Montana Technologies Corporation(AIRJ) - 2023 Q1 - Quarterly Report

PART I - FINANCIAL INFORMATION This section presents the company's unaudited financial statements, management's analysis, market risk disclosures, and internal controls Condensed Financial Statements This section presents the company's unaudited financial position, operations, equity changes, and cash flows as of March 31, 2023 Condensed Balance Sheets This section provides a summary of the company's financial position, detailing assets, liabilities, and equity as of March 31, 2023 Condensed Balance Sheet Summary (in USD) | Metric | March 31, 2023 (Unaudited) | December 31, 2022 | | :--- | :--- | :--- | | Assets | | | | Cash | $1,122,452 | $1,287,986 | | Investments held in Trust Account | $297,519,738 | $294,395,846 | | Total Assets | $298,920,094 | $295,968,237 | | Liabilities & Equity | | | | Total Liabilities | $13,515,352 | $11,864,944 | | Class A common stock subject to possible redemption | $295,942,581 | $293,293,429 | | Total stockholders' deficit | ($10,537,839) | ($9,190,136) | Unaudited Condensed Statements of Operations This section presents the company's unaudited financial performance, including net income and loss from operations for the three months ended March 31 Condensed Statement of Operations (in USD, for the three months ended March 31) | Metric | 2023 | 2022 | | :--- | :--- | :--- | | Loss from operations | ($1,397,704) | ($453,396) | | Income from investments held in Trust Account | $3,123,892 | $27,607 | | Net income (loss) | $1,301,449 | ($425,789) | | Basic and diluted net income (loss) per share, Class A | $0.04 | ($0.01) | Unaudited Condensed Statements of Changes in Stockholders' Deficit This section details the changes in the company's stockholders' deficit, highlighting the impact of redemption value and net income - The total stockholders' deficit increased from $(9.2) million at the end of 2022 to $(10.5) million as of March 31, 2023. This change was primarily driven by a $2.6 million increase in the redemption value of Class A common stock, partially offset by a net income of $1.3 million[11] Unaudited Condensed Statements of Cash Flows This section outlines the company's cash inflows and outflows, focusing on operating activities for the three months ended March 31 Condensed Statement of Cash Flows (in USD, for the three months ended March 31) | Metric | 2023 | 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | ($165,534) | ($1,217,533) | | Net decrease in cash | ($165,534) | ($1,217,533) | | Cash - beginning of the period | $1,287,986 | $2,844,602 | | Cash - end of the period | $1,122,452 | $1,627,069 | Notes to Unaudited Condensed Financial Statements This section provides critical context on the company's nature as a blank check entity, its IPO, business combination deadlines, going concern uncertainty, and tax implications - The company is a blank check company formed to effect a business combination and has not commenced any operations. Its initial public offering in December 2021 raised gross proceeds of $287.5 million[14][15][16] - The company has until June 14, 2023 (the Combination Period) to complete an initial business combination, with an option to extend this period. On May 5, 2023, the company filed a preliminary proxy statement to extend the deadline to December 14, 2023, and potentially further to March 14, 2024[24][25] - Management has determined that the company's liquidity needs and the mandatory liquidation requirement raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments related to this uncertainty[33][34] - The company is subject to a new 1% U.S. federal excise tax on stock repurchases effective January 1, 2023, which may apply to share redemptions in connection with a business combination or extension vote, potentially reducing cash available[36] - Deferred underwriting commissions of approximately $10.1 million are payable to underwriters from the Trust Account only upon the completion of a Business Combination[75] Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial performance, liquidity, and critical accounting policies, highlighting its blank check nature and going concern uncertainty - The company is a blank check company formed to effect a business combination, having consummated its IPO of 28,750,000 units in December 2021, generating gross proceeds of $287.5 million[97][98] Results of Operations Comparison (For the three months ended March 31) | Metric | 2023 | 2022 | | :--- | :--- | :--- | | Net income (loss) | ~$1.3 million | ~($426,000) | | Income from investments in trust account | ~$3.1 million | ~$28,000 | | Operating expenses | ~$1.4 million | ~$453,000 | - Management has concluded there is substantial doubt about the company's ability to continue as a going concern due to liquidity needs and the mandatory liquidation requirement if a business combination is not completed by the deadline (currently June 14, 2023)[105] - The company has agreed to pay affiliates of its sponsor $20,000 per month for office space and administrative support services until a business combination or liquidation occurs[116] Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, the company is exempt from providing quantitative and qualitative disclosures regarding market risk - The company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[128] Controls and Procedures Management concluded that disclosure controls and procedures were ineffective as of March 31, 2023, due to a material weakness in accounting for expenses and tax provision - Management concluded that disclosure controls and procedures were not effective as of March 31, 2023[130] - A material weakness was identified in internal control over financial reporting related to accounting for accrued general and administrative expenses and the company's tax provision[130] - No changes were made to the company's internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[131] PART II - OTHER INFORMATION This section covers legal proceedings, risk factors, equity sales, and other disclosures relevant to the company's operations Legal Proceedings The company reports no legal proceedings - There are no legal proceedings to report[133] Risk Factors This section outlines key risks, including regulatory changes affecting SPACs, new excise taxes on stock repurchases, and identified material weaknesses in internal controls - Proposed SEC rules for SPACs, if adopted, may materially increase the costs and time required to complete an initial Business Combination[136] - The Inflation Reduction Act of 2022 imposes a 1% excise tax on stock repurchases, which may apply to redemptions in connection with a Business Combination and could reduce available cash[137] - A material weakness in internal control over financial reporting was identified as of March 31, 2023, relating to the accounting for accrued general and administrative expenses[138][139] Unregistered Sales of Equity Securities and Use of Proceeds This section details the issuance of unregistered equity securities and the allocation of proceeds from the IPO and private placement - The sponsor acquired 7,187,500 shares of Class B common stock for $25,000 to cover certain offering costs[140] - Simultaneously with the IPO, the company sold 11,125,000 private placement warrants at $1.00 per warrant, generating total proceeds of $11,125,000[143] Defaults Upon Senior Securities The company reports no defaults upon senior securities - None[144] Mine Safety Disclosures This item is not applicable to the company - Not applicable[144] Other Information The company reports no other information - None[144] Exhibits This section lists the exhibits filed with the Form 10-Q, including officer certifications and Inline XBRL documents - The exhibits include certifications from the Chief Executive Officer and Chief Financial Officer as required by Sections 302 and 906 of the Sarbanes-Oxley Act[146] - Inline XBRL files are included as exhibits for interactive data purposes[146]