Level 2 Level 3 Total Assets: Cash equivalents $ 28,058 $ — $ — $ 28,058 Total assets $ 28,058 $ — $ — $ 28,058 Liabilities: FPA Put Option liability $ — $ — $ 37,523 $ 37,523 Fixed Maturity Consideration — — 7,228 7,228 Brookfield SAFE liability — — 25,150 25,150 Private Placement Warrants — — 3,915 3,915 Public Warrants 3,699 — — 3,699 Total Liabilities $ 3,699 $ — $ 73,816 $ 77,515 Forward Purchase Agreement The fair value upon issuance of the FPA (both the FPA Put Option liability and Fixed Maturity Consideration) and subsequent changes in fair value are included in other expense, net in the consolidated statements of operations and comprehensive loss in the corresponding period. The fair value of the FPA was estimated using a Monte-Carlo Simulation in a risk-neutral framework through March 31, 2024. Because the stock price already traded below the threshold of $ 3.00 per share for 49 days out of 50 trading days during a 60 -day consecutive trading-day period, management determined that estimating the fair value of the FPA using an accelerated FPA Maturity Date was more appropriate. As such, the model calculated the value of the in-substance written put option and the portion of the Maturity Consideration in excess of the Fixed Maturity Consideration as if the Early Termination Option was exercised on June 30, 2024. Thereafter, the in-substance written put option was calculated as the repurchase of the Recycled Shares at the Share Price minus the Company’s share price as of the reporting date. The 107 Maturity Consideration was calculated as 7,500,000 multiplied by $ 2.00 or $ 15,000 , which included the Fixed Maturity Consideration calculated as 7,500,000 less the Terminated Shares multiplied by $ 2.00 , or $ 3,167 . The following table represents the inputs used in calculating the fair value of the prepaid forward contract and the Fixed Maturity Consideration as of December 31, 2024 and December 31, 2023: December 31, 2024 December 31, 2023 Stock price $ 1.37 $ 5.03 Term (in years) 0 2.11 Expected volatility N/A 50.0 % Risk-free interest rate N/A 4.16 % Expected dividend yield — % — % The Company has filed suit against Vellar in July 2024 under the FPA and fully settled with ACM in October 2024 (see Note 9 - Forward Purchase Agreement and Note 17 - Commitments and Contingencies ) Convertible Note The Company has elected to measure the Convertible Note using the fair value option under ASC 825. As of December 31, 2024, no part of the Convertible Note had converted into the Company’s common stock as no Qualified Equity Financing nor Non-Qualifying Financing events have occurred and the holder had not exercised its right to convert. The fair value of the Convertible Note was estimated using a binomial lattice model. At issuance, the Company recognized the Convertible Note liability at a fair value of $ 40,150 on August 6, 2024. Subsequently, the Company remeasured the liability and recognized a decrease of approximately $ 11,743 on the consolidated statements of operations and comprehensive loss within Other expense, net, representing the change in fair value from the initial closing to December 31, 2024, and $ 781 attributable to the change in the instrument-specific credit risk in other comprehensive income. The following table represents the inputs used in calculating the fair value of the Convertible Note as of December 31, 2024 and August 6, 2024: December 31, 2024 August 6, 2024 Stock price $ 1.37 $ 1.40 Term (in years) 4.60 5 Expected volatility 110.0 % 85.0 % Risk-free interest rate 4.3 % 3.70 % Expected dividend yield — % — % Brookfield SAFE The Brookfield SAFE is legal form debt that the Company has elected to measure using the FVO under ASC 825. As of December 31, 2024, no part of the Brookfield SAFE had converted to Company common shares as no qualifying projects had been presented to Brookfield yet. There were no cash flows associated with the Brookfield SAFE as of December 31, 2024. As of December 31, 2024, the Company expected to present projects to Brookfield to result in the Brookfield SAFE liability being automatically converted into shares at 75 % with remaining portion to be outstanding until maturity. For the conversion portion, since the liquidity price was set at the Business Combination, the number of shares that Brookfield receives is fixed. Based on this expectation, the value of the Brookfield SAFE is equal to the Brookfield SAFE's as-converted value, which is the converted portion of initial purchase amount, divided by the liquidity price, multiplied by the stock price. For the maturity portion, the Brookfield SAFE is not automatically converted prior to maturity. At maturity, the holder could either convert or receive the remaining principal and interest in cash, similar in structure to a standard convertible note. Accordingly, the fair value of the maturity portion was estimated using the Black-Scholes option pricing model. The strike price would be the accrued balance of the Brookfield SAFE at maturity. On a per share basis the strike price would be $ 14.69 (i.e. $ 10.00 grown at 8.0 percent until maturity five ( 5 ) years from issuance). The “stock” price 108 input would be the current value of the shares that Brookfield would receive at conversion. On a per share price basis, the stock price input would be the Valuation Date stock price of $ 1.37 . Based on the portion of the Brookfield SAFE expected to automatically convert and the portion of the Brookfield SAFE expected to remain outstanding until maturity, the estimated fair value of Brookfield SAFE was 13,223 as of December 31, 2024, which is recorded on the consolidated