Company: AIRJW
Filing Date: 2025-05-05
Form Type: 424B3
Source: 0001213900-25-039770
Chunk: 93

Company: AirJoule Technologies Corp.
Filing Date: 2025-05-05
Form: 424B3
Chunk 93
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 the probability of possible future events. Changes in any or all of these estimates and assumptions or the
relationships between those assumptions impact our valuations as of each valuation date and may have a material impact on the valuation
of share based compensation arrangements. An increase of 100-basis points in interest rates would not have a material impact on our share-based
compensation. During the period from the date of the Business Combination through December 31, 2024 we did not record share-based
compensation expense associated with these Earnout Shares as the performance conditions associated with these Earnout Shares
were not deemed probable of achievement. Unrecognized share-based compensation expense for these Earnout Shares with a performance-based
vesting condition that was not deemed probable of occurring as of December 31, 2024 was $6.6 million which is expected to vest
subject to the performance-based vesting condition being satisfied or deemed probable.

<div align='center'>48</div>

Earnout Shares Liability

In connection with the reverse recapitalization
and pursuant to the Merger Agreement, eligible former Predecessor equity holders are entitled to receive the Earnout Shares upon us achieving
certain Earnout Milestones. The settlement of the Earnout Shares to the holders of the Predecessor’s common units contain variations
in something other than the fair value of the issuer’s equity shares. As such, management determined that they should be classified
as a liability and recognized at fair value at each reporting period with changes in fair value included in earnings.

We estimated fair value of the Earnout Shares
with a Monte Carlo simulation using a distribution of potential outcomes for expected earnings before interest, taxes, depreciation, and
amortization, or EBITDA, and stock price at expected commission dates, utilizing a correlation coefficient for EBITDA and stock price,
and assuming $50.0 million of Annualized EBITDA per production line, with each of the production lines commissioned over a five-year
period. EBITDA was discounted to the valuation date with a weighted average cost of capital estimate and forecasted to each estimated
commission date. Earnout mechanics at each estimated commission date were assessed, and if the Earnout Thresholds were achieved, the future
value of the Earnout Shares was discounted to the valuation date utilizing a risk-free rate commensurate with the overall term. Expected
EBITDA assumes that each production line will achieve equivalent production generating $50.0 million of Annualized EBITDA. The
commission dates used