UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
☒ ANNUAL
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2024
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________
to ______________
Commission File Number
001-41151
AIRJOULE TECHNOLOGIES CORPORATION
(Exact name of registrant as specified in its charter)
(Address of principal executive offices) (Zip Code)
(800)942-3083
(Registrant’s telephone number, including
area code)
N/A
(Former name, former address and former fiscal year,
if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Warrants to purchase Class A common stock AIRJW The Nasdaq Stock Market LLC
Indicate by check mark if the registrant is a well-known seasoned issuer,
as defined in Rule 405 of the Securities Act. Yes ☐No☒
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act. Yes ☐No☒
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes☒ No ☐
Indicate by check mark whether the registrant has submitted electronically
every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter)
during the preceding 12 months (or such shorter period that the registrant was required to submit such files). Yes☒
No ☐
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of
“large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth
company” in Rule 12b-2 of the Exchange Act:
Large accelerated filer ☐ Accelerated filer ☐
Non-accelerated filer ☒ Smaller reporting company ☒
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant
to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report
on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section
404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
☐
If the securities are registered pursuant to Section 12(b)
of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of
an error to previously issued financial statements. ☒
Indicate by check mark whether any of those error corrections
are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive
officers during the relevant recovery period pursuant to §240.10D-1(b). ☒
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
☒
The aggregate market value of the common equity held by non-affiliates
of the registrant as of June 30, 2024, was approximately $184,459,860 based on the closing price on The Nasdaq Global Select Market
reported for such date. Shares of common stock held by each officer and director and by each person who is known to own 10% or more of
the outstanding common stock have been excluded in that such persons may be deemed to be affiliates of the registrant. This determination
of affiliate status is not necessarily a conclusive determination for other purposes.
As of March 1, 2025, there were 55,997,661 shares of the registrant’s
Class A common stock, par value $0.0001 per share, issued and outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the definitive Proxy Statement for the registrant’s
2025 Annual Meeting of Stockholders are incorporated by reference into Part III of this Report.
Table of Contents
Page
CERTAIN DEFINED TERMS ii
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS iv
PART I 1
Item 1. Business 1
Item 1A. Risk Factors 10
Item 1B. Unresolved Staff Comments 24
Item 1C: Cybersecurity 24
Item 2. Properties 24
Item 3. Legal Proceedings 24
Item 4. Mine Safety Disclosures 24
Item 6. Reserved. 25
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 35
Item 8. Financial Statements and Supplementary Data 35
Item 9A. Controls and Procedures 35
Item 9B. Other Information 36
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 36
PART III 37
Item 10. Directors, Executive Officers and Corporate Governance 37
Item 11. Executive Compensation 37
Item 14. Principal Accounting Fees and Services 37
Item 15. Exhibit and Financial Statement Schedules 38
SIGNATURES 41
INDEX TO FINANCIAL STATEMENTS F-1
i
CERTAIN TERMS
Unless otherwise stated in this Annual Report on Form 10-K (this “Report”),
or the context otherwise requires, references to:
● “CATL” are to Contemporary Amperex Technology Co., Limited;
● “CATL US” are to CATL US Inc., an affiliate of CATL;
● “common stock” are to our Class A common stock and our Class B common stock;
● “common unit” are to our units issued in our initial public offering;
● “GE Vernova” are to GE Ventures LLC;
ii
● “Nasdaq” are to the Nasdaq Stock Market LLC;
iii
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Report, including, without
limitation, statements under the heading “Item 7. Management’s Discussion and Analysis of Financial Condition and Results
of Operations,” includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended
(the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
All statements other than statements of historical facts contained in this Report, including statements concerning possible or assumed
future actions, business strategies, events or results of operations, and any statements that refer to projections, forecasts or other
characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. These statements
involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements
to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.
In some cases, you can identify forward-looking statements by terms
such as “may,” “should,” “will,” “expect,” “plan,” “anticipate,”
“could,” “intend,” “target,” “goal,” “project,” “contemplate,”
“believe,” “estimate,” “predict,” “potential” or “continue” or the negative
of these terms or other similar expressions. We have based these forward-looking statements largely on our current expectations, assumptions
and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations.
These forward-looking statements speak only as of the date of this Report and are subject to a number of important factors that could
cause actual results to differ materially from those in the forward-looking statements, including the risks, uncertainties and assumptions
described under the section in this Report titled “Risk Factors.” These forward-looking statements are subject to numerous
risks, including, without limitation, the following:
● the ability to maintain the listing of the Company’s securities on the Nasdaq;
Because forward-looking statements
are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and some of which are beyond our control,
you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our
forward-looking statements may not be achieved or occur, and actual results could differ materially from those projected in the forward-looking
statements. Moreover, we operate in an evolving environment and a competitive industry. New risks and uncertainties may emerge from time
to time, and it is not possible for management to predict all risks and uncertainties, nor can we assess the impact of all factors on
our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained
in any forward-looking statement we may make in this Report. As a result of these factors, although we believe that the expectations reflected
in our forward-looking statements are reasonable, we cannot assure you that the forward-looking statements in this Report will prove to
be accurate. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained
herein, whether as a result of any new information, future events, changed circumstances, or otherwise.