balance sheets. On February 14, 2025, the Company and Brookfield terminated the Brookfield SAFE and all rights and obligations, and concurrently entered into a Loan Agreement as defined in Note 19 - Subsequent Events . Significant inputs for Level 3 Brookfield SAFE measurement at December 31, 2024 and December 31, 2023 are as follows: December 31, 2024 December 31, 2023 Initial purchase amount $ 50,000 $ 50,000 Liquidity price $ 10.00 $ 10.00 Stock price $ 1.37 $ 5.03 Term (in years) 3.11 N/A Expected volatility 67.5 % N/A Risk-free interest rate 4.3 % N/A Expected dividend yield — % N/A Public Warrants and Private Placement Warrants For the Public Warrants, the Company uses inputs such as actual trade data, quoted market prices from dealers or brokers, and other similar sources to determine the fair value. Changes in fair value are recorded in Other expense, net within the consolidated statements of operations and comprehensive loss. The Company recognized decreases in the fair value of the liability of $ 1,600 during the year ended December 31, 2024 compared to an increase of $ 1,224 in 2023. The fair value of the Private Placement Warrants was estimated using a Black-Scholes option pricing model. For the year ended December 31, 2024, the Company recognized a decrease in the fair value of $ 2,483 compared to a decrease of $ 1,766 for the prior year. Changes in fair value are recorded on the consolidated statements of operations and comprehensive loss within Other expense, net. The following table represents the weighted average inputs used in calculating the fair value of the Private Placement Warrants outstanding as of December 31, 2024 and December 31, 2023: December 31, 2024 December 31, 2023 Stock price $ 1.37 $ 5.03 Exercise price $ 11.50 $ 11.50 Term (in years) 3.11 4.11 Expected volatility 97.5 % 45.0 % Risk-free interest rate 4.28 % 3.92 % Expected dividend yield — % — % 109 The following tables represent reconciliations of the fair value measurements of the assets and liabilities using significant unobservable inputs (Level 3) (in thousands): Convertible Note FPA Put Option Fixed Maturity Consideration Brookfield SAFE Private Placement Warrants Balance as of January 1, 2024 $ — $ ( 37,523 ) $ ( 7,228 ) $ ( 25,150 ) $ ( 3,914 ) Issuance of the Convertible Note ( 40,150 ) — — — — Partial settlement of Forward Purchase Agreement — 30,000 4,123 — — (Loss) gain recognized in other expense, net on the consolidated statement of operations and comprehensive loss ( 10,962 ) ( 22,492 ) ( 1,018 ) 11,927 2,482 Balance as of December 31, 2024 $ ( 51,112 ) $ ( 30,015 ) $ ( 4,123 ) $ ( 13,223 ) $ ( 1,432 ) FPA Put Option Fixed Maturity Consideration FPA Warrants Warrants on Preferred Shares AM SAFE liability AM SAFE warrant Brookfield SAFE Private Placement Warrants Balance as of January 1, 2023 $ — $ — $ — $ ( 2,119 ) $ ( 28,986 ) $ ( 1,989 ) $ ( 50,000 ) $ — Recognized as a result of the Business Combination — — — — — — — ( 2,148 ) (Loss) gain recognized in other expense, net on the consolidated statement of operations and comprehensive loss ( 37,523 ) ( 7,228 ) ( 3,063 ) ( 3,770 ) ( 744 ) 189 24,850 ( 1,766 ) Conversion of warrants to preferred shares — — — 5,889 — — — — Conversion of SAFE liability to equity classification — — — — 29,730 — — — Reclassification of warrant to equity — — 3,063 — — 1,800 — — Balance as of December 31, 2023 $ ( 37,523 ) $ ( 7,228 ) $ — $ — $ — $ — $ ( 25,150 ) $ ( 3,914 ) 110 Note 11 — Other Current Assets As of December 31, 2024 and 2023 other current assets consisted of the following (in thousands): December 31, 2024 2023 Inventory $ 2,156 $ 1,750 Materials and supplies 3,583 3,595 Prepaid assets 3,416 3,698 Other 5,875 3,518 Total $ 15,030 $ 12,561 111 Note 12 — Property, Plant, and Equipment, net The Company’s property, plant and equipment, net consisted of the following (in thousands): December 31, 2024 2023 Plant and Equipment $ 45,014 $ 40,827 Leasehold improvements 7,012 4,837 Office Equipment and furniture 2,351 2,103 Vehicles 92 92 Land 64 64 Other 932 900 Construction in progress 4,638 6,287 $ 60,103 $ 55,110 Less accumulated depreciation and amortization $ 37,770 $ 32,287 Property, plant and equipment, net $ 22,333 $ 22,823 Depreciation for the years ended December 31, 2024 and 2023 totaled $ 5,567 and $ 5,452 , respectively. Note 13 — Income Taxes The Company is subject to federal and state income taxes in the United States, as well as income taxes in foreign jurisdictions in which it conducts business. The Company does not provide for federal income taxes on the undistributed earnings of its foreign subsidiaries as such earnings are reinvested indefinitely. The Company and its foreign subsidiaries have historically been loss generating entities that have resulted in no excess earnings to consider for repatriation and accordingly there were no deferred income taxes recognized for the years ended December 31, 2024 and 2023. The Company recorded no income tax expense for the years ended December 31, 2024 and 2023, representing an effective tax rate of 0 %. The difference between the U.S. federal statutory rate of 21 % and the Company's effective tax rate in the years ended December 31, 2024 and 2023 was primarily due to a full valuation allowance related to the Company's U.S. and foreign deferred tax assets. The Company reassesses the need for a valuation allowance on a quarterly basis. If it is determined that a portion or all of the valuation allowance is not required, it will generally be a benefit to the income tax provision in the period such determination is made. The Company conducts business in multiple jurisdictions within and outside the United States. Consequently, the Company is subject to periodic income tax examinations by domestic and foreign income tax authorities. The Company is subject to audits for tax years 2018 and onward for federal purposes. There are tax years which remain subject to examination in various other state and foreign jurisdictions that are not material to the Company's financial statements. 