Company: AIRJW
Filing Date: 2025-03-27
Form Type: S-1
Source: 0001013762-25-002897
Chunk: 188

Company: AirJoule Technologies Corp.
Filing Date: 2025-03-27
Form: S-1
Chunk 188
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 losses or right to receive benefits in assessing whether or not the VIE should be accounting for under the equity method of accounting. Certain assumptions the Company used to reach its conclusion included the lack of reconsideration events, the assessment of decision -makingrights based on contractual agreements and expected financial exposure. The Company applies the equity method to an investment in common stock of a nonconsolidated entity. In addition to $ 10.0million in cash, the Company contributed a perpetual license in its intellectual property with a carrying value of zero in exchange for its investment in AirJoule, LLC. In applying the equity method, the Company’s investment was initially recorded at fair value on the consolidated balance sheet. As it relates to the contributed perpetual license, the Company followed the following the guidance in ASC 610 -20, Sale or Transfer of Non -financial assets, which states the transfer of a license of IP that is not part of the entity’s ordinary activities, the entity should apply the licensing guidance in ASC 606, Revenue from Contracts with Customers, by analogy when evaluating the recognition and measurement of consideration received in exchange for transferring the rights to the IP and record this as other income in the statements of operations. As such the Company recognized a gain of $ 333.5million (and treated as a temporary item for tax purposes resulting in a deferred tax liability of approximately $ 87.8million) as presented on the accompanying consolidated statements of operations. The Company evaluated whether there was a basis difference between the carrying value and fair value of the Company’s proportionate share of the investee’s underlying net assets. AirJoule, LLC has elected to early adopt ASU 2023 -05, Business Combinations — Joint Venture Formations(Subtopic 805 -60), and, as a result measured the contributed assets at fair value. AirJoule, LLC was deemed a business as defined in ASC 805, Business Combinations, and, as such there is a basis difference of $ 266.0million between the Company’s investment and the amount recorded in member’s capital by the investee, AirJoule, LLC, related to in -processR&D and goodwill which, as of December 31, 2024, have indefinite lives. The Company determined the fair value of the IP license by applying the multi -periodexcess earnings method. The excess earnings valuation method estimates the value of the IP license equal to the present value of the incremental after -taxcash flows attributable to that IP license over its remaining