Company: AIRJW
Filing Date: 2025-03-27
Form Type: S-1
Source: 0001013762-25-002897
Chunk: 88

Company: AirJoule Technologies Corp.
Filing Date: 2025-03-27
Form: S-1
Chunk 88
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. We believe that the following accounting policies were most critical to the judgments and estimates used in the preparation of our consolidated financial statements. Share-Based Compensation We account 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. We account for forfeitures when the forfeitures occur. We estimate the fair value of stock option awards subject to only a service condition on the date of grant using the Black -Scholesvaluation model. The Black -Scholesmodel requires the use of highly subjective and complex assumptions, including the stock option’s expected term, the price volatility of the underlying stock, the applicable risk -freeinterest rate, and the expected dividend yield of the underlying common stock, as well as an estimate of the fair value of the common stock underlying the stock option. We estimate the fair value of Earnout Shares (as described below), which are considered compensatory awards and accounted for under ASC 718, using the Monte -Carlosimulation model .The Monte -Carlosimulation model was selected as the valuation methodology for the Earnout Shares due to the path -dependentnature of applicable triggering events. Under ASC 718, such Earnout Shares are measured at fair value as of the grant date and expense is recognized over the applicable time -basedvesting period (the applicable triggering event is a market condition and does not impact expense recognition). The Monte -Carlomodel requires the use of highly subjective and complex assumptions, estimates and judgements, including the current stock price, the volatility of the underlying stock, the expected term, the risk -freeinterest rate, the selection of comparable companies, and the probability of possible future events. Changes in any or all of these estimates and assumptions or the relationships between those assumptions impact our valuations as of each valuation date and may have a material impact on the valuation of share based compensation arrangements. An increase of 100 -basispoints in interest rates would not have a material impact on our share -basedcompensation. During the period from the date of the Business Combination through December 31, 2024 we did not record share -basedcompensation expense associated with these Earnout Shares as the performance conditions associated with 50 these Earnout Shares