LanzaTech Global, Inc.: Form 10-Q for the period ended Sep 30, 2025

The following discussion and analysis should be read in conjunction with our unaudited interim consolidated financial statements and accompanying footnotes thereto included in Part I, “Item 1-Financial Results and Supplementary Data” of this Quarterly Report, and our audited consolidated financial statements and related notes included in the Company’s 2024 Annual Report. In this section, unless otherwise indicated or the context otherwise requires, references in this section to “LanzaTech,” the “Company,” “we,” “us,” “our” and other similar terms refer to LanzaTech Global, Inc. and its consolidated subsidiaries. References to “AMCI” refer to AMCI Acquisition Corp. II prior to the Business Combination. This discussion contains forward-looking statements that involve risks and uncertainties about our business and operations. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include without limitation those discussed in this Management’s Discussion and Analysis of Financial Condition and Results of Operations and those identified in Part I, “Item 1A-Risk Factors” of the Company’s 2024 Annual Report and Part II, “Item 1A.-Risk Factors” of the Company’s Quarterly Report for the fiscal quarters ended March 31, 2025 and June 30, 2025.

Overview

We are a nature-based carbon refining company that develops technology to transform waste carbon into the chemical building blocks for consumer goods such as sustainable fuels, fabrics, and packaging that people use in their daily lives. Our customers leverage our proven proprietary gas fermentation technology platform to convert certain feedstocks, including waste carbon gases, into sustainable fuels and chemicals such as ethanol. Today, we are focused on taking advantage of the many uses of ethanol while capitalizing on the growing preference among major companies for renewable products and environmentally-conscious manufacturing processes. We have also developed the capabilities to produce single cell protein as a primary product from our gas fermentation platform.

LanzaTech employs a licensing business model whereby our customers build, own and operate facilities that use our technology, and in return, we are paid a royalty fee based on the revenue generated from the use of our technology. We are augmenting our technology licensing business model to incorporate incremental ownership and operatorship in the biorefining value chain, enabling greater control over development, financing, and product access. We began operations in 2005. In 2018, through our joint venture with Shougang LanzaTech (also referred as “SGLT” herein), we established the world’s first commercial waste gas-to-ethanol plant in China, followed by three more plants between 2021 and 2023. With additional partnerships, we established two more commercial plants, one in India, and one in Belgium, respectively, and we currently have other plants in various states of development in various countries around the world. We also perform research and development (“R&D”) services related to novel technologies and development of biocatalysts for commercial applications, mainly to produce fuels and chemicals. In June 2024, the Company and LanzaJet launched CirculAir™, a new joint offering and end-to-end solution utilizing LanzaTech’s gas fermentation technology in conjunction with LanzaJet’s Alcohol-to-Jet (“ATJ”) platform to produce sustainable aviation fuel and renewable diesel from a wide range of waste feedstocks.

We have not achieved operating profitability since our formation. Our net losses after tax were $48.9 million and $110.7 million for the nine months ended September 30, 2025 and 2024, respectively. As of September 30, 2025 we had an accumulated deficit of $1,018.5 million compared to an accumulated deficit of $969.6 million as of December 31, 2024. We anticipate that we will continue to incur losses until we sufficiently commercialize our technology.

Recent Developments

As previously announced, LanzaTech is focused on shifting its core operations from research and development to globally deploying the Company’s proven technology. We are streamlining our priorities to sharpen our business focus and improve our cost structure and evaluating other liquidity enhancing initiatives, including pursuing capital raising, partnership or asset-related opportunities, and other strategic options.

On May 7, 2025 (the “PIPE Closing Date”), the Company and LanzaTech Global SPV, LLC, an entity controlled by a large existing investor (the “PIPE Purchaser”), entered into a Series A Convertible Senior Preferred Stock Purchase Agreement (as amended by Amendment No. 1 to the Series A Convertible Senior Preferred Stock

Purchase Agreement, dated June 2, 2025, and Amendment No. 2 to the Series A Convertible Senior Preferred Stock Purchase Agreement, dated September 22, 2025, the “PIPE Purchase Agreement”) pursuant to which the Company agreed to issue and sell 20,000,000 shares of its preferred stock designated as “Series A Convertible Senior Preferred Stock”, par value of $0.0001 per share (“Series A Preferred Stock”), to the PIPE Purchaser for an aggregate purchase price of $40.0 million (the “Series A Preferred Stock Issuance”), subject to certain closing conditions described therein. The Series A Preferred Stock Issuance was consummated on the PIPE Closing Date. In connection with the Series A Preferred Stock Issuance, the Company’s $40.2 million aggregate principal amount of a Convertible Note (the “Convertible Note”), plus accrued and unpaid interest thereon, was converted into 340,543 shares of common stock (34,054,337 prior to the Reverse Stock Split) pursuant to the mandatory conversion provision of the Convertible Note.

