AirJoule Technologies (AIRJ) risk factors, FY2024 10-K

Risks Related to Our Business, Our Technology and Our Industry

1. 01We have incurred significant losses since inception, we expect to incur losses in the future, and we may not be able to achieve or maintain profitability
2. 02We have not yet commenced commercial activities and have a limited operating history, which may make it difficult to evaluate the prospects for our future viability. There is no assurance that we will successfully execute our proposed strategy
3. 03Demand for our products may not grow or may grow at a slower rate than we anticipate
4. 04We depend on revenue generated from a single product and in the foreseeable future will be significantly dependent on a limited number of products
5. 05Our financial results depend on successful project execution and may be adversely affected by cost overruns, failure to meet customer schedules, failure of our suppliers or partners to fulfill their obligations to us or other execution issues
6. 06We face significant barriers in our attempts to deploy our technology and may not be able to successfully develop our technology. If we cannot successfully overcome those barriers, it could adversely impact our business and operations
7. 07We are subject to risks associated with changing technology, product innovation, manufacturing techniques, operational flexibility and business continuity, which could place us at a competitive disadvantage
8. 08We expect to incur research and development costs and devote resources to identifying and commercializing new products, which could reduce our profitability and may never result in revenue
9. 09Actual capital costs, operating costs, production and economic returns may differ significantly from those we have anticipated and future development activities may not result in profitable operations
10. 10We may face significant competition from established companies with longer operating histories, customer incumbency advantages, access to and influence with governmental authorities and more capital resources than we do
11. 11If we fail to retain our key personnel or if we fail to attract additional qualified personnel, we may not be able to achieve our anticipated level of growth and our business could suffer
12. 12Any failure by our management to properly manage our growth could have a material adverse effect on our business, operating results and financial condition
13. 13If the estimates and assumptions we use to determine the size of our total addressable market are inaccurate, our future growth rate may be affected and the potential growth of our business may be limited
14. 14Damage to our reputation or brand image could adversely affect our business
15. 15The occurrence of significant events for which we may not be fully insured could have a material adverse effect on our business, financial condition and results of operations
16. 16Cyber-attacks or a failure in our information technology and data security infrastructure could adversely affect our business and operations
17. 17Increased scrutiny of ESG matters, including our completion of certain ESG initiatives, could have an adverse effect on our business, financial condition and results of operations, result in reputational harm and negatively impact the assessments made by ESG-focused investors when evaluating us

Risks Related to Our Joint Ventures, Our Suppliers and Our Customers

1. 18We conduct a substantial amount of our operations through joint ventures, which may lead to disagreements with joint venture partners and adversely affect our interest in the joint ventures
2. 19We may incur impairment charges related to the carrying value of our equity method investment in the AirJoule JV, which could have a significant negative effect on our financial condition, results of operations and the price of our securities
3. 20We may face supply chain competition, including competition from businesses in other industries, which could result in insufficient inventory and negatively affect our results of operations
4. 21Manufacturing issues not identified prior to design finalization, long-lead procurement and/or fabrication could potentially be realized and may impact our deployment cost and schedule, which could adversely impact our business
5. 22The Binding Term Sheets we and CAMT have entered into with Carrier may not ultimately yield definitive agreements with Carrier consistent with the term sheets or at all
6. 23We expect to be dependent on a limited number of customers and end markets. A decline in revenue from, or the loss of, any significant customer, could have a material adverse effect on our financial condition and operating results
7. 24Our long-term success depends, in part, on our ability to negotiate and enter into sales agreements with, and deliver our products to, customers on commercially viable terms. There can be no assurance that we will be successful in securing such agreements
8. 25Our sales and profitability may be impacted by, and we may incur liabilities as a result of, warranty claims, product defects, recalls, improper use of our products, or our failure to meet performance guarantees or customer safety standards

Risks Related to Legal, Compliance, Regulations and Geopolitical Issues

1. 26Our business may require numerous permits, licenses and other approvals from various governmental agencies, and the failure to obtain or maintain any of them, or delays in obtaining them, could materially adversely affect us
2. 27Any of these risk factors could have a material adverse effect on our business
3. 28Our business could be adversely affected by trade wars, trade tariffs or other trade barriers
4. 29Exchange rate fluctuations may materially affect our results of operations and financial condition
5. 30Our failure to comply with applicable anti-corruption, anti-bribery, anti-money laundering, antitrust, foreign investment and similar laws and regulations could negatively impact our reputation and results of operations
6. 31While we have policies and procedures to address compliance with such laws, our employees and agents could violate our policies and applicable law, for which we may be ultimately held responsible. As we increase our international sales and business, our risks under these laws may increase
7. 32(1) produces, designs, tests, manufactures, fabricates, or develops one or more “critical technologies;” (2) owns, operates, manufactures, supplies or services certain “covered investment critical infrastructure;” or (3) maintains or collects, directly or indirectly, “sensitive personal data” of U.S. citizens
8. 33Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, investments and results of operations
9. 34Changes to, or changes to interpretations of, the U.S. federal, state, local or other jurisdictional tax laws could have a material adverse effect on our business, financial condition and results of operations
10. 35Our business may be adversely affected by force majeure events outside of our control, including labor unrest, civil disorder, war, subversive activities or sabotage, extreme weather conditions, fires, floods, explosions or other catastrophes or epidemics

Risks Related to Intellectual Property

1. 36Our 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
2. 37Our failure or the inadequacy of our efforts to protect our intellectual property rights may undermine our competitive position, and litigation associated with our intellectual property rights may be costly
3. 38If we are unable to effectively protect our technologies, intellectual property, trade secrets and other proprietary information, our competitive position, business, financial condition, and results of operations could be harmed
4. 39We rely on licenses to use the intellectual property rights of third parties, which are incorporated into our products, services and offerings

Risks Related to our Common Stock and Capital Structure

1. 40Concentration of ownership among our existing executive officers, directors and their respective affiliates may prevent new investors from influencing significant corporate decisions
2. 41There may be future sales of our common stock or other dilution of our equity, which may adversely affect the market price of our common stock
3. 42We do not intend to pay dividends on our common stock for the foreseeable future
4. 43Material weaknesses in our internal control over financial reporting could have a significant adverse effect on our business and the price of our common stock
5. 44Anti-takeover provisions in our governing documents and under Delaware law could make an acquisition of us more difficult, limit attempts by our stockholders to replace or remove our current management and limit the market price of our common stock
6. 45These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our management
7. 46We are an “emerging growth company.” The reduced public company reporting requirements applicable to emerging growth companies may make our common stock less attractive to investors