Company: AIRJW
Filing Date: 2025-05-05
Form Type: 424B3
Source: 0001213900-25-039770
Chunk: 92

Company: AirJoule Technologies Corp.
Filing Date: 2025-05-05
Form: 424B3
Chunk 92
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 financial statements, which are prepared in conformity
with accounting principles generally accepted in the United States of America. 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.

We believe that the following accounting policies
were most critical to the judgments and estimates used in the preparation of our consolidated financial statements.

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 of the underlying stock, the expected term, the risk-free interest rate, the selection
of comparable companies, and