You should read this Report completely
and with the understanding that our actual future results may be materially different from our expectations. We qualify all of our forward-looking
statements by these cautionary statements. You should read this Report and the documents that have been filed as exhibits hereto with
the understanding that the actual future results, levels of activity, performance, events and circumstances of the Company may be materially
different from what is expected.
iv
Summary of Risk Factors
Our business is subject to numerous risks and uncertainties. These
risks include, but are not limited to:
v
PART I
Item 1. Business.
Overview
We are a water harvesting technology company that produces pure distilled
water by harvesting the water vapor in the atmosphere. Our proprietary AirJoule system, once commercialized, will provide cost-effective
water to businesses and consumers around the world and help address growing concerns around water scarcity. Our system is especially valuable
for industrial users, which generate significant amounts of waste heat that can be utilized to produce pure distilled water and dehumidified
air – two key inputs for a variety of industrial activities, including data centers and advanced manufacturing. In HVAC applications,
our AirJoule technology is designed to reduce energy consumption, minimize or even eliminate the use of environmentally-harmful refrigerants,
and generate material cost efficiencies for air conditioning systems. We are focused on commercialization and scaling manufacturing of
our AirJoule systems through our global partnerships, including with GE Ventures LLC “GE Vernova” and Carrier Global Corporation
(“Carrier”), and we believe that deploying AirJoule units worldwide can help to improve water security and reduce global emissions.
We plan to manufacture AirJoule units capable of producing 1,000 liters per day in 2025, which we intend to use for customer demonstrations,
and we expect to scale capacities for commercial sales in 2026.
Company Background
Our Predecessor, established in 2018, worked closely with researchers
at the Pacific Northwest National Laboratory (“PNNL”) to develop enhancements to its self-regenerating pressure swing dehumidifier
technology. In 2020, the Predecessor executed a strategic project partnership agreement with PNNL, and in 2021, obtained an exclusive
worldwide license from PNNL with respect to the technology. Our Predecessor then spent several years developing the pressure swing technology,
securing additional intellectual property protection, producing multiple prototypes, and assembling partnerships with leading global companies
including GE Vernova and Carrier. See “Our Competitive Strengths — Our Partners.” In June 2023, we entered into
an Agreement and Plan of Merger (“the Merger Agreement”) with the Predecessor, which was consummated through a Business Combination
on March 14, 2024. In connection with closing the Business Combination, we changed our name from Power & Digital Infrastructure Acquisition
II Corp. to Montana Technologies Corporation. In November 2024, to better align our name with our business operations and proprietary
technology, we changed our name from Montana Technologies Corporation to AirJoule Technologies Corporation, and our wholly-owned subsidiary
changed its name from Montana Technologies LLC to AirJoule Technologies LLC.
The AirJoule Technology
Advanced Sorbents
AirJoule is a transformational technology that uses an advanced sorbent,
in conjunction with a proprietary pressure swing system, to cost-effectively harvest pure distilled water from air. At present, the sorbent
used in AirJoule systems is a proprietary metal organic framework (“MOF”). MOFs are a class of porous, crystalline materials
composed of metal ions or clusters coordinated to organic ligands, forming highly ordered, three-dimensional structures. Known for their
exceptionally high surface areas, which often surpass that of traditional porous materials, MOFs can be engineered at the molecular level
to adsorb certain molecules from the air. Adsorption occurs when a molecule of one substance binds to the surface of another molecule
(in contrast to absorption, where one material is taken into the bulk of another material). Desorption is the opposite process, whereby
a molecule is released from the surface of another molecule.
MOFs have been widely studied for their potential applications in various
fields, including gas storage and separation, catalysis, sensing, and drug delivery. MTMOF1 is the specific MOF used by AirJoule, which
is manufactured by BASF using our proprietary formula. MTMOF1 is highly engineered to adsorb water vapor molecules, and it can adsorb
more than 50% of its weight in water vapor.
Pressure Swing System
Our proprietary pressure swing system integrates adsorption and desorption
functions, so the heat of adsorption can be used to assist desorption under vacuum, eliminating or reducing the need for additional energy.
In one chamber, ambient air is passed over heat exchangers coated with a paper-thin film of MOF (the “coated contactors”),
pulling water vapor into the material’s nano-sized pores. The heat that is generated from adsorbing water vapor is then transferred
to the other chamber to help release water previously captured in the MOF pores. An air purge pump creates a light vacuum pressure to
help release the water vapor from the MOF. Once the high-capacity MOF has released the water vapor, the twin chambers reverse their functions
and the cycle repeats, reducing the need to add heat or cooling to the process. By balancing the heat transfer between chambers, the system
works to minimize energy consumption and allows the AirJoule system to continuously operate at ambient temperature with less energy required
than existing water harvesting or dehumidification systems, assuming air temperature of 80°F and 60% relative humidity.
1
Additionally, AirJoule can utilize low-grade waste heat, which is available
at nearly all industrial operations globally, including data centers, to enhance its own internally-generated heat to reduce the amount
of energy required and significantly improve efficiency. Assuming air temperature of 80°F and 60% relative humidity, the US Department
of Energy estimates that as much as 50% of industrial energy input is lost as waste heat and a significant portion of this is low-grade
heat, which when integrated into an AirJoule system, can further reduce the required energy. We anticipate that our pre-production units
will be able to deliver over 1,000 liters of water per day at or below 130 Wh/L when utilizing low-grade waste heat.
