Company: AIRJW
Filing Date: 2025-04-28
Form Type: S-1/A
Source: 0001213900-25-036124
Chunk: 187

Company: AirJoule Technologies Corp.
Filing Date: 2025-04-28
Form: S-1/A
Chunk 187
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 or contain features that qualify as embedded derivatives, pursuant to ASC 480 and FASB ASC 815, Derivatives and Hedging(“ASC 815”). The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period. The True Up Shares issued under one of the Subscription Agreements do not qualify as equity under ASC 815; therefore, the True Up Shares are required to be classified as a liability and measured at fair value with subsequent changes in fair value recorded in the consolidated statements of operations. The fair value of the derivative liability is discussed in Note 12 — Fair Value Measurements. F-13 AIRJOULE TECHNOLOGIES CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 3 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) The Subject Vesting Shares liability was an assumed liability of XPDB. The Subject Vesting Shares vest and are no longer subject to forfeiture as described in Note 4 — Recapitalization. They do not meet the “fixed -for-fixed” criterion and thus are not considered indexed to the Company’s stock price. As such, management determined that the Subject Vesting Shares should be classified as a liability and recognized at fair value at each reporting period with changes in fair value included the consolidated statements of operations . The estimated fair value of the Subject Vesting Shares was determined utilizing a Monte Carlo simulation, with underlying forecast mathematics based on geometric Brownian motion in a risk -neutralframework. The Calculation of the value of the Subject Vesting Shares considered the $ 12.00and $ 14.00vesting conditions in addition to the vesting related to the milestones associated with the Earnout Shares. Management’s valuation of the Subject Vesting Shares liability involves certain assumptions requiring significant judgment and actual results may differ from assumed and estimated amounts. See Note 12 — Fair Value Measurements. Share-Based Compensation The Company accounts for share -basedcompensation arrangements granted to employees and non -employeesin 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 -basedcompensation expense is only recognized for awards subject to performance conditions if it is probable that the applicable performance conditions will be achieved. The Company accounts for forfeitures when the forfeitures occur. The Company estimates the fair value of stock option awards subject to only a