Market Potential - The company estimates its Total Addressable Market (TAM) globally to be approximately $455 billion, with $355 billion in the HVAC sector and $100 billion in atmospheric water harvesting [137]. Financial Performance - The company reported a net income of $13,429,895 for Q2 2024, compared to a net loss of $3,037,844 in Q2 2023, reflecting a significant improvement [190]. - The company recognized a gain of $333,500,000 on the contribution to AirJoule, LLC for the six months ended June 30, 2024, due to the fair value of intellectual property transferred [187]. - The fair value of Earnout Shares liability decreased by $13,064,000 for Q2 2024, recognized as a gain in other income [189]. - The company expects future operating losses and negative cash flows to increase due to additional costs related to technology development and market relationships [192]. Capital Expenditure and Investments - The company anticipates a capital expenditure investment of less than $25 million per production line could generate approximately $50 million in Annualized EBITDA per line [138]. - The company contributed $10 million in cash to the AirJoule joint venture and has agreed to contribute up to an additional $90 million based on future business plans [148]. - The company received approximately $40 million in March 2024 and $6 million in May 2024 from the Business Combination, which will support product development and growth plans [193]. Operating Expenses - Operating expenses are categorized into general and administrative, research and development, and sales and marketing expenses [156]. - General and administrative expenses for Q2 2024 increased to $3,211,205 from $1,813,014 in Q2 2023, reflecting a $1,398,191 increase due to higher professional services costs [182]. - Research and development expenses for Q2 2024 were $1,050,804, a decrease of $48,339 from $1,099,143 in Q2 2023, attributed to timing of services and purchases [184]. - Sales and marketing expenses for Q2 2024 were $74,841, down from $128,153 in Q2 2023, with expectations of future increases aligned with business growth [186]. Shareholder Information - Following the Business Combination, there were 53,823,412 shares of Company Common Stock issued and outstanding, with approximately 85.5% of the voting power held by Legacy Montana equity securities holders [143]. - The company entered into subscription agreements resulting in Aggregate Transaction Proceeds of approximately $43.365 million as part of the Business Combination [144]. Joint Ventures and Partnerships - The company has established partnerships with Pacific Northwest National Laboratory, BASF, and CATL to accelerate manufacturing and commercialization [138]. - The AirJoule joint venture aims to incorporate proprietary sorbent materials into systems utilizing AirJoule technology for markets in the Americas, Africa, and Australia [146]. - The Company has not funded the CAMT joint venture as of June 30, 2024, despite agreeing to contribute $6 million [197]. Cash Flow and Liquidity - As of June 30, 2024, the company had $32.4 million in working capital, including $34.6 million in cash [191]. - Net cash used in operating activities was $17,576,561 for the six months ended June 30, 2024, compared to $1,856,812 for the same period in 2023, indicating a significant increase in cash outflow [199]. - Net cash used in investing activities was $10,006,554 for the six months ended June 30, 2024, compared to $96,025 for the same period in 2023, primarily due to contributions to AirJoule, LLC [200]. - Net cash provided by financing activities was $61,855,930 for the six months ended June 30, 2024, a substantial increase from $264,441 in the same period of 2023, driven by higher proceeds from stock issuances [201]. Tax and Accounting - The company follows the asset and liability method for income taxes, with no unrecognized tax benefits or reserves for uncertain tax positions as of June 30, 2024 [179]. - Management identified a material weakness in internal controls over financial reporting, particularly regarding complex accounting issues [207]. - The Company plans to implement remediation steps to improve its internal controls and disclosure procedures [208]. Legal and Compliance - The Company is not currently involved in any legal proceedings that would materially affect its business or financial condition [209]. - The Company is classified as an emerging growth company under the JOBS Act, allowing it to delay compliance with certain accounting standards [204].
Power & Digital Infrastructure Acquisition II (XPDB) - 2024 Q2 - Quarterly Report