AirJoule operates as follows:
Once MOF is full of water vapor, chamber doors close and vacuum is applied;
Industry Background
Water Harvesting
According to the World Resources Institute, 25% of the global population
lives in countries facing extremely high water stress, with as many as four billion people already exposed to water stress conditions
for at least one month per year. As a result of the rising degradation and disappearance of natural ecosystems that provide clean water
and alleviate floods and other risks, the World Resources Institute estimates that demand for water will increase by up to 30% by 2050.
The map below reflects the projected ratio of water withdrawals to water supply by country in 2040.
2
The Earth’s atmosphere continuously cycles and redistributes water
vapor through the natural process of evaporation from oceans, lakes, and rivers, facilitating the ongoing replenishment and global distribution
of water resources. While the water vapor in the atmosphere represents an enormous untapped resource of freshwater, the challenge has
been to access it cost-effectively. The methods used to try to harvest potable water from air generally utilize conventional refrigerant-based
systems or desiccant-based systems and have failed to achieve a competitive cost of the harvested water due to their energy requirements.
We believe that AirJoule’s transformational technology and unprecedented
energy efficiency for separating water from air provides the superior energetics necessary to tap into the largest aquifer on the planet.
Industrial Dehumidification
When AirJoule separates and collects water from air, the air is
dehumidified. Dehumidification plays a critical role in
maintaining optimal environmental conditions across a variety of industries, including manufacturing, food processing,
pharmaceuticals, data centers, and storage facilities. Dehumidification systems are designed to regulate humidity levels, preventing
issues such as corrosion, mold growth, and equipment damage that can arise from excessive moisture. Demand for industrial
dehumidifiers is driven by the need to enhance operational efficiency, ensure product quality, and comply with stringent
environmental and safety standards. The sector is characterized by an urgent need for innovation to increase energy
efficiency.
While separating water from air, AirJoule
technology produces dehumidified air at unprecedented high efficiencies yielding significant operating expense savings for customers that
require dehumidified air in their operations.
HVAC
According to The Brainy Insights, the global HVAC system market was
valued at approximately $214 billion in 2022 and is expected to reach a value of approximately $358 billion by 2032 at a compound annual
growth rate of 5.27% from 2023 to 2032. The Rocky Mountain Institute estimates that cooling demand in developing economies will increase
5x by 2050, with global stock of air conditioners in buildings growing by approximately 4 billion units by 2050, which amounts to nearly
4 new air conditioners sold every second for the next 25 years. Further, according to the U.S. Energy Information Administration, the
single largest demand for power in the United States is HVAC for buildings, accounting for approximately 32.1% of total residential energy
use. In 2020, cooling the interior of residential and commercial buildings accounted for about 10% of the United States’ total energy
usage. Our AirJoule system has the potential to make HVAC systems more efficient by reducing energy use and lowering costs for air conditioning
by up to 50%, depending on the environmental conditions and method of integration into the HVAC system.
There are various types of HVAC systems, but the basic mechanisms are
similar across all types. A mechanical system is used to draw in air, which is dehumidified and adjusted to the desired temperature. The
dehumidification step occurs when the temperature is lowered using refrigerants and water vapor in the air condenses into water. During
this process, condensation heat is generated. Thus, the cooling mechanism must be powerful enough so that the cooling effect exceeds the
rise in temperature resulting from condensation heat in order to lower the net temperature of the environment in which this system is
being used. Therefore, a significant amount of energy is required to offset condensation heat and lower the indoor temperature, particularly
in increasingly hot and humid environments. A recent study found that the removal of humidity in air conditioning requires more energy
than the temperature reduction itself and is responsible for more than 1% of all global greenhouse gas emissions.
When integrated with an air conditioning system, AirJoule produces
dehumidified air, lowering the overall energy requirements for the system and reduces operating expenses for customers. Additionally,
AirJoule integration into an air conditioning system is expected to reduce the need for environmentally harmful refrigerants.
Growth Strategy and Outlook
We anticipate significant growth opportunities by offering AirJoule
in global markets where demand for water, dehumidified air and cooling are highest. With our proprietary technology, we believe that we
are uniquely positioned to provide curated solutions that satisfy our customers’ needs and expectations in fast-growing and water
and energy-intensive industries, such as data centers and advanced manufacturing, along with military and HVAC applications. We estimate
the combined total addressable market to be approximately $450 billion.
In the data center arena, we aim to address escalating energy and water
efficiency challenges associated with increased computing density by using low-grade waste heat to produce pure distilled water and enabling
data center operators to reduce their cooling costs and improve water sustainability. Similarly, in advanced manufacturing environments,
where product quality and process precision hinge on consistent humidity and ultra-pure water, AirJoule can help customers with cost-effective
dehumidification. The military sector presents a distinct opportunity, as AirJoule is able to operate in a variety of climate conditions
to support troops in remote and water-scarce environments, ensuring mission readiness and resilience. In the HVAC space, where building
owners and facility managers are under pressure to cut energy consumption and improve indoor air quality, AirJoule’s superior moisture
removal capability is expected to reduce power consumption and the use of refrigerants in air conditioning systems.
