Leases

6 Months Ended

Jun. 30, 2024

NOTE 13 — Leases

The following table presents the future minimum lease payments that the Company expects to make under its operating leases as of June 30, 2024 (Successor):


Year	Future Minimum Lease Payments
Remainder of 2024	$	257
2025	523
2026	535
2027	548
2028	515


Total	$	2,378

Lease costs are recorded as General and administrative expense on the condensed consolidated statements of operations and comprehensive loss. The following table presents the Company's lease costs by period presented:


	Period from						Period from
	April 1 – June 30, 2024 (Successor)		June 8 – June 30, 2023 (Successor)		April 1 – June 7, 2023 (Predecessor)		January 1 - June 30, 2024 (Successor)		June 8 – June 30, 2023 (Successor)		January 1 – June 7, 2023 (Predecessor)
Operating lease costs	$	128	$	13	$	36	$	255	$	13	$	85

Office Leases

On June 6, 2022, the Company entered into an office space lease agreement for commercial office space in Durham, North Carolina (the “Measurement Building Lease”), which became effective on November 1, 2022 and had an original lease term of 60 months from the signing date. The lease was classified as an operating lease and the lease liability was calculated using an incremental borrowing rate of 8.0%. On August 11, 2023, the Company agreed to terminate the Measurement Building Lease effective October 6, 2023 and entered into a new office lease agreement (the “Roney St. Lease”). The Roney St. Lease commenced on October 6, 2023 and has an original lease term of 62 months from the commencement date. The simultaneous termination of the Measurement Building Lease and execution of the Roney St. Lease represents a single transaction accounted for as a modification of the Measurement Building Lease. As such, the Company remeasured the lease liabilities and right-of-use asset associated with the Measurement Building Lease and recognized those balances over the amended, remaining lease term.

On February 28, 2024, the Company entered into an office space lease agreement for commercial office space in Houston, Texas (the “Atlas Tower Lease”), which became effective in July of 2024 and has an original lease term of 68 months from the commencement date. The Company will measure the lease liabilities and right-of-use asset associated with the Atlas Tower Lease upon commencement of the lease and will recognize those balances over the lease term.

The Roney St. Lease includes an early termination option that enables the Company to end the lease on or after its 50th month. The Atlas Tower Lease includes an early termination option that enables the Company to end the lease at the end of its 44th month. As of June 30, 2024 (Successor), the Company determined that it is unlikely to exercise either termination option; therefore, the above minimum lease payments, as well as the right-of-use asset and lease liabilities associated with the Roney St. Lease, do not consider the effects of this termination option on the lease term.

As of June 30, 2024 (Successor), the Company had $1,987 in lease liabilities and $1,886 in right-of-use assets attributable to the Roney St. Lease on its condensed consolidated balance sheets.

Land Leases

On March 8, 2024, the Company entered into a land lease with a subsidiary of Occidental Petroleum, a related party, which becomes effective no later than December 31, 2024. The lease has an initial term of 60 months from the commencement date. Additionally, the term may be extended for up to three consecutive periods of ten years. The Company will measure

the lease liabilities and right-of-use asset upon commencement of the lease and will recognize those balances over the lease term.

The Company leases the land under the Demonstration Plant. During the second quarter of 2024, we entered into a lease amendment extending the lease term. The amended lease expires on the earlier of (i) January 1, 2031 or (ii) the termination of the Company's oxygen supply agreement with the lessor. Lease payments for the land equal one dollar per year. As of June 30, 2024 (Successor), the value of the right-of-use asset attributable to the Demonstration Plant land lease was $109.

Reference Note 15 — Commitments and Contingencies for discussion on the Company’s asset retirement and unconditional purchase obligations related to the Demonstration Plant.