Pursuant to the PIPE Purchase Agreement, the Company also agreed to issue to the PIPE Purchaser immediately prior to the consummation, if any, of a Financing (as defined below) (such time, the “Issuance Time”), if and only if the Issuance Time occurs on or prior to May 7, 2026, a warrant (the “PIPE Warrant”) to purchase an aggregate of 7,800,000 shares (“PIPE Warrant Shares”) of common stock at an exercise price equal to $0.0000001 per PIPE Warrant Share (subject to adjustments in certain events) and the other terms to be set forth in the PIPE Warrant. Pursuant to the PIPE Purchase Agreement, the parties agreed that the PIPE Warrant would only be exercised upon consummation of a Subsequent Financing (as defined below) or, with the PIPE Purchaser’s consent, a financing that does not constitute a Subsequent Financing (an “Other Financing”) (collectively, the “Conditions to Exercise”); provided, however, that if the Conditions to Exercise are satisfied, the PIPE Warrant will be deemed automatically exercised on a cashless, net-exercise basis at such time (the time immediately following such automatic exercise, the “Expiration Time”). The PIPE Warrant will terminate at the earlier of (i) the Expiration Time and (ii) May 7, 2026.

The Company also agreed to use its reasonable best efforts to consummate a bona fide financing pursuant to which the Company sells common stock to one or more accredited investors reasonably satisfactory to the Majority Holders, at a price per share of $0.0005 (after giving effect to the Reverse Stock Split but subject to further adjustment in certain events), payable in cash, with an aggregate original issue price of not less than $35.0 million and not more than $60.0 million, on terms and conditions reasonably satisfactory to the Majority Holders (the “Subsequent Financing”). The PIPE Purchase Agreement provides that the Subsequent Financing must be consummated, if at all, no later than October 15, 2025. In addition, with the Majority Holders’ consent and in lieu of the Subsequent Financing, the Company may consummate any other financing that does not constitute a Subsequent Financing (an “Other Financing” and any such Other Financing or a Subsequent Financing, a “Financing”).

The Company is actively pursuing an Other Financing. The Company has not consummated a Subsequent Financing and does not currently have any committed capital. Therefore, the Company can provide no assurance that it will secure an Other Financing in a timely manner, on favorable terms or at all.

Reverse Stock Split and Reduction in Authorized Shares

On August 15, 2025,the Company filed with the Secretary of State of the State of Delaware (the “Delaware Secretary of State”) two Certificates of Amendment to the Company’s Second Amended and Restated Articles of Incorporation to (1) decrease the par value of the Company’s common stock from $0.0001 to $0.0000001 per share (the “Par Value Change”) and increase the number of authorized shares of common stock from 600,000,000 to 2,580,000,000 (the “Authorized Share Increase”), effective 4:59 p.m. Eastern Time on August 18, 2025, and (2) effect a 1-for-100 reverse stock split (the “Reverse Stock Split”) of the Company’s issued and outstanding common stock and proportionately decrease the number of authorized shares of common stock to 25,800,000 (the “Proportionate Authorized Share Decrease” and, together with the Par Value Change, Authorized Share Increase and Reverse Stock Split, the “Charter Amendments”), effective 5:00 p.m. Eastern Time on August 18, 2025 (the “Reverse Split Effective Time”). The Charter Amendments were approved by the Board of Directors of the Company and by stockholders of the Company at the Company’s 2025 Annual Meeting of Stockholders held on July 28, 2025, as detailed in the Company’s definitive proxy statement for such annual meeting, filed with the SEC on June 18, 2025 (as supplemented by the proxy supplement filed with the SEC on July 17, 2025).

At the Reverse Split Effective Time, every 100 shares of the Company’s issued and outstanding common stock were automatically reclassified and combined into one share of common stock. No fractional shares were issued in connection with the Reverse Stock Split. Instead, any fractional shares resulting from the Reverse Stock Split were rounded up to the nearest whole share at the registered holder and participant level with The Depository Trust Company. Proportionate adjustments were made to the number of shares of the Company’s common stock underlying the Company’s outstanding equity awards. With respect to the Company’s warrants, every 100 shares of common stock that may be purchased pursuant to the exercise of warrants prior to the Reverse Split Effective Time represent one share of common stock that may be purchased pursuant to such warrants following the Reverse Split Effective Time. Correspondingly, the exercise price per share of such warrants has been proportionately increased, such that the exercise price per share of such warrants immediately following the Reverse Stock Split is $1,150, which equals the product of 100 multiplied by $11.50, the exercise price per share immediately prior to the Reverse Stock Split.