112 The components of (loss) income before income taxes and loss from equity method investees, net are as follows (in thousands): Years Ended December 31, 2024 2023 United States $ ( 136,223 ) $ ( 134,020 ) Foreign ( 1,508 ) ( 78 ) Total $ ( 137,731 ) $ ( 134,098 ) The Company does not have any current or deferred taxes in either the United States or its foreign operations. The following table is a reconciliation of income taxes computed at the statutory federal income tax rate (21.0% federal income tax rate in the United States for 2024 and 2023) to the income tax expense (benefit) reflected in the consolidated statement of operations and comprehensive loss (in thousands, except percentages): Years Ended December 31, 2024 2023 Income tax (benefit) at the statutory federal income tax rate $ ( 28,924 ) 21.0 % $ ( 28,145 ) 21.0 % Foreign tax rate differential 102 ( 0.1 ) % ( 15 ) — % State and local taxes ( 12,148 ) 8.8 % ( 9,757 ) 7.3 % Share Based Compensation 547 ( 0.4 ) % 197 ( 0.1 ) % Nondeductible loss on stock 1,126 ( 0.8 ) % 6,324 ( 4.7 ) % Valuation allowance 34,544 ( 25.1 ) % 31,661 ( 23.6 ) % Expiring NOLs 1,109 ( 0.8 ) % — — % Other 3,644 ( 2.6 ) % ( 265 ) 0.2 % Total income tax expense (benefit) $ — — % $ — — % 113 Deferred Taxes Significant components of deferred tax assets and liabilities were as follows (in thousands): Years Ended December 31, 2024 2023 Deferred tax assets: Net operating loss and credit carryforwards $ 150,372 $ 134,609 Stock-based compensation 6,636 4,526 Operating lease liability 9,551 6,281 Accrued bonus — — Accrued expenses 168 — Deferred revenue 203 148 Equity method investment 3,875 3,051 R&D capitalization 38,517 26,725 Other 4,357 1,051 Total deferred tax assets 213,679 176,391 Valuation allowance ( 205,566 ) ( 171,223 ) Total net deferred tax asset 8,113 5,168 Deferred tax liabilities: Operating lease asset ( 8,113 ) ( 5,584 ) Other — 416 Total deferred tax liabilities ( 8,113 ) ( 5,168 ) Net deferred income tax assets and liabilities $ — $ — At December 31, 2024 and 2023, the Company had $ 456,014 and $ 395,590 , respectively, of tax losses and credits carried forward subject to shareholder continuity and acceptance in the countries where the Company has tax losses carried forward. R&D tax credits included within these amounts are $ 35,111 and $ 35,147 for the respective periods, which may be available to offset future income tax liabilities. At December 31, 2024 and 2023, the net operating loss and credit carryforwards were comprised of $ 376,507 and $ 321,743 in the United States,$ 34,019 and $ 30,011 in state and local jurisdictions, $ 45,456 and $ 43,805 in foreign jurisdictions, respectively. At December 31, 2024 and 2023, the Company had net operating loss carryforwards of approximately $ 148,511 and $ 144,588 , respectively, that expire in various years from 2024 through 2044, plus $ 272,391 and $ 215,891 , respectively, for which there is no expiration date. Section 382 of the Internal Revenue Code imposes an annual limitation on the utilization of net operating loss carryforwards based on a statutory rate of return and the value of the corporation at the time of a “change of ownership” as defined by Section 382. The Company had a change in ownership in November 2014. Therefore, the Company’s ability to utilize its net operating loss carryforwards incurred prior to the 2014 ownership change, will be subject in future periods to annual limitations. In assessing the realizability of deferred tax assets, the Company assesses whether it is more-likely-than-not that a portion or all of the deferred tax assets will not be realized. The Company considers the scheduled reversal of deferred tax liabilities, tax planning strategies and projected future taxable income in making this assessment. At December 31, 2024 and 2023, a valuation allowance of $ 205,566 and $ 171,223 , respectively, was recorded against certain deferred tax assets based on this assessment. The Company believes it is more-likely-than-not that the tax benefit of the remaining net deferred tax assets will be realized. The amount of net deferred tax assets considered realizable could be increased or reduced in the future if the Company’s assessment of future taxable income or tax planning strategies changes. 114 The Company and its foreign subsidiaries have historically been loss generating entities that have resulted in no excess earnings to consider for repatriation and accordingly there were no deferred income taxes recognized as of December 31, 2024 and 2023. At December 31, 2024 and 2023, the Company had no tax liability or benefit related to uncertain tax positions. No interest or penalties related to uncertain taxes have been recognized on the accompanying consolidated statements of operations. Management does not expect a significant change in uncertain tax positions during the twelve months subsequent to December 31, 2024. The Company conducts business in multiple jurisdictions within and outside the United States. Consequently, the Company is subject to periodic income tax examinations by domestic and foreign income tax authorities. During December 2021, the Internal Revenue Service completed an income tax examination of the Company’s U.S. federal