Company: AIRJW
Filing Date: 2025-03-25
Form Type: 10-K
Source: 0001013762-25-002263
Chunk: 1007

Company: AirJoule Technologies Corp.
Filing Date: 2025-03-25
Form: 10-K
Item: Item 6
Chunk 1007
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 simulation, with underlying forecast mathematics based on geometric Brownian motion in a risk-neutral framework. The calculation
of the value of the Subject Vesting Shares considered the $12.00 and $14.00 vesting conditions in addition to the vesting related to the
Earnout Milestone Amount. The Subject Vesting Shares liability involves certain assumptions requiring significant judgment and actual
results may differ from assumed and estimated amounts. See Note 12 – Fair Value Measurements.

Business Combinations

We evaluate whether acquired net assets should be accounted for as
a business combination or an asset acquisition by first applying a screen test to determine whether substantially all of the fair value
of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If so, the transaction
is accounted for as an asset acquisition. If not, we apply judgement to determine whether the acquired net assets meet the definition
of a business by considering if the set includes an acquired input, process, and the ability to create outputs.

We account for business combinations using the acquisition method
of accounting whereby the identifiable assets and liabilities of the acquired business, including contingent consideration, as well as
any non-controlling interest in the acquired business, are recorded at their estimated fair values as of the date that we obtain control
of the acquired business. We measure goodwill as the fair value of the consideration transferred including the fair value of any
non-controlling interest recognized, less the net recognized amount of the identifiable assets and liabilities combined, all measured
at their fair value as of the acquisition date. Transaction costs, other than those associated with the issuance of debt or equity securities,
that we incur in connection with a business combination are expensed as incurred.

Any contingent consideration is measured at fair
value at the acquisition date. For contingent consideration that does not meet all the criteria for equity classification, such contingent
consideration is required to be recorded at its initial fair value at the acquisition date, and on each balance sheet date thereafter.
Changes in the estimated fair value of liability-classified contingent consideration are recognized on the consolidated statements of
operations in the period of change.

Several valuation methods may be used to determine the fair value of
assets acquired and liabilities assumed. For intangible assets, we typically use a variation of the income approach, whereby a forecast
of future cash flows attributable to the asset is discounted to present value using a risk-adjusted discount rate. Some of the more significant
estimates and assumptions inherent in the income approach include the amount and timing of