The Reverse Stock Split affected all stockholders uniformly and did not alter any stockholder’s percentage interest in the Company’s equity (other than as a result of the rounding of shares to the nearest whole share in lieu of issuing fractional shares).

Unless otherwise indicated, all common stock share and per share data for all periods presented herein have been retroactively adjusted to reflect the Reverse Stock Split and the Par Value Change.

Strategic Outlook

During the nine months ended September 30, 2025, LanzaTech initiated a series of strategic actions designed to streamline commercialization across its operational structure, enhance capital efficiency, and accelerate deployment of its platform technology. These efforts reflect a shift from one-off project execution to a portfolio-driven model, which is designed to be aligned with long-term revenue generation.

As part of this transition, LanzaTech introduced a cohort-based operating model to guide the phased deployment of commercial projects. Under this structure, projects are grouped into cohorts based on their stage of maturity, financing readiness, and offtake progress. Under this model, each cohort will progress through a structured pathway—from early-stage services and engineering to equipment deployment, licensing, and ultimately recurring revenue from product sales and potential carbon credits.

This model is designed to:

• Systematically de-risk execution by applying learnings from prior deployments;
• Align resources and capital allocation around milestone-based progression; and
• Build revenue visibility as each cohort advances into operations.

We currently have 4 projects in our first cohort, the lead project of which is nearing completion of offtake negotiations, which we expect will unlock financing capital and serve as a blueprint for future deployments. Subsequent projects in this cohort are advancing through development pipelines with staged progression aligned to regulatory approvals, customer readiness, and financing, with the earliest targeted to be in first half of 2027.

However, we also note that a portion of our near-term revenue is linked to projects supported directly or indirectly by U.S. government programs, including those administered by the Department of Energy (DOE). In the event of a prolonged federal government shutdown, we may experience delays in critical DOE-dependent project milestones. This could include:

• Postponed approval of grants or cooperative agreements; and
• Financing bottlenecks for cost-share projects reliant on DOE commitments.

Such delays could shift expected revenue recognition from project services, equipment sales, or offtake-linked products, particularly for projects in earlier cohorts where DOE involvement plays a key role.

We continue to actively manage this risk by seeking to diversify our project funding sources, engage private capital partners, and sequence project cohorts to mitigate dependency. Nonetheless, these efforts may not be successful, and prolonged government funding disruptions could negatively impact the timing of certain revenue streams and increase working capital pressure in the near term.

Looking ahead, LanzaTech remains focused on scaling its commercialization model across successive cohorts. However, obtaining financing, including an Other Financing, remains essential to our efforts.

Basis of Presentation

LanzaTech’s consolidated financial statements were prepared in accordance with U.S. GAAP. See Note 2 - Summary of Significant Accounting Policies of our consolidated financial statements for a full description of our basis of presentation.

Key Financial Metrics

In addition to the measures presented in our consolidated financial statements, we review the following key business metrics to measure our performance, identify trends affecting our business, formulate business plans, and make strategic decisions that will impact the future operational results of LanzaTech. Increases or decreases in our key business metrics may not correspond with increases or decreases in our revenue.

Key elements of the Company’s performance for the three months ended September 30, 2025 and 2024 are summarized in the tables below:

(In thousands, except for percentages)

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

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

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

(4) Adjusted EBITDA, a non-GAAP financial measure, is calculated as net loss, excluding the impact of depreciation, interest income, net, stock-based compensation expense, change in fair value of warrant liabilities, loss on the Brookfield SAFE extinguishment, change in fair value of the Brookfield SAFE and the Brookfield Loan liabilities, change in fair value of the FPA Put Option liability and Fixed Maturity Consideration (net of interest accretion reversal), change in fair value of the Convertible Note, change in fair value of the PIPE Warrant and loss from equity method investees, net. Adjusted EBITDA is a supplemental measure that is not a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. Adjusted EBITDA does not represent, and should not be considered, an alternative to net income (loss), as determined in accordance with GAAP. See “Non-GAAP Financial Measures” for additional information and reconciliation of Adjusted EBITDA to net loss, its most directly comparable GAAP measure.

Key elements of the Company’s performance for the nine months ended September 30, 2025 and 2024 are summarized in the tables below:

(In thousands, except for percentages)

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

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

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

(4) Adjusted EBITDA, a non-GAAP financial measure, is calculated as net loss, excluding the impact of depreciation, interest income, net, stock-based compensation expense, change in fair value of warrant liabilities, loss on the Brookfield SAFE extinguishment, change in fair value of the Brookfield SAFE and the Brookfield Loan liabilities, change in fair value of the FPA Put Option liability and Fixed Maturity Consideration (net of interest accretion reversal), change in fair value of the Convertible Note, change in fair value of the PIPE Warrant and loss from equity method investees, net. Adjusted EBITDA is a supplemental measure that is not a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. Adjusted EBITDA does not represent, and should not be considered, an alternative to net income (loss), as determined in accordance with GAAP. See “Non-GAAP Financial Measures” for additional information and reconciliation of Adjusted EBITDA to net loss, its most directly comparable GAAP measure.

