Financial Performance - The Company had a net income of approximately $48,000 for the three months ended September 30, 2023, with $1.5 million from investments held in the Trust Account, offset by $1.1 million in operating expenses and $0.3 million in income tax expenses [136]. - For the nine months ended September 30, 2023, the Company reported a net income of approximately $1.2 million, consisting of $7.7 million from investments and a reversal of transaction costs of $0.2 million, offset by $5.3 million in operating expenses and $1.4 million in income tax expenses [137]. - The Company incurred approximately $5.0 million in general and administrative expenses for the nine months ended September 30, 2023 [137]. - The Company has not generated any operating revenues since inception and relies on non-operating income from the Trust Account [135]. Trust Account and Liquidity - As of September 30, 2023, the balance in the Trust Account was approximately $113,045,191 after the redemption of 18,141,822 shares of Class A common stock at a redemption price of approximately $10.37 per share, totaling approximately $188,132,132 [127]. - The Company’s liquidity needs have been met through a capital contribution of $25,000 from the Sponsor and a related party loan of approximately $115,000, which has been repaid [129]. - The Company faces substantial doubt about its ability to continue as a going concern due to liquidity needs and the mandatory liquidation requirement [131]. Business Combination and Agreements - The Company intends to complete a Business Combination before the mandatory liquidation date of December 14, 2023, which may be extended [130]. - The Company has deposited $300,000 into the Trust Account on multiple occasions since June 15, 2023, as part of the agreement to extend the deadline for completing a Business Combination [128]. - The merger agreement with Montana Technologies LLC involves an aggregate consideration of approximately $421.9 million, payable in newly issued shares of the Combined Company [146][147]. - The Proposed Transactions are expected to close in the fourth quarter of 2023, pending stockholder approval and customary closing conditions [151]. - The Sponsor Support Agreement includes provisions for voting in favor of the Proposed Transactions and waiving certain redemption rights [152]. Compensation and Shareholder Agreements - Equity holders of Montana may receive additional Earnout Shares valued at up to $200 million, contingent upon achieving an Annualized EBITDA exceeding $150 million from new production capacity [148][149]. - The maximum value of Earnout Shares is capped at $200 million, with the ability to receive them expiring five years after the Closing [149]. - The Company will provide competitive compensation and equity awards to key personnel post-merger to ensure continued involvement in technology development [150]. - The Company has agreed to pay affiliates of its Sponsor $20,000 per month for administrative support services until the completion of the initial Business Combination [145]. Accounting and Reporting - The Company accounts for Class A common stock subject to possible redemption as temporary equity, reflecting changes in redemption value immediately [162]. - The company qualifies as an "emerging growth company" under the JOBS Act, allowing it to delay the adoption of new or revised accounting standards [168]. - Diluted net (loss) income per share is the same as basic net (loss) income per share for the three and nine months ended September 30, 2023 and 2022 [165]. - The company does not anticipate any material effects from recently issued accounting pronouncements if adopted [166]. - The company is evaluating the benefits of reduced reporting requirements under the JOBS Act, which may exempt it from certain disclosures for five years post-IPO [169]. - The company has two classes of shares, Class A and Class B, with income and losses shared pro rata [164]. - The exercise of Public Warrants and Private Placement Warrants is contingent upon future events and is considered anti-dilutive [165]. - The company is classified as a smaller reporting company and is not required to provide certain market risk disclosures [170]. Deferred Fees - BofA waived its entitlement to a portion of the Deferred Discount, resulting in a reduction of deferred underwriting fees by $4,025,000, with the outstanding deferred fee payable now approximately $6.0 million [143]. Investment Restrictions - The Investment Agreement with CATL Parties restricts them from acquiring more than 9.8% of the Post-Combination Company and requires divestment if this limit is exceeded [154].
Power & Digital Infrastructure Acquisition II (XPDB) - 2023 Q3 - Quarterly Report