AirJoule Technologies Corp.: Form 10-Q for the period ended Sep 30, 2025

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes appearing in this Quarterly Report on Form 10-Q, as well as the audited financial statements, notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2024.

This discussion includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act. We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions. Such statements include, but are not limited to, possible business combinations and the financing thereof, and related matters, as well as all other statements other than statements of historical fact included herein. Factors that might cause or contribute to such a discrepancy include, but are not limited to: our status as an early stage company with limited operating history, which may make it difficult to evaluate the prospects for our future viability; our initial dependence on revenue generated from a single product; significant barriers we face to deploy our technology; the dependence of our commercialization strategy on our relationship with third parties; our history of losses; accuracy of assumptions underlying projections related to our equity method goodwill impairment testing; and other risks and uncertainties described in our other SEC filings.

Unless the context otherwise requires, references in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” to “we”, “us”, “our”, and the “Company” are intended to refer to (i) following the Business Combination (as defined below), the business and operations of AirJoule Technologies Corporation, formerly known as Montana Technologies Corporation and its consolidated subsidiaries, and (ii) prior to the Business Combination, AirJoule Technologies LLC, formerly known as Montana Technologies LLC, or Legacy Montana, and its consolidated subsidiaries.

Company Overview

We are an advanced technology company whose purpose is to free the world from its water and energy constraints by delivering groundbreaking sorption technologies. AirJoule is the leading technology platform that unleashes the power of water from air. AirJoule produces pure distilled water from air, and our proprietary AirJoule platform, at commercial scale, will mitigate water scarcity through distributed water generation for businesses and consumers around the world. Our products are especially valuable for industrial users, which generate significant amounts of waste heat that can be used to power our sorption technologies to produce low cost pure distilled water and dehumidified air – two key inputs for a variety of industrial activities, including data centers and advanced manufacturing. In HVAC applications, AirJoule is designed to reduce energy consumption, minimize or even eliminate the use of environmentally-harmful refrigerants, and generate material cost efficiencies for air conditioning systems. We are focused on commercialization and scaling manufacturing of our AirJoule products through our global collaborations, including with GE Vernova and Carrier, and we believe that deploying AirJoule units worldwide will serve our purpose of freeing the world of its water and energy constraints. We plan to manufacture initial AirJoule systems capable of producing more than 250 liters per day in 2025, which we intend to use for customer demonstrations, and we expect to scale capacities for commercial sales in 2026.

Growth Strategy and Outlook

We anticipate significant growth opportunities by offering AirJoule in global markets where demand for water, dehumidified air and cooling are highest. With our technology platform, we believe that we are uniquely positioned to provide curated solutions that satisfy our customers’ needs and expectations in fast-growing and water and energy-intensive industries, such as data centers and advanced manufacturing, along with military and HVAC applications. We estimate the combined total addressable market to be approximately $450 billion.

In the data center arena, we aim to address escalating energy and water efficiency challenges associated with increased computing density by using low-grade waste heat to produce pure distilled water and enabling data center operators to reduce their cooling costs and improve water sustainability. Similarly, in advanced manufacturing environments, where product quality and process precision hinge on consistent humidity and ultra-pure water, AirJoule can help customers with cost-effective dehumidification. The military sector presents a distinct opportunity, as AirJoule is able to operate in a variety of climate conditions to support troops in remote and water-scarce environments, ensuring mission readiness and resilience. In the HVAC space, where building owners and facility managers are under pressure to cut energy consumption and improve indoor air quality, AirJoule’s superior moisture removal capability will reduce power consumption and the use of refrigerants in air conditioning systems.

To accelerate market penetration and scale our manufacturing capabilities, we plan to leverage our strategic partnerships. These partnerships offer access to industry-specific R&D expertise, mature supply chains, established sales channels and extensive service networks, allowing us to quickly move from pilot deployments to full-scale commercialization. We intend to co-develop sector-specific solutions, capitalizing on our partners’ market insights and reputational strength to better serve diverse customer needs. By combining our innovative AirJoule technology with their global reach and operational expertise, we will unlock value across multiple industries, establish our position as a leader in water-focused solutions and deliver long-term growth and value to our shareholders.