3
To accelerate market penetration and scale our manufacturing capabilities,
we plan to leverage our strategic partnerships, which are discussed below. These partnerships offer access to industry-specific R&D
expertise, mature supply chains, established sales channels, and extensive service networks, allowing us to quickly move from pilot deployments
to full-scale commercialization. We intend to co-develop sector-specific solutions, capitalizing on our partners’ market insights
and reputational strength to better serve diverse customer needs. By combining our innovative AirJoule technology with their global reach
and operational expertise, we will unlock value across multiple industries, establish our position as a leader in water-focused solutions,
and deliver long-term growth and value to our shareholders.
Our Competitive Strengths
Our Product
AirJoule enables humanity to cost-effectively access the vast freshwater
resource available in the earth’s atmosphere. Its proprietary pressure swing system and use of advanced sorbents yields an unprecedented
level of energy efficiency when compared to existing water harvesting and dehumidification systems that rely on refrigerants or desiccants.
Because it produces pure distilled water and dehumidified air, AirJoule’s applications are numerous. AirJoule can be deployed on
a standalone basis to harvest water from air or provide customers with dehumidified air. We expect it can be integrated into a data center
or other industrial operation to utilize low-grade waste heat, simultaneously acting as a chiller to reduce cooling load and producing
pure water at a very low cost. We also expect it can be integrated into HVAC systems to manage humidity more efficiently and reduce both
operating and capital expenses for customers. AirJoule is a transformational technology that can be deployed to the nexus of energy and
water to solve some of the world’s greatest challenges.
Our Business Model
We believe we have a capital efficient and highly scalable business
model. For water harvesting and dehumidification applications, we intend to manufacture and sell full AirJoule systems to customers and
generate additional recurring revenue through maintenance and service agreements. We may also consider offering distilled water as a service.
Our preproduction units are being designed and manufactured by our joint venture with GE Vernova at the manufacturing facility in Newark,
Delaware. This facility has the capacity to support the expected volumes of preproduction units, as well as initial volumes of our commercial
units that we expect to deliver starting in 2026. Once we have visibility into customer demand and have received certain customer commitments,
we may choose expand our manufacturing capacity.
For HVAC applications, we are working with Carrier to integrate AirJoule
technology into air conditioning systems. Through our joint venture with GE Vernova, we intend to manufacture and sell to Carrier the
sorbent-coated contactors that are integral to AirJoule’s operation. The manufacturing facility in Newark, Delaware includes a coating
line where the contactors will be manufactured. We expect this facility to support our coated contactor requirements into 2026. As our
manufacturing output increases, we may choose to build a high volume manufacturing line for coated contactors or partner with industry
leading suppliers. We expect that Carrier will procure many of the other key AirJoule system components from its existing suppliers, who
may manufacture and sell these proprietary components pursuant to a licensing agreement.
Our Partners
We intend to elevate and grow our international partnerships to rapidly
and sustainably deploy AirJoule systems worldwide as a key solution to address global warming and water scarcity. We are collaborating
with experienced strategic partners such as PNNL, BASF (an international chemical producer) and CATL (an international lithium-ion electric
vehicle battery manufacturer), Carrier (a global provider of HVAC technology and equipment), and GE Vernova (a global provider of advanced
technologies and service for renewable energy, power generation, grid solutions, and decarbonization). All of our strategic partners are
committed to the continued development, commercialization, and distribution of AirJoule units. We anticipate that these partnerships will
enable us to rapidly scale to mass production, using a capital-efficient business model.
PNNL License. PNNL scientists originally conceived of and patented
the concept for a self-regenerating dehumidifier. In the first quarter of 2021, we obtained an exclusive worldwide license from PNNL with
respect to the self-regenerating dehumidifier technology. Since then, we have added our own significant advancements to the technology,
and we hold independent intellectual property relating to, among other things, heating, cooling and low-cost harvesting of potentially
potable water from the air. See “— Intellectual Property.”
4
BASF Commercial Agreements. According to Chemical & Engineering
News’ 2024 list of the top 50 global companies, BASF was the world’s largest chemical producer in 2023 based on sales. We
are party to a joint development agreement, dated as of September 27, 2022, with BASF for the production of engineered super-porous MOF
materials to our specifications that are applied as a coating to AirJoule contactors to perform the energy and water-harvesting function
(the “Joint Development Agreement”). In 2024, BASF produced our proprietary MOF for our prototypes as part of pilot production,
and we believe BASF is positioned to scale its production for mass production of our MOF materials.
Pursuant to the terms of the Joint Development Agreement, for as long
as BASF is able and willing to supply MOF materials developed under the Joint Development Agreement with a competitive performance profile
at a competitive price, we are required to procure all of our MOF materials exclusively from BASF during the term of the Joint Development
Agreement and for at least ten years thereafter. In the event that commercial dealings between us and BASF are discontinued, and we instead
utilize third-party manufacturers to produce the MOF materials, we will be required to pay BASF a license fee based on MOF quantities
manufactured if the third-party utilizes intellectual property that is jointly owned by us and BASF. The Joint Development Agreement has
a three-year term that ends on September 27, 2025.
CATL Joint Venture. On October 27, 2021, we entered into a joint
venture agreement with CATL US Inc. (“CATL”), pursuant to which we and CATL formed CAMT Climate Solutions Ltd., a limited
liability company organized under the laws of Hong Kong (“CAMT”). We and CATL both own 50% of CAMT’s issued and
outstanding shares. CAMT is managed by a four-member board of directors, with two directors designated by CATL and two directors designated
by us. Under the joint venture agreement, as revised, CAMT has the exclusive right to commercialize our AirJoule technology in Europe
and Asia.