Results of Operations — Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024

The results of operations presented below should be reviewed in conjunction with our consolidated financial statements and notes. The following table sets forth our consolidated results of operations for the periods indicated:

(In thousands, except for per share amounts)

(1) exclusive of depreciation

Revenue

Total revenue decreased $0.7 million, or 7%, in the three months ended September 30, 2025, compared to the same period in 2024. The decline was primarily driven by a $0.9 million reduction in revenue from Joint Development Agreements (“JDA”), reflecting the completion of projects with existing customers and the absence of new contracts as a result of workforce reductions. In addition, licensing, engineering and other services revenue decreased by $0.8 million, primarily due to the completion of projects with existing customers and governmental entities of $4.3 million, partially offset by $3.5 million increase in revenue from new customers. These decreases were partially offset by a $0.8 million increase in CarbonSmart product sales, and a $0.3 million increase in contract research revenue.

Cost of Revenue

Cost of revenue decreased $1.2 million, or 15%, in the three months ended September 30, 2025, compared to the same period in 2024. The decrease was primarily driven by a $1.2 million reduction in engineering and other service costs associated with the completion of projects for existing customers and government entities. Additionally, cost of revenue related to contract research decreased by $0.5 million, and costs for joint development arrangements declined by $0.4 million. These reductions were partially offset by a $0.9 million increase in the cost of revenue for CarbonSmart products, consistent with the higher sales volume in that product line.

Research and Development

R&D expense decreased $11.8 million, or 53%, in the three months ended September 30, 2025, compared to the same period in 2024. The decrease was primarily driven by a $6.1 million decrease in external R&D services related to project development costs that are not eligible for capitalization. Additionally, personnel and contractor expenses related to R&D projects decreased by $3.0 million, reflecting headcount reductions implemented during the third quarter of 2025 as part of the Company’s broader cost optimization initiatives. Consumables and facilities-related expenses also declined by $2.6 million, consistent with the overall reduction in project activity levels.

Selling, General and Administrative Expense

SG&A expense decreased $4.7 million, or 41%, in the three months ended September 30, 2025, compared to the same period in 2024. The decrease was primarily attributable to a $3.7 million reduction in personnel and contractor costs, driven by headcount reductions and lower variable compensation, and a $1.3 million decrease in external professional and R&D-related service costs. These reductions were partially offset by a $0.3 million increase in facilities-related expenses.

Interest income, net

Interest income, net decreased $0.5 million in the three months ended September 30, 2025, compared to the same period in 2024. The decrease was primarily attributable to lower interest earned on smaller cash balances held in savings, money market, and investment accounts.

Other Income, Net

Other income, net increased $38.1 million in the three months ended September 30, 2025, compared to the same period in 2024. The increase was primarily driven by a $21.6 million change in the fair value of the Convertible Note issued in August 2024 and subsequently converted into common stock in May 2025. In addition, the PIPE Warrant liability decreased in fair value by $12.2 million, and the Brookfield Loan liability decreased in fair value by $6.1 million, partially offset by a $0.3 million change in fair value of the warrants. See Note 5 — Other Income (Expense), Net /Fair Value Change Impact on Net Income in our unaudited consolidated financial statements for further information. The remaining difference is due to foreign currency translation adjustments resulting from changes in exchange rates.

Results of Operations — Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024

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

(In thousands, except for per share amounts)

(1) exclusive of depreciation

Revenue

Total revenue decreased $9.7 million, or 25.9%, in the nine months ended September 30, 2025, compared to the same period in the prior year. The decrease was primarily driven by a $7.1 million reduction in licensing revenue recognized in the prior year related to LanzaJet sublicensing activity, which did not recur in the current period. In addition, engineering and other services revenue declined by $6.7 million, primarily due to the completion of projects with existing customers and governmental entities of $12.0 million partially offset by a $6.1 million increase in revenue from new customers. JDA revenue decreased by $2.7 million, reflecting project completions and the absence of new contracts following workforce reductions. Contract research revenue declined by $0.2 million, partially offset by a $7.0 million increase in CarbonSmart product sales, driven by expanded commercialization and higher customer adoption.

