Note 4 — EQUITY METHOD INVESTMENT

AirJoule, LLC

On January 25, 2024, the Company entered into a Framework Agreement with GE Vernova, a Delaware limited liability company, and, solely for the purposes specified therein, GE Vernova LLC, a Delaware limited liability company (“GE Vernova Parent”), pursuant to which the Company and GE Vernova agreed, subject to the terms and conditions of the Framework Agreement, including certain closing conditions specified therein, to form a joint venture in which each of the Company and GE Vernova will hold a 50% interest. The purpose of the AirJoule JV is to incorporate GE Vernova’s proprietary sorbent materials into systems that utilize the Company’s AirJoule water capture technology and to manufacture and bring products incorporating the combined technologies to market in the Americas, Africa and Australia. AirJoule, LLC is a variable interest entity for which the Company has determined there is shared power with GE Vernova; therefore the Company accounts for the VIE under the equity method of accounting.

The Company’s share of the income (loss) reported by AirJoule, LLC is recorded as an equity gain (loss) from investment in AirJoule, LLC in the accompanying condensed consolidated statements of operations.

AirJoule, LLC tests its intangible assets for impairment during the fourth quarter of each year, or whenever a change in events and circumstances (triggering event) occurs that indicates the fair value of intangible assets may be below their carrying values.

Given AirJoule, LLC’s status as an early-stage company with limited operating history and the uncertainties regarding AirJoule, LLC’s successful development and commercialization of its products, there can be no assurance that the estimates and assumptions made for purposes of its goodwill impairment testing in 2025 will prove to be accurate predictions of the future. If AirJoule, LLC’s assumptions, including timing of revenue generation and forecasted EBITDA, are not achieved, then AirJoule, LLC may be required to record goodwill impairment charges in future periods.

Based on triggering events, specifically a sustained decline in the Company’s stock price, AirJoule, LLC performed an interim impairment test as of March 31, 2026 on its in-process R&D. In performing the interim impairment test as of March 31, 2026, AirJoule, LLC determined that the carrying value of its in-process R&D exceeded the respective fair value, concluding an impairment of $110.3 million. The Company’s share of the in-process R&D impairment reported by AirJoule, LLC was recorded as an equity loss from investment in AirJoule, LLC in the accompanying condensed consolidated statements of operations. No triggering events were identified with respect to the Company's in-process R&D during the three months ended June 30, 2026, and accordingly, no additional interim impairment test was performed.

Additionally, AirJoule, LLC performed an interim impairment test as of March 31, 2026 on its goodwill and determined that the carrying value exceeded the respective fair value and recorded goodwill impairment charges of $76.1 million during the three months ended March 31, 2026. As a result, the Company reduced its basis difference by the Company’s share of AirJoule, LLC’s goodwill impairment charges. The Company’s updated basis difference as of March 31, 2026 was $105.8 million. No triggering events were identified with respect to AirJoule, LLC's goodwill during the three months ended June 30, 2026, and accordingly, no additional interim impairment test was performed as of that date, and the basis difference remained at $105.8 million.