Pursuant to the amended and restated joint venture agreement, entered
into on September 29, 2023, we and CATL have each agreed to contribute $6.0 million to CAMT. Contributions may be called once a business
plan and operating budget is set by CAMT’s board of directors, but no action to establish a business plan or operating budget has
occurred to date. Therefore, through December 31, 2024, neither we nor CATL have funded CAMT. Accordingly, our financial statements do
not reflect any accounting for CAMT as no assets (including IP) or cash have been contributed to CAMT and there has been no activity as
of December 31, 2024.
CATL Investment Agreement. Prior to the Business Combination,
an affiliate of CATL purchased equity interest in our Predecessor. In connection therewith, we entered into an Investment Agreement (the
“Investment Agreement”) with CATL and the affiliated entity (together, the “CATL Parties”), pursuant to which
the CATL Parties agreed, among other things, that they would not, following the Business Combination, directly or indirectly, (i) seek
election to, or to place a representative on, our board of directors, or (ii) acquire equity interest in the Company if, following such
acquisition, the CATL Parties and their affiliates would hold, in the aggregate, an interest in the Company of greater than 9.8% on either
an economic or voting basis. Pursuant to the Investment Agreement, the CATL Parties also agreed that they would not, and would cause their
affiliates not to, access, obtain, or seek to access or obtain our trade secrets, know-how, or other confidential, proprietary, or competitively
sensitive information (excluding any such information that we are obligated to provide to CAMT or the CATL Parties pursuant to the CAMT
joint venture agreement described above), including by reverse engineering, or seeking to reverse engineer, any of our products.
Carrier. On January 7, 2024, we and CAMT entered into binding
term sheets for a commercialization and collaboration agreement (together, the “Binding Term Sheets”) with Carrier, pursuant
to which, among other things, the parties agreed to negotiate in good faith to finalize and enter into, as promptly as reasonably practicable,
definitive agreements relating to the development of a system that incorporates AirJoule technology into HVAC equipment (the “Applicable
Products”) and the viability of the commercialization of the Applicable Products. Subject to certain milestones to be set forth
in the definitive agreements relating to the proposed collaboration, the Binding Term Sheets provide that Carrier will have (i) the
exclusive right to commercialize the Applicable Products in North and South America (subject, in each case, to exclusively sourcing primary
components of the AirJoule technology from us, our designated affiliates and joint venture entities of which we are a member) for a period
of three years from the earlier of (a) the date of the definitive agreement relating thereto and (b) the first commercialization
of the Applicable Products by Carrier and (ii) a non-exclusive right to commercialize the Applicable Products in Europe, India
and the Middle East (subject, in each case, to exclusively sourcing primary components of the AirJoule technology from CAMT or its affiliates)
for a period of three years from the first commercialization of the Applicable Products by Carrier. Despite entry into the Binding
Term Sheets, we and CAMT ultimately may not enter into definitive agreements with Carrier on terms consistent with the Binding Term Sheets
or at all.
On January 7, 2024, we entered into the Common Unit Subscription
Agreement with Carrier, pursuant to which Carrier, indirectly through TEP Montana LLC, purchased a number of units in the Predecessor
that converted into 1,176,471 shares in the Company upon the closing for an aggregate purchase price of approximately $10.0 million.
5
Also on January 7, 2024, we entered into a letter agreement with
Carrier pursuant to which Carrier was granted the right to nominate one (1) designee, subject to the approval of the Company, for
election to the board of directors for so long as Carrier satisfies certain investment conditions, following the Business Combination.
Pursuant to the terms of the agreement, Carrier has nominated its director.
GE Vernova. On January 25, 2024, we entered into the
Framework Agreement with GE Vernova, and, solely for the purposes specified therein, GE Vernova LLC, a Delaware limited liability company
(“GE Vernova Parent”), pursuant to which we and GE Vernova agreed, subject to the terms and conditions of the Framework Agreement,
including certain closing conditions specified therein, to form the AirJoule, LLC (the “AirJoule JV”) in which each of us
and GE Vernova hold a 50% interest. The purpose of the AirJoule JV is to incorporate GE Vernova’s proprietary sorbent materials
into systems that utilize our AirJoule water capture technology and to manufacture and bring products incorporating the combined technologies
to market in the Americas, Africa, and Australia.
Upon the JV closing, each party to the Framework Agreement entered
into (i) the A&R Joint Venture Agreement, pursuant to which, among other things, the AirJoule JV has the exclusive right to manufacture
and supply products incorporating the combined technologies to leading original equipment manufacturers and customers in the Americas,
Africa and Australia, (ii) master services agreements, pursuant to which, among other things, each party to the agreement agreed to provide
certain agreed services to the AirJoule JV for a period of at least two years following the JV closing (unless earlier terminated by the
parties thereto) and (iii) an intellectual property agreement, pursuant to which, among other things, each of the we and GE Vernova Parent
agreed to license certain intellectual property to the AirJoule JV. In addition, pursuant to the A&R Joint Venture Agreement, we contributed
$10.0 million to the AirJoule JV at the JV closing and expected to contribute additional capital to the AirJoule JV based on a business
plan and annual operating budgets to be agreed between us and GE Vernova.
