Company: AIRJW
Filing Date: 2025-03-25
Form Type: 10-K
Source: 0001013762-25-002263
Chunk: 142

Company: AirJoule Technologies Corp.
Filing Date: 2025-03-25
Form: 10-K
Item: Item 1
Chunk 142
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 in the estimated fair value of the liability was recognized as a loss in the consolidated statements
of operations.

Change in Fair Value of Subject Vesting Shares
Liability

Upon consummation of the Business Combination, we assumed $11.8 million
for the subject vesting shares liability. The change in fair value of income of $4.0 million during the year ended December 31, 2024 is
due to a decrease in the estimated fair value of the liability recognized as a gain in the consolidated statements of operations. The
fair value of the liability decreased primarily due to changes in the valuation inputs, mainly a decrease in the stock price, a change
in the timing of future cash flows and an increase in the volatility.

29

Gain on Settlement of Legal Fees

During the year ended December 31, 2024, we recognized a gain on the
settlement of legal fees related to the transaction costs of the Business Combination. There were no such gains in year ended December
31, 2023.

Income Tax Benefit (Expense)

Income tax expense was $81.3 million and $0 for the year ended
December 31, 2024 and 2023, respectively. During the year ended December 31, 2024, our contribution of a perpetual license to
AirJoule, LLC’s intellectual property was measured at fair value and resulted in a book gain and a temporary difference
between book and taxable income. The temporary difference resulted in the recognition of a deferred tax expense and deferred tax
liabilities. The deferred tax expense was partially offset by the recognition of deferred tax assets in connection with the Company
now being a corporation through the Business Combination.

Liquidity and Capital Resources

Our primary sources of liquidity have been cash from contributions
from founders or equity capital raised from other investors. We had retained earnings of $198.5 million as of December 31, 2024. As of
December 31, 2024, we had $27.4 million of working capital including $28.0 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