Market Opportunity - The company estimates a Total Addressable Market (TAM) of approximately $455 billion, with $355 billion in the HVAC sector and $100 billion in atmospheric water harvesting [162]. Financial Performance - The net loss for the three months ended March 31, 2024, was $11,552,823, compared to a net loss of $834,627 for the same period in 2023, representing an increase in loss of $10,718,196 [229]. - Net cash used in operating activities was $5,439,983 for the three months ended March 31, 2024, compared to $803,634 in the same period of 2023, reflecting a significant increase in cash outflow [230]. - General and administrative expenses increased to $827,576 for the three months ended March 31, 2024, from $218,175 in the same period of 2023, reflecting a $609,401 increase due to higher professional services costs [210]. - Research and development expenses rose to $896,613 for the three months ended March 31, 2024, compared to $604,944 in the prior year, marking a $291,669 increase driven by personnel and prototype costs [211]. - Sales and marketing expenses increased to $37,725 for the three months ended March 31, 2024, up from $10,423 in the same period of 2023, indicating a growth of $27,302 [212]. - The company recognized a change in fair value of earnout shares liability of $7.7 million during the three months ended March 31, 2024, which was recorded as other expenses [216]. - Net cash provided by financing activities was $42,494,907 for the three months ended March 31, 2024, compared to $255,861 in the same period of 2023, showing a substantial increase in financing [232]. Capital Expenditure and Investment - The company anticipates a capital expenditure of less than $25 million per production line, potentially generating approximately $50 million in Annualized EBITDA per line [164]. - The recapitalization resulted in Aggregate Transaction Proceeds of approximately $43.365 million from subscription agreements [171]. - The company contributed $10 million to the AirJoule joint venture and may contribute up to an additional $90 million based on future business plans [174]. - The company has committed to contribute up to an additional $90 million to the AirJoule joint venture based on future business plans and operating budgets [222]. Stock and Shareholder Information - Following the Business Combination, there are 53,823,412 shares of common stock issued and outstanding, with 45,821,456 shares representing approximately 85.5% of the voting power [169]. - The company’s Class A common stock began trading on Nasdaq under the symbols "AIRJ" and "AIRJW" on March 15, 2024 [170]. Joint Ventures and Partnerships - The AirJoule joint venture aims to incorporate proprietary sorbent materials into systems utilizing AirJoule technology for markets in the Americas, Africa, and Australia [172]. - The company has established partnerships with organizations like BASF and CATL to accelerate manufacturing and product validation [163]. Management and Organizational Changes - The company’s management team has expanded with the appointment of a new Chief Financial Officer and a transition of the previous CFO to Chief Administrative Officer [180]. Goodwill and Financial Instruments - The company recognizes goodwill as the excess of acquisition-date consideration over the fair value of net identifiable assets acquired, with no impairment loss recognized as of March 31, 2024 [199]. - The fair value of derivative financial instruments, including True Up Shares and Subject Vesting Shares, is measured at each reporting period, with changes recorded in earnings [190][191]. - The company accounts for business combinations using the acquisition method, recording identifiable assets and liabilities at their estimated fair values as of the acquisition date [193]. - Non-controlling interests are recognized as a component of equity and adjusted for the allocable portion of income or loss [197]. - The company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks [189]. - The estimated fair value of IPR&D acquired in business combinations is capitalized and tested for impairment annually [201]. - Changes in the estimated fair value of liability-classified contingent consideration are recognized in the consolidated statements of operations [195]. - The company performs its annual goodwill impairment test on October 1, with no impairment loss recognized as of the latest reporting date [199].
Power & Digital Infrastructure Acquisition II (XPDB) - 2024 Q1 - Quarterly Report