Pursuant to the A&R Joint Venture Agreement, we have agreed to
contribute up to an additional $90.0 million in capital contributions to the AirJoule JV following the JV closing based on a business
plan and annual operating budgets to be agreed between us and GE Vernova. In general, for the first six years, GE Vernova has the right,
but not the obligation, to make capital contributions to the AirJoule JV. Until GE Vernova elects to participate and contributes its pro-rata share
of all past capital contributions and commits to contribute its pro-rata share for all future capital contributions (the “GE
Match Date”), we shall be solely responsible for funding the AirJoule JV, and we shall have a distribution preference under the
A&R Joint Venture Agreement for the amount of its post-closing capital contributions plus a 9.50% preferred return on such amounts.
Our Patents
We hold and license foundational patent applications relating to atmospheric
latent energy and water harvesting that uniquely position us to capture and drive a meaningful amount of the growth in the rapidly developing
atmospheric water harvesting sector. In the first quarter of 2021, we obtained an exclusive worldwide license from PNNL with respect to
the self-regenerating dehumidifier technology. We also have two master patent PCT applications and have filed patent applications in all
relevant markets relating to the AirJoule units. Our patent applications cover various technologies and components, including latent energy
and water harvesting systems, evaporative cooling and water recapture systems, evaporative heat pump systems, water heating systems, low
relative humidity drying systems, pre- and mid-cool integration coils, advanced vacuum pump systems, isothermal condenser design, gate
and seal systems and methods, HVAC systems with AirJoule integration, and microchannel harvesters and contactors. See “—
Intellectual Property.”
Sales and Marketing
As an early participant in the rapidly growing ecosystem of atmospheric
water harvesting, we believe we are well-positioned to capture and drive a meaningful amount of growth in the sector. As water harvesting
technology continues to advance, we expect a corresponding growth in demand for the products resulting from the deployment of our AirJoule
technology. We believe the AirJoule system harvests water from the air more effectively than any other technology that is available in
the market today and that the AirJoule system can potentially secure access to and make abundant water for industrial and drinking use
almost anywhere on the planet, particularly in water-scarce regions. We aim to offer our products and services in global markets where
demand for water and cooling are highest.
In addition to the direct benefit our technology is expected to provide
to our customers, we believe our product and service will also enable customers to manage and improve their sustainability profile. Many
companies have become increasingly conscious of their environmental footprint as a result of expectations placed upon them by their customers,
investors, and other stakeholders. The Governance & Accountability Institute found that in 2023, 99% of S&P 500 companies and
93% of Russell 1000 companies published reports to their investors describing their environmental, social, and governance commitments.
Companies are developing strategies to adapt their business models in response to customer and investor demands that these businesses
transition to leveraging sustainable, clean energy and invest in solutions to global warming and water scarcity.
6
Data Centers
The data center industry is experiencing rapid growth, driven by the
increasing global demand for digital infrastructure to support cloud computing, artificial intelligence, and big data analytics. The market,
fueled by significant investments in hyperscale data centers by major technology companies, is expected to grow at a double-digit compound
annual growth rate of 11.7% between 2024 and 2034, according to a recent report from Precedence Research.
Furthermore, the push for energy-efficient and sustainable data center
operations, including the adoption of renewable energy and innovative cooling solutions, is shaping the industry’s future. While evaporative
cooling is the most efficient method for cooling data centers, it has high water requirements and puts stress on local water systems.
New data center designs are increasingly shifting away from evaporative cooling towards liquid cooling or hybrid systems that utilize
refrigerant cooling, which use less water but require more energy. AirJoule can utilize low-grade waste heat from data centers to produce
dehumidified air and pure distilled water at a very low levelized cost, enabling a refreshed look at energy-efficient adiabatic cooling.
The use of waste heat to create water for adiabatic cooling can improve the data center’s power usage effectiveness through reduced thermal load and more efficient cooling. Further, on-site water generation from AirJoule can reduce reliance on municipal
water systems, which are increasingly strained by the development of water-intensive operations such as data centers and advanced manufacturing
facilities.
Advanced Manufacturing
Advanced manufacturing in the United States is experiencing significant
growth, driven by increased investments in domestic production, technological innovation, and supply chain resilience. Key sectors such
as semiconductors, aerospace, biotechnology, food and beverage, and renewable energy components are expanding as companies seek to capitalize
on government incentives, such as the CHIPS Act, and reduce dependency on foreign suppliers.
Pure water and precise humidity control are critical in advanced manufacturing
processes, where even slight deviations in environmental conditions can compromise product quality, equipment performance, and operational
efficiency. Industries such as semiconductor fabrication, pharmaceutical production, and aerospace manufacturing rely on ultra-pure water
for cleaning, chemical mixing, and cooling, as impurities can lead to defects or inefficiencies in highly sensitive processes. Similarly,
controlled dehumidification is essential to maintain optimal moisture levels, preventing corrosion, condensation, and contamination of
materials and components. The need for these systems is further heightened in cleanroom environments, where stringent air quality standards
demand advanced filtration and humidity regulation to ensure compliance.
AirJoule can be integrated into manufacturing operations to harvest
pure distilled water from the atmosphere, recapture water vapor from exhaust air, and provide a more efficient source of dehumidified
air compared to existing desiccant-based dehumidification systems. This results in lower operating expenses and improved water sustainability
for manufacturers.
