Company: AIRJW
Filing Date: 2025-03-25
Form Type: 10-K
Source: 0001013762-25-002263
Chunk: 651

Company: AirJoule Technologies Corp.
Filing Date: 2025-03-25
Form: 10-K
Item: Item 2
Chunk 651
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 precluded from equity classification. Equity-classified contracts are initially measured
at fair value (or allocated value). Subsequent changes in fair value are not recognized as long as the contracts continue to be classified
in equity.

Subscription
Agreements

During
the year ended December 31, 2024, the Company entered into subscription agreements with various investors (the “Subscription Agreements”),
which brought in approximately $61.8 million in gross proceeds. The Company issued and sold 5,807,647 shares of the Class A common stock
to investors upon the Closing in exchange for equity interests issued by Legacy Montana pursuant to Subscription Agreements entered into
by Legacy Montana with such investors in the first quarter of 2024, which resulted in gross proceeds of approximately $49.4 million,
comprised of approximately $43.4 million received in the first quarter of 2024 and approximately $6.0 million in the second quarter of
2024. Of this total, TEP Montana purchased an aggregate of 5,116,176 shares in exchange for approximately $43.5 million pursuant to Subscription
Agreements between Legacy Montana and TEP Montana. During the second quarter of 2024, the Company issued and sold an additional 1,238,500
shares of Class A common stock to investors pursuant to Subscription Agreements executed in the second quarter, which resulted in additional
gross proceeds of approximately $12.4 million.

Equity
financing  

Legacy Montana completed a preferred equity financing during February 2023
with TEP Montana and issued 4,426 Series B Preferred Units in conjunction with this transaction. Upon close of the Business
combination, these shares were converted to 105,331 Class A common stock of the Company.

Note
11 — SHARE-BASED COMPENSATION

Legacy
Montana Options

On April 5, 2023, Legacy Montana granted 383,151 options, as converted,
exercisable for Class A common stock to key team members of Legacy Montana. The options immediately vested, had an exercise
price of $0.49, as converted, a term of seven years, and a grant date fair value of $0.14, as converted. The Company used the Black-Scholes
option pricing model to estimate the fair value of stock options. Fair value was estimated at the date of grant.

In
January, February and March 2024, 13 Legacy Montana option holders exercised their options to purchase