Company: AIRJW
Filing Date: 2025-03-25
Form Type: 10-K
Source: 0001013762-25-002263
Chunk: 392

Company: AirJoule Technologies Corp.
Filing Date: 2025-03-25
Form: 10-K
Item: Item 1B
Chunk 392
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 warrant must be (i) indexed to our equity and (ii) meet
the conditions for equity classification.

If a warrant does not meet the conditions for stockholders’ deficit
classification, it is carried on the consolidated balance sheets as a warrant liability measured at fair value, with subsequent changes
in the fair value of the warrant recorded in other non-operating losses (gains) in the consolidated statements of operations. If
a warrant meets both conditions for equity classification, the warrant is initially recorded, at its relative fair value on the date of
issuance, in stockholders’ deficit in the consolidated balance sheets, and the amount initially recorded is not subsequently remeasured
at fair value.

Income Taxes

Prior to the Business Combination on March 14, 2024, we were a limited
liability company, or LLC, and treated as a partnership for income tax purpose. As a Partnership, we were not directly liable for federal
income taxes. As of the date of the Business Combination, the operations of the Company ceased to be taxed as a partnership resulting
in a change in tax status for federal and state income tax purposes.

We follow the asset and liability method of accounting for income taxes
under ASC 740, Income Taxes, or ASC 740. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply
to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in income in the period that is included in the enactment date. Valuation
allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

ASC 740 prescribes a recognition threshold and a measurement attribute
for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits
to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. We recognize accrued
interest and penalties related to unrecognized tax benefits as income tax expense. Management has evaluated our tax positions, including
our Predecessor’s previous status as a pass-through entity for federal and state tax purposes, and has determined that we have taken
no uncertain tax positions that require adjustment to the consolidated financial statements. Our reserves related to uncertain tax positions
was zero as of December 31, 2024 and 2023. There were no unrecognized tax benefits and no amounts accrued for interest