Company: AIRJW
Filing Date: 2025-03-25
Form Type: 10-K
Source: 0001013762-25-002263
Chunk: 1554

Company: AirJoule Technologies Corp.
Filing Date: 2025-03-25
Form: 10-K
Item: Item 9C
Chunk 1554
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Leases of the FASB to leases with a term of 12 months or less for all classes of
assets.

Warrants

The Company determines the accounting classification of warrants it
issues as either liability or equity classified by first assessing whether the warrants meet the liability classification in accordance
with ASC 480-10, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity (“ASC 480”),
then in accordance with ASC 815-40, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s
Own Stock (“ASC 815”). In order for a warrant to be classified in stockholders’ equity (deficit), the warrant must
be (i) indexed to the Company’s equity and (ii) meet the conditions for equity classification.

If a warrant does not meet the conditions for stockholders’ deficit
classification, it is carried on the consolidated balance sheets as a warrant liability measured at fair value, with subsequent changes
in the fair value of the warrant recorded in other non-operating gains (losses) in the consolidated statements of operations. If
a warrant meets both conditions for equity classification, the warrant is initially recorded, at its relative fair value on the date of
issuance, in stockholders’ equity (deficit) in the consolidated balance sheets, and the amount initially recorded is not subsequently
remeasured at fair value.

Income Taxes 

Prior to the Business Combination on March 14, 2024, the Company was
a limited liability company and treated as a partnership for income tax purpose. As a partnership, the Company was not directly liable
for federal income taxes. As of the date of the Business Combination, the operations of the Company ceased to be taxed as a partnership
resulting in a change in tax status for federal and state income tax purposes.

The Company follows the asset and liability method of accounting for
income taxes under ASC 740, Income Taxes (“ASC 740”). Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that is included in the
enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

ASC 740 prescribes a recognition threshold and a measurement attribute
for the financial statement