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, 2025. 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,” “will,” “expect,” “might,” “plan,” “anticipate,” “could,” “intend,” “target,” “goal,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential,” “seek,” “would,” “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 the business and operations of AirJoule Technologies Corporation 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. Our platform technology, AirJoule, produces pure distilled water from air and, 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, our technology 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 commercializing and scaling manufacturing of our AirJoule systems through our global collaborations, including our 50/50 joint venture with GE Vernova Inc. (NYSE: GEV) and our commercial partnerships with Carrier Global Corporation (NYSE: CARR). We believe that deploying AirJoule systems worldwide will unleash the power of water from air and help to improve global water security. During 2025, we manufactured and deployed AirJoule Core systems for field testing and customer demonstrations in Texas, Arizona and Dubai, and we advanced the productization and manufacturing scale-up of our Core and larger Prime system in preparation for commercial sales beginning in late 2026. Growth Strategy and Outlook We anticipate significant growth opportunities by offering the AirJoule technology 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 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, residential development, 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 depend on consistent humidity and ultra-pure water, our technology 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. For residential applications, we have partnered with Kubota to deploy AirJoule systems for off-grid water generation to support multi-unit residential developments in water-scarce regions. In the HVAC space, where building owners and facility managers are under pressure to cut energy consumption and improve 15 indoor air quality, AirJoule’s superior moisture removal capability can 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 expect to 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 Third-Party Recognition 2026 CleanTech Breakthrough Awards On April 9, 2026, we announced that we had been named the winner of the "Water Tech Innovation of the Year" award in the 2026 CleanTech Breakthrough Awards program. The program is conducted by CleanTech Breakthrough, an independent market intelligence organization that evaluates climate and clean technology companies, products and services globally. Winners are selected from thousands of nominations submitted by companies around the world through a multi-step evaluation conducted by an independent panel of industry experts, with each entry assessed on criteria including innovation, performance, market impact and value. Strategic Partnerships Kubota Exclusive Residential Sales Partnership On July 21, 2026, we announced an exclusive sales agreement with Kubota Corporation, a global provider of water and environmental infrastructure solutions, together with initial deployments of AirJoule systems in Texas and California. Under the agreement, Kubota will market, sell and distribute AirJoule systems for multi-unit residential developments in the initial territories of Texas and California. Kubota also purchased two AirJoule Core systems for initial deployments at sites near Corpus Christi, Texas and Irvine, California, both of which are expected to begin during the third quarter of 2026. The deployments will pair our atmospheric water generation technology with Kubota's wastewater treatment, water reclamation, pipe systems and operation and maintenance capabilities, and are expected to generate operational data across a range of environmental conditions relevant to residential water supply. The parties may consider broader commercial collaboration based on the results of the initial deployments, customer needs, and the feasibility of integrating AirJoule systems with Kubota's wastewater reclamation equipment and digital infrastructure capabilities. Field Deployments and Demonstrations GE Vernova Advanced Research Center Frontier Campus On July 28, 2026, we announced the deployment of an AirJoule Core atmospheric water generation system at GE Vernova's Advanced Research Center Frontier Campus in Niskayuna, New York. The facility, which held its grand opening on July 16, 2026, was advanced with more than $110 million of combined investment from GE Vernova and the State of New York, and GE Vernova featured AirJoule among the technologies on display at the opening. The system operates at the campus as a live showcase for GE Vernova customers and partners visiting the facility, demonstrating the production of pure distilled water directly from air. Components of Our Results of Operations Revenue Revenue will be earned primarily from the assembly and sale of AirJoule systems. During the year ended December 31, 2025, the AirJoule JV recognized $0.1 million of revenue through the sale of a pre-production unit to an academy partner for research and validation purposes. No revenue was earned in the six months ended June 30, 2026. Operating Expenses We classify our operating expenses into the following categories: 16 •General and administrative: General and administrative expenses consist primarily of personnel-related expenses for our executives, consultants and advisors. These expenses also include non-personnel costs, such as rent, office supplies, legal, audit and accounting services and other professional fees. •Research and development: Research and development expenses include internal personnel, parts, prototypes and third-party consulting costs related to preliminary research and development of our products. •Sales and marketing: Sales and marketing expenses consist primarily of business development, professional fees, advertising and marketing costs. •Depreciation and amortization: Depreciation and amortization expense consists of depreciation of property and equipment. Results of Operations The following tables set forth the results of our operations for the periods presented, as well as the changes between periods. The period-to-period comparison of financial results is not necessarily indicative of future results. The three and six months ended