Recent Developments

The April 2025 PIPE

On April 23, 2025, we entered into the April 2025 PIPE Subscription Agreements with the April 2025 PIPE Investors, pursuant to which, among other things, the April 2025 PIPE Investors agreed to subscribe for and purchase from the Company, and we agreed to issue and sell to the April 2025 PIPE Investors, an aggregate of 3,775,126 newly issued shares of Class A common stock at a purchase price of $3.98 per share on the terms and subject to the conditions set forth therein. The April 2025 PIPE Subscription Agreements entitled the April 2025 PIPE Investors to shelf registration rights with respect to the shares of Class A common stock they purchased. The transaction closed on April 25, 2025, and the shares of Class A common stock were issued and sold to the April 2025 PIPE Investors in reliance on Section 4(a)(2) of the Securities Act.

Committed Equity Facility

On March 25, 2025, we entered into the Equity Line Purchase Agreement, with the Equity Line Investor. Under the terms and subject to the conditions of the Equity Line Purchase Agreement, the Company has the right, but not the obligation, to sell to the Equity Line Investor, over a 36-month period, up to an aggregate of $30,000,000 of our newly issued shares of common stock subject to certain conditions and limitations contained in the Equity Line Purchase Agreement, including that we may issue no more than the number of shares equal to 19.99% of the aggregate number of our issued and outstanding shares of common stock as of immediately prior to the execution of the Equity Line Purchase Agreement without first obtaining stockholder approval. As of September 30, 2025, sales under the Equity Line Purchase Agreement generated net proceeds of approximately $0.4 million.

The Amended LLC Agreement

On April 25, 2025, we entered into the Amended LLC Agreement, pursuant to which we expected to contribute additional capital to the AirJoule JV based on a business plan and annual operating budgets to be agreed between us and GE Vernova. In October 2025, we contributed an additional $5.0 million in capital contributions to the AirJoule JV.

Components of Our Results of Operations

Revenue

We anticipate that we will earn revenue from the sale of various key components that will be used in the assembly of AirJoule systems. As of September 30, 2025, no revenue has been earned from our operations.

Operating Expenses

We classify our operating expenses into the following categories:

• General and administrative: General and administrative expenses consist primarily of personnel-related expenses for our executives, consultants and advisors. These expenses also include non-personnel costs, such as rent, office supplies, legal, audit and accounting services and other professional fees.
• Research and development: Research and development expenses include internal personnel, parts, prototypes and third-party consulting costs related to preliminary research and development of our products.
• Sales and marketing: Sales and marketing expenses consist primarily of business development, professional fees, advertising and marketing costs.
• Transaction costs incurred in connection with business combination: Transaction costs represent the initial recognition of the Earnout Shares liability and fees incurred for financial advisory, legal and other professional services that were directly related to the Business Combination.
• Depreciation and amortization: Depreciation and amortization expense consists of depreciation of property and equipment.

Results of Operations

The following tables set forth the results of our operations for the periods presented, as well as the changes between periods. The period-to-period comparison of financial results is not necessarily indicative of future results.

The three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024

The following table sets forth the Company’s condensed consolidated statements of operations data for the three and nine months ended September 30, 2025 and 2024:

General and Administrative

General and administrative expenses for the three months ended September 30, 2025 were $3.0 million as compared to $2.4 million for the three months ended September 30, 2024. The $0.5 million increase was primarily related to a $0.7 million increase in share-based compensation expense and a $0.1 million increase in salaries and benefits as a result of an increased headcount offset by a $0.3 million decrease in audit and legal fees. We expect that our general and administrative expenses will increase in future periods commensurate with the expected growth of our business and increased expenditures associated with our status as an exchange-listed public company.

General and administrative expenses for the nine months ended September 30, 2025 were $9.5 million as compared to $6.5 million for the nine months ended September 30, 2024. The $3.0 million increase was primarily related to a $3.1 million increase in share-based compensation expense and a $1.4 million increase in salaries and benefits as a result of an increased headcount offset by an increase in reimbursement of costs incurred per the statement of work with AirJoule, LLC of $0.6 million, a $0.5 million decrease in professional services and a $0.4 million decrease in audit and legal fees. We expect that our general and administrative expenses will increase in future periods commensurate with the expected growth of our business and increased expenditures associated with our status as an exchange-listed public company.

