Company: AIRJW
Filing Date: 2025-05-27
Form Type: POS AM
Source: 0001213900-25-047828
Chunk: 226

Company: AirJoule Technologies Corp.
Filing Date: 2025-05-27
Form: POS AM
Chunk 226
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 to the holder of such Legacy Montana option only if such holder continues to provide services
(whether as an employee, director or individual independent contractor) to the Post-Combination Company or one of its subsidiaries through
the date on which such Earnout Shares are issued, as determined by a majority of the independent members of the Post-Combination Company
Board.

If the conditions for payment of the Earnout Shares
are satisfied and assuming all originally designated employees are then still providing services to the Post-Combination Company on the
date such condition is met, approximately % of the aggregate Earnout Shares will be payable to the employees and % of the aggregate
Earnout Shares will be payable to the holders of Legacy Montana common units, in accordance with their respective pro rata share immediately
following the Closing.

The settlement of the Earnout Shares to the holders
of Legacy Montana common units contains variations in something other than the fair value of the issuer’s equity shares. As such,
management determined that they should be classified as a liability and recognized at fair value at each reporting period with changes
in fair value included in earnings. The Earnout Shares are subject to ASC 718 and are accounted for as post-combination compensation
cost.

F-64 AIRJOULE TECHNOLOGIES CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 12 — FAIR VALUE MEASUREMENTS(cont.)

The estimated fair value of the Earnout Shares
was determined with a Monte Carlo simulation using a distribution of potential outcomes for expected EBITDA and stock price at expected
commission dates, utilizing a correlation coefficient for EBITDA and stock price, and assuming $ million of Annualized EBITDA
per production line, with each of the production lines commissioned over a five-year period. EBITDA was discounted to the valuation date
with a weighted average cost of capital estimate and forecasted to each estimated commission date. Earnout mechanics at each estimated
commission date were assessed, and if the Earnout Thresholds were achieved, the future value of the Earnout Shares was discounted to
the valuation date utilizing a risk-free rate commensurate with the overall term. The commission dates used reflected XPDB’s management’s
best estimates regarding the time to complete full construction and operational viability of a production line, including all permitting,
regulatory approvals and necessary or useful inspections. The Earnout term of years and the Earnout mechanics which impact the
timing of future cash flows represent contractual inputs.

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