Business context and reporting period
Registrant identification: The supplied filing is for Power & Digital Infrastructure Acquisition II Corp. (Nasdaq: XPDBU, XPDB and XPDBW), not Airjoule Technologies Corp. It is a SPAC and shell company formed to pursue a business combination, with a stated focus on power-transition and digital-infrastructure businesses. It had selected no target and held no substantive target discussions as of the filing.
This is the 10-K for the fiscal year ended December 31, 2021. Because the company was incorporated on March 23, 2021 and completed its IPO in December, financial results cover inception through year-end, not a full comparable year or a standalone fourth quarter. Units began trading in December 2021; Class A shares and warrants began separate trading in January 2022.
Financial results and liquidity
| Metric | Reported amount or detail |
|---|---|
| Operating revenue | None; the company expected no operating revenue before a business combination. |
| Net loss | $544,224 from inception through December 31, 2021; basic and diluted loss per share was $0.07 for each common-stock class. |
| Expenses and investment income | Operating loss was $545,119, including $372,924 in general and administrative expense, $20,000 in related-party expense, and $152,195 in franchise taxes. Trust investment income was $895. |
| Cash flow | Net cash used in operating activities was $0. Trust funding used $290.375 million in investing activities; financing activities provided $293.220 million. Year-end cash was $2.845 million. |
| Assets and liabilities | Total assets were $293.834 million, including $290.376 million in the trust account. Total liabilities were $11.773 million, including $10.063 million of deferred underwriting commissions. |
| Liquidity | Management reported approximately $1.6 million of working capital, excluding approximately $152,000 of tax obligations potentially payable from trust investment income. The filing states funds and borrowing capacity should meet needs for one year from filing; sponsor or management loans were optional, not committed. |
| Debt and public financing | No working-capital loans were outstanding at year-end. A sponsor note of approximately $115,000 was repaid in December 2021. The December IPO raised $287.5 million gross; a concurrent private placement raised $11.125 million. Approximately $290.375 million was deposited in trust. |
All 28.75 million public Class A shares were classified as temporary equity and carried at $290.375 million, or $10.10 per share, due to redemption rights. The balance sheet reported a stockholders’ deficit of $8.314 million, substantially affected by the accounting accretion to the redemption value. No meaningful year-over-year comparison is available.
Outlook, risks and unusual items
- The company had until June 14, 2023—18 months after the IPO—to complete a business combination. It could, but was not required to, extend by two additional three-month periods if the sponsor or designee deposited $2.875 million per extension; public stockholders would not vote on or redeem shares for those extensions. Warrants would expire worthless if no combination is completed.
- The trust may be used for a qualifying combination with a target valued at least 80% of relevant trust assets, and the post-transaction company must acquire at least 50% of the target’s voting securities or otherwise obtain control. Public shareholders have redemption rights, subject to applicable limits and cash conditions.
- Management cited COVID-19 as a possible adverse factor whose specific financial impact could not be determined. The filing also discusses geopolitical uncertainty, including Russia’s invasion of Ukraine, and risks to deal execution, markets, and financing.
- Key risks include failure to find or complete a deal before the deadline, redemptions reducing available cash, competition for targets, additional financing and dilution, creditor claims against trust funds, and conflicts of interest. Founder shares were acquired at approximately $0.004 per share, creating potential sponsor-management incentives that may differ from public-stockholder interests.
- Recurring related-party administrative fees were $20,000 per month beginning December 9, 2021. The company also disclosed possible post-combination advisory or management compensation and reimbursement of expenses. Deferred underwriting commissions of $10.063 million are payable only if a business combination is completed.
- The auditor issued an unqualified opinion on the financial statements. Management concluded disclosure controls were effective; the 10-K did not include management’s internal-control assessment or auditor attestation because of the newly public company transition period. No material litigation or unresolved SEC staff comments were reported.
- No operating guidance or forecast was provided. Management’s outlook is limited to its expectation that available working capital and borrowing capacity would fund operations for one year from filing.
Important facts for investors to verify
- Confirm the intended issuer: the filing identifies Power & Digital Infrastructure Acquisition II Corp., not Airjoule Technologies Corp.
- Verify the trust balance, redemption terms, business-combination deadline, and whether any extension deposits or subsequent transaction announcements occurred after the reporting date.
- Review the audited statements and notes for temporary-equity treatment, the $37.165 million redemption-value accretion, and the resulting stockholders’ deficit.
- Check the filing’s differing disclosures about founder shares to be purchased by anchor investors: several sections state 1,078,125 shares, while another passage states 937,500. Confirm the governing agreement and applicable amount.
- Assess sponsor and management conflicts, founder-share incentives, potential related-party fees, redemption limitations, and the possibility that trust funds could be reduced by claims or transaction costs.