Company: AIRJW
Filing Date: 2025-05-05
Form Type: 424B3
Source: 0001213900-25-039770
Chunk: 208

Company: AirJoule Technologies Corp.
Filing Date: 2025-05-05
Form: 424B3
Chunk 208
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ation events, the assessment of decision-making rights 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 $10.0 million 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 $333.5 million (and treated as a temporary item for tax purposes resulting in a deferred
tax liability of approximately $87.8 million) 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 $266.0 million between the Company’s
investment and the amount recorded in member’s capital by the investee, AirJoule, LLC, related to in-process R&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-period excess earnings method. The excess earnings valuation method estimates the value of the
IP license equal to the present value of the incremental after-tax cash flows attributable to that IP license over its remaining economic
life. Some of the more significant assumptions utilized in our asset valuations included projected revenues, probability of commercial
success, and the discount