Military
The U.S. military has significant water needs to support personnel,
equipment, and operations across diverse environments, ranging from domestic bases to remote and austere locations. Water is essential
for drinking, sanitation, cooking, medical care, and equipment maintenance, with daily consumption requirements increasing in arid and
combat zones. Currently, these needs are fulfilled through a combination of local water sourcing, logistical supply chains, and advanced
water purification technologies which involve significant costs of up to $5 per liter of water.
AirJoule’s market-leading technology for harvesting water from
air, even in the arid environments, make it ideally suited to improve water security and reduce costs for the U.S. military. AirJoule
has already been demonstrated for senior military leaders through the AIR2WATER program led by the US Department of Defense Advanced Research
Projects Agency, as well as Thunderstorm 24-4, a showcase focused on innovative technology for expeditionary military operations. The
Company is evaluating potential field test deployments with various branches of the U.S. military.
7
HVAC
According to the International Energy Agency, air
conditioning currently accounts for approximately ~10% of global electricity demand, and global demand for air conditioning is expected
to triple by 2050. This growth is likely to be accompanied by an increase in global emissions from the additional power generation required,
exacerbating climate change. Integrating AirJoule into air conditioning systems can lower power consumption by up to 50% and mitigate
some of the negative impacts from the growth in demand for air conditioning.
There are various types of air conditioning systems, but the basic
mechanisms are similar across all types. A mechanical system is used to draw in air, which is dehumidified and adjusted to the desired
temperature. The dehumidification step occurs when the temperature is lowered using refrigerants and water vapor in the air condenses
into water. During this process, condensation heat is generated. Thus, the cooling mechanism must be powerful enough so that the cooling
effect exceeds the rise in temperature resulting from condensation heat in order to lower the net temperature of the environment in which
this system is being used. Therefore, a significant amount of energy is required to offset condensation heat and lower the indoor temperature,
particularly in increasingly hot and humid environments. A recent study found that the removal of humidity in air conditioning requires
more energy than the temperature reduction itself and is responsible for more than 1% of all global greenhouse gas emissions.
When integrated into an air conditioning system, AirJoule produces
dehumidified air without the heat of condensation, which lowers overall energy requirements for the system and reduces operating expenses
for customers. Additionally, AirJoule integration into the system reduces the need for environmentally harmful refrigerants.
Through our partnership with Carrier, they have an exclusive right
to commercialize AirJoule for HVAC applications in the Americas for three years after the date of commercialization. We are working closely
with them to design an AirJoule system that can be integrated into their products, and we are positioned to be a tier-1 supplier of coated
contactors to Carrier as part of this HVAC integration.
Manufacturing
In the fourth quarter of 2024, we achieved breakthrough levels of efficiency
by integrating low-grade waste heat into our fifth generation AirJoule prototype, reducing the energy requirement down to 155 Wh/L. We
are now developing our 1,000 liter per day preproduction unit, which we expect to be ready for customer demonstrations in 2025. These
units are being manufactured by our AirJoule JV in Newark, Delaware.
We expect to commence sales of our first commercial AirJoule units
in 2026, and we anticipate that our international partnerships, including our joint venture with GE Vernova, will enable us to transition
to mass production quickly and efficiently. We also believe these partnerships will help in the validation and commercialization of our
products.
Research and Development
Our management team knows the ability to grow and maintain a leading
position in our industries depends on our continuing investment in research and development activities. The goals of our research and
development efforts include continuing to optimize our AirJoule systems and corresponding technology and protecting and developing our
intellectual property rights in our product and technology. Through a statement of work with GE Vernova, the AirJoule JV is supported
by a number of full time employee equivalent engineers and scientists at the GE Vernova Advanced Research Center who are focused on technology
advancement and product support, with specific expertise in sorbent and coating development, systems and process engineering, advanced
component and system modeling, and component development.
Intellectual Property
As of December 31, 2024 our technology is supported by two master patent
PCT applications in the U.S., and we have applications pending in all foreign countries that we believe to be relevant markets for our
AirJoule units. Our patent applications cover various technologies and components, including latent energy and water harvesting systems
(effective October 1, 2021), evaporative cooling and water recapture systems, evaporative heat pump systems, water heating systems, low
relative humidity drying systems, pre- and mid-cool integration coils, advanced vacuum pump systems, isothermal condenser design, gate
and seal systems and methods, HVAC systems with AirJoule integration and microchannel harvesters and contactors. As part of the joint
venture agreement with GE Vernova, GE Vernova contributed intellectual property related to MOF-coating technology and processes. We are
also pursuing additional patent applications relating to recent technology developments, and we expect to continue to pursue further patent
applications as the development and optimization of the AirJoule units continues.
We rely on non-disclosure agreements with employees, independent contractors,
customers, and other third parties to protect our intellectual property and proprietary rights. Circumstances outside our control could
pose a threat to our intellectual property rights. For more information, see “Risk Factors — Risks Related to Intellectual
Property — Our patent applications may not result in issued patents, and our issued patents may not provide adequate protection,
which may have a material adverse effect on our ability to prevent others from commercially exploiting products similar to ours.”
8
Competition
Atmospheric Water Harvesting
Harvesting water from air, which is often referred to as atmospheric
water harvesting, is an emerging sector focused on extracting water from ambient air to address the growing global demand for sustainable
water solutions. The current market for systems that harvest water from air is highly fragmented, with most competitors offering products
that rely on condensation-based methods, using energy and refrigerants to cool air below its dew point and collect the resulting water
droplets. Other products incorporate desiccant materials that absorb humidity from the air, then release it as liquid water when heated.
