Company: AIRJW
Filing Date: 2025-03-25
Form Type: 10-K
Source: 0001013762-25-002263
Chunk: 1308

Company: AirJoule Technologies Corp.
Filing Date: 2025-03-25
Form: 10-K
Item: Item 8
Chunk 1308
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 to be classified in stockholders’ equity (deficit), the warrant must
be (i) indexed to the Company’s 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 gains (losses) 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’ equity (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, the Company was
a limited liability company and treated as a partnership for income tax purpose. As a partnership, the Company was 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.

The Company follows the asset and liability method of accounting for
income taxes under ASC 740, Income Taxes (“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. The Company recognizes
accrued interest and penalties related to unrecognized tax benefits as income tax expense. Management has evaluated the Company’s
tax positions, including its previous status as a pass-through entity for federal and state tax purposes, and has determined that the
Company has taken no uncertain tax positions that require adjustment to the consolidated financial statements. The Company’s reserve
related to uncertain tax positions was zero as of December 31