AirJoule Technologies (AIRJ) risk factors, FY2025 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 profitability71% rewritten
2. 02expand our production and testing facilities to enhance our efficiency and capabilities for assembly of AirJoule systemsNew
3. 03We have not yet commenced commercializing our AirJoule systems 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
4. 04Demand for our products may not grow or may grow at a slower rate than we anticipate
5. 05We depend on revenue generated from a single product and in the foreseeable future will be significantly dependent on a limited number of products
6. 06Our 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 issues70% rewritten
7. 07Our Water Purchase Agreements and other long-term commercial arrangements may include penalties for not delivering sufficient water on schedule, which may result in liabilities and reductions in cash flowNew
8. 08our ability to invest in growth opportunities and fund operational expenses, among other financial impacts. Incurring penalties might also harm our reputation in the market, and may put us at a competitive disadvantage to our competitorsNew
9. 09We 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 operations34% rewritten
10. 10We 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
11. 11We 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
12. 12Actual 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 operations31% rewritten
13. 13We 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
14. 14If 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
15. 15Any failure by our management to properly manage our growth could have a material adverse effect on our business, operating results and financial condition
16. 16If 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
17. 17Damage to our reputation or brand image could adversely affect our business
18. 18The 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
19. 19Cyber-attacks or a failure in our information technology and data security infrastructure could adversely affect our business and operations
20. 20Increased 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 us44% rewritten
21. 21responded appropriately or quickly enough to growing concern for ESG and sustainability issues, regardless of whether there is a regulatory or legal requirement to do so, we may suffer from reputational damage and our business, financial condition and/or stock price could be materially and adversely affectedNew

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

1. 22We 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. 23We regularly evaluate the carrying value of our equity method investment in the AirJoule JV, and we may incur an impairment charge if we determine that the carrying value of such investment exceeds the fair valueNew
3. 24difference attributable to AirJoule, LLC’s goodwill balance is greater than our 50% share of the goodwill impairment charges recordedNew
4. 25We 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
5. 26Manufacturing 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
6. 27The 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
7. 28We 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
8. 29Our 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
9. 30Our 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. 31difficulty in obtaining distribution and support for our productsNew
2. 32Our 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
3. 33Any of these risk factors could have a material adverse effect on our business70% rewritten
4. 34Our business could be adversely affected by trade wars, trade tariffs or other trade barriers and related government actions85% rewritten
5. 35Exchange rate fluctuations may materially affect our results of operations and financial condition
6. 36Our 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
7. 37While 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
8. 38produces, 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
9. 39Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, investments and results of operations
10. 40Changes 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
11. 41Our business may be adversely affected by force majeure events outside of our control, including labor unrest, civil disorder, war, subversive activities or sabotage, climate change, changes in climate change policies, extreme weather conditions, fires, floods, explosions or other catastrophes or epidemics

Risks Related to Intellectual Property

1. 42Our 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. 43Our 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. 44If 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. 45establish and maintain alternative branding for our technology, products or servicesNew
5. 46We 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. 47Concentration of ownership among our existing executive officers, directors and their respective affiliates may prevent new investors from influencing significant corporate decisions
2. 48There 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. 49We do not intend to pay dividends on our common stock for the foreseeable future
4. 50Material 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. 51Anti-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. 52These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our management
7. 53We are an “emerging growth company.” The reduced public company reporting requirements applicable to emerging growth companies may make our common stock less attractive to investors39% rewritten