Cost of Revenues

Cost of revenues increased $0.3 million, or 1.3%, in the nine months ended September 30, 2025, compared to the same period in the prior year. The increase was primarily driven by a $7.2 million increase in costs associated with CarbonSmart product sales, consistent with higher production and sales volumes during the period. This increase was partially offset by a $4.7 million reduction in engineering and other service costs, a $1.3 million decrease in costs related to JDAs, and a $0.9 million decrease in costs associated with other contract research activities. The change in cost composition reflects the company’s evolving business model, with a greater share of costs now attributable to product manufacturing and commercialization rather than service-based project activity.

Research and Development

R&D expense decreased $18.9 million, or 31.2%, in the nine months ended September 30, 2025, compared to the same period in the prior year. The decrease was primarily driven by an $8.8 million reduction in external R&D services expenses related to project development costs that were not eligible for capitalization in the current period. In addition, facilities and consumables expenses decreased by $6.4 million, and personnel and contractor expenses declined by $3.3 million, reflecting the impact of headcount reductions implemented during the quarter as part of the Company’s cost optimization and organizational streamlining initiatives. These reductions align with management’s ongoing focus on prioritizing core R&D programs and improving operating efficiency.

Selling, general and administrative expense

SG&A expense increased $7.4 million, or 21.5%, in the nine months ended September 30, 2025, compared to the same period in the prior year. The increase was primarily attributable to a $13.5 million increase in professional fees associated with the Company’s restructuring efforts and initiatives to realign business priorities, as well as a $2.2 million increase in facilities-related expenses. These increases were partially offset by an $8.4 million reduction in personnel and contractor expenses, driven by headcount reductions during the third quarter of 2025.

Interest income, net

Interest income, net decreased $1.5 million in the nine months ended September 30, 2025 compared to the same period in the prior year. This was primarily attributable to interest earned on lower cash balances held in savings and money market accounts.

Other Income, net

Other income, net increased $62.5 million in the nine months ended September 30, 2025 compared to the same period in the prior year. The increase was primarily driven by a $65.3 million change in the fair value of the Convertible Note issued in August 2024 and converted into common stock in May 2025. Additionally, other favorable fair value adjustments included a $23.2 million decrease related to the Forward Purchase Agreement with ACM, which was settled in October 2024, and an $5.7 million gain from a decrease in the fair value of PIPE Warrant. These decreases were offset by the change in fair value of Brookfield Loan of $25.8 million during the nine months ended September 30, 2025, extinguishment of Brookfield SAFE with change period over period of $4.6 million in February 2025 and a $1.2 million loss from increase in the fair value of the warrants. See Note 5 — Other Income (Expense), Net /Fair Value Change Impact on Net Income in our unaudited consolidated financial statements for further information.

Liquidity and Capital Resources

Cash and Cash Equivalents

Cash and cash equivalents comprise cash on hand, demand deposits at banks, and other short-term, highly liquid investments with original maturity of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

The following table shows the balances of our cash, cash equivalents and restricted cash as of September 30, 2025 and December 31, 2024:

(In thousands, except for percentages)

As of September 30, 2025, compared to December 31, 2024, LanzaTech’s cash, cash equivalents, and restricted cash decreased by $22.2 million, or 48.6%, primarily due to funding the net loss adjusted for non-cash charges (see cash flow section below) and partial repayment on the Brookfield Loan.

Management continues to evaluate opportunities to preserve liquidity and align expenditures with near-term revenue priorities. The Company’s expense optimization initiatives, coupled with its project prioritization framework, are intended to improve cash efficiency and extend its operating runway. However, as discussed above and below under “—Going Concern”, obtaining additional financing is essential.

Debt Security Investments

Debt security investments comprise mainly held-to-maturity U.S. Treasury and high quality corporate securities that the Company has both the ability and intent to hold to maturity. These securities all mature within one year and will provide additional liquidity upon maturity. As of September 30, 2025, held-to-maturity security investments all matured, compared to $12.4 million as of December 31, 2024.

Sources and Uses of Capital

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

As of September 30, 2025, our capital structure consisted of equity (comprising issued capital, and accumulated deficit), and the Brookfield Loan. We are not subject to any externally imposed capital requirements. As of September 30, 2025, our outstanding debt comprised the Brookfield Loan, the FPA Put Option liability and the Fixed Maturity Consideration, which are all classified as liabilities for accounting purposes, on our consolidated balance sheets as of September 30, 2025. For a description of these investments see Note 2 - Summary of Significant Accounting Policies, Note 7 – Brookfield Investments and Note 9 – Forward Purchase Agreement in our unaudited consolidated financial statements for further information.

In the normal course of our business, we also enter into purchase commitments or other transactions in which we make representations and warranties that relate to the performance of our goods and services. We do not expect material losses related to these transactions.

Going Concern

We have recurring net losses and anticipate continuing to incur losses. We had cash and cash equivalents of $19.6 million and an accumulated deficit of $(1,018.5) million as of September 30, 2025, along with cash outflows from operations of $(58.7) million and net loss of $(48.9) million for the nine months ended September 30, 2025.