Research and Development

Research and development expenses for the three months ended September 30, 2025 were $(8,476) as compared to $(87,147) for the three months ended September 30, 2024. Reimbursement of costs related to the statement of work with AirJoule, LLC, which was executed in November 2024, was $2.0 million as of September 30, 2024. These costs were incurred from March 4, 2024 to September 30, 2024 and resulted in negative research and development expense during the period. During the three months ended September 30, 2025, the Company entered into the Second Amended and Restated License Agreement which eliminated the minimum royalty payment obligations through 2029, resulting in a reversal of $0.5 million and negative research and development expense during the period.

Research and development expenses for the nine months ended September 30, 2025 were $0.8 million as compared to $1.8 million for the nine months ended September 30, 2024. The $1.0 million decrease in research and development was primarily related to a $1.0 million decrease in R&D materials purchases, a $0.7 million decrease in patent and royalty expenses, a $0.6 million decrease in professional and consulting services offset by the decrease in the reimbursement of costs incurred per the statement of work with AirJoule, LLC of $1.0 million and a $0.3 million increase in share-based compensation and salaries and benefits.

Sales and Marketing

Sales and marketing expenses for the three months ended September 30, 2025 were $50,473 as compared to $23,639 for the three months ended September 30, 2024.

Sales and marketing expenses for the nine months ended September 30, 2025 were $72,476 as compared to $136,205 for the nine months ended September 30, 2024.

Transaction Costs Incurred in Connection with Business Combination

Transaction costs incurred in connection with the business combination include the non-cash recognition of earnout liabilities of approximately $53.7 million and transaction costs incurred by Legacy Montana of approximately $1.0 million, which were paid in 2024.

Depreciation and Amortization

Depreciation and amortization expense for the three months ended September 30, 2025 and 2024 was $2,871 and $2,136, respectively.

Depreciation and amortization expense for the nine months ended September 30, 2025 and 2024 was $6,748 and $4,437, respectively.

Interest Income

Interest income was $272,899 and $374,051 for the three months ended September 30, 2025 and 2024, respectively. This was primarily a result of the decrease in our cash balance and interest rates.

Interest income was $799,656 and $616,677 for the nine months ended September 30, 2025 and 2024, respectively. This was primarily a result of the increase in our cash balance.

Gain on Contribution to AirJoule, LLC

An equity method investment received in exchange for noncash consideration is measured at fair value. As a result, during the nine months ended September 30, 2024, we recognized a gain of $333.5 million on the contribution to AirJoule, LLC for the difference between our zero carrying value and the fair value of the perpetual license to intellectual property that we transferred to AirJoule, LLC.

We determined the fair value of the intellectual property by applying the multi-period excess earnings method, which involved the use of significant estimates and assumptions related to forecasted revenue growth rate and customer attrition rate, Level 3 measurements. Valuation specialists were used to develop and evaluate the appropriateness of the multi-period excess earnings method, our discount rates, attrition rate and fair value estimates using its cash flow projections.

Equity Loss from Investment in AirJoule, LLC

As previously noted, on January 25, 2024, Legacy Montana and GE Vernova entered into a joint venture, the AirJoule JV which closed on March 4, 2024. For the three months ended September 30, 2025 and 2024, we recognized a loss of $1.9 million and $2.3 million, respectively from our 50% equity investment in the AirJoule JV. For the nine months ended September 30, 2025 and 2024, we recognized a loss of $6.3 million and $2.9 million, respectively from our 50% equity investment in the AirJoule JV. During the three months ended September 2025, AirJoule, LLC determined that the carrying value of its goodwill exceeded the respective fair value, and recorded an impairment charge of $154.8 million. There was no financial impact to our Equity Loss from Investment in AirJoule, LLC for the three and nine months ended September 30, 2025 as we reduced our basis difference attributable to goodwill by $77.4 million, which represented our share of AirJoule, LLC’s goodwill impairment charge.

Change in Fair value of Earnout Shares liability

Upon consummation of the Business Combination, we expensed approximately $53.7 million in Earnout Shares liability. The change in fair value of $(1.7) million for the three months ended September 30, 2025 was primarily due to an increase in the estimated fair value of the liability and recognized as a loss in the condensed consolidated statements of operations. The fair value of the liability increased primarily due to changes in the valuation inputs and changes in the timing of expected future cash flows. The change in fair value of $31.8 million for the three months ended September 30, 2024 and $17.4 million and $37.2 million for the nine months ended September 30, 2025 and 2024, respectively, was primarily due to a decrease in the estimated fair value of the liability and recognized as gains in the condensed consolidated statements of operations. The fair value of the liability decreased primarily due changes in the valuation inputs, mainly a decrease in the stock price and changes in the timing of expected future cash flows.

Change in Fair value of True Up Shares liability

Upon consummation of the Business Combination, we assumed approximately $0.6 million in earnout true up shares liability. The change in fair value of the liability during the nine months ended September 30, 2025 was primarily due to the triggering event and issuance of Class A common stock.

Change in Fair value of Subject Vesting Shares liability

Upon consummation of the Business Combination, we assumed approximately $11.8 million for the subject vesting shares liability. The change in fair value of income of $(0.1) million for the three months ended September 30, 2025 was primarily due to an increase in the estimated fair value of the liability and recognized as a loss in the condensed consolidated statements of operations. The fair value of the liability increased primarily due to changes in the valuation inputs and changes in the timing of expected future cash flows. The change in fair value of $8.2 million during the three months ended September 30, 2024 and $6.3 million and $7.5 million during the nine months ended September 30, 2025 and 2024, respectively was primarily due to a decrease in the estimated fair value of the liability recognized as gains in the condensed consolidated statements of operations. The fair value of the liability decreased primarily due changes in the valuation inputs, mainly a decrease in the stock price and changes in the timing of expected future cash flows.

Income Tax Benefit (Expense)

For the three months ended September 30, 2025 and 2024, income tax benefit was $2.4 million and $1.3 million, respectively. For the nine months ended September 30, 2025 and 2024, income tax benefit (expense) was $5.6 million and $(83.2) million, respectively. During the three and nine months ended September 30, 2024, our contribution of a perpetual license to AirJoule, LLC’s intellectual property was measured at fair value resulted in a book gain and a temporary difference between book and taxable income. The temporary difference resulted in the recognition of a deferred tax expense and deferred tax liabilities of approximately $87.8 million. This expense was partially offset by the recognition of deferred tax assets in connection with the Company now being a corporation through the Business Combination.

Liquidity and Capital Resources

The April 2025 PIPE

On April 23, 2025, we entered into the April 2025 PIPE Subscription Agreements with the April 2025 PIPE Investors pursuant to which, among other things, the April 2025 PIPE Investors agreed to subscribe for and purchase from the Company, and we agreed to issue and sell to the April 2025 PIPE Investors, an aggregate of 3,775,126 newly issued shares of Class A common stock at a purchase price of $3.98 per share on the terms and subject to the conditions set forth therein. The April 2025 PIPE Subscription Agreements entitled the April 2025 PIPE Investors to shelf registration rights with respect to the shares of Class A common stock they purchased. The transaction closed on April 25, 2025, and the shares of Class A common stock were issued and sold to the April 2025 PIPE Investors in reliance on Section 4(a)(2) of the Securities Act.

Committed Equity Facility

On March 25, 2025, we entered into the Equity Line Purchase Agreement with the Equity Line Investor. Under the terms and subject to the conditions of the Equity Line Purchase Agreement, the Company has the right, but not the obligation, to sell to the Equity Line Investor, over a 36-month period, up to an aggregate of $30,000,000 of our newly issued shares of common stock subject to certain conditions and limitations contained in the Equity Line Purchase Agreement, including that we may issue no more than the number of shares equal to 19.99% of the aggregate number of our issued and outstanding shares of common stock as of immediately prior to the execution of the Equity Line Purchase Agreement without first obtaining stockholder approval. As of September 30, 2025, sales under the Equity Line Purchase Agreement generated net proceeds of approximately $0.4 million.

Capital Contribution

Pursuant to the A&R Joint Venture Agreement, we are expected to contribute additional capital to the AirJoule JV based on a business plan and annual operating budgets to be agreed between us and GE Vernova. During the nine months ended September 30, 2025, we contributed an additional $12.8 million in capital contributions to the AirJoule JV.

General

Our primary sources of liquidity have been cash from contributions from founders or equity capital raised from other investors. As of September 30, 2025, we had $25.9 million of working capital including $26.0 million in cash, cash equivalents and restricted cash.

We assess liquidity in terms of our ability to generate adequate amounts of cash to meet current and future needs. Our expected primary uses of cash on a short and long-term basis are for working capital requirements, capital expenditures and other general corporate services. Our primary working capital requirements are for project execution activities including purchases of materials, services and payroll which fluctuate during the year, driven primarily by the timing and extent of activities required for new and existing projects. Management expects that future operating losses and negative operating cash flows may increase from historical levels because of additional costs and expenses related to the development of its technology and the development of market and strategic relationships with other businesses and customers.

Our future capital requirements will depend on many factors, including the timing and extent of spending to support the launch of our product and research and development efforts, the degree to which we are successful in launching new business initiatives and the cost associated with these initiatives and the growth of our business generally. Pursuant to the A&R Joint Venture Agreement, we contributed $10 million in cash to the AirJoule JV at the JV closing and in June 2024, GE Vernova contributed $100 to the AirJoule JV. Pursuant to the A&R Joint Venture Agreement, we agreed to make additional capital contributions to the AirJoule JV based on a business plan and annual operating budgets to be agreed between the Company and GE Vernova, and our remaining commitment for capital contributions to the AirJoule JV is $82.3 million as of September 30, 2025. In general, for the first six years, GE Vernova has the right, but not the obligation, to make capital contributions to the AirJoule JV.

In order to finance these opportunities and associated costs, it is possible that we would need to raise additional financing if the proceeds realized to date are insufficient to support our business needs. While we believe that the proceeds realized to date will be sufficient to meet our currently contemplated business needs, management cannot assure that this will be the case. If additional financing is required by us from outside sources, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital on acceptable terms when needed, our product development business, results of operations and financial condition would be materially and adversely affected.

Cash flows for the nine months ended September 30, 2025 and 2024

The following table summarizes our cash flows from operating, investing and financing activities for the nine months ended September 30, 2025 and 2024:

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Cash Flows from Operating Activities

During the nine months ended September 30, 2025, net cash used in operating activities was $4.0 million and primarily reflected our net income of $13.4 million, a $6.3 million equity loss from our investment in AirJoule, LLC, a $3.5 million of share-based compensation and a $2.2 million increase in our operating assets and liabilities offset by net noncash operating activities of $29.4 million of changes in fair value of our Earnout Shares, True Up Shares, Subject Vesting Shares and Equity Line Obligation liabilities as well as our deferred tax benefit and changes in accrued royalties. We expect to continue to use cash in our operating activities with the expected growth of our business.

During the nine months ended September 30, 2024, net cash used in operating activities was $21.6 million and primarily reflected our net income of $230.0 million, a $83.2 million deferred tax expense, a $2.9 million equity loss from our investment in AirJoule, LLC and $0.7 million of share-based compensation offset by net noncash operating activities of $282.0 million related to the contribution to AirJoule, LLC, the settlement of legal fees and other costs in connection with the business combination, $42.9 million of changes in fair value of our Earnout Shares, True Up Shares and Subject Vesting Shares liabilities and a $13.6 million decrease in our operating assets and liabilities.

Cash Flows from Investing Activities

During the nine months ended September 30, 2025, net cash used in investing activities was $12.8 million primarily as a result of our contributions made to the AirJoule JV during the period.

During the nine months ended September 30, 2024, net cash used in investing activities was $10.0 million primarily as a result of our contributions made to the AirJoule JV.

Cash Flows from Financing Activities

During the nine months ended September 30, 2025, net cash provided by financing activities was $14.8 million primarily as a result of the $14.2 million net proceeds from the April 2025 PIPE Offering, $0.4 million net proceeds from the Equity Line Purchase Agreement and $0.1 million of proceeds from the exercise of options.

During the nine months ended September 30, 2024, net cash provided by financing activities was $61.9 million and was primarily related to the $61.8 million net proceeds from the issuance of common stock related to private placements prior to the Business Combination, and $0.1 million of proceeds from the exercise of stock options and warrants.

Contractual Obligations and Commitments

Royalties

In October 2021, the Company entered into a patent license agreement with a third party whereby the third party granted us rights to use certain of their patents in exchange for an upfront payment and royalties based on a percentage of net sales until such patents expire. In connection with this, the Company agreed to certain minimum royalty amounts. In September 2025, the Company entered into the Second Amended and Restated License Agreement which eliminated the minimum royalty amounts through 2029, which resulted in a reversal of $0.5 million in accrued royalties expense during the three months ended September 30, 2025.

Joint Venture Agreements

On October 27, 2021, we entered into a joint venture agreement with CATL, pursuant to which we and CATL formed CAMT. We and CATL both own 50% of CAMT’s issued and outstanding shares. Under the joint venture agreement, as revised, CAMT has the exclusive right to commercialize our AirJoule technology in Europe and Asia.

Pursuant to the Amended and Restated Joint Venture Agreement for CAMT, entered into on September 29, 2023, Legacy Montana and CATL US have each agreed to contribute $6.0 million to CAMT. Contributions will be requested by CAMT once a business plan and operating budget is set by CAMT’s board of directors. No action to establish a business plan or operating budget has occurred to date. Any additional financing beyond the initial $12.0 million (i.e., $6.0 million from each of Legacy Montana and CATL US) will be subject to the prior mutual agreement of Legacy Montana and CATL US. CAMT is managed by a four-member board of directors, with two directors (including the chairman) designated by CATL US and two directors (including the vice chairman) designated by Legacy Montana. In the event of an equal vote, the chairman may cast the deciding vote. Certain reserved matters, including debt issuances exceeding $5.0 million in a single transaction or in aggregate within a fiscal year, amendments to CAMT’s constitutional documents the annual financial budget of CAMT, and any transaction between CAMT and CATL US or Legacy Montana in an amount exceeding $10.0 million in a single transaction or in aggregate within a fiscal year, require the unanimous vote of both CATL US and Legacy Montana or all directors. As of September 30, 2025, we have not funded this joint venture or contributed any assets to the joint venture.

The purpose of Legacy Montana’s joint venture with CATL US is to commercialize our AirJoule technology in Asia and Europe and, pursuant to the Amended and Restated Joint Venture Agreement for CAMT, CAMT has the exclusive right to commercialize AirJoule technology in those territories. Subject to the oversight of CAMT’s board, CATL US is responsible for managing the day-to-day operations of CAMT (including the nomination and replacement of the Chief Executive Officer of CAMT), and is responsible for providing CAMT and any subsidiaries formed by CAMT with, among other things, administrative services, supply chain support, assistance in obtaining required permits and approvals and assistance in purchasing or leasing land and equipment.

Critical Accounting Estimates

There have been no material changes to the critical accounting policies as disclosed in “Part I—Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Estimates” in our previously filed Quarterly Report on Form 10-Q.

Recent Accounting Pronouncements

A discussion of recently issued accounting standards applicable to the Company is described in Note 3 - Summary of Significant Accounting Policies, in the Notes to Financial Statements contained elsewhere in this Current Report on Form 10-Q.

Off Balance Sheet Arrangements

We did not have any off-balance sheet arrangements as of September 30, 2025.

Emerging Growth Company Status

We are an emerging growth company as defined in the JOBS Act. The JOBS Act permits companies with emerging growth company status to take advantage of an extended transition period to comply with new or revised accounting standards, delaying the adoption of these accounting standards until they would apply to private companies. We have elected to use this extended transition period to comply with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, our financial statements may not be comparable to companies that comply with the new or revised accounting standards as of public company effective dates.

In addition, we intend to rely on the other exemptions and reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an emerging growth company, we intend to rely on such exemptions, we are not required to, among other things: (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act; (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act; (iii) comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis); and (iv) disclose certain executive compensation-related items such as the correlation between executive compensation and performance and comparisons of the Chief Executive Officer’s compensation to median employee compensation.

We will remain an emerging growth company under the JOBS Act until the earliest of (i) the last day of our first fiscal year following the fifth anniversary of the closing of XPDB’s initial public offering, (ii) the last date of our fiscal year in which we have total annual gross revenue of at least $1.235 billion, (iii) the date on which we are deemed to be a “large accelerated filer” under the rules of the SEC with at least $700.0 million of outstanding securities held by non-affiliates or (iv) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the previous three years.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and our principal financial officer, evaluated, as of the end of the period covered by this Quarterly Report on Form 10-Q, the effectiveness of our disclosure controls and procedures. Based on this evaluation of our disclosure controls and procedures as of September 30, 2025, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures as of such date are effective at the reasonable assurance level. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act are recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and our management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Changes in Internal Control Over Financial Reporting

There were no significant changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended) during the three months ended September 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Our operations and financial results are subject to various risks and uncertainties, including the factors discussed in Part I, Item 1A, Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2024, which could adversely affect our business, financial conditions and future results.