Company: AIRJW
Filing Date: 2025-03-25
Form Type: 10-K
Source: 0001013762-25-002263
Chunk: 1103

Company: AirJoule Technologies Corp.
Filing Date: 2025-03-25
Form: 10-K
Item: Item 7
Chunk 1103
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 stock price, a change
in the timing of future cash flows and an increase in the volatility.

29

Gain on Settlement of Legal Fees

During the year ended December 31, 2024, we recognized a gain on the
settlement of legal fees related to the transaction costs of the Business Combination. There were no such gains in year ended December
31, 2023.

Income Tax Benefit (Expense)

Income tax expense was $81.3 million and $0 for the year ended
December 31, 2024 and 2023, respectively. During the year ended December 31, 2024, our contribution of a perpetual license to
AirJoule, LLC’s intellectual property was measured at fair value and resulted in a book gain and a temporary difference
between book and taxable income. The temporary difference resulted in the recognition of a deferred tax expense and deferred tax
liabilities. The deferred tax expense was partially offset by the recognition of deferred tax assets in connection with the Company
now being a corporation through the Business Combination.

Liquidity and Capital Resources

Our primary sources of liquidity have been cash from contributions
from founders or equity capital raised from other investors. We had retained earnings of $198.5 million as of December 31, 2024. As of
December 31, 2024, we had $27.4 million of working capital including $28.0 million in cash, cash equivalents and restricted cash.

We assess liquidity in terms of our ability to generate adequate amounts
of cash to meet current and future needs. Our expected primary uses of cash on a short and long-term basis are for working capital requirements,
capital expenditures and other general corporate services. Our primary working capital requirements are for project execution activities
including purchases of materials, services and payroll which fluctuate during the year, driven primarily by the timing and extent of activities
required for new and existing projects. Management expects that future operating losses and negative operating cash flows may increase
from historical levels because of additional costs and expenses related to the development of its technology and the development of market
and strategic relationships with other businesses and customers.  

With the consummation of the Business Combination and Subscription
Agreements (as described above and in Note 4 – Recapitalization), we received gross proceeds of approximately $43.4 million
in the first quarter of 2024 and approximately $6.0 million in May 2024. Additionally, in June 2024, we received gross proceeds of