Part I Item 1. Condensed Consolidated Financial Statements (Unaudited) This section presents AirJoule Technologies' unaudited condensed consolidated financial statements, detailing financial position and JV accounting Condensed Consolidated Balance Sheets As of March 31, 2025, total assets were $365.6 million, a slight decrease from $369.9 million at year-end 2024, while total liabilities significantly decreased to $95.4 million from $117.7 million, leading to an increase in total stockholders' equity from $252.1 million to $270.2 million Condensed Consolidated Balance Sheet Data (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash, cash equivalents and restricted cash | $23,001 | $28,022 | | Total current assets | $24,449 | $31,456 | | Investment in AirJoule, LLC | $340,948 | $338,179 | | Total assets | $365,606 | $369,852 | | Liabilities & Stockholders' Equity | | | | Total current liabilities | $1,657 | $4,019 | | Earnout Shares liability | $11,692 | $24,524 | | Subject Vesting Shares liability | $2,345 | $7,819 | | Total liabilities | $95,423 | $117,742 | | Total stockholders' equity | $270,183 | $252,110 | Condensed Consolidated Statements of Operations For the three months ended March 31, 2025, the company reported a net income of $14.9 million, or $0.26 per diluted share, compared to a net income of $181.6 million, or $4.18 per diluted share, for the same period in 2024, with 2024 significantly impacted by a one-time $333.5 million gain on IP contribution and $54.7 million in transaction costs Condensed Consolidated Statements of Operations Data (in thousands) | Account | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | General and administrative | $2,786 | $813 | | Research and development | $388 | $846 | | Transaction costs incurred in connection with business combination | $0 | $54,693 | | Loss from operations | ($3,190) | ($56,391) | | Gain on contribution to AirJoule, LLC | $0 | $333,500 | | Change in fair value of Earnout, True Up, & Subject Vesting Shares liabilities | $18,412 | ($9,828) | | Equity loss from investment in AirJoule, LLC | ($2,230) | ($26) | | Income tax benefit (expense) | $1,643 | ($85,725) | | Net income | $14,879 | $181,555 | | Diluted net income per share | $0.26 | $4.18 | Condensed Consolidated Statements of Cash Flows Operating cash flow significantly improved in Q1 2025, providing $72.2 million compared to $6.4 million used in Q1 2024, resulting in a net cash decrease of $5.0 million Summary of Cash Flows (in thousands) | Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $72 | ($6,425) | | Net cash used in investing activities | ($5,135) | ($10,000) | | Net cash provided by financing activities | $42 | $43,467 | | Net increase (decrease) in cash | ($5,021) | $27,042 | | Cash at end of period | $23,001 | $27,417 | Notes to the Unaudited Condensed Consolidated Financial Statements Notes detail the company's formation, GE Vernova JV, liquidity, and fair value accounting for share liabilities, including a subsequent $15 million PIPE financing - The company was formed via a reverse recapitalization with Power & Digital Infrastructure Acquisition II Corp (XPDB), which closed on March 14, 2024, with Legacy Montana treated as the accounting acquirer1921 - A 50/50 joint venture, AirJoule, LLC, was formed with GE Vernova in March 2024, resulting in a $333.5 million gain on IP contribution, with a commitment to contribute up to an additional $90.0 million to the JV239299 - The company entered into a $30 million Committed Equity Facility with B. Riley on March 25, 2025, providing a future source of liquidity, with no sales occurring as of March 31, 202524 - Earnout Shares, True Up Shares, and Subject Vesting Shares liabilities are measured at fair value using Level 3 inputs (Monte Carlo simulation), with their combined fair value decreasing from $34.5 million to $14.0 million during the quarter5865146 - Subsequent to quarter end, on April 23, 2025, the company entered into agreements for a PIPE financing to sell 3,775,126 shares of Class A common stock for aggregate proceeds of approximately $15 million169 Item 2. Management's Discussion and Analysis of Financial Condition And Results of Operations Management discusses AirJoule's water-harvesting technology commercialization, Q1 2025 financial results, liquidity, and critical accounting estimates Company Overview and Growth Strategy AirJoule Technologies focuses on commercializing its AirJoule system, targeting a $450 billion market across various industries by leveraging strategic partnerships - The company's core product, AirJoule, is a climate solution technology that separates water from air to produce pure distilled water174 - The growth strategy focuses on leveraging global collaborations with GE Vernova and Carrier to scale manufacturing and commercialization174177 - Key target markets include data centers, advanced manufacturing, military, and HVAC applications, with an estimated combined total addressable market of $450 