Company: AIRJW
Filing Date: 2025-03-25
Form Type: 10-K
Source: 0001013762-25-002263
Chunk: 281

Company: AirJoule Technologies Corp.
Filing Date: 2025-03-25
Form: 10-K
Item: Item 1A
Chunk 281
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. The preparation of these financial statements requires us to make certain estimates,
judgments, and assumptions that we believe are reasonable based upon the information available. These estimates and assumptions can be
subjective and complex and may affect the reported amounts of assets and liabilities, revenues, and expenses reported in those financial
statements. As a result, actual results could differ from such estimates and assumptions. Such changes to estimates could potentially
result in impacts that would be material to the consolidated financial statements.

While our significant accounting policies are described in more detail
in Note 3 to our consolidated financial statements appearing in Item 8 to this Annual Report on Form 10-K, we believe that the following
accounting policies were most critical to the judgments and estimates used in the preparation of our consolidated financial statements.

31

Share-Based Compensation

We account for share-based compensation arrangements granted to employees
and non-employees in accordance with ASC 718, Share-based Compensation, by measuring the grant date fair value of each award and
recognizing the resulting expense over the period during which the recipient is required to perform services in exchange for the award.
Equity-based compensation expense is only recognized for awards subject to performance conditions if it is probable that the applicable
performance conditions will be achieved. We account for forfeitures when the forfeitures occur.

We estimate the fair value of stock option awards subject to only a
service condition on the date of grant using the Black-Scholes valuation model. The Black-Scholes model requires the use of highly subjective
and complex assumptions, including the stock option’s expected term, the price volatility of the underlying stock, the applicable
risk-free interest rate, and the expected dividend yield of the underlying common stock, as well as an estimate of the fair value of the
common stock underlying the stock option.

We estimate the fair value of Earnout Shares (as described below),
which are considered compensatory awards and accounted for under ASC 718, using the Monte-Carlo simulation model. The Monte-Carlo
simulation model was selected as the valuation methodology for the Earnout Shares due to the path-dependent nature of applicable triggering
events. Under ASC 718, such Earnout Shares are measured at fair value as of the grant date and expense is recognized over the applicable
time-based vesting period (the applicable triggering event is a market condition and does not impact expense recognition). The Monte-Carlo
model requires the use of highly subjective and complex assumptions, estimates and judgements, including the current stock price, the
volatility