Filing summary
Entity discrepancy: The request identifies Airjoule Technologies Corp., but the supplied 10-Q is for Power & Digital Infrastructure Acquisition II Corp. (Nasdaq: XPDB). The financial information below relates to Power & Digital Infrastructure Acquisition II Corp., not Airjoule.
Business context and reporting period
This unaudited Form 10-Q covers the three months ended March 31, 2022. The registrant is a blank-check company formed to pursue a business combination; it had not commenced operating activities and reported no operating revenue. Its IPO closed December 14, 2021, raising $287.5 million gross, and approximately $290.4 million was held in the trust account at quarter-end.
Financial performance and position
| Metric | Q1 2022 / March 31, 2022 |
|---|---|
| Operating revenue | None; the company expects no operating revenue before a business combination. |
| Operating expenses | $453,396: general and administrative $343,396; related-party administrative expense $60,000; franchise tax $50,000. |
| Trust investment income | $27,607. |
| Net loss | $425,789; basic and diluted loss per share was $0.01 for both Class A and Class B. |
| Operating cash flow | Used $1,217,533. Cash declined from $2,844,602 at year-end to $1,627,069. |
| Liquidity | Current assets were $1,988,538 and current liabilities $903,425; management reported working capital of approximately $1.1 million, excluding certain trust-funded tax obligations. |
| Trust account | $290,403,502, invested in U.S. government securities or qualifying money market funds. |
| Debt and other obligations | No working capital loans outstanding. Deferred underwriting commissions were $10,062,500, payable only if a business combination is completed. |
Changes versus comparable period
The filing compares Q1 2022 with March 23–31, 2021, the company’s first days after incorporation, so the comparison is not a like-for-like operating period. Net loss was $425,789 in Q1 2022 versus $973 in the 2021 inception period. The company reported no operating revenue in either period.
Outlook, risks, and unusual items
- The company had until June 14, 2023 to complete a business combination, with up to two optional three-month extensions requiring sponsor deposits of approximately $2.9 million each.
- Management stated that additional capital may be needed for transaction costs and that sponsor or affiliate financing is not committed. It warned that financing may not be available on acceptable terms and disclosed substantial doubt about the company’s ability to continue as a going concern for one year from issuance of the statements.
- If no business combination is completed within the permitted period, the company must cease operations, redeem public shares from the trust account, and liquidate. Warrants may expire worthless.
- Management said COVID-19 could adversely affect the company’s financial position, operations, or target search, but the impact was not determinable.
- The filing reported no legal proceedings, no material change in previously disclosed risk factors, and no off-balance-sheet arrangements. Management concluded disclosure controls were effective and reported no material change in internal control over financial reporting.
- No operating or transaction guidance was provided. The filing states a business combination was not considered probable at March 31, 2022; approximately $516,000 of founder-share compensation expense would be recognized when it becomes probable.
Important facts for investors to verify
- Confirm the intended issuer: the supplied filing is for Power & Digital Infrastructure Acquisition II Corp., not Airjoule Technologies Corp.
- Review the company’s ability to fund search and transaction expenses outside the trust account, given the going-concern warning and reliance on potential, noncommitted financing.
- Track progress toward the business-combination deadline and any extension, including required sponsor deposits and potential dilution from additional warrants.
- Assess redemption rights, the trust balance, deferred underwriting fees, and the terms and potential dilution of the 25.5 million outstanding warrants.