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

In light of the Company’s operating requirements and projected capital expenditure under its current business plan, the Company is projecting that its existing cash and short-term debt securities will not be sufficient to fund its operations through the next twelve months from the date of issuance of this Quarterly Report on Form 10-Q. 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 unaudited consolidated financial statements and has determined that the Company’s ability to continue as a going concern is dependent on its ability to raise significant amounts of additional capital, implement other strategic options, and execute its business plan.

On the PIPE Closing Date, the Company and the PIPE Purchaser, entered into the PIPE Purchase Agreement pursuant to which the Company agreed to issue and sell 20,000,000 shares of Series A Preferred Stock to the PIPE Purchaser for an aggregate purchase price of $40.0 million (the “Series A Preferred Stock Issuance”), subject to certain closing conditions described therein. The Series A Preferred Stock Issuance was consummated on the PIPE Closing Date. In connection with the Series A Preferred Stock Issuance, the Company’s $40.2 million aggregate principal amount of Convertible Note, plus accrued and unpaid interest thereon, was converted into 340,543 shares of common stock (34,054,337 prior to the Reverse Stock Split) pursuant to the mandatory conversion provision of the Convertible Note. Pursuant to the PIPE Purchase Agreement, the Company also agreed to issue to the PIPE Purchaser immediately prior to the consummation, if any, of a Financing (such time, the “Issuance Time”), if and only if the Issuance Time occurs on or prior to May 7, 2026, the PIPE Warrant to purchase an aggregate of 7,800,000 shares of common stock at an exercise price equal to $0.0000001 per PIPE Warrant Share (subject to adjustments in certain events) and the other terms to be set forth in the PIPE Warrant. Pursuant to the PIPE Purchase Agreement, the parties agreed that the PIPE Warrant would only be exercised upon consummation of a Subsequent Financing or, with the PIPE Purchaser’s consent, an Other Financing. If the Conditions to Exercise are satisfied, the PIPE Warrant will be deemed automatically exercised, concurrently with the consummation of such Financing, on a cashless, net-exercise basis (the time immediately following such automatic exercise, the “Expiration Time”). The Warrant will terminate at the earlier of (i) the Expiration Time and (ii) May 7, 2026.

The Company also agreed to use its reasonable best efforts to consummate a Subsequent Financing. The PIPE Purchase Agreement provides that the Subsequent Financing must be consummated, if at all, no later than October 15, 2025. In addition, with the Majority Holders’ consent and in lieu of the Subsequent Financing, the Company may consummate an Other Financing. The Company has not consummated a Subsequent Financing and can provide no assurance that it will be able to secure an Other Financing in a timely manner, on favorable terms or at all.

We are actively pursuing the above actions. However, because the Company does not currently have any committed capital and obtaining receipt of the Other Financing described above is subject to investor interest and market and other conditions not within the Company’s control, management has concluded that these plans do not alleviate substantial doubt about our ability to continue as a going concern.

The unaudited consolidated financial statements for the quarter ended September 30, 2025 included in this Quarterly Report do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.

Cash Flows

The following table provides a summary of our cash flows for the nine months ended September 30, 2025 and 2024:

(in thousands)

Cash Flows Used in Operating Activities

Net cash used in operating activities decreased $10.7 million, or 15.4%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The decrease was primarily attributable to the larger adjustments to the net loss related to non-cash losses on financial instruments and equity method investment during the nine months ended September 30, 2025 compared to the prior year period and to changes in working capital items such as accounts payable, accrued liabilities and other current assets.

Cash Flows Provided by Investing Activities

Net cash provided by investing activities was $11.4 million for the nine months ended September 30, 2025, compared to $14.1 million of net cash provided by investing activities for the nine months ended September 30, 2024. The decrease of $2.7 million was primarily due to lower proceeds from the maturities of debt securities, partially offset by a modest reduction in capital expenditure. The prior year period included significant purchases of debt securities, which did not recur in the current period, contributing to the year-over-year change in net investing cash flows.

Cash Flows from Financing Activities

Net cash from financing activities was $25.6 million for the nine months ended September 30, 2025, compared to net cash provided by financing activities of $40.2 million for the nine months ended September 30, 2024. The change was driven by issuance of $40.0 million of Series A Preferred Stock with a corresponding $12.5 million partial repayment of the Brookfield Loan.

Critical Accounting Estimates

Our management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements that have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosures. We consider an accounting estimate to be critical to the consolidated financial statements if the estimate is complex in nature or requires a high degree of judgment and actual results may differ from these estimates with any such differences being potentially material. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances. We evaluate our estimates and assumptions on an ongoing basis.