billion175176 Results of Operations Loss from operations decreased significantly in Q1 2025 due to the absence of prior year's one-time costs, while total other income declined due to non-recurring gains - General and administrative expenses increased by $2.0 million in Q1 2025 compared to Q1 2024, primarily due to higher legal, audit, and accounting service fees184 - Research and development expenses decreased by $0.5 million, largely due to the reimbursement of costs from the AirJoule, LLC joint venture185 - Q1 2024 results included $54.7 million in transaction costs related to the business combination, which were not present in Q1 2025183187 - The significant decrease in 'Total other income' is due to a $333.5 million gain on contribution to AirJoule, LLC in Q1 2024, which did not recur, while Q1 2025 other income was mainly from a $12.8 million gain on the change in fair value of the Earnout Shares liability183190193 Liquidity and Capital Resources The company's liquidity relies on equity financing, with $23.0 million cash as of March 31, 2025, and future capital needs including up to $90.0 million for the AirJoule JV, supported by a $30 million committed equity facility - As of March 31, 2025, the company had $23.0 million in cash, cash equivalents, and restricted cash199 - A committed equity facility was established on March 25, 2025, allowing the company to sell up to $30 million of common stock over 36 months197 - The company has agreed to contribute up to an additional $90.0 million in capital to the AirJoule JV, subject to an agreed-upon business plan201 Critical Accounting Estimates Management identifies several critical accounting estimates, including share-based compensation, derivative liabilities, and equity method investments, all requiring significant judgment - Key critical accounting estimates include: Share-Based Compensation, Earnout Shares Liability, Derivative Financial Instruments, Business Combinations, Equity Method Investment, Warrants, and Income Taxes214215219 - The fair value of Earnout Shares, True Up Shares, and Subject Vesting Shares liabilities are determined using Monte Carlo simulations, which are Level 3 measurements requiring significant judgment on inputs like future EBITDA and stock price volatility220222223 Item 3. Quantitative and Qualitative Disclosures About Market Risk This section is marked as 'Not applicable', indicating the company does not have material exposure to market risks requiring disclosure under this item - The company has stated that this item is not applicable244 Item 4. Controls and Procedures Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2025, with no significant changes in internal control over financial reporting during the quarter - Management concluded that as of March 31, 2025, the company's disclosure controls and procedures were effective245 - No significant changes to internal control over financial reporting occurred during the quarter ended March 31, 2025246 Part II Item 1. Legal Proceedings The company is not currently a party to any legal proceedings expected to have a material adverse effect on its business, financial condition, or operations - The company reports no material legal proceedings249 Item 1A. Risk Factors This section refers the reader to the detailed risk factors disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024, indicating no material changes to those risks - The company refers to its Annual Report on Form 10-K for the year ended December 31, 2024, for a discussion of risk factors250 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds No unregistered sales of capital stock occurred during the three months ended March 31, 2025, though an Equity Line was established for future sales - No unregistered sales of equity securities were made during the quarter251 - On March 25, 2025, the company entered into an Equity Line Purchase Agreement to sell up to 4,250,000 shares of Class A common stock, but no sales had occurred as of March 31, 2025252 Item 3. Defaults Upon Senior Securities The company reports that there were no defaults upon senior securities during the period - None reported253 Item 4. Mine Safety Disclosures This section is not applicable to the company's business operations - Not applicable254 Item 5. Other Information During the quarter ended March 31, 2025, no director or officer of the company adopted or terminated a Rule 10b5-1 trading agreement or a non-Rule 10b5-1 trading agreement - No director or officer adopted or terminated a Rule 10b5-1 trading plan during the quarter255 Item 6. Exhibits This section lists all exhibits filed as part of the quarterly report, including the merger agreement, corporate governance documents, warrant agreements, and various certifications by the CEO and CFO - The report includes exhibits such as the merger agreement, certificate of incorporation, bylaws, warrant agreements, and CEO/CFO certifications257
Montana Technologies Corporation(AIRJ) - 2025 Q1 - Quarterly Report