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Investments

9 Months Ended

Sep. 30, 2025

7. INVESTMENTS

Equity Method Investments

The changes in our equity method investments were as follows:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2025		2024		2025		2024

	(in thousands)
Beginning balance	$	29,628	$	45,088	$	35,532	$	46,503
Contributions		22,874		108		24,265		1,398
Net income (loss) on equity method investments		4,487		(2,327)		945		(3,032)
Distributions received		(2,407)		(849)		(6,160)		(2,849)
Change in our share of net assets		—		(5,118)		—		(5,118)
Ending balance	$	54,582	$	36,902	$	54,582	$	36,902

Net income (loss) on equity method investments represents our share of the income or loss of the equity method investments.

Infinitum

During 2022, we purchased shares of Series D Preferred Stock (“Series D Preferred Stock”) in Infinitum for $42.0 million. Infinitum is a Texas-based startup developer and manufacturer of electric motors featuring printed circuit board stators. On September 8, 2023, we purchased shares of Series E Preferred Stock (“Series E Preferred Stock” and, together with the “Series D Preferred Stock,” the “Infinitum Preferred Stock”) in Infinitum for $24.6 million. The Infinitum Preferred Stock provides for non-cumulative dividends when and if declared by Infinitum’s board of directors. Each share of Infinitum Preferred Stock is convertible, at any time, at our option, into shares of common stock of Infinitum. We account for our ownership interest in Infinitum as an equity investment without a readily determinable fair value. Absent an observable price change, it is not practicable to estimate the fair value of our investment in Infinitum because of the lack of a quoted market price for our ownership interests. Therefore, we use a measurement alternative other than fair value to account for our investment.

As a development-stage company, Infinitum periodically may initiate new funding rounds to raise capital. Should Infinitum initiate a new round of funding at a valuation less than the carrying amount of our Infinitum Preferred Stock, an impairment in our investment could be necessary in future periods.

Ascend

On August 22, 2023, we purchased shares of Series D Preferred Stock (the “Ascend Series D Preferred Stock”) in Ascend for $25.0 million which was accounted for as an equity investment without a readily determinable fair value because of the lack of quoted market prices. Ascend is a U.S.-based manufacturer and recycler of sustainable, engineered battery materials for electric vehicles. In June 2025, Ascend raised new capital through a convertible note financing. Under the terms of the convertible note and the resulting recapitalization, all existing shares of each outstanding series of preferred stock were converted into common stock on a 1:1 basis for stockholders that participated in the convertible note purchase, or on a 3:1 basis if they did not participate.

We elected to participate in the recapitalization of Ascend with a $3.0 million commitment to purchase convertible debt. We have funded $2.9 million of this commitment as of September 30, 2025. The convertible notes provide for a redemption in two years for an amount equal to the greater of (a) a multiple of each stockholder’s investment in the convertible notes as determined by the level of participation or (b) the principal amount of each stockholder’s investment in the convertible notes plus an annual interest rate of 15%. Based on our level of participation, our convertible notes provide for a multiple of 12 times our funded commitment at redemption. We concluded that these convertible notes represent available-for-sale debt securities. We do not intend to sell our debt securities (which are subject to certain transfer restrictions) and believe it is likely that we will not be required to sell them before redemption. As a result of our participation in the recapitalization, our shares of Ascend Series D Preferred Stock converted into common stock on a 1:1 basis.

The following table reflects our debt securities holdings:


	September 30, 2025
	Cost Basis		Unrealized Gains (1)		Fair Value

	(in thousands)
Debt Securities	$	2,959	$	10,234	$	13,193

(1)	Unrealized gains in our debt securities are included in the Change in unrealized gains (losses) on debt securities line item within our condensed consolidated statements of comprehensive income.

As discussed in Note 4 – Fair Value Measurements, we determined the fair value of the debt securities was $13.2 million as of September 30, 2025.

During the second quarter of 2025, we determined that the common stock we hold in Ascend as a result of the conversion had no value using the same models used to determine the fair value of our debt securities. This resulted in an impairment charge of $25.0 million included in our condensed consolidated statements of income. The $25.0 million impairment charge is a Level 3 fair value measurement and is included within our Other, Corporate and Elimination category.

The following table presents quantitative information about certain significant unobservable inputs used in this fair value measurement:


	Valuation Technique(s)	Unobservable Input	Range/Amount (Average) (a)

Common Stock	Option-pricing approach methodology	Industry volatility	29.10% - 70.86% (49.98%)
		Estimated time to exit	2.0 - 4.0 (3.0) years
	Income approach methodology	Forecasted future cash flow	$906.6 - $1,285.9 ($1,096.3) million
		Cost of capital	11.25% - 16.58% (13.92%)

(a)

Averages represent the arithmetic average of the inputs and is not weighted by a relative fair value or notional amount.