income tax return for the year ended December 31, 2016, which resulted in no impact to the Company’s consolidated financial statements. The Company has no other ongoing tax examinations with domestic or foreign taxing authorities. During 2021, the Company migrated its country of domicile from New Zealand to Delaware in the United States. On migration, the Company was deemed to have disposed of all its assets and liabilities to a third-party at market value which resulted in taxable income to the Company for New Zealand income tax purposes. The migration to Delaware is classified as a tax-free reorganization for U.S. federal income tax purposes. The Organization for Economic Co-operation and Development (OECD) has a framework to implement a global minimum corporate tax of 15% for companies with global revenues and profits above certain thresholds (referred to as Pillar 2.0), with certain aspects of Pillar 2.0 effective January 1, 2024 and other aspects effective January 1, 2025. While it is uncertain whether the U.S. will enact legislation to adopt Pillar 2, certain countries in which the Company operates, have adopted legislation, and other countries are in the process of introducing legislation to implement Pillar 2. The Company does not anticipate Pillar 2 to have material impacts on its effective tax rate, financial position or cash flows. Note 14 — Share-Based Compensation In 2023, the Company adopted the LanzaTech Long-Term Incentive Plan (the “LTIP”) in conjunction with the closing of the Business Combination. The LTIP provides for grants of a variety of awards to employees, directors, and other service providers to the Company, including, but not limited to stock options, stock appreciation rights, restricted stock awards, restricted stock units, performance awards and other stock-based awards or cash incentives. Prior to the effective date of the closing of the Business Combination, the Company granted awards under the LanzaTech NZ Inc. 2013 Stock Plan, the LanzaTech NZ Inc. 2015 Stock Plan, and the LanzaTech NZ, Inc. 2019 Stock Plan, (collectively, the “Prior Stock Plans”). Equity Classified Awards: RSUs Under the LTIP, the Company has granted two types of RSUs: time-based RSUs, and market-based RSUs. Time-based RSUs granted to employees and other service providers (other than directors) are generally subject to a three-year annual pro-rata vesting schedule whereby the awards generally vest in three equal tranches on the first, second, and third anniversaries of the vesting commencement date, subject to grantee’s continued service through each vesting date. However, vesting will accelerate in certain circumstances (e.g., retirement, death, disability, or a qualified termination in connection with a change in control). Time-based RSUs granted to directors are subject to a one-year vesting schedule and the full award vests on the first anniversary of the vesting commencement date, subject to the director’s continued service through the vesting date. However, vesting will accelerate in certain circumstances (e.g., removal in connection with a change in control). The market-based RSUs have both a time-based and a market-based vesting component. Both components must be met for the award to vest. The market-based RSUs are subject to a three-year annual pro-rata vesting schedule whereby the awards generally vest in three equal tranches on the first, second, and third anniversaries of 115 the vesting commencement date, subject to grantee’s continued service through each vesting date. The market-based vesting component is satisfied if on any date during the period beginning on the 151 st date following the vesting commencement date and ending on the fifth anniversary of the vesting commencement date, the average closing price of a share of the Company’s common stock, equals or exceeds $ 11.50 , determined using the closing share price from the 20 trading days preceding such determination date. A summary of the unvested time-based and market-based equity-classified RSUs are presented in the following table: Time-based RSUs Market-based RSUs Shares (in thousands) Weighted Average Grant Date Fair Value Shares (in thousands) Weighted Average Grant Date Fair Value Non-vested Outstanding at January 1, 2024 3,155 $ 3.51 3,930 $ 1.69 Granted 2,401 3.00 — — Vested ( 1,151 ) 3.49 ( 253 ) 1.61 Cancelled/forfeited ( 396 ) 3.32 ( 214 ) 1.61 Non-vested Outstanding at December 31, 2024 4,009 $ 3.22 3,463 $ 1.71 The Company recorded compensation expense related to the time-based RSUs of $ 5,355 for the year ended December 31, 2024. Unrecognized compensation cost as of December 31, 2024 was $ 8,444 and will be recognized over a weighted average of 1.75 years. The Company recorded compensation expense related to the market-based RSUs of $ 1,958 for the year ended December 31, 2024. Unrecognized compensation costs as of December 31, 2024 was $ 896 and will be recognized over a weighted average of 1.03 years. Stock Options In accordance with the LTIP and Prior Stock Plans, grantees have also been granted stock options to purchase common shares. The exercise price of each stock option was no less than the fair market value price of the Company’s common shares determined as of the date of grant. The stock options generally vest over the course of two to five years , subject to the service provider’s continued service through each vesting date. Upon termination of service, unvested stock options are forfeited in accordance with their terms unless the award agreement provides for accelerated vesting (e.g., due to retirement). The below tables reflect the stock options granted prior