Company: AIRJW
Filing Date: 2025-03-25
Form Type: 10-K
Source: 0001013762-25-002263
Chunk: 833

Company: AirJoule Technologies Corp.
Filing Date: 2025-03-25
Form: 10-K
Item: Item 4
Chunk 833
---
 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, 2024 and 2023. There were no unrecognized tax benefits, and no amounts
accrued for interest and penalties as of December 31, 2024 and 2023. The Company is currently not aware of any issues under review that
could result in significant payments, accruals or material deviations from its position.

Research and Development Cost

The Company accounts for research and development cost (“R&D”)
in accordance with FASB ASC 730, Research and Development. R&D represents costs incurred in performing research aimed at the
discovery of new knowledge and the advancement of techniques to bring significant improvements to products and processes. Costs incurred
in developing a product include consulting, engineering, construction and costs incurred to build prototypes.

F-11

Fair Value of Financial Instruments

Fair value is the price that would be received to sell an asset or
the amount paid to transfer a liability in an orderly transaction between market participants at the measurement date. There is a fair
value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to quoted prices in active
markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement).
The Company classifies fair value balances based on the observability of those inputs. The three levels of the fair value hierarchy are
as follows:

    Level 1 —
    Inputs based on unadjusted quoted market prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

    Level 2 — 
    Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets or quoted prices for identical or similar instruments in markets that are not active or for which all significant inputs are observable or can be corroborated by observable market data.

    Level 3 —
    Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. The inputs are both unobservable for the asset and liability in the market