There have been no significant changes in our critical accounting estimates during the three and nine months ended September 30, 2025, from those disclosed in the Company’s 2024 Annual Report, except for the measurement of the Brookfield Loan liability and Series A Convertible Senior Preferred Stock and PIPE Warrant.

Brookfield Loan

The Brookfield Loan is a legal form debt and the Company has elected to apply FVO with the Brookfield Loan classified as a mark-to-market liability. The fair value of the Brookfield Loan was determined using a scenario-weighted discounted cash flow model on the adjusted remaining portion of the Brookfield Loan.

The discounted cash flow model is based on our best estimate of amounts and timing of future cash flows related to the Brookfield Loan. Our estimates require judgmental assumptions about (i) the percentage of qualifying projects presented to and funded by Brookfield within the term of the Brookfield Loan, (ii) the weight on each scenarios related to certain business and strategic plans, and (iii) the discount rate. The sensitivity of the fair value calculation to these method, assumptions, and estimates included could create materially different results under different conditions or using different assumptions.

Series A Convertible Senior Preferred Stock – Mezzanine Equity

On May 7, 2025, the Company issued Series A Convertible Senior Preferred Stock pursuant to the PIPE Purchase Agreement. Due to contractual provisions that could require redemption upon the occurrence of certain events—such as a deemed liquidation event (e.g., change of control)—that are not solely within the Company’s control, management determined that classification as mezzanine equity (temporary equity) outside of permanent equity was appropriate. This classification is in accordance with applicable SEC guidance and ASC 480.

The determination of classification requires significant judgment in evaluating the contractual terms of the instrument, including the likelihood and timing of potential redemption events. Management’s assessment involves consideration of all relevant facts and circumstances at issuance and on an ongoing basis. These judgments directly affect the Company’s presentation of equity and liquidity metrics and could materially impact future results if redemption becomes probable or if the instrument is subsequently reclassified.

PIPE Warrant – Fair Value Measurement

Effective August 18, 2025, following the Authorized Share Increase and the Proportionate Authorized Share Decrease in connection with the Reverse Stock Split, the Company obtained sufficient authorized but unissued shares to be able to settle the PIPE Warrant in shares when it is due. As a result, and in accordance with ASC 815-40, the PIPE Warrant no longer met the criteria for liability classification. The PIPE Warrant was therefore remeasured to fair value immediately prior to reclassification and subsequently reclassified from a current liability to Additional Paid-in Capital within stockholders’ equity. Changes in the fair value of the PIPE Warrant were recognized in other income (expense), net within the Company’s consolidated statements of operations and comprehensive loss.

Following this reclassification, no further fair value adjustments will be recognized for the PIPE Warrant so long as the settlement conditions continue to permit equity classification.

The valuation of the PIPE Warrant involves the use of significant unobservable inputs and management judgment. As of September 30, 2025, the fair value was determined based on the Company’s common stock price, adjusted for the probability of warrant issuance and exercisability, as well as applicable discounts reflecting liquidity, dilution, and other financing-related risks. Because these assumptions are highly sensitive to changes in market conditions, the fair value of the PIPE Warrant may fluctuate materially from period to period.

Non-GAAP Financial Measures

To supplement our financial statements presented in accordance with GAAP and to provide investors with additional information regarding our financial results, we have presented Adjusted EBITDA, a non-GAAP financial measure. Adjusted EBITDA is not based on any standardized methodology prescribed by GAAP and is not necessarily comparable to similarly titled measures presented by other companies.

We define Adjusted EBITDA as our net loss, excluding the impact of depreciation, interest income, net, stock-based compensation expense, change in fair value of warrant liabilities, loss on the Brookfield SAFE extinguishment, change in fair value of the Brookfield SAFE and the Brookfield Loan liabilities (net of interest accretion reversal), change in fair value of the FPA Put Option liability and Fixed Maturity Consideration, change in fair value of the Convertible Note, change in fair value of the PIPE Warrant and loss from equity method investees, net. We monitor and have presented in this Quarterly Report Adjusted EBITDA because it is a key measure used by our management and the Board to understand and evaluate our operating performance, to establish budgets, and to develop operational goals for managing our business. We believe Adjusted EBITDA helps identify underlying trends in our business that could otherwise be masked by the effect of certain expenses that we include in net loss. Accordingly, we believe Adjusted EBITDA provides useful information to investors, analysts, and others in understanding and evaluating our operating results and enhancing the overall understanding of our past performance and future prospects.