June 30, 2026 compared to the three and six months ended June 30, 2025 The following table sets forth the Company’s condensed consolidated statements of operations data for the three and six months ended June 30, 2026 and 2025: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 Change ($) 2026 2025 Change ($) Cost and expenses: General and administrative $ 3,817,932 $ 3,751,211 $ 66,721 $ 7,162,278 $ 6,537,695 $ 624,583 Research and development 172,807 401,623 (228,816 ) 388,278 789,542 (401,264 ) Sales and marketing 118,047 7,794 110,253 163,950 22,003 141,947 Depreciation and amortization 4,405 2,289 2,116 8,307 3,877 4,430 Loss from operations (4,113,191 ) (4,162,917 ) 49,726 (7,722,813 ) (7,353,117 ) (369,696 ) Other income (expense): Interest income 292,929 283,733 9,196 577,594 526,758 50,836 Equity loss from investment in AirJoule, LLC (2,510,952 ) (2,089,667 ) (421,285 ) (65,658,820 ) (4,319,945 ) (61,338,875 ) Change in fair value of Earnout Shares liability (2,393,000 ) 6,276,000 (8,669,000 ) (965,000 ) 19,108,000 (20,073,000 ) Change in fair value of True Up Shares liability — — — — 106,106 (106,106 ) Change in fair value of Subject Vesting Shares liability (2,730,000 ) 934,000 (3,664,000 ) (2,289,000 ) 6,408,000 (8,697,000 ) Change in fair value of Equity Line Obligation liability — — — 35,598 — 35,598 Other expense, net — (286,818 ) 286,818 (1,577 ) (285,470 ) 283,893 Total other income (expense), net (7,341,023 ) 5,117,248 (12,458,271 ) (68,301,205 ) 21,543,449 (89,844,654 ) Income (loss) before income taxes (11,454,214 ) 954,331 (12,408,545 ) (76,024,018 ) 14,190,332 (90,214,350 ) Income tax benefit 2,920,649 1,558,882 1,361,767 17,664,912 3,201,539 14,463,373 Net income (loss) $ (8,533,565 ) $ 2,513,213 $ (11,046,778 ) $ (58,359,106 ) $ 17,391,871 $ (75,750,977 ) General and Administrative General and administrative expenses for the three months ended June 30, 2026 were $3.8 million, relatively flat as compared to $3.8 million for the three months ended June 30, 2025, reflecting minor offsetting changes in professional service costs and stock-based compensation expense. 17 General and administrative expenses for the six months ended June 30, 2026 were $7.2 million as compared to $6.5 million for the six months ended June 30, 2025. The $0.6 million increase was primarily related to higher stock-based compensation expense and audit fees, partially offset by lower other professional services costs. We expect that our general and administrative expenses will increase in future periods commensurate with the expected growth of our business. Research and Development Research and development expenses for the three months ended June 30, 2026 were $0.2 million as compared to $0.4 million for the three months ended June 30, 2025, reflecting minor changes in royalty fees and the reimbursement of costs incurred per the statement of work with AirJoule, LLC. Research and development expenses for the six months ended June 30, 2026 were $0.4 million as compared to $0.8 million for the six months ended June 30, 2025. The $0.4 million decrease was primarily related to lower royalty fees and increased reimbursement of costs incurred per the statement of work with AirJoule, LLC, partially offset by higher stock-based compensation expense. Sales and Marketing Sales and marketing expenses for the three months ended June 30, 2026 were $118,047 as compared to $7,794 for the three months ended June 30, 2025. We expect that our sales and marketing expenses will increase in future periods commensurate with the expected growth of our business. Depreciation and Amortization Depreciation and amortization expense for the three months ended June 30, 2026 and 2025 was $4,405 and $2,289, respectively. Interest Income Interest income was $292,929 and $283,733 for the three months ended June 30, 2026 and 2025, respectively. This was primarily a result of the increase in our cash balance. Equity Loss from Investment in AirJoule, LLC As previously noted, on January 25, 2024, AirJoule Technologies LLC entered into a joint venture with GE Ventures LLC, the AirJoule JV which closed on March 4, 2024. For the three months ended June 30, 2026 and 2025, we recognized a loss of $2.5 million and $2.1 million, respectively. The equity loss from investment in AirJoule, LLC for the three months ended June 30, 2026 was primarily as a result of the impairment to AirJoule, LLC’s in-process R&D. Change in Fair value of Earnout Shares liability The change in fair value of the Earnout Shares liability resulted in a loss of $2.4 million and $1.0 million for the three and six months ended June 30, 2026, respectively, primarily due to an increase in the estimated fair value of the liability driven by an increase in our stock price during the period. The change in fair value of the Earnout Shares liability resulted in a gain of $6.3 million and $19.1 million for the three and six months ended June 30, 2025, respectively, primarily due to a decrease in the estimated fair value of the liability driven by a decrease in our stock price and changes in the timing of future cash flows. Change in Fair value of True Up Shares liability The change in fair value of the liability during the six months ended June 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 The change in fair value of the Subject Vesting Shares liability resulted in a loss of $2.7 million and $2.3 million for the three and six months ended June 30, 2026, respectively, primarily due to an increase in the estimated fair value of the liability driven by an increase in our stock price during the period. The change in fair value of the Subject Vesting Shares liability resulted in a gain of $0.9 million and $6.4 million for the three and six months ended June 30, 2025, respectively, primarily due to a decrease in the estimated fair value of the liability driven by a decrease in our stock price and changes in the timing of future cash flows. 