The primary drawback from these existing technologies is that they require significant amounts energy to operate, which negatively impacts
cost-efficiency.
We believe that AirJoule, with its transformational technology and
unprecedented efficiency for harvesting water vapor, provides superior energetics compared to incumbent technologies and positions us
to capture a meaningful amount of the growth in this evolving sector.
Dehumidification
Several established players have a significant presence in the industrial
dehumidification market, leveraging extensive experience, broad product portfolios, and strong global distribution networks. Our AirJoule
technology produces dehumidified air at a fraction of the energy required for conventional desiccant-based systems, which can yield significant
operating expense savings for customers that require dehumidified air in their operations.
HVAC
The production and sale of HVAC equipment is highly competitive. HVAC
manufacturers primarily compete on the basis of price, depth of product line, product efficiency and reliability, product availability
and warranty coverage. The largest companies in the HVAC market include Carrier, Trane Technologies plc, Lennox International, Inc., Mitsubishi
Electric Corporation and Rheem Manufacturing Company, among others. A number of factors affect competition in the HVAC market, including
the development and application of new technologies and an increasing emphasis on the development of more efficient HVAC products.
In addition, there are several startups focused on disrupting the air
conditioning industry by introducing innovative new products that attempt to compete with and displace the large incumbent companies.
These startups include Blue Frontier, Mojave Systems, and Transaera.
While AirJoule’s superior energy-efficiency for dehumidification
has the potential to transform air conditioning, our strategy does not involve competing directly against the large incumbents. Rather,
we have chosen to partner with Carrier and work with them to integrate AirJoule into their air conditioning products. We intend to be
a tier-1 supplier to Carrier for AirJoule’s key component – the sorbent-coated contactors. We also intend to license the designs
for the other proprietary components to Carrier’s existing suppliers.
Seasonality
AirJoule captures moisture from the air, and variations in ambient
humidity levels can occur due to seasonal weather patterns. While certain geographic regions may experience fluctuations in water vapor
content throughout the year, we do not anticipate these seasonal shifts to materially impact our future sales or operations. The industries
we are targeting – including data centers, advanced manufacturing, the military, and HVAC – maintain consistent, year-round
demand for reliable humidity control and water availability. Additionally, our global footprint and ability to supply multiple markets
help mitigate any localized seasonality effects. As a result, we expect overall demand and performance to remain relatively stable, despite
potential seasonal variations in moisture levels.
Government Regulation
Our business activities are subject to various laws, rules, and regulations
across multiple jurisdictions. Compliance with these laws, rules, and regulations has not had a material effect upon our capital expenditures,
results of operations, or competitive position, and we do not currently anticipate material capital expenditures to comply with applicable
environmental, health and safety laws and regulations. Nevertheless, compliance with existing or future governmental regulations, including,
but not limited to, those pertaining to international operations, export controls, business acquisitions, consumer and data protection,
environmental protection, employee health and safety, and taxes, could have a material impact on our business in subsequent periods. Please
see “Risk Factors” for a discussion of these potential impacts.
9
Legal Proceedings
We have not been, are not currently a party to, nor are we aware of,
any legal proceeding or claim which, in the opinion of management, is likely to materially adversely affect our business or financial
results or condition. From time to time, we may be subject to various claims, lawsuits and other legal and administrative proceedings
that may arise in the ordinary course of business. Some of these claims, lawsuits and other proceedings may range in complexity and result
in substantial uncertainty; it is possible that they may result in damages, fines, penalties, non-monetary sanctions or relief.
Facilities
Our principal executive office is located in Ronan, Montana. We currently
lease 4,000 square feet of office and research and development space in Polson, Montana. Along with the AirJoule JV manufacturing facility
in Newark, DE, the facility in Polson, MT accommodates our pilot product development and engineering functions. We believe that our office
and pilot prototyping spaces are adequate for our needs for the immediate future and, should we need additional space in connection with
our expansion plans, we believe we will be able to obtain additional space on commercially reasonable terms.
Human Capital Resources
As of December 31, 2024, we had seventeen employees and contractors,
fifteen of whom are located in the United States, one of whom is located in the United Kingdom and one of whom is located in the United
Arab Emirates. Most of our employees and contractors work remotely, and most of our engineering employees and contractors spend significant
time at our research facility in Polson, MT and at the AirJoule JV manufacturing facility in Newark, DE. None of our employees or contractors
are represented by a labor union. We have not experienced any work stoppages, and we believe we maintain good employee and contractor
relations.
Available Information
Our website address is www.airjouletech.com. We use our website as
a routine channel for distribution of information that may be material to investors, including news releases, financial information, presentations
and corporate governance information. Information contained or connected to our website is not incorporated by reference in this Annual
Report on Form 10-K unless expressly noted. Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K
and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act are available on our website,
free of charge, as soon as reasonably practicable after we electronically file such materials with, or furnish them to, the Securities
and Exchange Commission (the “SEC”). Additionally, the SEC maintains a website that contains reports, proxy and information
statements, and other information regarding issuers that file electronically with the SEC, including us, at www.sec.gov.
Item 1A. Risk Factors
Risks Related to Our Business, Our Technology and Our Industry