Adjusted EBITDA is not prepared in accordance with GAAP and should not be considered in isolation of, or as an alternative to, measures prepared in accordance with GAAP. There are a number of limitations related to the use of Adjusted EBITDA rather than net loss, which is the most directly comparable financial measure calculated and presented in accordance with GAAP. For example, Adjusted EBITDA: (i) excludes stock-based compensation expense because it is a significant non-cash expense that is not directly related to our operating performance; (ii) excludes depreciation expense and, although this is a non-cash expense, the assets being depreciated and amortized may have to be replaced in the future; (iii) excludes gain or losses on equity method investee; and (iv) excludes certain income or expense items that do not provide a comparable measure of our business performance. In addition, the expenses and other items that we exclude in our calculations of Adjusted EBITDA may differ from the expenses and other items, if any, that other companies may exclude from Adjusted EBITDA when they report their operating results. In addition, other companies may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison.

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

Reconciliation of Net Loss to Adjusted EBITDA

(In thousands)

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

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), evaluated the effectiveness of our disclosure controls and procedures as defined in Rules 13a–15(e) and 15d-15(e) under the Exchange Act, as of September 30, 2025 (the “Evaluation Date”).

Based on that evaluation, the CEO and CFO concluded that the material weaknesses in our internal control over financial reporting related to: (i) the accounting for complex transactions and estimates requiring significant judgment and (ii) revenue recognition, which were previously identified in Item 9A. “Controls and Procedures” of our Annual Report on Form 10-K for the year ended December 31, 2023, were still present as of Evaluation Date.

The Company also identified control deficiencies related to the impact of headcount reductions and turnover in certain senior and control-related roles during 2025, including during the quarter ended September 30, 2025. These changes affected various individuals responsible for financial reporting and internal control execution and created certain resource constraints within the finance and control functions, which in turn affected the consistency and timeliness of performing certain control activities. These resource constraints limited the execution of certain review and monitoring procedures at the level required for effective internal control over financial reporting. Management views these deficiencies in the aggregate as constituting a material weakness in our internal control over financial reporting, primarily stemming from short-term capacity limitations rather than systemic control framework issues, and has implemented supplemental reviews and reallocated responsibilities to support control performance while remediation efforts continue.

The implementation of our remediation measures will require validation and testing of the design and operating effectiveness of internal controls over a sustained period. We will not consider the material weaknesses remediated until our enhanced controls are operational for a sufficient period of time and tested, enabling management to conclude that the enhanced controls are operating effectively. In addition, we cannot ensure that the measures taken by us to date, and actions that we may take in the future, will be sufficient to remediate these deficiencies in a timely manner or at all or that they will prevent or avoid potential future deficiencies.

Based on the material weaknesses, and the evaluation of our disclosure controls and procedures, our CEO and CFO concluded that our disclosure controls and procedures were not effective as of the Evaluation Date.

Notwithstanding the identified material weaknesses, our CEO and CFO have concluded that our unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented in conformity with GAAP.

Changes in Internal Control Over Financial Reporting

Except as otherwise described herein, there were no changes in our internal control over financial reporting 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 risk factors are disclosed in Part I, Item 1A of our 2024 Annual Report. [Other than as described below, there have been no material changes from our updates to the risk factors discussed in Part I, Item 1A. Risk Factors, of our 2024 Annual Report as updated in our Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 2025 and June 30, 2025.

An extended U.S. Government shutdown could materially adversely affect our business, results of operations, and financial condition.

A portion of our revenue is linked to projects supported directly or indirectly by U.S. government programs, including those administered by the Department of Energy (DOE). The U.S. continues to face a changing geopolitical environment, along with certain fiscal and economic challenges, and uncertainty exists regarding how future budget and program decisions will unfold. During periods of federal government shutdowns, many government agencies and contracting offices cease operations or operate at reduced capacity. These shutdowns may delay funding decisions, new contract awards, contract modifications, and may result in the suspension of ongoing work under existing contracts.

In the event of a prolonged federal government shutdown, we may experience delays in critical DOE-dependent project milestones. This could include:

• Postponed disbursement of grants or cooperative agreements;
• Slower progression through loan guarantee processes; and
• Financing bottlenecks for cost-share projects reliant on DOE commitments.

Such delays could shift expected revenue recognition from project services, equipment sales, or offtake-linked products, particularly for projects in earlier cohorts where DOE involvement plays a catalytic role.

Government shutdowns can also create uncertainty in federal budgeting and procurement priorities, which could reduce future opportunities for our products. We continue to actively manage this risk by seeking to diversify our project funding sources, engage private capital partners, and sequence project cohorts to mitigate dependency. Nonetheless, these efforts may not be successful, and prolonged government funding disruptions could negatively impact the timing of certain revenue streams and increase working capital pressure in the near term.

The timing and duration of any shutdown are unpredictable, and we cannot estimate the ultimate effect on our business. Any prolonged or repeated shutdowns could have a material adverse effect on our financial condition, results of operations, and ability to execute our strategic objectives.