18 Change in Fair Value of Equity Line Obligation Liability On March 25, 2025, we entered into an Equity Line Purchase Agreement with B. Riley Principal Capital II, LLC. See Note 2 - Liquidity and Capital Resources. During the six months ended June 30, 2026, we recognized a $35,598 change in the fair value of the related liability. Income Tax Benefit For the three months ended June 30, 2026 and 2025, income tax benefit was $2.9 million and $1.6 million, respectively. The effective tax rate during this period was primarily driven by non-deductible mark to market adjustments, state taxes and stock compensation. For the six months ended June 30, 2026 and 2025, income tax benefit was $17.7 million and $3.2 million, respectively. For the six months ended June 30, 2026, the effective tax rate was driven by our share of the impairment to AirJoule, LLC’s in-process R&D and non-deductible mark to market adjustments, state taxes and stock compensation. For the six months ended June 30, 2025, the effective tax rate was driven by non-deductible mark to market adjustments, state taxes and stock compensation. Liquidity and Capital Resources The June Public Offering of Class A Common Stock On June 1, 2026, we entered into a securities purchase agreement with certain institutional investors pursuant to which we agreed to issue and sell to the investors an aggregate of 3,658,536 shares of Class A common stock at a purchase price of $4.10 per share in a registered direct offering, or the June 2026 Offering, pursuant to a prospectus supplement filed under Rule 424(b)(5) under the Securities Act of 1933, as amended. Titan Partners Group, a division of American Capital Partners, LLC, acted as sole placement agent for the June 2026 Offering. Gross proceeds from the June 2026 Offering were $15.0 million, and after payments of an agent fee and certain legal and other expenses, net proceeds to us were approximately $14.2 million. The January Public Offering of Class A Common Stock On January 15, 2026, we completed a public offering of Class A common stock, par value $0.0001 per share, or the January Offering, pursuant to a prospectus supplement filed under Rule 424(b)(5) under the Securities Act of 1933, as amended. In the January Offering, we issued an aggregate of 7.1 million shares of Class A common stock, consisting of 6.2 million shares sold in the initial offering and 0.9 million additional shares issued upon the underwriter’s full exercise of its 45-day overallotment option, at a public offering price of $3.25 per share. After giving effect to these amounts and other legal and offering expenses paid by the Company, net proceeds to the Company were $21.6 million 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 generating net proceeds of $14.2 million. 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 19 execution of the Equity Line Purchase Agreement without first obtaining stockholder approval. There were no sales under the Equity Line Purchase Agreement during the six months ended June 30, 2026. 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 six months ended June 30, 2026, we contributed an additional $12.5 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 June 30, 2026, we had $41.0 million of working capital including $41.4 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. 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, including the remaining commitment for capital contributions to the AirJoule JV. While we believe that the proceeds realized to date will be sufficient to meet our anticipated cash requirements, including funding our operations and capital contributions to the AirJoule JV, for at least the next twelve months from the date of this filing, 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 six months ended June 30, 2026 and 2025 The following table summarizes our cash flows from operating, investing and financing activities for the six months ended June 30, 2026 and 2025: For the Six Months Ended June 30, 2026 2025 Net cash used in operating activities $ (3,759,952 ) $ (2,163,485 ) Net cash used in investing activities (12,519,506 ) (10,011,376 ) Net cash provided by financing activities 35,848,137 14,655,824 Net increase in cash and cash equivalents $ 19,568,679 $ 2,480,963 Cash Flows from Operating Activities During the six months ended June 30, 2026, net cash used in operating activities was $3.8 million, primarily reflecting cash used to fund our general and administrative and research and development expenses. We expect to continue to use cash in operating activities as we continue to expand our operations. During the six months ended June 30, 2025, net cash used in operating activities was $2.2 million and primarily reflected our net income from operations offset by changes in operating assets and liabilities including decreases in our due from related party and accrued expenses and other liabilities accounts. 20 Cash Flows from Investing Activities During the six months ended June 30, 2026, net cash used in investing activities was $12.5 million primarily as a result of our contributions made to the AirJoule JV during the period. During the six months ended June 30, 2025, 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 six months ended June 30, 2026, net cash provided by financing activities was $35.8 million, primarily as a result of $35.9 million in net proceeds from the issuance of our common stock in the January 2026 and June 2026 Offerings. During the six months ended June 30, 2025, net cash provided by financing activities was $14.6 million and was primarily related to net proceeds of $14.6 million from the April 2025 PIPE offering and $0.1 million from the exercise of stock options. Contractual Obligations and Commitments Joint Venture Agreement On October 27, 2021, we entered into a joint venture with CATL US Inc., or CATL US, an affiliate of CATL, pursuant to which we and CATL US formed CAMT Climate Solutions Ltd., a limited liability company organized under the laws of Hong Kong, or CAMT. We and CATL US both own 50% of CAMT’s issued and outstanding shares. While we and CATL both continue to own 50% of CAMT’s issued and outstanding shares, neither we nor CATL funded this joint venture or contributed any assets to the joint venture. Similarly, no business plan or operating budget has ever been set by CAMT’s board of directors. As of June 30, 2026, no amount was funded to CAMT and our financial statements do not reflect any accounting for CAMT as no assets (including IP) or cash have been contributed to CAMT. 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 Annual Report on Form 10-K. 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 June 30, 2026. 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 opt 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 21 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.