to the Business Combination multiplied by the exchange ratio and the weighted average exercise price divided by the exchange ratio. Stock option awards outstanding as of December 31, 2024 and changes during the period ended December 31, 2024 were as follows: 116 Shares subject to option (thousands) Weighted average exercise price Weighted average remaining contractual term (years) Aggregate intrinsic value (thousands) Outstanding at January 1, 2024 16,412 $ 1.96 Vested and expecting to vest at January 1, 2024 16,412 1.96 Exercisable at January 1, 2024 10,869 1.49 Granted 3,254 3.10 Exercised ( 206 ) 1.44 Cancelled/forfeited ( 560 ) 3.31 Expired ( 241 ) 3.19 Outstanding at December 31, 2024 18,659 $ 2.11 5.60 $ 1,476 Vested and expecting to vest at December 31, 2024 18,659 2.11 5.60 1,476 Exercisable at December 31, 2024 12,819 $ 1.67 4.31 $ 1,294 The Company recorded compensation expense related to the options of $ 6,132 and $ 5,623 for the years ended December 31, 2024 and 2023, respectively. Unrecognized compensation costs as of December 31, 2024 was $ 8,369 and will be recognized over a weighted average of 1.78 years. Restricted Stock Awards (“RSAs”) Under the Prior Stock Plans, the Company granted RSAs which become eligible to vest upon the satisfaction of a time-based service condition. However, in order to vest, a liquidity event, defined as acquisition, asset transfer, or initial listing, must occur within 10 years from the grant date. Upon a liquidity event, if the participant’s service has not terminated, the entire RSA award vests in full, whether or not previously eligible for vesting. If the participant’s service has terminated and the participant has satisfied the time-based service condition, the RSAs that are outstanding and eligible for vesting immediately vest in full upon liquidity event. The time-based service requirements of the RSAs have a maximum term of three years from the date of grant. The Business Combination constituted a “liquidity event” which caused the vesting of all such outstanding, unvested RSAs. The vesting of the RSAs resulted in compensation expense of $ 2,741 for the year ended December 31, 2023. In connection with the vesting of these RSAs, certain holders of the RSAs surrendered 771,141 shares in a withhold to cover transaction to fund the payment of applicable tax withholding on their behalf by the Company. This resulted in a total cash payment of $ 7,650 by the Company to the Internal Revenue Service for the applicable tax withholding associated with this vesting event. There were no RSA award outstanding as of December 31, 2024. Liability-Classified Awards Phantom RSUs Under a phantom equity sub-plan of the LTIP, certain non-US employees of the Company were provided with Phantom RSUs that can only be settled in cash and are therefore recorded as a liability. The Phantom RSUs have a graded vesting schedule and vest in three equal tranches on the first, second, and third anniversaries of the vesting commencement date, subject to the employee meeting the requisite service requirements. Grantees are entitled to receive a cash payment equal to the fair market value of a share multiplied by the number of vested Phantom RSUs as of the applicable vesting date. Phantom SARs Under a phantom equity sub-plan of the LTIP, certain non-US employees of the Company were provided with Phantom SARs that can only be settled in cash and are therefore recorded as a liability. The Phantom SARs 117 have a graded vesting schedule and vest in three equal tranches on the first, second, and third anniversaries of the vesting commencement date, subject to the employee meeting the requisite service requirements. Phantom SARs expire 10 years after the grant date and entitle the grantee to receive a cash payment upon exercise of the award equal to the excess of the fair market value of a share on the date of exercise over the exercise price multiplied by the number of SARs exercised. Note 15 — Related Party Transactions As of December 31, 2024 and 2023, the Company had equity ownership in LanzaJet and SGLT (see Note 6 - Investments for further details). The table below summarizes amounts related to transactions with these related parties (in thousands): As of December 31, 2024 December 31, 2023 Accounts receivable $ 2,452 $ 2,190 Contract assets 399 659 Notes receivable 5,789 5,436 Accounts payable 234 582 The following table presents revenue from related parties per disaggregated revenue categories: Years Ended December 31, 2024 2023 Revenue from related parties, included within Licensing $ 11,297 $ 3,449 Revenue from related parties, included within Engineering and other services 1,784 2,363 The main transactions with related parties are described below: LanzaJet The Company and LanzaJet have entered into a master service agreement defining the terms when LanzaJet is a subcontractor for some of the Company’s projects, and conversely, when the Company is a subcontractor for LanzaJet’s projects. The accounts payable balance is for work that LanzaJet performed as a subcontractor to the Company. In connection with the formation of LanzaJet, the Company entered into a transition services agreement with LanzaJet. The transition services agreement generally sets out the respective rights, responsibilities and obligations of the Company and LanzaJet with respect to R&D services, access to office and laboratory space, business development and other administrative support services. The transition services agreement may be terminated by mutual consent of the Company and LanzaJet, by LanzaJet at any time, and by the Company upon breach or non-payment by LanzaJet. There are no substantive termination penalties in the event the Company terminates. For the years ended December 31, 2024 and 2023, the Company recognized revenue from related parties of approximately $ 194 and $ 245 , respectively, under the transition services agreement. In addition to the licensing and sublicensing of its intellectual property, pursuant to the Investment Agreement as described in Note 6 - Investments , the Company provides certain engineering and other services related to a gas-to-jet demonstration plant currently in development by LanzaJet and other projects whereby LanzaJet is the customer. The Company recognized revenue of $ 62 and $ 468 , respectively, for the years ended December 31, 2024 and 2023. In December 2023, LanzaTech sold LanzaJet the right to utilize some of LanzaTech’s completed engineering work as a basis for future LanzaJet projects for a price of $ 2 million and recorded a $ 2 million receivable. The payment will be offset against the license fees LanzaTech would pay to LanzaJet for the use of their 118 technology in the Company’s projects. A license agreement is in process and is expected to be executed in 2025, at which time the Company’s $ 2 million receivable will be reduced to the extent of payments due and payable under the license agreement. The Company recognized $ 231 in deferred profit for the year ended December 31, 2024. In May 2020, the Company entered into an agreement to lease certain land to a subsidiary of LanzaJet and recognized lease revenue on a straight-line basis over the life of the lease agreement. Refer to Note 18 - Leases , for additional information. LanzaJet Note Purchase Agreement On November 9, 2022, the Company and the other LanzaJet shareholders entered into a Note Purchase Agreement (the “LanzaJet Note Purchase Agreement”), pursuant to which LanzaJet Freedom Pines Fuels LLC (“FPF”), a wholly owned subsidiary of LanzaJet, will issue, from time to time, notes in an aggregate principal amount of up to $ 147,000 (the “Notes”), comprised of approximately $ 113,500 aggregate principal amount of 6.00 % Senior Secured Notes maturing December 31, 2043 and $ 33,500 aggregate principal amount of 6.00 % Subordinated Secured Notes maturing December 31, 2043. The Company committed to purchase $ 5,500 of Subordinated Secured Notes, which was funded on May 1, 2023. The Senior Secured Notes are secured by a security interest over substantially all assets of FPF, and both the Senior Secured Notes and the Subordinated Secured Notes are secured by a security interest over the intellectual property owned or in-licensed by LanzaJet. Each purchaser of Notes under the LanzaJet Note Purchase Agreement also received a warrant for the right to purchase 575,000 shares of common stock of LanzaJet for each $ 10,000 of Notes purchased by such purchaser for an exercise price of $ 0.01 per share. The warrants are exercisable when the related loan commitment is funded, and may be exercised until the earlier of the third anniversary following the date the holder’s loan commitment is fully funded, or the end of the availability period as defined in the LanzaJet Note Purchase Agreement if the commitment has not been fully funded. In the case of the Company, LanzaTech received warrants to purchase 316,250 shares of common stock of LanzaJet, which became exercisable by the Company when the note was funded on May 1, 2023. The Company exercised the warrants in January 2024. Upon funding of the Notes, the warrants meet the accounting criteria to be considered in-substance common stock, and are accounted for as part of the equity-method investment. Refer to Note 6 - Investments. The LanzaJet Note Purchase Agreement may be amended with the approval of holders of at least 66 2∕3% of the Notes, except with respect to certain rights that require approval of all holders to amend. Upon an event of default under the LanzaJet Note Purchase Agreement, each purchaser may accelerate the payment of its own Notes. Enforcement against the collateral securing the Notes requires the approval of certain holders as specified in the Notes. SGLT The Company supplies SGLT with certain water-soluble organic compounds required in the Company's proprietary gas fermentation process, small-size equipment and consulting services. For the years ended December 31, 2024 and 2023, the Company recognized revenue of approximately $ 454 and $ 75 , respectively. The Company also provided engineering services and incurred costs of $ 1,017 and $ 853 for the years ended December 31, 2024 and 2023, respectively. Additionally, LanzaTech and SGLT entered into a license agreement in 2019, subsequently amended in August 2023, to provide SGLT with the right to sublicense the intellectual property that LanzaTech previously licensed to SGLT. In exchange, the Company is entitled to receive fixed licensing consideration, calculated as a percentage of the maximum amount of royalties owed to SGLT from its sublicenses. Prior to June 2023, the Company was only entitled to royalties from SGLT, if SGLT received sublicense royalty payments. For the year ended December 31, 2024, the Company did not recognize any sublicensing revenue compared to $ 1,200 in 2023. 119 Note 16 - Reportable Segment The Company operates as one operating segment and therefore one reportable segment, focused on integrated solutions to customers based on its proprietary technology. The determination of the Company’s reportable segment is consistent with the financial information regularly reviewed by the chief operating decision maker (“CODM”) for purposes of evaluating performance, allocating resources, setting incentive compensation targets, and planning and forecasting for future periods. The Company’s chief operating decision maker is its Chief Executive Officer. The Company’s single operating segment generates revenues from its three business lines: (1) biorefining, (2) joint development agreements (“JDAs”), contract research, and (3) CarbonSmart sales, all of which share the Company’s technology platforms, research and development infrastructure, and operational resources. Operations and strategies are centralized across the business lines and geographic regions. While the Company operates in various countries, its financial results and operations are viewed on a global basis. The CODM primarily uses revenue and net loss as reported on the consolidated statements of operations, as the measure of profit or loss to allocate resources during the annual budget and forecasting process. The CODM also uses consolidated net loss, along with financial and non-financial inputs, to evaluate the Company’s performance, and make strategic decisions related to headcount and capital expenditures on a consolidated basis. The measure of segment assets is reported on the balance sheet as total assets. The CODM does not review segment assets at a level other than that presented in the Company’s consolidated balance sheets. The table below presents the Company’s consolidated operating results including significant segment expenses: Year Ended December 31, 2024 2023 Consolidated Revenues $ 49,592 $ 62,631 Less Consolidated Cost of Sales 25,970 44,979 Salaries and benefits expenses 1 75,710 77,094 External service providers 1 29,359 23,803 Other Operating expenses (net of recharges) 27,486 23,135 Net loss from operations $ ( 108,933 ) $ ( 106,380 ) Other expenses, net ( 14,564 ) ( 24,816 ) Loss from equity method investees, net ( 14,234 ) ( 2,902 ) Net Loss $ ( 137,731 ) $ ( 134,098 ) (1) including those salaries and benefits and external service providers expenses recharged into cost of sales. For disaggregation of the Company’s revenues by customer location and contract type, please refer to Note 5 - Revenues and for major customers, please refer to Note 2 - Summary of Significant Accounting Policies . Total expenditure on long-lived asset is disclosed in Note 12 - Property, Plant, and Equipment, net. The following table presents long-lived assets by geographic region as of the periods presented: As of December 31, 2024 December 31, 2023 United States $ 20,729 $ 20,964 Foreign 1,604 1,859 Total $ 22,333 $ 22,823 120 Note 17 — Commitments and Contingencies Litigation The Company may be involved in legal proceedings and exposed to potential claims in the normal course of business. As of December 31, 2024 and December 31, 2023, the Company did not have any reasonably possible or probable losses from such claims. The Company has filed suit against Vellar under the FPA, and Vellar has filed suit against the Company, as discussed below. Schara litigation In May 2024, a putative class action complaint (the “Complaint”) was filed in the Delaware Court of Chancery against LanzaTech f/k/a/ AMCI, AMCI Sponsor II LLC (“AMCI Sponsor”) and the individual directors of AMCI (the “Director Defendants”) for purported damages arising from the February 10, 2023, merger between AMCI and Legacy LanzaTech. The Company was subsequently voluntarily dismissed from the case in July 2024, before it was required to respond to the Complaint. The Complaint asserts claims for (i) breach of fiduciary duty against the Director Defendants; and (ii) unjust enrichment against AMCI Sponsor and the Director Defendants. The parties have not yet engaged in any discovery in connection with the litigation and Defendants have not yet been required to respond to the Complaint. The Company and the defendants believe the allegations and claims made in the Complaint are without merit. As the surviving entity following the merger at issue, the Company has certain indemnification obligations to the Director Defendants in connection with the defense of the litigation. The Company has notified the relevant D&O insurance carriers of the litigation and while the Director Defendants are covered for such costs by directors’ and officers’ insurance, such coverage is subject to a retention of $ 5,000 . FPA litigation In relation to the FPA, 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 (the “VWAP Trigger Event”). On July 22, 2024, Vellar (one of the Purchasers) notified the Company 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) the Maturity Consideration of $ 7,500 (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 $ 2,539 , payable in cash, in each case, 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 $ 4,164 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 are 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 noticed to the Company as part of an early termination, which Vellar has not done. In the event of a sale of Recycled Shares subject to an optional early termination, the Company is entitled to receive approximately $ 10.16 for each share sold (see Note 2 - Summary of Significant Accounting Policies). LanzaTech believes that Vellar’s notice regarding the VWAP Trigger Event and consequently, its notice of an event of default, is not valid and accordingly, that no payments are owed to Vellar in connection with the purported acceleration of the FPA Maturity Date or early termination of the FPA. LanzaTech filed an amended complaint on September 30, 2024. Vellar moved to dismiss, and the motion, which is fully briefed, remains pending. The Company intends to vigorously pursue its claims against Vellar. On October 23, 2024, Vellar filed suit against the Company, alleging breach of the FPA, and seeking $ 4,164 plus interest. The Company intends to vigorously defend itself against the claim. On October 24, 2024, Vellar sought advancement of certain expenses from the Company in connection with this litigation. The Company denied the request on October 28, 2024. Vellar filed a motion for advancement of fees on November 20, 2024, 121 which was fully briefed on December 20, 2024 and which remains pending. On April 11, 2025, Vellar filed a motion to amend its complaint, seeking to add a claim for breach of the FPA Warrants, to which LanzaTech and Vellar are parties. The amended complaint seeks damages, including liquidated damages under the FPA Warrants. The motion to amend remains pending. As of December 31, 2024, the Company did not have sufficient information to predict the outcome of the lawsuits. Note 18 — Leases The Company leases certain office space and laboratory facilities. The Company’s lease agreements typically do not contain any significant guarantees of asset values at the end of a lease, renewal options or restrictive covenants. Pursuant to ASC 842, Leases , all leases are classified as operating leases. Total operating lease costs and variable lease costs for the years ended December 31, 2024 and 2023 were $ 3,641 and $ 2,702 and $ 3,703 and $ 3,205 , respectively. Cash paid for amounts included in the measurement of operating lease liabilities for the years ended December 31, 2024 and 2023 was $ 1,058 and $ 1,857 , respectively. As of December 31, 2024, lease payments for operating leases for the Company’s office facility and laboratories was as follows (in thousands): Year ending December 31, 2025 $ ( 76 ) 2026 99 2027 4,646 2028 4,612 2029 4,715 Thereafter 36,913 Total future lease payments $ 50,909 Less: imputed interest 20,132 Total lease liabilities $ 30,777 The following is a summary of weighted average remaining lease term and discount rate for all of the Company’s operating leases: Years Ended December 31, 2024 2023 Weighted average remaining lease term (years) 12.0 12.7 Weighted average discount rate 7.50 % 7.50 % Lessor accounting In May 2020, the Company executed an agreement to lease certain land to a subsidiary of LanzaJet for a period of 10 years with an option to renew this lease for five additional periods of one year with minimum annual rent due. This agreement is accounted for as an operating lease. Through August 2024, the lease was amended three times to modify the scope of the renting areas, increase the annual rent and increase the term from 10 years to 12 years with an option to renew this lease for thirteen additional periods of one year . The Company recognizes lease revenue on a straight-line basis over the life of the lease agreement. For the year ended December 31, 2024, we recognized $ 155 of revenue included in revenue from related party transactions in the consolidated statements of 122 operations. The future minimum lease payments owed to the Company from the lease agreement at December 31, 2024, was as follows (in thousands): Year ending December 31, 2025 $ 155 2026 155 2027 155 2028 155 2029 155 Thereafter 932 Total $ 1,707 Note 19 — Subsequent Events Vellar cashless FPA Warrants exercise On January 23, 2025, the Company issued 1,652,178 shares of common stock pursuant to a cashless exercise of all 2,010,000 FPA Warrants held by Vellar. See Note 17 - Commitments and Contingencies for additional information. Brookfield SAFE Termination and Brookfield Loan execution On February 14, 2025, LanzaTech and Brookfield entered into a Loan Agreement (the “Loan Agreement”), and concurrently terminated the Brookfield SAFE. Under the Loan Agreement and effective as of the termination of the Brookfield SAFE, Brookfield was deemed to have loaned to LanzaTech and LanzaTech was deemed to have borrowed from Brookfield $ 60,031 , representing the $ 50,000 initial amount under the Brookfield SAFE plus accrued interest at a rate of 8 % per annum, compounded annually from October 2, 2022 to and including February 14, 2025 (the “Loan”). The Loan will accrue interest at a rate of 8 % per annum, compounded annually, from February 14, 2025. The initial principal payment of $ 12,500 to Brookfield was due on or prior to February 21, 2025 and has been paid. Any remaining outstanding principal amount of the Loan (the “Remaining Amount”), plus accrued interest will be repayable in cash upon the earlier of (i) October 3, 2027, (ii) the occurrence of certain change of control events or (iii) a breach of the Loan Agreement. In addition, for each $ 50,000 of aggregate equity funding required for qualifying projects presented to Brookfield in accordance with the Framework Agreement, $ 5,000 of the Remaining Amount will be deemed to be repaid. Take-Private Proposal On April 3, 2025, the Board received a preliminary, nonbinding proposal from Carbon Direct Capital offering to acquire all of the outstanding shares of our common stock for $ 0.02 per share (the “Take-Private Proposal”). Carbon Direct Capital is the holder of the Company’s outstanding $ 40,150 Convertible Note, which upon conversion, would entitle it to receive shares of common stock representing approximately 14.6 % of the Company’s common stock based on the total number of shares of common stock of the Company outstanding on April 10, 2025. The Strategic Committee of the Board is currently reviewing, evaluating and negotiating the Take-Private Proposal in consultation with the Company’s financial advisor and legal counsel. 123 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure None