SECURITIES AND EXCHANGE COMMISSION

 Washington, D.C. 20549

 FORM 10-K

 ANNUAL REPORT PURSUANT TO SECTION 13 OR
15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the fiscal year ended December 31, 2023

 TRANSITION REPORT PURSUANT TO SECTION 13
OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the period from
to

 POWER & DIGITAL INFRASTRUCTURE ACQUISITION
II CORP.

 (Exact name of registrant as specified in its charter)

 Delaware

 001-41151

 86-2962208

 (State or other jurisdiction
of

incorporation or organization)

 (Commission File Number)

 (I.R.S. Employer

Identification No.)

 321 North Clark Street, Suite 2440

 Chicago, IL 60654

 (312) 262-5642

 (Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)

 Securities registered pursuant to Section 12(b)
of the Act:

 Title of Each Class

 Trading Symbol

 Name of Each Exchange On

Which Registered

 Units, each consisting of one share of Class A common stock and one-half of one redeemable warrant

 XPDBU

 The Nasdaq Stock Market LLC

 Class A common stock, par value $0.0001 per share

 XPDB

 The Nasdaq Stock Market LLC

 Warrants included as part of the units, each whole warrant exercisable for one share of Class A common stock at an exercise price of $11.50

 XPDBW

 The Nasdaq Stock Market LLC

 Securities registered pursuant to Section 12(g)
of the Act: None

 Indicate by check mark if the registrant is a well-known seasoned issuer,
as defined in Rule 405 of the Securities Act. Yes No

 Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act. Yes No

 Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
 Yes No

 Indicate by check mark whether the registrant has submitted electronically
every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

 Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions
of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging
growth company" in Rule 12b-2 of the Exchange Act.

 Large accelerated filer

 Accelerated filer

 Non-accelerated filer

 Smaller reporting company

 Emerging Growth company

 If an emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant
to Section 13(a) of the Exchange Act.

 Indicate by check mark whether the registrant
has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or
issued its audit report.

 If the securities are registered pursuant to Section
12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction
of an error to previously issued financial statements.

 Indicate by check mark whether any of those error
corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's
executive officers during the relevant recovery period pursuant to §240.10D-1(b).

 Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

 The aggregate market value of the common stock outstanding, other than
shares held by persons who may be deemed affiliates of the registrant, computed by reference to the closing sales price for the Class
A common stock on June 30, 2023, as reported on the NASDAQ Stock Market LLC ("Nasdaq") was approximately $ 110,325,051 (based
on the closing sales price of the Class A common stock on June 30, 2023 of $10.40).

 As of March 11, 2024, there were 10,608,178 shares of Class A common
stock, $0.0001 par value per share, and 7,187,500 shares of Class B common stock, $0.0001 par value per share, issued and outstanding.

 Documents Incorporated by Reference: None.

 Page

 CERTAIN TERMS

 ii

 CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 iv

 Item 1.

 Business

 Item 1A. Risk Factors

 Item 1B. Unresolved Staff Comments

 Item 1C: Cybersecurity

 Item 2.

 Properties

 Item 3.

 Legal Proceedings

 Item 4.

 Mine Safety Disclosures

 Item 5.

 Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information and Holders

 Item 6.

 [Reserved.]

 Item 7.

 Management's Discussion and Analysis of Financial Condition and Results of Operations

 Item 7A. Quantitative and Qualitative Disclosures About Market Risk

 Item 8.

 Financial Statements and Supplementary Data

 Item 9.

 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 Item 9A. Controls and Procedures

 Item 9B. Other Information

 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

 Item 10.

 Directors, Executive Officers and Corporate Governance

 Item 11.

 Executive Compensation

 Item 12.

 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 Item 13.

 Certain Relationships and Related Transactions, and Director Independence

 Item 14.

 Principal Accounting Fees and Services

 Item 15.

 Exhibit and Financial Statement Schedules

 Item 16.

 Form 10-K Summary

 SIGNATURES

 INDEX TO FINANCIAL STATEMENTS

 i

 CERTAIN
TERMS

 Unless otherwise stated in this Annual Report on
Form 10-K (this "Report"), or the context otherwise requires, references to:

 "amended and restated certificate of incorporation" are to the amended and restated certificate of incorporation of the company, which was adopted in connection with the closing of our initial public offering;

 "anchor investors" are to certain funds and accounts managed by subsidiaries of BlackRock, Inc.;

 "Class A common stock" are to our Class A common stock, par value $0.0001 per share;

 "Class B common stock" are to our Class B common stock, par value $0.0001 per share;

 "common stock" are to our Class A common stock and our Class B common stock;

 "equity-linked securities" are to any debt or equity securities that are convertible, exercisable or exchangeable for shares of our Class A common stock issued in connection with our initial business combination including, but not limited to, a private placement of equity or debt;

 "founder shares" are to shares of our Class B common stock initially issued to our sponsor in a private placement prior to our initial public offering and the shares of our Class A common stock that will be issued upon the automatic conversion of the shares of our Class B common stock at the time of our initial business combination (for the avoidance of doubt, such shares of our Class A common stock will not be "public shares");

 "IPO" are to the initial public offering of the company completed on December 14, 2021;

 "initial stockholders" are to holders of our founder shares prior to our initial public offering and include our sponsor and independent directors;

 "management" or our "management team" are to our executive officers and directors, and "directors" are to our current directors;

 "Nasdaq" are to the Nasdaq Stock Market LLC;

 "private placement warrants" are to the warrants of the company to purchase one share of common stock, which warrants were initially purchased by the sponsor and the anchor investors in a private placement that closed simultaneously with the IPO and upon conversion of working capital loans, if any;

 "public shares" are to shares of our Class A common stock sold as part of the units in our initial public offering (whether they were purchased in our initial public offering or thereafter in the open market);

 ii

 "public stockholders" are to the holders of our public shares, including our sponsor and management team to the extent our sponsor and/or members of our management team purchase public shares, provided that our sponsor's and each member of our management team's status as a "public stockholder" will only exist with respect to such public shares;

 "public warrants" are to the publicly traded warrants of the company to purchase one share of common stock issued as part of each unit in our initial public offering and which began trading separately on January 31, 2022;

 "sponsor" are to XPDI Sponsor II LLC, a Delaware limited liability company formed by individuals affiliated with TEP and XMS. References to the experience of our sponsor include the experience of TEP, XMS and their respective affiliated investment professionals;

 "TEP" are to Transition Equity Partners, LLC, a private equity fund focused on renewable and transition energy infrastructure in North America;

 "trust account" are to the trust account set up following our initial public offering with Continental Stock Transfer & Trust Company acting as trustee;

 "unit" are to our units issued in our initial public offering, each consisting of one share of Class A common stock, $0.0001 par value per share, and one-half of one redeemable warrant;

 "warrants" are to the private placement warrants, public warrants and any warrants we issue to our sponsor upon conversion of loans;

 "we," "us," "our," "company" or "our company" are to Power & Digital Acquisition II Corp., a Delaware corporation; and

 "XMS" are to XMS XPDI Sponsor Holdings II LLC, an entity owned by professionals of XMS Capital Partners, LLC, a global independent financial services firm, primarily providing strategic and financial advisory services.

 "XMS Capital" are to XMS Capital Partners, LLC, an entity experienced in providing strategic and financial advisory services, inducing advising clients on mergers and acquisitions, capital structure, financings, takeover and activist preparation, and restructurings.

 iii

 CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS

 This Report, including, without limitation, statements
under the heading "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations," includes
forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, (the "Securities Act")
and Section 21E of the Securities Exchange Act of 1934, as amended, (the "Exchange Act"). Our forward-looking statements include,
but are not limited to, statements regarding our or our management team's expectations, hopes, beliefs, intentions or strategies
regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or
circumstances, including any underlying assumptions, are forward-looking statements. The words "anticipate," "believe,"
"continue," "could," "estimate," "expect," "intends," "may," "might,"
"plan," "possible," "potential," "predict," "project," "should,"
"would" and similar expressions may identify forward-looking statements, but the absence of these words does not mean that
a statement is not forward-looking. Forward-looking statements in this Report may include, for example, statements about:

 our ability to select an appropriate target business or businesses;

 our ability to complete our initial business combination;

 our expectations around the performance of a prospective target business or businesses;

 our success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business combination;

 our officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business or in approving our initial business combination;

 our potential ability to obtain additional financing to complete our initial business combination;

 our pool of prospective target businesses;

 our ability to consummate an initial business combination due to the uncertainty resulting from the invasion of Ukraine by Russia and resulting sanctions, ongoing conflict in the Middle East and other events (such as terrorist attacks, geopolitical unrest, natural disasters or a significant outbreak of other infectious diseases);

 the ability of our officers and directors to generate a number of potential investment opportunities;

 our public securities' potential liquidity and trading;

 the lack of a market for our securities;

 the use of proceeds not held in the trust account or
available to us from interest income on the trust account balance;

 the trust account not being subject to claims of third
parties; or

 our financial performance following our initial public offering.

 The forward-looking statements contained in this
Report are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be
no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a
number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance
to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include,
but are not limited to, those factors described under the heading "Risk Factors." Should one or more of these risks or uncertainties
materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these
forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise, except as may be required under applicable securities laws. These risks and others described
under "Risk Factors" may not be exhaustive.

 iv

 Summary of Risk Factors

 Our business is subject to numerous risks and uncertainties.
These risks include, but are not limited to:

 We have no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.

 Our independent registered public accounting firm's report contains an explanatory paragraph that expresses substantial doubt about our ability to continue as a "going concern."

 Our public stockholders may not be afforded an opportunity to vote on our initial business combination, and even if we hold a vote, holders of our founder shares will participate in such vote, which means we may complete our initial business combination even though a majority of our public stockholders do not support such initial business combination.

 If we seek stockholder approval of our initial business combination, our sponsor, officers and directors have agreed to vote in favor of such initial business combination, regardless of how our public stockholders vote, and depending on the number of stockholders who vote, our sponsor, officers and directors may have almost enough votes to approve our initial business combination based on the shares held by them.

 Your only opportunity to affect the investment decision regarding our initial business combination will be limited to the exercise of your right to redeem your public shares from us for cash, unless we seek stockholder approval of such initial business combination.

 The ability of our public stockholders to exercise redemption rights with respect to a large number of our public shares may not allow us to complete the most desirable business combination or optimize our capital structure.

 The ability of our public stockholders to exercise redemption rights with respect to a large number of our public shares could increase the probability that our initial business combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your public shares.

 The requirement that we complete our initial business combination by March 14, 2024 (or such later date approved by the stockholders or the Board in accordance with our amended and restated certificate of incorporation, including the 2024 Extension), may give potential target businesses leverage over us in negotiating a business combination and may limit the time we have in which to conduct due diligence on potential business combination targets, in particular as we approach our dissolution deadline, which could undermine our ability to complete our initial business combination on terms that would produce value for our stockholders.

 We may not be able to complete our initial business
combination by March 14, 2024 (or such later date approved by the stockholders or the Board in accordance with our amended and restated
certificate of incorporation, including the 2024 Extension), in which case we would cease all operations, except for the purpose of winding
up and we would redeem our public shares and liquidate, in which case our public stockholders may receive only $10.80 per public share,
based on the balance of the trust account as of December 29, 2023, and our warrants will expire worthless.

 v

 Our search for a business combination, and any target business with which we ultimately consummate a business combination, may be materially adversely affected by conflict between Ukraine and Russia, ongoing conflict in the Middle East and the status of debt and equity markets.

 If we seek stockholder approval of our initial business combination, our sponsor, directors, officers, advisors or any of their respective affiliates may elect to purchase public shares or public warrants from the public, which may influence a vote on a proposed business combination and reduce the public "float" of our common stock.

 If a stockholder fails to receive notice of our offer to redeem our public shares in connection with our initial business combination despite our compliance with the tender offer rules or proxy rules, or fails to comply with the procedures for tendering its shares, such shares may not be redeemed.

 You will not have any rights or interests in funds
from the trust account, except under certain limited circumstances. To liquidate your investment, therefore, you may be forced to sell
your public shares or warrants, potentially at a loss.

 The Nasdaq may delist our securities from trading on its exchange, which could limit investors' ability to make transactions in our securities and subject us to additional trading restrictions.

 You will not be entitled to protections normally afforded to investors of certain other blank check companies.

 If we seek stockholder approval of our initial business combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a "group" of stockholders are deemed to hold in excess of 15% of our public shares, you will lose the ability to redeem all such shares in excess of 15% of our public shares.

 Because of our limited resources and the significant
competition for business combination opportunities, it may be more difficult for us to complete our initial business combination. If
we are unable to complete our initial business combination within the prescribed time period, our public stockholders may receive only
approximately $10.80 per public share, based on the balance of the trust account as of December 29, 2023, on the liquidation of the trust
account, and our warrants will expire worthless.

 If the funds not being held in the trust account are
insufficient, it could limit the amount available to fund our search for a target business or businesses and complete our initial business
combination and we will depend on loans from our management team or our sponsor or any of their respective affiliates to fund our search,
to pay our taxes and to complete our initial business combination. If we are unable to obtain such loans, we may be unable to complete
our initial business combination.

 If we have not completed our initial business combination
by March 14, 2024 (or such later date approved by the stockholders or the Board in accordance with our amended and restated certificate
of incorporation, including the 2024 Extension), our public stockholders may be forced to wait beyond such prescribed time period before
redemption from the trust account.

 If third parties bring claims against us, the proceeds
held in the trust account could be reduced and the per share redemption amount received by our public stockholders may be less than the
$10.10 per share initially deposited in the trust account.

 We identified a material weakness in our internal control over financial reporting and may identify additional material weaknesses in the future, or fail to maintain an effective system of internal control over financial reporting, which may result in material misstatements of our financial statements or cause us to fail to meet our periodic reporting obligations.

 vi

 Item 1. Business.

 Overview

 We are a blank check company incorporated as a
Delaware corporation and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization
or similar business combination with one or more businesses or entities, which we refer to throughout this Report as our initial business
combination.

 Our intention is to acquire a business or entity
that could benefit from our expertise across the power and digital infrastructure landscape.

 TEP is a private equity fund focused on renewable and transition energy infrastructure. Its leadership team has over 20 years of investment experience and has invested in ~$1.1 billion, including ~$900 million directly, in the renewable and transition power verticals.

 XMS is an entity owned by professionals of XMS Capital.

 In March 2021, our sponsor paid $25,000 to cover
for certain offering costs on behalf of us in exchange for issuance of 5,750,000 shares of our Class B common stock. In November 2021,
we effected a stock dividend of 1,437,500 shares of our Class B common stock, resulting in there being an aggregate of 7,187,500 shares
of our Class B common stock outstanding. We have agreed to sell to the anchor investors 1,078,125 founder shares, and the anchor investors
agreed to purchase from us on the date of the initial business combination an aggregate of 1,078,125 founder shares for an aggregate purchase
price of approximately $3,750, or approximately $0.004 per share. Our sponsor has also agreed that in the event of such purchase by the
anchor investors, our sponsor will forfeit to us for no consideration a number of founder shares equal to the number of founder shares
purchased by the anchor investors.

 In July 2021, our sponsor transferred 30,000 shares
of Class B common stock to each of the four independent director nominees, a total of 120,000 shares of Class B common stock. In November
2021, our sponsor repurchased 30,000 shares of Class B common stock from a former independent director nominee.

 On December 14, 2021 the company consummated its
IPO of 28,750,000 units, which included the exercise of the underwriters' option to purchase an additional 3,750,000 units at the
initial public offering price to cover over-allotments. Each unit consists of one share of Class A common stock and one-half of one warrant,
each whole public warrant entitling the holder thereof to purchase one share of Class A common stock at an exercise price of $11.50 per
share, subject to adjustment. The units were sold at an offering price of $10.00 per unit, generating gross proceeds of $287,500,000.

 Simultaneously with the closing of our IPO and
the issuance and sale of the units, we completed the private placement of an aggregate of 11,125,000 private placement warrants at a price
of $1.00 per private placement warrant, generating total proceeds of $11,125,000. The private placement warrants, which were purchased
by the sponsor and the anchor investors, are substantially similar to the public warrants, except that if held by the sponsor, the anchor
investors or their respective permitted transferees, they (i) may be exercised on a cashless basis, (ii) are not redeemable and (iii)
subject to certain limited exceptions, will be subject to transfer restrictions until 30 days following the consummation of our initial
business combination. If the private placement warrants are held by holders other than the sponsor, the anchor investors or their respective
permitted transferees, the private placement warrants will be redeemable by the company under all redemption scenarios and exercisable
by holders on the same basis as the public warrants.

 On May 15, 2023, we filed
a definitive proxy statement for the solicitation of proxies in connection with that certain special meeting in lieu of annual meeting
of stockholders of the company held on June 9, 2023 (the "Extension Special Meeting") to consider and vote on, among
other proposals, the extension of the date by which the company must consummate an initial business combination from June 14, 2023
to December 14, 2023, and to allow the company, without another stockholder vote, by resolution of the company's board of directors
(the "Board") to elect to further extend such date in one-month increments up to three additional times until March 14,
2024, unless the closing of a an initial business combination shall have occurred prior thereto, or such earlier date as determined by
the Board to be in the best interests of the company (such proposal, the "Extension Amendment Proposal"), and the amendment
of the company's amended and restated certificate of incorporation to remove the limitation that the company may not redeem public
shares to the extent that such redemption would result in the company having net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of
the Exchange Act (or any successor rule)) of less than $5,000,001 (such proposal, the "Redemption Limitation Amendment
Proposal").

 At the Extension Special Meeting on June 9,
2023, the company's stockholders approved the Extension Amendment Proposal and the Redemption Limitation Amendment Proposal. In
connection with the stockholders' vote at the Extension Special Meeting, the stockholders elected to redeem 18,141,822 shares
of XPDB Class A Common Stock at a redemption price of approximately $10.37 per share, for an aggregate redemption amount of approximately
$188,132,132 (the "June Redemptions"). After the satisfaction of the June Redemptions, the balance in the trust account as
of December 31, 2023 was approximately $114,641,527. Upon completion of the June Redemptions, 10,608,178 shares of Class A common
stock and 7,187,500 shares of Class B common stock remained issued and outstanding.

 In connection with the approval of the Extension
Amendment Proposal, the company deposited $300,000 in the trust account on June 15, 2023, July 10, 2023 and August 10, 2023 and the sponsor
deposited $300,000 in the trust account on September 8, 2023, October 10, 2023, and November 9, 2023.On December 12, 2023, the Board
approved an extension of the date by which the company must consummate an initial business combination from December 14, 2023 to
January 14, 2024.

 On January 10, 2024, the
Board approved an extension of the date by which the company must consummate an initial business combination from January 14, 2024
to February 14, 2024.

 On February 8, 2024, the Board
approved an extension of the date by which the company must consummate an initial business combination from February 14, 2024 to
March 14, 2024.

 On February 20, 2024, we filed
a definitive proxy statement for the solicitation of proxies in connection with a special meeting of stockholders of the company to consider
and vote on, among other proposals, the extension of the date by which the company must consummate an initial business combination from
March 14, 2024 to April 14, 2024, and to allow the company, without another stockholder vote, by resolution of the Board, to
elect to further extend such date in one-month increments up to three additional times until July 14, 2024 (the "2024
Extension"), unless the closing of a an initial business combination shall have occurred prior thereto, or such earlier date as
determined by the Board to be in the best interests of the company.

 Competitive Strengths

 We believe the sourcing, valuation, diligence and
execution capabilities of our management team will provide us with a significant pipeline of opportunities from which to evaluate and
select a target for an initial business combination that will benefit from our extensive experience. Our competitive strengths include
the following:

 TEP's leadership has 20 years of experience and decades-long relationships across the energy & power industry to facilitate proprietary and relationship-based opportunities for sourcing and improving investments;

 TEP's deep experience as an investor in carbon credits and businesses that generate carbon credits;

 TEP's leadership drives value at the investment level by leveraging industry relationships, employing rigorous underwriting and risk management acumen, and macroeconomic and financial insight;

 Senior leadership has more than 20 years of energy & power investing experience through multiple commodity/economic cycles;

 XMS' partners average over 25 years of investment banking experience;

 XMS has the expertise to advise across the entire range of strategic and financial alternatives - M&A, capital structure, financings, takeover and activist preparation, dividend policy, restructuring;

 XMS Capital has world class execution with expertise navigating all potential process dynamics and nuances, and has executed transactions in virtually every industry, sector, and vertical; and

 The XMS and TEP teams have decades of combined experience in sourcing deals with a demonstrated track record of successfully executing transactions.

 Business Strategy

 Our business strategy is to identify and complete
an initial business combination that creates substantial long-term value for our stockholders. We will seek North American targets operating
as leaders in the power and digital infrastructure areas and adjacent industries to capitalize on co-optimization opportunities, where
they exist. We believe the network of proprietary and relationship-based opportunities of the management, combined with its rigorous underwriting
and risk management acumen, and macroeconomic and financial insight, will allow us to effectively and efficiently identify and evaluate
potential opportunities for our initial business combination. In addition to our network and expertise, we plan to leverage XMS'
world class execution with expertise navigating all potential process dynamics and nuances, to extend our access to opportunities. We
will seek to:

 Bridge the gap between renewable energy and storage assets with high-density energy consumers in the digital infrastructure industry with a co-optimization strategy, where it's present and actionable;

 Optimize renewable energy resource integration into the transmission and distribution grid using power technology, equipment and services;

 Utilize more sustainable power to satisfy the energy demands of the ever-increasing data center and blockchain digital infrastructure industries;

 Provide a public currency to facilitate rapid growth through acquisition as the electrical grid transitions in these high-growth renewable energy supply and digital infrastructure demand markets;

 Leverage the management team's and Board's deep expertise and deal flow across both the power and digital infrastructure industries which will provide a large opportunity set for XPDI II to pursue both as the initial target for the SPAC, as well as for follow-on acquisitions; and

 Capitalize on TEP's long-standing relationships across the energy & power industry to facilitate proprietary and relationship-based opportunities for sourcing and improving investments.

 Our company is supported by a full management team
with deep expertise and deal flow across both the intermittent renewable and dispatchable power and digital infrastructure industries.
Our operations are overseen by an experienced Board of Directors with deep knowledge developed through extensive M&A, financing transactions,
and entrepreneurial ventures. Our management team brings extensive knowledge and a developed network.

 We believe that the evolving transition taking
place in the electrical power and digital infrastructure landscape has created and will continue to create significant opportunity for
co-optimization from renewable energy resources, expanding their integration into the transmission and distribution grid, and utilizing
the more sustainable power to satisfy the demands of the ever-increasing high-density electrical needs of data centers and blockchain
infrastructure.

 Acquisition Criteria

 The following general criteria and guidelines were
developed to evaluate prospective target businesses, consistent with our Business Strategy.

 These criteria and guidelines will be used in evaluating
acquisition opportunities, but the target business that we decide to enter into our initial business combination with may not meet all
of the criteria and guidelines listed below. We may also consider other criteria and/or guidelines not listed below. We intend to acquire
a business or an entity that we believe:

 Has demonstrated, or has the potential to develop, fundamentally sound financial performance, with visibility into revenue and cash flow growth and relatively predictable future financial performance;

 Exhibits unique business attributes and/or product offerings that provide us confidence on the long-term profitability and outlook of the company;

 Is directed by an exemplary and accomplished management team with a proven track record and complementary capabilities, or is open to augmenting the existing leadership team's capabilities with additional talent through our network; and

 Embraces the potential to maximize the value to our stockholders, through utilizing our industry experience, as well as our operating, strategic, financing and M&A capabilities.

 The list of criteria and guidelines are not intended
to be exhaustive. Any evaluation of the merits of a particular initial business combination may be based on the above criteria and guidelines
as well as other factors and considerations that our management and our sponsors may deem appropriate. Should we elect to enter into our
initial business combination with a target business that does not meet the above criteria and guidelines, it will be disclosed in any
stockholder communications related to our initial business combination that the target business does not meet the above criteria.

 Initial Business Combination

 In accordance with the rules of the Nasdaq, our initial business combination
must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of the assets held in
the trust account (excluding the amount of deferred underwriting discounts held in trust and taxes payable by us on the income earned
on the trust account) at the time of our signing a definitive agreement in connection with our initial business combination. If our Board
is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion from an independent
investment banking firm or an independent valuation or appraisal firm with respect to satisfaction of such criteria. Our stockholders
may not be provided with a copy of such opinion nor will they be able to rely on such opinion. We do not intend to purchase multiple businesses
in unrelated industries in conjunction with our initial business combination. Subject to this requirement, our management has virtually
unrestricted flexibility in identifying and selecting one or more prospective businesses, although we are not permitted to effectuate
our initial business combination solely with another blank check company or a similar company with nominal operations. We anticipate structuring
our initial business combination so that the post-transaction company in which our public stockholders own shares will own or acquire
100% of the equity interests or assets of the target business or businesses. We may, however, structure our initial business combination
such that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order to
meet certain objectives of the prior owners of the target business, the target management team or stockholders or for other reasons, but
we will only complete such business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting
securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as
an investment company under the Investment Company Act. Even if the post-transaction company owns or acquires 50% or more of the voting
securities of the target, our stockholders prior to the business combination may collectively own a minority interest in the post-transaction
company, depending on valuations ascribed to the target and us in the business combination transaction. For example, we could pursue a
transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock, shares or other
equity interests of a target. In this case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance
of a substantial number of new shares, our stockholders immediately prior to our initial business combination could own less than a majority
of our issued and outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or assets
of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that
is owned or acquired is what will be valued for purposes of the 80% of net assets test. If the business combination involves more than
one target business, the 80% of net assets test will be based on the aggregate value of all of the target businesses and we will treat
the target businesses together as the initial business combination for purposes of a tender offer or for seeking stockholder approval,
as applicable.

 To the extent we effect our initial business combination
with a company or business that may be financially unstable or in its early stages of development or growth, we may be affected by numerous
risks inherent in such company or business. Although our management will endeavor to evaluate the risks inherent in a particular target
business, we cannot assure you that we will properly ascertain or assess all significant risk factors. In evaluating a prospective target
business, we expect to conduct a thorough due diligence review which will encompass, among other things, meetings with incumbent management
and employees, document reviews, inspection of facilities, as well as a review of financial, operational, legal and other information
which will be made available to us.

 The time required to select and evaluate a target
business and to structure and complete our initial business combination, and the costs associated with this process, are not currently
ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of a prospective target
business with which our initial business combination is not ultimately completed will result in our incurring losses and will reduce the
funds we can use to complete another business combination.

 Potential Conflicts of Interest

 We are not prohibited from pursuing an initial
business combination with a company that is affiliated with our sponsor, officers, directors. or any of their affiliates. In the event
we seek to complete our initial business combination with a company that is affiliated with our sponsor, officers, or directors, we, or
a committee of independent directors, will obtain an opinion from an independent investment banking firm or another valuation or appraisal
firm that commonly renders fairness opinions that our initial business combination is fair to our company from a financial point of view.

 Our sponsor and directors directly or indirectly
own founder shares, Class A common stock and/or private placement warrants following our IPO and, accordingly, may have a conflict of
interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business
combination. In particular, because the founder shares were purchased at approximately $0.004 per share, the holders of our founder shares
(including members of our management team that directly or indirectly own founder shares) could make a substantial profit after our initial
business combination even if our public stockholders lose money on their investment as a result of a decrease in the post-combination
value of their shares of common stock (after accounting for any adjustments in connection with an exchange or other transaction contemplated
by the business combination). Further, each of our officers and directors may have a conflict of interest with respect to evaluating a
particular business combination if the retention or resignation of any such officers and directors was included by a target business as
a condition to any agreement with respect to our initial business combination.

 Each of our officers and directors presently has,
and any of them in the future may have additional, fiduciary or contractual obligations to other entities pursuant to which such officer
or director is or will be required to present a business combination opportunity to such entities, including as described above. Accordingly,
if any of our officers or directors becomes aware of a business combination opportunity that is suitable for an entity to which he or
she has then current fiduciary or contractual obligations, including one or more other blank check companies, he or she will honor his
or her fiduciary or contractual obligations to present such business combination opportunity to such other entity, subject to their fiduciary
duties under Delaware law.

 Certain of our directors and officers have invested, directly or indirectly,
in Montana Technologies LLC ("Montana Technologies").

 Status as a Public Company

 We believe our structure will make us an attractive
business combination partner to target businesses. As an existing public company, we offer a target business an alternative to the traditional
initial public offering through a merger or other business combination with us. In a business combination transaction with us, the owners
of the target business may, for example, exchange their shares of stock, shares or other equity interests in the target business for our
Class A common stock (or shares of a new holding company) or for a combination of our Class A common stock and cash, allowing us to tailor
the consideration to the specific needs of the sellers. We believe target businesses will find this method a more expeditious and cost
effective method to becoming a public company than the typical initial public offering. The typical initial public offering process takes
a significantly longer period of time than the typical business combination transaction process, and there are significant expenses in
the initial public offering process, including underwriting discounts and commissions, that may not be present to the same extent in connection
with a business combination with us.

 Furthermore, once a proposed business combination
is completed, the target business will have effectively become public, whereas an initial public offering is always subject to the underwriters'
ability to complete the offering, as well as general market conditions, which could delay or prevent the offering from occurring or could
have negative valuation consequences. Once public, we believe the target business would then have greater access to capital, an additional
means of providing management incentives consistent with stockholders' interests and the ability to use its shares as currency for
acquisitions. Being a public company can offer further benefits by augmenting a company's profile among potential new customers
and vendors and aid in attracting talented employees.

 While we believe that our structure and our management
team's backgrounds will make us an attractive business partner, some potential target businesses may view our status as a blank
check company, such as our lack of an operating history and our ability to seek stockholder approval of any proposed initial business
combination, negatively.

 Financial Position

 With funds available for a business combination from our IPO and the
sale of the private placement warrants, after the satisfaction of the June Redemptions, the balance in the trust account as of December
31, 2023 was approximately $114,641,527. After payment of approximately $6 million of deferred underwriting fees, we offer a target business
a variety of options such as creating a liquidity event for its owners, providing capital for the potential growth and expansion of its
operations or strengthening its balance sheet by reducing its debt leverage ratio. Because we are able to complete our initial business
combination using our cash, debt or equity securities, or a combination of the foregoing, we have the flexibility to use the most efficient
combination that will allow us to tailor the consideration to be paid to the target business to fit its needs and desires. However, we
have not taken any steps to secure third party financing and there can be no assurance it will be available to us.

 Effecting our Initial Business Combination

 Our entire activity since inception up to December
31, 2023 has been related to our formation, preparation for the IPO, and since the closing of the IPO, the search for a prospective initial
business combination. We intend to effectuate our initial business combination using cash from the proceeds of our IPO, the private placements
of the private placement warrants, our equity, debt or a combination of these as the consideration to be paid in our initial business
combination. We may seek to complete our initial business combination with a company or business that may be financially unstable or in
its early stages of development or growth, which would subject us to the numerous risks inherent in such companies and businesses.

 If our initial business combination is paid for using equity or debt
securities, or not all of the funds released from the trust account are used for payment of the consideration in connection with our initial
business combination or used for redemptions of our Class A common stock, we may apply the balance of the cash released to us from the
trust account for general corporate purposes, including for maintenance or expansion of operations of the post-transaction company, the
payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of
other companies or for working capital.

 Although our management will assess the risks inherent
in a particular target business with which we may combine, we cannot assure you that this assessment will result in our identifying all
risks that a target business may encounter. Furthermore, some of those risks may be outside of our control, meaning that we can do nothing
to control or reduce the chances that those risks will adversely affect a target business.

 We may need to obtain additional financing to complete our initial
business combination, either because the transaction requires more cash than is available from the proceeds held in our trust account,
or because we become obligated to redeem a significant number of our public shares upon completion of the business combination, in which
case we may issue additional securities or incur debt in connection with such business combination. There are no prohibitions on our ability
to issue securities or incur debt in connection with our initial business combination. We are not currently a party to any arrangement
or understanding with any third party with respect to raising any additional funds through the sale of securities, the incurrence of debt
or otherwise.

 Sources of Target Businesses

 Our process of identifying acquisition targets
will leverage XMS, TEP, our sponsor and our management team's industry experiences, proven deal sourcing capabilities and broad
and deep network of relationships in numerous industries, including executives and management teams, private equity groups and other institutional
investors, large business enterprises, lenders, investment bankers and other investment market participants, restructuring advisers, consultants,
attorneys and accountants, which we believe should provide us with a number of business combination opportunities. We expect that the
collective experience, capability and network of XMS, TEP, our directors and officers, combined with their individual and collective reputations
in the investment community, will help to create prospective business combination opportunities. In addition, we anticipate that target
business candidates may be brought to our attention from various unaffiliated sources, including investment bankers and private investment
funds. Target businesses may be brought to our attention by such unaffiliated sources as a result of being solicited by us through calls
or mailings. These sources may also introduce us to target businesses in which they think we may be interested on an unsolicited basis,
since many of these sources will have read this Report and know what types of businesses we are targeting. Our officers and directors,
as well as their affiliates, may also bring to our attention target business candidates of which they become aware through their business
contacts as a result of formal or informal inquiries or discussions they may have, as well as attending trade shows or conventions.

 We also expect to receive a number of proprietary deal flow opportunities
that would not otherwise necessarily be available to us as a result of the business relationships of our officers and directors. While
we do not presently anticipate engaging the services of professional firms or other individuals that specialize in business acquisitions
on any formal basis, we may engage these firms or other individuals in the future, in which event we may pay a finder's fee, consulting
fee or other compensation to be determined in an arm's length negotiation based on the terms of the transaction. We will engage
a finder only to the extent our management determines that the use of a finder may bring opportunities to us that may not otherwise be
available to us or if finders approach us on an unsolicited basis with a potential transaction that our management determines is in our
best interest to pursue. Payment of finder's fees is customarily tied to completion of a transaction, in which case any such fee
will be paid out of the funds held in the trust account. In no event, however, will either of our sponsor or any of our existing officers
or directors, or any entity with which they are affiliated, be paid any finder's fee, consulting fee or other compensation by the
company prior to, or for any services they render in order to effectuate, the completion of our initial business combination (regardless
of the type of transaction that it is). However, these individuals will be reimbursed for any out-of-pocket expenses incurred in connection
with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations.

 We are not prohibited from pursuing an initial
business combination with a business combination target that is affiliated with our sponsor, officers or directors or from making the
acquisition through a joint venture or other form of shared ownership with our sponsor, officers or directors. In the event we seek to
complete our initial business combination with a business combination target that is affiliated with our sponsor, executive officers or
directors, we, or a committee of independent directors, would obtain an opinion from an independent investment banking firm or an independent
accounting firm, that such an initial business combination is fair to our company from a financial point of view. We are not required
to obtain such an opinion in any other context.

 Each of our officers and directors presently has,
and any of them in the future may have additional, fiduciary or contractual obligations to other entities, including entities that are
affiliates of our sponsor, pursuant to which such officer or director is or will be required to present a business combination opportunity
to such entity.

 Accordingly, if our sponsor or its affiliates or
our officers or directors becomes aware of a business combination opportunity that is suitable for an entity to which he or she has then-current
fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such business combination
opportunity to such entity, subject to their fiduciary duties under Delaware law.

 Evaluation of a Target Business and Structuring of our Initial Business
Combination

 Our initial business combination must occur with one or more target
businesses that together have an aggregate fair market value of at least 80% of our assets held in the trust account (excluding the deferred
underwriting commissions and taxes payable by us on the income earned on the trust account) at the time of the agreement to enter into
the initial business combination. The fair market value of the target or targets will be determined by our Board based upon one or more
standards generally accepted by the financial community, such as discounted cash flow valuation or value of comparable businesses. If
our Board is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion
from an independent investment banking firm, or from an independent accounting firm, with respect to the satisfaction of such criteria.
We do not intend to purchase multiple businesses in unrelated industries in conjunction with our initial business combination. Subject
to this requirement, our management will have virtually unrestricted flexibility in identifying and selecting one or more prospective
target businesses, although we will not be permitted to effectuate our initial business combination with another blank check company or
a similar company with nominal operations.

 In any case, we will only complete an initial business
combination in which we own or acquire 50% or more of the outstanding voting securities of the target or otherwise acquire a controlling
interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act. If
we own or acquire less than 100% of the equity interests or assets of a target business or businesses, the portion of such business or
businesses that are owned or acquired by the post-transaction company is what will be valued for purposes of the 80% of net assets test.
There is no basis for investors in our IPO to evaluate the possible merits or risks of any target business with which we may ultimately
complete our business combination.

 To the extent we effect our business combination
with a company or business that may be financially unstable or in its early stages of development or growth we may be affected by numerous
risks inherent in such company or business. Although our management will endeavor to evaluate the risks inherent in a particular target
business, we cannot assure you that we will properly ascertain or assess all significant risk factors.

 In evaluating a prospective target business, we
expect to conduct a thorough due diligence review, which will encompass, among other things, meetings with incumbent management and employees,
document reviews, interviews of customers and suppliers, inspection of facilities, as well as a review of financial, operational, legal
and other information which will be made available to us. If we determine to move forward with a particular target, we will proceed to
structure and negotiate the terms of the business combination transaction.

 The time required to select and evaluate a target
business and to structure and complete our initial business combination, and the costs associated with this process, are not currently
ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of, and negotiation with,
a prospective target business with which our initial business combination is not ultimately completed will result in our incurring losses
and will reduce the funds we can use to complete another business combination. The company will not pay any consulting fees to members
of our management team, or any of their respective affiliates, for services rendered to or in connection with our initial business combination.

 Lack of Business Diversification

 For an indefinite period of time after the completion
of our initial business combination, the prospects for our success may depend entirely on the future performance of a single business.
Unlike other entities that have the resources to complete business combinations with multiple entities in one or several industries, it
is probable that we will not have the resources to diversify our operations and mitigate the risks of being in a single line of business.
By completing our initial business combination with only a single entity, our lack of diversification may:

 subject us to negative economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact on the particular industry in which we operate after our initial business combination and

 cause us to depend on the marketing and sale of a single product or limited number of products or services.

 Limited Ability to Evaluate the Target's Management Team

 Although we intend to closely scrutinize the management
of a prospective target business when evaluating the desirability of effecting our initial business combination with that business, our
assessment of the target business's management may not prove to be correct. In addition, the future management may not have the
necessary skills, qualifications or abilities to manage a public company. Furthermore, the future role of members of our management team,
if any, in the target business cannot presently be stated with any certainty. The determination as to whether any of the members of our
management team will remain with the combined company (as defined below) will be made at the time of our initial business combination.
While it is possible that one or more of our directors will remain associated in some capacity with us following our initial business
combination, it is unlikely that any of them will devote their full efforts to our affairs subsequent to our initial business combination.
Moreover, we cannot assure you that members of our management team will have significant experience or knowledge relating to the operations
of the particular target business.

 We cannot assure you that any of our key personnel
will remain in senior management or advisory positions with the combined company. The determination as to whether any of our key personnel
will remain with the combined company will be made at the time of our initial business combination.

 Following a business combination, we may seek to
recruit additional managers to supplement the incumbent management of the target business. We cannot assure you that we will have the
ability to recruit additional managers, or that additional managers will have the requisite skills, knowledge or experience necessary
to enhance the incumbent management.

 Stockholders May Not Have the Ability to Approve our Initial Business
Combination

 We may conduct redemptions without a stockholder
vote pursuant to the tender offer rules of the SEC subject to the provisions of our amended and restated certificate of incorporation.
However, we will seek stockholder approval if it is required by law or applicable stock exchange rule, or we may decide to seek stockholder
approval for business or other legal reasons.

 Under the Nasdaq's listing rules, stockholder
approval would be required for our initial business combination if, for example:

 we issue shares of common stock that will be equal to or in excess of 20% of the number of our shares of common stock then outstanding (other than in a public offering);

 any of our directors, officers or substantial stockholders (as defined by the Nasdaq rules) has a 5% or greater interest (or such persons collectively have a 10% or greater interest), directly or indirectly, in the target business or assets to be acquired or otherwise and the present or potential issuance of common stock could result in an increase in outstanding common stock or voting power of 5% or more; or

 the issuance or potential issuance of common stock will result in our undergoing a change of control.

 The decision as to whether we will seek stockholder
approval of a proposed business combination in those instances in which stockholder approval is not required by law will be made by us,
solely in our discretion, and will be based on business and legal reasons, which include a variety of factors, including, but not limited
to:

 the timing of the transaction, including in the event we determine stockholder approval would require additional time and there is either not enough time to seek stockholder approval or doing so would place the company at a disadvantage in the transaction or result in other additional burdens on the company;

 the expected cost of holding a stockholder vote;

 the risk that the stockholders would fail to approve the proposed business combination;

 other time and budget constraints of the company; and

 additional legal complexities of a proposed business combination that would be time-consuming and burdensome to present to stockholders.

 Permitted Purchases of Our Securities

 If we seek stockholder approval of our initial business combination
and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor,
directors, executive officers, advisors or their affiliates may purchase shares or public warrants in privately negotiated transactions
or in the open market prior to the completion of our initial business combination. However, they have no current commitments, plans or
intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds
in the trust account will be used to purchase shares or public warrants in such transactions. If they engage in such transactions, they
will not make any such purchases when they are in possession of any material non-public information not disclosed to the seller or if
such purchases are prohibited by Regulation M under the Exchange Act.

 Such a purchase may include a contractual acknowledgment
that such stockholder, although still the record holder of our shares is no longer the beneficial owner thereof and therefore agrees not
to exercise its redemption rights. In the event that our sponsor, directors, officers, advisors or their affiliates purchase shares in
privately negotiated transactions from public stockholders who have already elected to exercise their redemption rights, such selling
stockholders would be required to revoke their prior elections to redeem their shares. We do not currently anticipate that such purchases,
if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject
to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases
are subject to such rules, the purchasers will comply with such rules.

 The purpose of any such purchases of shares could
be to (i) vote such shares in favor of the business combination and thereby increase the likelihood of obtaining stockholder approval
of the business combination or (ii) to satisfy a closing condition in an agreement with a target that requires us to have a minimum net
worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise
not be met. The purpose of any such purchases of public warrants could be to reduce the number of public warrants outstanding or to vote
such warrants on any matters submitted to the warrant holders for approval in connection with our initial business combination. Any such
purchases of our securities may result in the completion of our initial business combination that may not otherwise have been possible.

 In addition, if such purchases are made, the public
"float" of our Class A common stock or public warrants may be reduced and the number of beneficial holders of our securities
may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities
exchange.

 Our sponsor, officers, directors and/or their affiliates anticipate
that they may identify the stockholders with whom our sponsor, officers, directors or their affiliates may pursue privately negotiated
purchases by either the stockholders contacting us directly or by our receipt of redemption requests submitted by stockholders (in the
case of our Class A common stock) following our mailing of proxy materials in connection with our initial business combination. To the
extent that our sponsor, officers, directors, advisors or their affiliates enter into a private purchase, they would identify and contact
only potential selling stockholders who have expressed their election to redeem their shares for a pro rata share of the trust account
or vote against our initial business combination, whether or not such stockholder has already submitted a proxy with respect to our initial
business combination but only if such shares have not already been voted at the stockholder meeting related to our initial business combination.
Our sponsor, executive officers, directors, advisors or any of their affiliates will select which stockholders to purchase shares from
based on the negotiated price and number of shares and any other factors that they may deem relevant, and will only purchase shares if
such purchases comply with Regulation M under the Exchange Act and the other federal securities laws.

 Any purchases by our sponsor, officers, directors
and/or their affiliates who are affiliated purchasers under Rule 10b-18 under the Exchange Act will only be made to the extent such purchases
are able to be made in compliance with Rule 10b-18, which is a safe harbor from liability for manipulation under Section 9(a)(2) and Rule
10b-5 of the Exchange Act. Rule 10b-18 has certain technical requirements that must be complied with in order for the safe harbor to be
available to the purchaser. Our sponsor, officers, directors and/or their affiliates will not make purchases of shares if the purchases
would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act. Any such purchases will be reported pursuant to Section 13 and Section
16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements.

 Redemption Rights for Public Stockholders upon Completion of our
Initial Business Combination

 We will provide our public stockholders with the opportunity to redeem
all or a portion of their Class A common stock upon the completion of our initial business combination at a per-share price, payable in
cash, equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the completion of
the initial business combination, including interest earned on the funds held in the trust account and not previously released to us to
pay our taxes, if any, divided by the number of then outstanding public shares, subject to the limitations described herein. The amount
in the trust account as of December 31, 2023 was approximately $10.80 per public share. The per-share amount we will distribute to investors
who properly redeem their shares will not be reduced by the deferred underwriting commissions we will pay to the underwriters. The redemption
rights will include the requirement that a beneficial holder must identify itself in order to validly redeem its shares. There will be
no redemption rights upon the completion of our initial business combination with respect to our warrants. Our sponsor, directors, each
other member of our management team and the anchor investors have entered into agreements with us, pursuant to which they have agreed
to waive their redemption rights with respect to any founder shares and any public shares in connection with (i) the completion of our
initial business combination and (ii) a stockholder vote to approve an amendment to our amended and restated certificate of incorporation
that would affect the substance or timing of our obligation to provide holders of shares of Class A common stock the right to have their
shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we have not completed an
initial business combination by March 14, 2024 (or such later date approved by the stockholders or the Board in accordance with our amended
and restated certificate of incorporation, including the 2024 Extension).

 Manner of Conducting Redemptions

 We will provide our public stockholders with the
opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination either (i) in connection
with a stockholder meeting called to approve the business combination or (ii) by means of a tender offer. The decision as to whether we
will seek stockholder approval of a proposed business combination or conduct a tender offer will be made by us, solely in our discretion,
and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would require
us to seek stockholder approval under applicable law or stock exchange listing requirement or whether we were deemed to be a foreign private
issuer (which would require a tender offer rather than seeking stockholder approval under SEC rules). Asset acquisitions and share purchases
would not typically require stockholder approval while direct mergers with our company where we do not survive and any transactions where
we issue more than 20% of our shares of outstanding common stock or seek to amend our amended and restated certificate of incorporation
would require stockholder approval. We currently intend to conduct redemptions in connection with a stockholder vote unless stockholder
approval is not required by applicable law or stock exchange listing requirement and we choose to conduct redemptions pursuant to the
tender offer rules of the SEC for business or other legal reasons. So long as we obtain and maintain a listing for our securities on the
Nasdaq, we will be required to comply with the Nasdaq rules.

 If we held a stockholder vote to approve our initial
business combination, we will, pursuant to our amended and restated certificate of incorporation:

 conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules and

 file proxy materials with the SEC.

 In the event that we seek stockholder approval
of our initial business combination, we will distribute proxy materials and, in connection therewith, provide our public stockholders
with the redemption rights described above upon completion of the initial business combination.

 If we seek stockholder approval, we will complete
our initial business combination only if a majority of the outstanding shares of common stock are voted by the stockholders at a stockholders
meeting to approve the initial business combination, unless applicable law, our corporate governing documents or applicable stock exchange
rules require a different vote, in which case we will complete our initial business combination only if such requisite vote is received.
A quorum for such meeting will consist of the holder present in person or by proxy of shares of outstanding capital stock of the company
representing a majority of the voting power of all outstanding shares of capital stock of the company entitled to vote at such meeting.
Our initial stockholders and the anchor investors will count towards this quorum and, pursuant to the terms of a letter agreement entered
into with us, our sponsor, directors and each member of our management team have agreed to vote their founder shares and any public shares
purchased during or after our IPO, in favor of our initial business combination. For purposes of seeking approval of the majority of our
outstanding shares of common stock voted, non-votes will have no effect on the approval of our initial business combination once a quorum
is obtained. As a result, in addition to our initial stockholders' founder shares, we would need 1,710,340, or 16.1%, of the 10,608,178
public shares remaining after the June Redemptions to be voted in favor of an initial business combination in order to have our initial
business combination approved (assuming all issued and outstanding shares are voted). Also, as a result of the founder shares and private
placement warrants that our anchor investors may hold (directly or indirectly), they may have different interests with respect to a vote
on an initial business combination than other public stockholders. These quorum and voting thresholds, and the voting agreements of our
initial stockholders, may make it more likely that we will complete our initial business combination. Each public stockholder may elect
to redeem its public shares irrespective of whether they vote for or against the proposed transaction or whether they were a stockholder
on the record date for the stockholder meeting held to approve the proposed transaction. In addition, our sponsor, directors, each other
member of our management team and the anchor investors have entered into agreements with us, pursuant to which they have agreed to waive
their redemption rights with respect to their founder shares and public shares in connection with (i) the completion of a business combination
and (ii) a stockholder vote to approve an amendment to our amended and restated certificate of incorporation that would affect the substance
or timing of our obligation to provide holders of shares of Class A common stock the right to have their shares redeemed in connection
with our initial business combination or to redeem 100% of our public shares if we have not completed an initial business combination
by March 14, 2024 (or such later date approved by the stockholders or the Board in accordance with our amended and restated certificate
of incorporation, including the 2024 Extension).

 If, however, stockholder approval of the transaction
is required by law or stock exchange listing requirement, or we decide to obtain stockholder approval for business or other legal reasons,
we will, pursuant to our amended and restated certificate of incorporation:

 conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers and

 file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies.

 Upon the public announcement of our initial business
combination, we or our sponsor will terminate any plan established in accordance with Rule 10b5-1 to purchase Class A common stock in
the open market if we elect to redeem our public shares through a tender offer, to comply with Rule 14e-5 under the Exchange Act.

 In the event we conduct redemptions pursuant to
the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a) under the
Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender offer period.
In addition, the tender offer will be conditioned on public stockholders not tendering more than the number of public shares we are permitted
to redeem. If public stockholders tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete
the initial business combination.

 Redemptions of our public shares may be subject
to a net tangible asset test or cash requirement pursuant to an agreement relating to our initial business combination. For example, the
proposed business combination may require: (i) cash consideration to be paid to the target or its owners, (ii) cash to be transferred
to the target for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions in accordance
with the terms of the proposed business combination. In the event the aggregate cash consideration we would be required to pay for all
shares of our Class A common stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant
to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the business
combination or redeem any shares, and all shares of our Class A common stock submitted for redemption will be returned to the holders
thereof.

 Limitation on Redemption upon Completion of Our Initial Business
Combination If We Seek Stockholder Approval

 Notwithstanding the foregoing, if we seek stockholder
approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant
to the tender offer rules, our amended and restated certificate of incorporation provides that a public stockholder, together with any
affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a "group" (as defined
under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to the excess shares. We believe
this restriction will discourage stockholders from accumulating large blocks of shares, and subsequent attempts by such holders to use
their ability to exercise their redemption rights against a proposed business combination as a means to force us or our management to
purchase their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this provision,
a public stockholder holding more than an aggregate of 15% of the shares sold in our IPO could threaten to exercise its redemption rights
if such holder's shares are not purchased by us, our sponsor or our management at a premium to the then-current market price or
on other undesirable terms. By limiting our stockholders' ability to redeem no more than 15% of the shares sold in our IPO without
our prior consent, we believe we will limit the ability of a small group of stockholders to unreasonably attempt to block our ability
to complete our initial business combination, particularly in connection with a business combination with a target that requires as a
closing condition that we have a minimum net worth or a certain amount of cash. However, we would not be restricting our stockholders'
ability to vote all of their shares (including excess shares) for or against our initial business combination.

 Tendering Share Certificates in Connection with a Tender Offer or
Redemption Rights

 Public stockholders seeking to exercise their redemption
rights, whether they are record holders or hold their shares in "street name," will be required to either tender their certificates
(if any) to our transfer agent prior to the date set forth in the proxy solicitation or tender offer materials, as applicable, mailed
to such holders, or to deliver their shares to the transfer agent electronically using The Depository Trust Company's DWAC (Deposit/Withdrawal
At Custodian) System, at the holder's option, in each case up to two business days prior to the initially scheduled vote to approve
the business combination. The proxy solicitation or tender offer materials, as applicable, that we will furnish to holders of our public
shares in connection with our initial business combination will indicate the applicable delivery requirements, which will include the
requirement that a beneficial holder must identify itself in order to validly redeem its shares. Accordingly, a public stockholder would
have from the time we send out our tender offer materials until the close of the tender offer period, or up to two days prior to the initial
vote on the business combination if we distribute proxy materials, as applicable, to tender its shares if it wishes to seek to exercise
its redemption rights. Given the relatively short period in which to exercise redemption rights, it is advisable for stockholders to use
electronic delivery of their public shares.

 There is a nominal cost associated with the above-referenced
tendering process and the act of certificating the shares or delivering them through the DWAC System. The transfer agent will typically
charge the tendering broker a fee of approximately $80.00 and it would be up to the broker whether or not to pass this cost on to the
redeeming holder. However, this fee would be incurred regardless of whether or not we require holders seeking to exercise redemption rights
to tender their shares. The need to deliver shares is a requirement of exercising redemption rights regardless of the timing of when such
delivery must be effectuated.

 The foregoing is different from the procedures
used by many blank check companies. In order to perfect redemption rights in connection with their business combinations, many blank check
companies would distribute proxy materials for the stockholders' vote on an initial business combination, and a holder could simply
vote against a proposed business combination and check a box on the proxy card indicating such holder was seeking to exercise his or her
redemption rights. After the business combination was approved, the company would contact such stockholder to arrange for him or her to
deliver his or her certificate to verify ownership. As a result, the stockholder then had an "option window" after the completion
of the business combination during which he or she could monitor the price of our shares in the market. If the price rose above the redemption
price, he or she could sell his or her shares in the open market before actually delivering his or her shares to the company for cancellation.
As a result, the redemption rights, to which stockholders were aware they needed to commit before the general meeting, would become "option"
rights surviving past the completion of the business combination until the redeeming holder delivered its certificate. The requirement
for physical or electronic delivery prior to the meeting ensures that a redeeming stockholder's election to redeem is irrevocable
once the business combination is approved.

 Any request to redeem such shares, once made, may be withdrawn at any
time up to two business days prior to the vote on the proposal to approve the business combination, unless otherwise agreed to by us.
Furthermore, if a holder of a public share delivered its certificate in connection with an election of redemption rights and subsequently
decides prior to the applicable date not to elect to exercise such rights, such holder may simply request that the transfer agent return
the certificate (physically or electronically). It is anticipated that the funds to be distributed to holders of our public shares electing
to redeem their shares will be distributed promptly after the completion of our initial business combination. If our initial business
combination is not approved or completed for any reason, then our public stockholders who elected to exercise their redemption rights
would not be entitled to redeem their shares for the applicable pro rata share of the trust account. In such case, we will promptly return
any certificates delivered by public holders who elected to redeem their shares.

 If our initial proposed business combination is
not completed, we may continue to try to complete a business combination with a different target until March 14, 2024 (or such later date
approved by the stockholders or the Board in accordance with our amended and restated certificate of incorporation, including the 2024
Extension).

 Redemption of Public Shares and Liquidation if no Initial Business
Combination

 We will have until March 14, 2024 (or such later date approved by the
stockholders or the Board in accordance with our amended and restated certificate of incorporation, including the 2024 Extension) to complete
an initial business combination. If the 2024 Extension is approved, our public stockholders will not be entitled to vote on, or redeem
their shares in connection with, any additional one-month extension approved by the Board in its sole discretion. This feature is different
from some other special purpose acquisition companies, in which any extension of the company's period to complete an initial business
combination would require a vote of the company's stockholders and in connection with such vote stockholders would have the right
to redeem their public shares. Our sponsor and its affiliates or designees are not obligated to fund the trust account to extend the time
for us to complete our initial business combination.

 If we have not completed an initial business combination
within the time period set forth above or such later date as approved by our stockholders or the Board, we will: (i) cease all operations
except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the
public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest
earned on the funds held in the trust account and not previously released to us to pay our taxes, if any (less up to $100,000 of interest
to pay dissolution expenses), divided by the number of the then outstanding public shares, which redemption will completely extinguish
public stockholders' rights as stockholders (including the right to receive further liquidation distributions, if any), subject
to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders
and our Board, liquidate and dissolve, subject in each case to our obligations under Delaware law to provide for claims of creditors and
the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants,
which will expire worthless if we do not complete an initial business combination by March 14, 2024 (or such later date approved by the
stockholders or the Board in accordance with our amended and restated certificate of incorporation, including the 2024 Extension). We
expect the pro rata redemption price to be approximately $10.80 per share of common stock based on the balance of the trust account as
of December 29, 2023. However, we cannot assure you that we will in fact be able to distribute such amounts as a result of claims of creditors
which may take priority over the claims of our public stockholders.

 Our sponsor, directors and each other member of
our management team have entered into agreements with us, pursuant to which they have waived their rights to liquidating distributions
from the trust account with respect to their founder shares if we do not complete an initial business combination by March 14, 2024 (or
such later date approved by the stockholders or the Board in accordance with our amended and restated certificate of incorporation, including
the 2024 Extension). However, if our sponsor, director or other members of our management team acquire public shares in or after our IPO,
they will be entitled to liquidating distributions from the trust account with respect to such public shares if we do not complete an
initial business combination by March 14, 2024 (or such later date approved by the stockholders or the Board in accordance with our amended
and restated certificate of incorporation, including the 2024 Extension).

 Our sponsor, executive officers and directors have
agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation
that would affect the substance or timing of our obligation to provide holders of shares of Class A common stock the right to have their
shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete an initial
business combination by March 14, 2024 (or such later date approved by the stockholders or the Board in accordance with our amended and
restated certificate of incorporation, including the 2024 Extension), unless we provide our public stockholders with the opportunity to
redeem their public shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then
on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to
pay our taxes, if any (less up to $100,000 of interest to pay dissolution expenses) divided by the number of the then outstanding public
shares.

 We expect that all costs and expenses associated
with implementing our plan of dissolution, as well as payments to any creditors, will be funded from amounts remaining out of the approximately
$59,000 of proceeds held outside the trust account as of December 31, 2023 plus up to $100,000 of funds from the trust account
available to us to pay dissolution expenses, although we cannot assure you that there will be sufficient funds for such purpose. If we
were to expend all of the funds in the trust account as of December 29, 2023, the per-share redemption amount received by stockholders
upon our dissolution would be approximately $10.80. The proceeds deposited in the trust account could, however, become subject to the
claims of our creditors which would have higher priority than the claims of our public stockholders. We cannot assure you that the actual
per-share redemption amount received by stockholders will not be substantially less than $10.80. Under Section 281(b) of the DGCL, our
plan of dissolution must provide for all claims against us to be paid in full or make provision for payments to be made in full, as applicable,
if there are sufficient assets. These claims must be paid or provided for before we make any distribution of our remaining assets to our
stockholders. While we intend to pay such amounts, if any, we cannot assure you that we will have funds sufficient to pay or provide for
all creditors' claims.

 Although we will seek to have all vendors, service
providers (other than our independent auditors), prospective target businesses and other entities with which we do business execute agreements
with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public
stockholders, there is no guarantee that they will execute such agreements or even if they execute such agreements that they would be
prevented from bringing claims against the trust account including but not limited to fraudulent inducement, breach of fiduciary responsibility
or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain an advantage with
respect to a claim against our assets, including the funds held in the trust account. If any third party refuses to execute an agreement
waiving such claims to the monies held in the trust account, our management will perform an analysis of the alternatives available to
it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third party's
engagement would be significantly more beneficial to us than any alternative. Examples of possible instances where we may engage a third
party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills are believed
by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management
is unable to find a service provider willing to execute a waiver. One of the underwriters of our IPO waived such claims to the monies
held in the trust account. The other underwriters of our IPO have not executed agreements with us waiving such claims to the monies held
in the trust account. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future
as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account
for any reason. In order to protect the amounts held in the trust account, our sponsor has agreed that it will be liable to us if and
to the extent any claims by a third party for services rendered or products sold to us (other than our independent registered public accounting
firm), or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amounts in the
trust account to below the lesser of (i) $10.10 per public share, and (ii) the actual amount per public share held in the trust account
as of the date of the liquidation of the trust account if less than $10.10 per public share, due to reductions in the value of the trust
assets, in each case net of the interest that may be withdrawn to pay our taxes, if any, provided that such liability will not apply to
any claims by a third party or prospective target business that executed a waiver of any and all rights to seek access to the trust account
nor will it apply to any claims under our indemnity of the underwriters of our IPO against certain liabilities, including liabilities
under the Securities Act. In the event that an executed waiver is deemed to be unenforceable against a third party, our sponsor will not
be responsible to the extent of any liability for such third party claims. However, we have not asked our sponsor to reserve for such
indemnification obligations, nor have we independently verified whether our sponsor has sufficient funds to satisfy their indemnity obligations
and we believe that our sponsor's only assets are securities of our company. Therefore, we cannot assure you that our sponsor would
be able to satisfy those obligations. None of our officers or directors will indemnify us for claims by third parties including, without
limitation, claims by vendors and prospective target businesses.

 In the event that the proceeds in the trust account
are reduced below the lesser of (i) $10.10 per public share, and (ii) the actual amount per public share held in the trust account as
of the date of the liquidation of the trust account if less than $10.10 per public share,, due to reductions in the value of the trust
assets, in each case net of the interest which may be withdrawn to pay our taxes, if any, and our sponsor asserts that it is unable to
satisfy its indemnification obligations or that they have no indemnification obligations related to a particular claim, our independent
directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations. While we currently
expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification obligations
to us, it is possible that our independent directors in exercising their business judgment may choose not to do so in any particular instance.
Accordingly, we cannot assure you that due to claims of creditors the actual value of the per-share redemption price will not be less
than $10.10 per public share.

 We will seek to reduce the possibility that our
sponsor will have to indemnify the trust account due to claims of creditors by endeavoring to have all vendors, service providers (other
than our independent auditors), prospective target businesses or other entities with which we do business execute agreements with us waiving
any right, title, interest or claim of any kind in or to monies held in the trust account. Our sponsor will also not be liable as to any
claims under our indemnity of the underwriters of our IPO against certain liabilities, including liabilities under the Securities Act.
We will have access to up to approximately $1.7 million from the proceeds of our IPO and the sale of the private placement warrants with
which to pay any such potential claims (including costs and expenses incurred in connection with our liquidation, currently estimated
to be no more than approximately $100,000). In the event that we liquidate and it is subsequently determined that the reserve for claims
and liabilities is insufficient, stockholders who received funds from our trust account could be liable for claims made by creditors,
however such liability will not be greater than the amount of funds from our trust account received by any such stockholder.

 Under the DGCL, stockholders may be held liable
for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. The pro rata portion
of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our
initial business combination by March 14, 2024 (or such later date approved by the stockholders or the Board in accordance with our amended
and restated certificate of incorporation, including the 2024 Extension) may be considered a liquidating distribution under Delaware law.
If the corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision
for all claims against it, including a 60-day notice period during which any third-party claims can be brought against the corporation,
a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating
distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser
of such stockholder's pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder
would be barred after the third anniversary of the dissolution.

 Furthermore, if the pro rata portion of our trust
account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business
combination by March 14, 2024 (or such later date approved by the stockholders or the Board in accordance with our amended and restated
certificate of incorporation, including the 2024 Extension) is not considered a liquidating distribution under Delaware law and such redemption
distribution is deemed to be unlawful (potentially due to the imposition of legal proceedings that a party may bring or due to other circumstances
that are currently unknown), then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be
six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating distribution. If we do not
complete our initial business combination by March 14, 2024 (or such later date approved by the stockholders or the Board in accordance
with our amended and restated certificate of incorporation, including the 2024 Extension), we will: (i) cease all operations except for
the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares,
at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on
the funds held in the trust account that may be released to us to pay our taxes, if any (less up to $100,000 of interest to pay dissolution
expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders'
rights as stockholders (including the right to receive further liquidating distributions, if any) and (iii) as promptly as reasonably
possible following such redemption, subject to the approval of our remaining stockholders and our Board, dissolve and liquidate, subject
in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. Accordingly,
it is our intention to redeem our public shares as soon as reasonably possible following March 14, 2024 (or such later date approved by
the stockholders or the Board in accordance with our amended and restated certificate of incorporation, including the 2024 Extension)
and, therefore, we do not intend to comply with those procedures. As such, our stockholders could potentially be liable for any claims
to the extent of distributions received by them (but no more) and any liability of our stockholders may extend well beyond the third anniversary
of such date.

 Because we will not be complying with Section 280,
Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide for our payment of all
existing and pending claims or claims that may be potentially brought against us within the subsequent 10 years. However, because we are
a blank check company, rather than an operating company, and our operations will be limited to searching for prospective target businesses
to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment bankers, etc.) or prospective target
businesses. As described above, pursuant to the obligation contained in our underwriting agreement, we will seek to have all vendors,
service providers, prospective target businesses or other entities with which we do business execute agreements with us waiving any right,
title, interest or claim of any kind in or to any monies held in the trust account. As a result of this obligation, the claims that could
be made against us are significantly limited and the likelihood that any claim that would result in any liability extending to the trust
account is remote. Further, our sponsor may be liable only to the extent necessary to ensure that the amounts in the trust account are
not reduced below (i) $10.10 per public share, or (ii) such lesser amount per public share held in the trust account as of the date of
the liquidation of the trust account, due to reductions in value of the trust assets, in each case net of the amount of interest withdrawn
to pay taxes and will not be liable as to any claims under our indemnity of the underwriters of our IPO against certain liabilities, including
liabilities under the Securities Act. In the event that an executed waiver is deemed to be unenforceable against a third party, our sponsor
will not be responsible to the extent of any liability for such third-party claims.

 If we file a bankruptcy or winding-up petition
or an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed, the proceeds held in the trust account
could be subject to applicable bankruptcy or insolvency law, and may be included in our bankruptcy estate and subject to the claims of
third parties with priority over the claims of our stockholders. To the extent any bankruptcy claims deplete the trust account, we cannot
assure you we will be able to return the $10.10 per public share initially held in the trust account, to our public stockholders. Additionally,
if we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed,
any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy or insolvency laws as either
a "preferential transfer" or a "fraudulent conveyance." As a result, a bankruptcy or insolvency court could seek
to recover some or all amounts received by our stockholders.

 Furthermore, our Board may be viewed as having
breached its fiduciary duty to our creditors and/or may have acted in bad faith, and thereby exposing itself and our company to claims
of punitive damages, by paying public stockholders from the trust account prior to addressing the claims of creditors. We cannot assure
you that claims will not be brought against us for these reasons.

 Our public stockholders will be entitled to receive
funds from the trust account only (i) in the event of the redemption of our public shares if we do not complete an initial business combination
by March 14, 2024 (or such later date approved by the stockholders or the Board in accordance with our amended and restated certificate
of incorporation, including the 2024 Extension), (ii) in connection with a stockholder vote to amend our amended and restated certificate
of incorporation (A) to modify the substance or timing of the company's obligation to allow redemption in connection with its initial
business combination or to redeem 100% of the Class A common stock if the company has not consummated an initial business combination
by March 14, 2024 (or such later date approved by the stockholders or the Board in accordance with our amended and restated certificate
of incorporation, including the 2024 Extension) or (B) with respect to any other provisions of the amended and restated certificate of
incorporation relating to stockholders' rights or pre-initial business combination activity, or (iii) if they redeem their respective
shares for cash upon the completion of the initial business combination. Public stockholders who redeem their shares of our Class A common
stock in connection with a stockholder vote described in clause (ii) in the preceding sentence shall not be entitled to funds from the
trust account upon the subsequent completion of an initial business combination or liquidation if we have not completed an initial business
combination by March 14, 2024 (or such later date approved by the stockholders or the Board in accordance with our amended and restated
certificate of incorporation, including the 2024 Extension), with respect to such shares of our Class A common stock so redeemed. In no
other circumstances will a stockholder have any right or interest of any kind to or in the trust account. In the event we seek stockholder
approval in connection with our initial business combination, a stockholder's voting in connection with the business combination
alone will not result in a stockholder's redeeming its shares to us for an applicable pro rata share of the trust account. Such
stockholder must have also exercised its redemption rights described above. These provisions of our amended and restated certificate of
incorporation, like all provisions of our amended and restated certificate of incorporation, may be amended with a stockholder vote.

 Competition

 In identifying, evaluating and selecting a target
business for our initial business combination, we may encounter intense competition from other entities having a business objective similar
to ours, including other blank check companies, private equity groups and leveraged buyout funds, public companies and operating businesses
seeking strategic acquisitions. Many of these entities are well established and have extensive experience identifying and effecting business
combinations directly or through affiliates. Moreover, many of these competitors possess greater financial, technical, human and other
resources than us. Our ability to acquire larger target businesses will be limited by our available financial resources. This inherent
limitation gives others an advantage in pursuing the acquisition of a target business. Furthermore, our obligation to pay cash in connection
with our public stockholders who exercise their redemption rights may reduce the resources available to us for our initial business combination
and our outstanding warrants, and the future dilution they potentially represent, may not be viewed favorably by certain target businesses.
Either of these factors may place us at a competitive disadvantage in successfully negotiating an initial business combination.

 Facilities

 We currently maintain our executive offices at
321 North Clark Street, Suite 2440, Chicago, IL 60654. The cost for our use of this space is included in the $20,000 per month fee we
will pay to affiliates of our sponsor for office space, administrative and support services. We consider our current office space adequate
for our current operations.

 Human Capital Resources

 We currently have four executive officers. These
individuals are not obligated to devote any specific number of hours to our matters but they intend to devote as much of their time as
they deem necessary to our affairs until we have completed our initial business combination. The amount of time they will devote in any
time period will vary based on whether a target business has been selected for our initial business combination and the stage of the business
combination process we are in. We do not intend to have any full time employees prior to the completion of our initial business combination.

 Periodic Reporting and Financial Information

 We will provide stockholders with audited financial
statements of the prospective target business as part of the proxy solicitation or tender offer materials, as applicable, sent to stockholders
to assist them in assessing the target business. In all likelihood, these financial statements may be required to be prepared in accordance
with, or reconciled to, GAAP, or IFRS, depending on the circumstances, and the historical financial statements may be required to be audited
in accordance with the standards of the PCAOB. These financial statement requirements may limit the pool of potential target businesses
we may acquire because some targets may be unable to provide such statements in time for us to disclose such statements in accordance
with federal proxy rules and complete our initial business combination within the prescribed time frame. We cannot assure you that any
particular target business identified by us as a potential acquisition candidate will have financial statements prepared in accordance
with the requirements outlined above, or that the potential target business will be able to prepare its financial statements in accordance
with the requirements outlined above. To the extent that these requirements cannot be met, we may not be able to acquire the proposed
target business. While this may limit the pool of potential acquisition candidates, we do not believe that this limitation will be material.

 We are required to evaluate our internal control
procedures for the fiscal year ending December 31, 2023 as required by the Sarbanes-Oxley Act. Only in the event we are deemed to be a
large accelerated filer or an accelerated filer, and no longer qualify as an emerging growth company, will we be required to have our
internal control procedures audited. A target business may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding
adequacy of their internal controls. The development of the internal controls of any such entity to achieve compliance with the Sarbanes-Oxley
Act may increase the time and costs necessary to complete any such acquisition.

 We have filed a Registration Statement on Form
8-A with the SEC to voluntarily register our securities under Section 12 of the Exchange Act. As a result, we are subject to the rules
and regulations promulgated under the Exchange Act. We have no current intention of filing a Form 15 to suspend our reporting or other
obligations under the Exchange Act prior or subsequent to the completion of our initial business combination. We are an "emerging
growth company," as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such, we are eligible to take
advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not "emerging
growth companies" including, but not limited to, not being required to comply with the auditor attestation requirements of Section
404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements
and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any
golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a less
active trading market for our securities and the prices of our securities may be more volatile.

 In addition, Section 107 of the JOBS Act also provides
that an "emerging growth company" can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the
Securities Act for complying with new or revised accounting standards. In other words, an "emerging growth company" can delay
the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage
of the benefits of this extended transition period.

 We will remain an emerging growth company until
the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of our IPO, (b) in which we have
total annual gross revenue of at least $1.235 billion, or (c) in which we are deemed to be a large accelerated filer, which means the
Market Value of the shares of our Class A common stock that is held by non-affiliates equals or exceeds $700.0 million as of the prior
June 30 th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year
period. Additionally, we are a "smaller reporting company" as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting
companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited
financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of
our common stock held by non-affiliates equals or exceeds $250 million as of the end of that year's second fiscal quarter, and (2)
our annual revenues exceeded $100 million during such completed fiscal year and the market value of our common stock held by non-affiliates
exceeds $700 million as of the end of that year's second fiscal quarter.

 Item 1A. Risk Factors

 An investment in our securities involves a high
degree of risk. You should consider carefully all of the risks described below, together with the other information contained in this
Report and our final prospectus associated with our IPO, before making a decision to invest in our securities. If any of the following
events occur, our business, financial condition and operating results may be materially adversely affected. In that event, the trading
price of our securities could decline, and you could lose all or part of your investment.

 Risks Relating to our Search for, Consummation of, or Inability
to Consummate, an Initial Business Combination and Post-Business Combination Risks

 We are a recently incorporated company with no operating history
and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.

 We are a recently incorporated company incorporated
under the laws of the State of Delaware with no operating results, and we did not commence operations until obtaining funding through
our IPO. Because we lack an operating history, you have no basis upon which to evaluate our ability to achieve our business objective
of completing our initial business combination with one or more target businesses. We have no plans, arrangements or understandings with
any prospective target business concerning a business combination and may be unable to complete our initial business combination. If we
do not complete our initial business combination, we will never generate any operating revenues.

 Our public stockholders may not be afforded an opportunity to
vote on our proposed initial business combination, which means we may complete our initial business combination even though a majority
of our public stockholders do not support such a combination.

 We may choose not to hold a stockholder vote before
we complete our initial business combination if the business combination would not require stockholder approval under applicable law or
stock exchange listing requirement. For instance, if we were seeking to acquire a target business where the consideration we were paying
in the transaction was all cash, we would not be required to seek stockholder approval to complete such a transaction. Except as required
by law or stock exchange, the decision as to whether we will seek stockholder approval of a proposed business combination or will allow
stockholders to sell their shares to us in a tender offer will be made by us, solely in our discretion, and will be based on a variety
of factors, such as the timing of the transaction and whether the terms of the transaction would otherwise require us to seek stockholder
approval. Accordingly, we may complete our initial business combination even if a majority of our public stockholders do not approve of
the business combination we complete.

 Please see the section of this Report entitled
"Item 1-Stockholders May Not Have the Ability to Approve our Initial Business Combination" for additional information.

 If we seek stockholder approval of our initial business combination,
our sponsor, directors and each member of our management team have agreed to vote in favor of such initial business combination, regardless
of how our public stockholders vote.

 Our initial stockholders (including our sponsor)
own, on an as-converted basis, 20% of our outstanding shares of common stock immediately following the completion of our IPO Our initial
stockholders, directors and members of our management team also may from time to time purchase Class A common stock prior to our initial
business combination. Our amended and restated certificate of incorporation provides that, if we seek stockholder approval of an initial
business combination, such initial business combination will be approved if we receive the affirmative vote of a majority of the shares
voted at such meeting, including the founder shares. If we submit our initial business combination to our public stockholders for a vote,
pursuant to the terms of a letter agreement entered into with us, our sponsor, directors and each member of our management team have agreed
to vote their founder shares and any shares purchased during or after the offering, in favor of our initial business combination. As a
result, in addition to our initial stockholders' founder shares, we would need 1,710,340, or 16.1%, of the 10,608,178 public shares
remaining after the June Redemptions to be voted in favor of an initial business combination in order to have our initial business combination
approved (assuming all issued and outstanding shares are voted). Accordingly, if we seek stockholder approval of our initial business
combination, the agreement by our sponsor and each member of our management team to vote in favor of our initial business combination
will increase the likelihood that we will receive the requisite stockholder approval for such initial business combination.

 Your only opportunity to affect the investment decision regarding
a potential business combination may be limited to the exercise of your right to redeem your shares from us for cash.

 At the time of your investment in us, you will
not be provided with an opportunity to evaluate the specific merits or risks of one or more target businesses. Since our Board may complete
a business combination without seeking stockholder approval, public stockholders may not have the right or opportunity to vote on the
business combination, unless we seek such stockholder vote. Accordingly, your only opportunity to affect the investment decision regarding
a potential business combination may be limited to exercising your redemption rights within the period of time (which will be at least
20 business days) set forth in our tender offer documents mailed to our public stockholders in which we describe our initial business
combination.

 The ability of our public stockholders to redeem their shares
for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult for us to
enter into a business combination with a target.

 We may seek to enter into a business combination
transaction agreement with a prospective target that requires as a closing condition that we have a minimum net worth or a certain amount
of cash. If too many public stockholders exercise their redemption rights, we would not be able to meet such closing condition and, as
a result, would not be able to proceed with the business combination. Consequently, if accepting all properly submitted redemption requests
would cause our net tangible assets to be less than the amount necessary to satisfy a closing condition as described above, we would not
proceed with such redemption and the related business combination and may instead search for an alternate business combination. Prospective
targets will be aware of these risks and, thus, may be reluctant to enter into a business combination transaction with us.

 The ability of our public stockholders to exercise redemption
rights with respect to a large number of our shares may not allow us to complete the most desirable business combination or optimize our
capital structure.

 In connection with the Extension, stockholders holding 18,141,822 shares
of Class A common stock exercised their right to redeem such shares for a pro rata portion of the funds in the trust account. As a result,
approximately $188,132,132 (approximately $10.37 per share) was removed from the trust account to pay such redeeming holders.

 At the time we entered into an agreement for our initial business combination,
we did not know how many stockholders may exercise their redemption rights, and therefore structured the transaction based on our expectations
as to the number of shares that will be submitted for redemption. If we are required to use a portion of the cash in the trust account
to satisfy the minimum Aggregate Transaction Proceeds (as defined in the Merger Agreement) under the Merger Agreement, we will need to
reserve a portion of the cash in the trust account to meet such requirements, or arrange for third party financing. In addition, if a
larger number of shares are submitted for redemption than we initially expected, we may need to restructure the transaction to reserve
a greater portion of the cash in the trust account or arrange for additional third party financing. Raising additional third party financing
may involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable levels. The above considerations may
limit our ability to complete the most desirable business combination available to us or optimize our capital structure. The amount of
the deferred underwriting commissions payable to the underwriters will not be adjusted for any shares that are redeemed in connection
with an initial business combination. The per-share amount we will distribute to stockholders who properly exercise their redemption rights
will not be reduced by the deferred underwriting commission and after such redemptions, the amount held in trust will continue to reflect
our obligation to pay the entire deferred underwriting commissions.

 The ability of our public stockholders to exercise redemption
rights with respect to a large number of our shares could increase the probability that our initial business combination would be unsuccessful
and that you would have to wait for liquidation in order to redeem your shares.

 If our initial business combination agreement requires us to use a
portion of the cash in the trust account to pay the purchase price, or requires us to have a minimum amount of cash at closing, the probability
that our initial business combination would be unsuccessful is increased. If our initial business combination is unsuccessful, you would
not receive your pro rata portion of the trust account until we liquidate the trust account. If you are in need of immediate liquidity,
you could attempt to sell your shares in the open market however, at such time our shares may trade at a discount to the pro rata
amount per share in the trust account. In either situation, you may suffer a material loss on your investment or lose the benefit of funds
expected in connection with our redemption until we liquidate or you are able to sell your shares in the open market.

 The requirement that we complete an initial business combination
by March 14, 2024 (or such later date approved by the stockholders or the Board in accordance with our amended and restated certificate
of incorporation, including the 2024 Extension) may give potential target businesses leverage over us in negotiating a business combination
and may limit the time we have in which to conduct due diligence on potential business combination targets as we approach our dissolution
deadline, which could undermine our ability to complete our initial business combination on terms that would produce value for our stockholders.

 Any potential target business with which we enter
into negotiations concerning a business combination will be aware that we must complete an initial business combination by March 14, 2024
(or such later date approved by the stockholders or the Board in accordance with our amended and restated certificate of incorporation,
including the 2024 Extension). Consequently, such target business may obtain leverage over us in negotiating a business combination, knowing
that if we do not complete our initial business combination with that particular target business, we may be unable to complete our initial
business combination with any target business. This risk will increase as we get closer to the timeframe described above. In addition,
we may have limited time to conduct due diligence and may enter into our initial business combination on terms that we would have rejected
upon a more comprehensive investigation.

 We may not be able to complete an initial business combination
by March 14, 2024 (or such later date approved by the stockholders or the Board in accordance with our amended and restated certificate
of incorporation, including the 2024 Extension), in which case we would cease all operations except for the purpose of winding up and
we would redeem our public shares and liquidate, in which case our public stockholders may only receive $10.80 per public share (as of
December 29, 2023), or less than such amount in certain circumstances, and our warrants will expire worthless.

 We will have until March 14, 2024 (or such later date approved by the
stockholders or the Board in accordance with our amended and restated certificate of incorporation, including the 2024 Extension) to complete
an initial business combination. We may not be able to find a suitable target business and complete an initial business combination by
March 14, 2024 (or such later date approved by the stockholders or the Board in accordance with our amended and restated certificate of
incorporation, including the 2024 Extension). Our ability to complete our initial business combination may be negatively impacted by general
market conditions, volatility in the capital and debt markets and the other risks described herein. If we have not completed an initial
business combination within such applicable time period or such later date as approved by our stockholders or the Board, we will: (i)
cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days
thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust
account, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, if any (less
up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will
completely extinguish public stockholders' rights as stockholders (including the right to receive further liquidating distributions,
if any), subject to applicable law; and (iii) as promptly as reasonably possible following such redemption, subject to the approval of
our remaining stockholders and our Board, liquidate and dissolve, subject in each case to our obligations under Delaware law to provide
for claims of creditors and the requirements of other applicable law.

 If we seek stockholder approval of our initial business combination,
our sponsor, directors, officers, advisors and their affiliates may elect to purchase shares or public warrants from public stockholders,
which may influence a vote on a proposed business combination and reduce the public "float" of our Class A common stock.

 If we seek stockholder approval of our initial business combination
and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor,
directors, executive officers, advisors or their affiliates may purchase shares or public warrants in privately negotiated transactions
or in the open market prior to the completion of our initial business combination, where otherwise permissible under applicable laws,
rules and regulations, although they are under no obligation to do so. However, other than as expressly stated herein, they have no current
commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions.
None of the funds in the trust account will be used to purchase shares or public warrants in such transactions. Such a purchase may include
a contractual acknowledgment that such stockholder, although still the record holder of our shares is no longer the beneficial owner thereof
and therefore agrees to vote in favor of the initial business combination or abstain and in any event not to exercise its redemption rights.
In the event that our sponsor, directors, executive officers, advisors or their affiliates purchase shares in privately negotiated transactions
from public stockholders who have already elected to exercise their redemption rights, such selling stockholders would be required to
revoke their prior elections to redeem their shares. The purpose of any such purchases of shares could be to vote such shares in favor
of the business combination, or abstain, and thereby increase the likelihood of obtaining stockholder approval of the business combination
or to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash
at the closing of our initial business combination, where it appears that such requirement would otherwise not be met. The purpose of
any such purchases of public warrants could be to reduce the number of public warrants outstanding or to vote such warrants on any matters
submitted to the public warrant holders for approval in connection with our initial business combination. Any such purchases of our securities
may result in the completion of our initial business combination that may not otherwise have been possible. Any such purchases will be
reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements.
See "Item 1-Permitted Purchases of Our Securities" for a description of how our sponsor, directors, executive officers, advisors
or any of their affiliates will select which stockholders to purchase securities from in any private transaction.

 In addition, if such purchases are made, the public
"float" of our Class A common stock or public warrants and the number of beneficial holders of our securities may be reduced,
possibly making it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.

 If a stockholder fails to receive notice of our offer to redeem
our public shares in connection with our initial business combination, or fails to comply with the procedures for tendering its shares,
such shares may not be redeemed.

 We will comply with the proxy rules or tender offer
rules, as applicable, when conducting redemptions in connection with our initial business combination. Despite our compliance with these
rules, if a stockholder fails to receive our proxy solicitation or tender offer materials, as applicable, such stockholder may not become
aware of the opportunity to redeem its shares. In addition, the proxy solicitation or tender offer materials, as applicable, that we will
furnish to holders of our public shares in connection with our initial business combination will describe the various procedures that
must be complied with in order to validly redeem or tender public shares. For example, we may require our public stockholders seeking
to exercise their redemption rights, whether they are record holders or hold their shares in "street name," to either tender
their certificates to our transfer agent prior to the date set forth in the tender offer documents or proxy materials mailed to such holders,
or up to two business days prior to the vote on the proposal to approve the business combination in the event we distribute proxy materials,
or to deliver their shares to the transfer agent electronically. In the event that a stockholder fails to comply with these or any other
procedures, its shares may not be redeemed. See the section of this Report entitled "Item 1-Tendering Share Certificates in Connection
with a Tender Offer or Redemption Rights."

 You will not have any rights or interests in funds from the
trust account, except under certain limited circumstances. Therefore, to liquidate your investment, you may be forced to sell your public
shares or public warrants, potentially at a loss.

 Our public stockholders will be entitled to receive funds from the
trust account only upon the earlier to occur of: (i) our completion of an initial business combination, and then only in connection with
those shares of our Class A common stock that such stockholder properly elected to redeem, subject to the limitations described herein,
(ii) the redemption of any public shares properly tendered in connection with a stockholder vote to amend our amended and restated certificate
of incorporation (A) to modify the substance or timing of the company's obligation to allow redemption in connection with its initial
business combination or to redeem 100% of the Class A common stock if the company has not consummated an initial business combination
by March 14, 2024 (or such later date approved by the stockholders or the Board in accordance with our amended and restated certificate
of incorporation, including the 2024 Extension) or (B) with respect to any other provisions of the amended and restated certificate of
incorporation relating to stockholders' rights or pre-initial business combination activity, and (iii) the redemption of our public
shares if we have not completed an initial business by March 14, 2024 (or such later date approved by the stockholders or the Board in
accordance with our amended and restated certificate of incorporation, including the 2024 Extension), subject to applicable law and as
further described herein. Public stockholders who redeem their Class A common stock in connection with a stockholder vote described in
clause (ii) in the preceding sentence shall not be entitled to funds from the trust account upon the subsequent completion of an initial
business combination or liquidation if we have not completed an initial business combination by March 14, 2024 (or such later date approved
by the stockholders or the Board in accordance with our amended and restated certificate of incorporation, including the 2024 Extension),
with respect to such Class A common stock so redeemed. In addition, if we do not complete an initial business combination by March 14,
2024 (or such later date approved by the stockholders or the Board in accordance with our amended and restated certificate of incorporation,
including the 2024 Extension), compliance with Delaware law may require that we submit a plan of dissolution to our then-existing stockholders
for approval prior to the distribution of the proceeds held in our trust account. In that case, public stockholders may be forced to wait
beyond March 14, 2024 (or such later date approved by the stockholders or the Board in accordance with our amended and restated certificate
of incorporation, including the 2024 Extension) before they receive funds from our trust account. In no other circumstances will a public
stockholder have any right or interest of any kind in the trust account. Holders of public warrants will not have any right to the proceeds
held in the trust account with respect to the warrants. Accordingly, to liquidate your investment, you may be forced to sell your public
shares or public warrants, potentially at a loss.

 You will not be entitled to protections normally afforded to
investors of many other blank check companies.

 Since the net proceeds of our IPO and the sale of the private placement
warrants are intended to be used to complete an initial business combination with a target business that has not been selected, we may
be deemed to be a "blank check" company under the United States securities laws. However, because we have net tangible assets
in excess of $5,000,000 from the successful completion of our IPO and the sale of the private placement warrants and have filed a Current
Report on Form 8-K, including an audited balance sheet demonstrating this fact, we are exempt from rules promulgated by the SEC to protect
investors in blank check companies, such as Rule 419. Accordingly, investors will not be afforded the benefits or protections of those
rules. Among other things, this means our units will be immediately tradable and we will have a longer period of time to complete our
initial business combination than do companies subject to Rule 419. Moreover, if our IPO were subject to Rule 419, that rule would prohibit
the release of any interest earned on funds held in the trust account to us unless and until the funds in the trust account were released
to us in connection with our completion of an initial business combination.

 Because of our limited resources, the number of special purpose
acquisition companies evaluating targets and the significant competition for business combination opportunities, it may be more difficult
for us to complete our initial business combination. If we do not complete our initial business combination, our public stockholders
may receive only their pro rata portion of the funds in the trust account that are available for distribution to public stockholders,
and our warrants will expire worthless.

 In recent years, the number of special purpose
acquisition companies that have been formed has increased substantially. Many potential targets for special purpose acquisition companies
have already entered into an initial business combination, and there are still many special purpose acquisition companies preparing for
an initial public offering, as well as many such companies currently in registration. As a result, we expect to encounter intense competition
from other entities having a business objective similar to ours, including private investors (which may be individuals or investment partnerships),
other blank check companies and other entities, domestic and international, competing for the types of businesses we intend to acquire.
Many of these individuals and entities are well-established and have extensive experience in identifying and effecting, directly or indirectly,
acquisitions of companies operating in or providing services to various industries. Many of these competitors possess greater technical,
human and other resources or more local industry knowledge than we do and our financial resources will be relatively limited when contrasted
with those of many of these competitors.

 Furthermore, this competition for available targets with attractive
fundamentals or business models could cause target companies to demand improved financial terms. While we believe there are numerous target
businesses we could potentially acquire with the net proceeds of our IPO and the sale of the private placement warrants, our ability to
compete with respect to the acquisition of certain target businesses that are sizable will be limited by our available financial resources.
This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore,
we are obligated to offer holders of our public shares the right to redeem their shares for cash at the time of our initial business combination
in conjunction with a stockholder vote or via a tender offer. Target companies will be aware that this may reduce the resources available
to us for our initial business combination. Any of these obligations may place us at a competitive disadvantage in successfully negotiating
a business combination. If we do not complete our initial business combination our public stockholders may receive only their pro rata
portion of the funds in the trust account that are available for distribution to public stockholders, and our warrants will expire worthless.

 If the net proceeds of our IPO and the sale of the private placement
warrants not being held in the trust account are insufficient to allow us to operate until March 14, 2024 (or such later date approved
by the stockholders or the Board in accordance with our amended and restated certificate of incorporation, including the 2024 Extension),
it could limit the amount available to fund our search for a target business or businesses and complete our initial business combination,
and we will depend on loans from our sponsor or management team to fund our search and to complete our initial business combination.

 The funds available to us outside of the trust account to fund our
working capital requirements may not be sufficient to allow us to operate until March 14, 2024 (or such later date approved by the stockholders
or the Board in accordance with our amended and restated certificate of incorporation, including the 2024 Extension), assuming that our
initial business combination is not completed during that time. We believe that the funds available to us outside of the trust account,
together with funds available from loans from our sponsor will be sufficient to allow us to operate until March 14, 2024 (or such later
date approved by the stockholders or the Board in accordance with our amended and restated certificate of incorporation, including the
2024 Extension) however, we cannot assure you that our estimate is accurate. Of the funds available to us, we expect to use a portion
of the funds available to us to pay fees to consultants to assist us with our search for a target business. We could also use a portion
of the funds as a down payment or to fund a "no-shop" provision (a provision in letters of intent designed to keep target
businesses from "shopping" around for transactions with other companies or investors on terms more favorable to such target
businesses) with respect to a particular proposed business combination, although we do not have any current intention to do so. If we
entered into a letter of intent where we paid for the right to receive exclusivity from a target business and were subsequently required
to forfeit such funds (whether as a result of our breach or otherwise), we might not have sufficient funds to continue searching for,
or conduct due diligence with respect to, a target business. If we do not complete our initial business combination, our public stockholders
may receive only approximately $10.80 per public share based on the balance of the trust account as of December 29, 2023, on the liquidation
of our trust account and our warrants will expire worthless. In certain circumstances, our public stockholders may receive less than the
$10.10 per public share initially deposited in the trust account, upon our liquidation. See "- If third parties bring claims against
us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than
$10.10 per share initially deposited in the trust account," and other risk factors below.

 If we are required to seek additional capital, we would need to borrow
funds from our sponsor, management team or other third parties to operate or may be forced to liquidate. Neither our sponsor, members
of our management team nor any of their affiliates is under any obligation to advance funds to us in such circumstances. Any such advances
would be repaid only from funds held outside the trust account or from funds released to us upon completion of our initial business combination.
Up to $1,500,000 of such loans may be convertible into warrants of the post-business combination entity at a price of $1.00 per warrant
at the option of the lender. The warrants would be identical to the private placement warrants. Prior to the completion of our initial
business combination, we do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe
third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust
account. If we are unable to obtain these loans, we may be unable to complete our initial business combination. If we do not complete
our initial business combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate
the trust account. Consequently, our public stockholders may only receive an estimated $10.80 per public share based on the balance of
the trust account as of December 29, 2023, or possibly less, on our redemption of our public shares, and our warrants will expire worthless.
In certain circumstances, our public stockholders may receive less than the $10.10 per public share initially deposited in the trust account,
on the redemption of their shares. See "- If third parties bring claims against us, the proceeds held in the trust account could
be reduced and the per-share redemption amount received by stockholders may be less than $10.10 per public share initially deposited in
the trust account," and other risk factors below.

 Subsequent to our completion of our initial business combination,
we may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative
effect on our financial condition, results of operations and our share price, which could cause you to lose some or all of your investment.

 Even if we conduct due diligence on a target business
with which we combine, we cannot assure you that this diligence will surface all material issues with a particular target business, that
it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of the target
business and outside of our control will not later arise. As a result of these factors, we may be forced to later write-down or write-off
assets, restructure our operations, or incur impairment or other charges that could result in our reporting losses. Even if our due diligence
successfully identifies certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent
with our preliminary risk analysis. Even though these charges may be non-cash items and not have an immediate impact on our liquidity,
the fact that we report charges of this nature could contribute to negative market perceptions about us or our securities. In addition,
charges of this nature may cause us to violate net worth or other covenants to which we may be subject as a result of assuming pre-existing
debt held by a target business or by virtue of our obtaining post-combination debt financing. Accordingly, any stockholders who choose
to remain stockholders following the business combination could suffer a reduction in the value of their securities. Such stockholders
are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction was due to the
breach by our officers or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring
a private claim under securities laws that the proxy solicitation or tender offer materials, as applicable, relating to the business combination
contained an actionable material misstatement or material omission.

 If third parties bring claims against us, the proceeds held
in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.10 per public
share initially deposited in the trust account.

 Our placing of funds in the trust account may not
protect those funds from third-party claims against us. Although we will seek to have all vendors, service providers (other than our independent
auditors), prospective target businesses and other entities with which we do business execute agreements with us waiving any right, title,
interest or claim of any kind in or to any monies held in the trust account for the benefit of our public stockholders, such parties may
not execute such agreements, or even if they execute such agreements, they may not be prevented from bringing claims against the trust
account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as
claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets,
including the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies held
in the trust account, our management will perform an analysis of the alternatives available to it and will only enter into an agreement
with a third party that has not executed a waiver if management believes that such third party's engagement would be significantly
more beneficial to us than any alternative. Making such a request of potential target businesses may make our acquisition proposal less
attractive to them and, to the extent prospective target businesses refuse to execute such a waiver, it may limit the field of potential
target businesses that we might pursue.

 Examples of possible instances where we may engage
a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills
are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases
where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities
will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements
with us and will not seek recourse against the trust account for any reason. Upon redemption of our public shares, if we have not completed
an initial business combination by March 14, 2024 (or such later date approved by the stockholders or the Board in accordance with our
amended and restated certificate of incorporation, including the 2024 Extension), or upon the exercise of a redemption right in connection
with our initial business combination, we will be required to provide for payment of claims of creditors that were not waived that may
be brought against us within the ten years following redemption. Accordingly, the per-share redemption amount received by public stockholders
could be less than the $10.10 per public share initially held in the trust account, due to claims of such creditors. Pursuant to the letter
agreement entered into in connection with our IPO, our sponsor has agreed that it will be liable to us if and to the extent any claims
by a third party (other than our independent auditors) for services rendered or products sold to us, or a prospective target business
with which we have discussed entering into a transaction agreement, reduce the amounts in the trust account to below the lesser of (i)
$10.10 per public share, and (ii) the actual amount per share held in the trust account as of the date of the liquidation of the trust
account if less than $10.10 per public share, due to reductions in the value of the trust assets, in each case net of the interest that
may be withdrawn to pay our taxes, if any, provided that such liability will not apply to any claims by a third party or prospective target
business that executed a waiver of any and all rights to seek access to the trust account nor will it apply to any claims under our indemnity
of the underwriters of our IPO against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that
an executed waiver is deemed to be unenforceable against a third party, our sponsor will not be responsible to the extent of any liability
for such third party claims. However, we have not asked our sponsor to reserve for such indemnification obligations, nor have we independently
verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and believe that our sponsor's only assets
are securities of our company. Therefore, we cannot assure you that our sponsor would be able to satisfy those obligations. As a result,
if any such claims were successfully made against the trust account, the funds available for our initial business combination and redemptions
could be reduced to less than $10.10 per public share. In such event, we may not be able to complete our initial business combination,
and you would receive such lesser amount per share in connection with any redemption of your public shares. None of our officers or directors
will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.

 Our directors may decide not to enforce the indemnification obligations
of our sponsor, resulting in a reduction in the amount of funds in the trust account available for distribution to our public stockholders.

 In the event that the proceeds in the trust account
are reduced below the lesser of (i) $10.10 per public share, and (ii) the actual amount per share held in the trust account as of the
date of the liquidation of the trust account if less than $10.10 per public share, due to reductions in the value of the trust assets,
in each case net of the interest that may be withdrawn to pay our taxes, if any, and our sponsor assert that it is unable to satisfy its
obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether
to take legal action against our sponsor to enforce its indemnification obligations. While we currently expect that our independent directors
would take legal action on our behalf against our sponsor to enforce its indemnification obligations to us, it is possible that our independent
directors in exercising their business judgment and subject to their fiduciary duties may choose not to do so in any particular instance.
If our independent directors choose not to enforce these indemnification obligations, the amount of funds in the trust account available
for distribution to our public stockholders may be reduced below $10.10 per public share.

 We may not have sufficient funds to satisfy indemnification claims
of our directors and executive officers.

 We have agreed to indemnify our officers and directors
to the fullest extent permitted by law. However, our officers and directors have agreed to waive any right, title, interest or claim of
any kind in or to any monies in the trust account and to not seek recourse against the trust account for any reason whatsoever (except
to the extent they are entitled to funds from the trust account due to their ownership of public shares). Accordingly, any indemnification
provided will be able to be satisfied by us only if (i) we have sufficient funds outside of the trust account or (ii) we complete an initial
business combination. Our obligation to indemnify our officers and directors may discourage stockholders from bringing a lawsuit against
our officers or directors for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood of
derivative litigation against our officers and directors, even though such an action, if successful, might otherwise benefit us and our
stockholders. Furthermore, a stockholder's investment may be adversely affected to the extent we pay the costs of settlement and
damage awards against our officers and directors pursuant to these indemnification provisions.

 If, after we distribute the proceeds in the trust account to
our public stockholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against
us that is not dismissed, a bankruptcy or insolvency court may seek to recover such proceeds, and the members of our Board may be viewed
as having breached their fiduciary duties to our creditors, thereby exposing the members of our Board and us to claims of punitive damages.

 If, after we distribute the proceeds in the trust
account to our public stockholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is
filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or
bankruptcy or insolvency laws as either a "preferential transfer" or a "fraudulent conveyance." As a result, a
bankruptcy or insolvency court could seek to recover some or all amounts received by our stockholders. In addition, our Board may be viewed
as having breached its fiduciary duty to our creditors and/or having acted in bad faith, thereby exposing itself and us to claims of punitive
damages, by paying public stockholders from the trust account prior to addressing the claims of creditors.

 If, before distributing the proceeds in the trust account to
our public stockholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against
us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our stockholders and the per-share
amount that would otherwise be received by our stockholders in connection with our liquidation may be reduced.

 If, before distributing the proceeds in the trust
account to our public stockholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is
filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy or insolvency
law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders.
To the extent any bankruptcy claims deplete the trust account, the per-share amount that would otherwise be received by our stockholders
in connection with our liquidation may be reduced.

 Our stockholders may be held liable for claims by third parties
against us to the extent of distributions received by them upon redemption of their shares.

 Under the Delaware General Corporation Law (the
"DGCL"), stockholders may be held liable for claims by third parties against a corporation to the extent of distributions
received by them in a dissolution. The pro rata portion of our trust account distributed to our public stockholders upon the redemption
of our public shares in the event we do not complete our initial business combination by March 14, 2024 (or such later date approved by
the stockholders or the Board in accordance with our amended and restated certificate of incorporation, including the 2024 Extension)
may be considered a liquidating distribution under Delaware law. If a corporation complies with certain procedures set forth in Section
280 of the DGCL intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during
which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims
brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders
with respect to a liquidating distribution is limited to the lesser of such stockholder's pro rata share of the claim or the amount
distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution.

 However, it is our intention to redeem our public
shares as soon as reasonably possible following March 14, 2024 (or such later date approved by the stockholders or the Board in accordance
with our amended and restated certificate of incorporation, including the 2024 Extension) in the event we do not complete our initial
business combination and, therefore, we do not intend to comply with the foregoing procedures.

 Because we will not be complying with Section 280, Section 281(b) of
the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide for our payment of all existing and pending
claims or claims that may be potentially brought against us within the 10 years following our dissolution. However, because we are a blank
check company, rather than an operating company, and our operations will be limited to searching for prospective target businesses to
acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment bankers, etc.) or prospective target businesses.
If our plan of distribution complies with Section 281(b) of the DGCL, any liability of stockholders with respect to a liquidating distribution
is limited to the lesser of such stockholder's pro rata share of the claim or the amount distributed to the stockholder, and any
liability of the stockholder would likely be barred after the third anniversary of the dissolution. We cannot assure you that we will
properly assess all claims that may be potentially brought against us. As such, our stockholders could potentially be liable for any claims
to the extent of distributions received by them (but no more) and any liability of our stockholders may extend beyond the third anniversary
of such date. Furthermore, if the pro rata portion of our trust account distributed to our public stockholders upon the redemption of
our public shares in the event we do not complete our initial business combination by March 14, 2024 (or such later date approved by the
stockholders or the Board in accordance with our amended and restated certificate of incorporation, including the 2024 Extension) is not
considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful (potentially due to
the imposition of legal proceedings that a party may bring or due to other circumstances that are currently unknown), then pursuant to
Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution,
instead of three years, as in the case of a liquidating distribution.

 We may seek acquisition opportunities in industries or sectors
which may be outside of our management's area of expertise.

 We will consider a business combination outside
of our management's area of expertise if a business combination candidate is presented to us and we determine that such candidate
offers an attractive acquisition opportunity for our company. Although our management will endeavor to evaluate the risks inherent in
any particular business combination candidate, we cannot assure you that we will adequately ascertain or assess all of the significant
risk factors. We also cannot assure you that an investment in our securities will not ultimately prove to be less favorable to investors
in our IPO than a direct investment, if an opportunity were available, in a business combination candidate. In the event we elect to pursue
an acquisition outside of the areas of our management's expertise, our management's expertise may not be directly applicable
to its evaluation or operation, and the information contained in this Report regarding the areas of our management's expertise would
not be relevant to an understanding of the business that we elect to acquire. As a result, our management may not be able to adequately
ascertain or assess all of the significant risk factors. Accordingly, any stockholder who choose to remain stockholders following our
business combination could suffer a reduction in the value of their shares. Such stockholders are unlikely to have a remedy for such reduction
in value.

 Although we have identified general criteria and guidelines that
we believe are important in evaluating prospective target businesses and our strategy is to identify, acquire and build a company in our
target investment area, we may enter into our initial business combination with a target that does not meet such criteria and guidelines,
and as a result, the target business with which we enter into our initial business combination may not have attributes entirely consistent
with our general criteria and guidelines.

 Although we have identified general criteria and guidelines for evaluating
prospective target businesses and our strategy is to identify, acquire and build a company in our target investment area, it is possible
that a target business with which we enter into our initial business combination will not have attributes consistent with our general
criteria and guidelines. If we complete our initial business combination with a target that does not meet some or all of these guidelines,
such combination may not be as successful as a combination with a business that does meet all of our general criteria and guidelines.
In addition, if we announce a prospective business combination with a target that does not meet our general criteria and guidelines, a
greater number of stockholders may exercise their redemption rights, which may make it difficult for us to meet any closing condition
with a target business that requires us to have a minimum net worth or a certain amount of cash. In addition, if stockholder approval
of the transaction is required by law, or we decide to obtain stockholder approval for business or other legal reasons, it may be more
difficult for us to attain stockholder approval of our initial business combination if the target business does not meet our general criteria
and guidelines. If we do not complete our initial business combination, our public stockholders may only receive their pro rata portion
of the funds in the trust account that are available for distribution to public stockholders, and our warrants will expire worthless.

 We may seek business combination opportunities with a financially
unstable business or an entity lacking an established record of revenue, cash flow or earnings, which could subject us to volatile revenues,
cash flows or earnings or difficulty in retaining key personnel.

 To the extent we complete our initial business
combination with an early stage company, a financially unstable business or an entity lacking an established record of revenues or earnings,
we may be affected by numerous risks inherent in the operations of the business with which we combine. These risks include investing in
a business without a proven business model or with limited historic financial data, volatile revenues or earnings, intense competition
and difficulties in obtaining and retaining key personnel. Although our officers and directors will endeavor to evaluate the risks inherent
in a particular target business, we may not be able to properly ascertain or assess all of the relevant risk factors and we may not have
adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control and leave us with no ability to
control or reduce the chances that those risks will adversely impact a target business.

 We are not required to obtain an opinion from an
independent accounting or investment banking firm, and consequently, you may have no assurance from an independent source that the price
we are paying for the business is fair to our stockholders from a financial point of view. Unless we complete our initial business combination
with an affiliated entity, we are not required to obtain an opinion from an independent accounting firm or independent investment banking
firm that the price we are paying is fair to our stockholders from a financial point of view. If no opinion is obtained, our stockholders
will be relying on the judgment of our Board, who will determine fair market value based on standards generally accepted by the financial
community. Such standards used will be disclosed in our proxy solicitation or tender offer materials, as applicable, related to our initial
business combination.

 Past performance by our sponsor and its affiliates, Power&
Digital Infrastructure Acquisition Corp. ("XPDI I"), XMS, TEP or our management team, including the businesses referred to
herein, may not be indicative of future performance of an investment in us or in the future performance of any business that we may acquire.

 Information regarding past performance of our sponsor
and its affiliates, XPDI I, XMS, TEP and our management team is presented for informational purposes only. Any past experience and performance
of our sponsor and its affiliates, XPDI I, XMS, TEP, our management team or the other companies referred to herein is not a guarantee
either: (1) that we will be able to successfully identify a suitable candidate for our initial business combination or (2) of any results
with respect to any initial business combination we may complete. You should not rely on the historical record of our sponsor and its
affiliates, XPDI I, XMS, TEP, our management team's performance or the performance of the other companies referred to herein as
indicative of the future performance of an investment in us or the returns we will, or are likely to, generate going forward. An investment
in us is not an investment in our sponsor or its affiliates, XPDI I, XMS, TEP nor the other companies referred to in this Report.

 Because we must furnish our stockholders with target business
financial statements, we may lose the ability to complete an otherwise advantageous initial business combination with some prospective
target businesses.

 The federal proxy rules require that a proxy statement
with respect to a vote on a business combination meeting certain financial significance tests include historical and/or pro forma financial
statement disclosure in periodic reports. We will include the same financial statement disclosure in connection with our tender offer
documents, whether or not they are required under the tender offer rules. These financial statements may be required to be prepared in
accordance with, or be reconciled to, accounting principles generally accepted in the United States of America ("GAAP"), or
international financial reporting standards as issued by the International Accounting Standards Board ("IFRS"), depending
on the circumstances and the historical financial statements may be required to be audited in accordance with the standards of the Public
Company Accounting Oversight Board (United States) ("PCAOB"). These financial statement requirements may limit the pool of
potential target businesses we may acquire because some targets may be unable to provide such statements in time for us to disclose such
statements in accordance with federal proxy rules and complete our initial business combination within the prescribed time frame.

 Compliance obligations under the Sarbanes-Oxley Act may make
it more difficult for us to effectuate a business combination, require substantial financial and management resources, and increase the
time and costs of completing an acquisition.

 Section 404 of the Sarbanes-Oxley Act requires
that we evaluate and report on our system of internal controls beginning with our Annual Report on Form 10-K for the year ending December
31, 2022. Only in the event we are deemed to be a large accelerated filer or an accelerated filer, and no longer qualify as an emerging
growth company, will we be required to comply with the independent registered public accounting firm attestation requirement on our internal
control over financial reporting. Further, for as long as we remain an emerging growth company, we will not be required to comply with
the independent registered public accounting firm attestation requirement on our internal control over financial reporting. The fact that
we are a blank check company makes compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared
to other public companies because a target business with which we seek to complete our initial business combination may not be in compliance
with the provisions of the Sarbanes-Oxley Act regarding adequacy of its internal controls. The development of the internal control of
any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition.

 Effective internal controls are necessary for us
to provide reliable financial reports and prevent fraud. As described in Part II, Item 9A, management has concluded that, due to the material
weakness we have identified in our internal control over financial reporting, our disclosure controls and procedures were not effective.
If we identify any new material weaknesses in the future, any such newly identified material weakness could limit our ability to prevent
or detect a misstatement of our accounts or disclosures that could result in a material misstatement of our annual or interim financial
statements. In such case, we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic
reports in addition to applicable stock exchange listing requirements, investors may lose confidence in our financial reporting and our
stock price may decline as a result. We cannot assure you that the measures we have taken to date, or any measures we may take in the
future, will be sufficient to avoid potential future material weaknesses.

 We have a material weakness in our internal control over financial
reporting as of December 31, 2023. If we are unable to develop and maintain an effective system of internal control over financial reporting,
we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us
and materially and adversely affect our business and operating results.

 A material weakness is a deficiency, or a combination
of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement
of our annual or interim financial statements will not be prevented or detected and corrected on a timely basis. Management concluded
that there was a material weakness in internal control over financial reporting as of December 31, 2023 relating to the accounting for
accrued general and administrative expenses and the Company's tax provision.

 Effective internal controls are necessary for us
to provide reliable financial reports and prevent fraud. We continue to evaluate steps to remediate the material weakness. If we identify
any new material weaknesses in the future, any such newly identified material weakness could limit our ability to prevent or detect a
misstatement of our accounts or disclosures that could result in a material misstatement of our annual or interim financial statements.
In such case, we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports in
addition to applicable stock exchange listing requirements, investors may lose confidence in our financial reporting and our stock price
may decline as a result. We cannot assure you that the measures we have taken to date, or any measures we may take in the future, will
be sufficient to avoid potential future material weaknesses.

 Our independent registered public accounting firm's report
contains an explanatory paragraph that expresses substantial doubt about our ability to continue as a "going concern."

 As of December 31, 2023, we have incurred and expect
to continue to incur costs in pursuit of our financing and acquisition plans. We cannot assure you that our plans to raise capital or
to consummate an initial business combination will be successful. If we are unable to raise additional funds to alleviate liquidity needs
and complete a business combination by March 14, 2024 (or such later date approved by the stockholders or the Board in accordance with
our amended and restated certificate of incorporation, including the 2024 Extension) then we will cease all operations except for the
purpose of liquidating. The liquidity condition and date for mandatory liquidation and subsequent dissolution raise substantial doubt
about the our ability to continue as a going concern. The financial statements contained elsewhere in this report do not include any adjustments
that might result from our inability to continue as a going concern.

 We do not have a specified maximum redemption threshold. The
absence of such a redemption threshold may make it possible for us to complete our initial business combination with which a substantial
majority of our stockholders do not agree.

does not provide a specified maximum redemption threshold. As a result, we may be able to complete our initial business combination even
though a substantial majority of our public stockholders do not agree with the transaction and have redeemed their shares or, if we seek
stockholder approval of our initial business combination and do not conduct redemptions in connection with our business combination pursuant
to the tender offer rules, have entered into privately negotiated agreements to sell their shares to our sponsor, officers, directors,
advisors or any of their affiliates. In the event the aggregate cash consideration we would be required to pay for all shares of our Class
A common stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of
the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the business combination or
redeem any shares, all shares of our Class A common stock submitted for redemption will be returned to the holders thereof, and we instead
may search for an alternate business combination.

 In order to effectuate an initial business combination, blank
check companies have, in the recent past, amended various provisions of their charters and other governing instruments, including their
warrant agreements. We cannot assure you that we will not seek to further amend our amended and restated certificate of incorporation
or governing instruments in a manner that will make it easier for us to complete our initial business combination that our stockholders
may not support.

 In order to effectuate a business combination, blank check companies
have, in the recent past, amended various provisions of their charters and governing instruments, including their warrant agreements.
For example, blank check companies have amended the definition of business combination, increased redemption thresholds, changed industry
focus and, with respect to their warrants, amended their warrant agreements to require the warrants to be exchanged for cash and/or other
securities. Amending our amended and restated certificate of incorporation requires the approval of holders of 65% of our common stock,
and amending our public warrant agreement will require a vote of holders of at least 50% of the public warrants. In addition, our amended
and restated certificate of incorporation requires us to provide our public stockholders with the opportunity to redeem their public shares
for cash if we propose an amendment to our amended and restated certificate of incorporation that would affect the substance or timing
of our obligation to provide holders of shares of Class A common stock the right to have their shares redeemed in connection with our
initial business combination or to redeem 100% of our public shares if we do not complete an initial business combination by March 14,
2024 (or such later date approved by the stockholders or the Board in accordance with our amended and restated certificate of incorporation,
including the 2024 Extension) or with respect to any other provisions relating to the rights of holders of Class A common stock. To the
extent any of such amendments would be deemed to fundamentally change the nature of any of the securities offered in our IPO, we would
register, or seek an exemption from registration for, the affected securities. In connection with the Extension, stockholders holding
18,141,822 shares of Class A common stock exercised their right to redeem such shares for a pro rata portion of the funds in the trust
account. As a result, approximately $188,132,132 (approximately $10.37 per share) was removed from the trust account to pay such redeeming
holders. Additionally, we filed a definitive proxy statement for the solicitation of proxies in connection with a special meeting of stockholders
of the company to consider and vote on, among other proposals, the extension of the date by which the company must consummate an initial
business combination from March 14, 2024 to April 14, 2024, and to allow the company, without another stockholder vote, by resolution
of the Board, to elect to further extend such date in one-month increments up to three additional times until July 14, 2024, unless the
closing of an initial business combination shall have occurred prior thereto, or such earlier date as determined by the Board to be in
the best interests of the company. We cannot assure you that we will not seek to amend our charter or governing instruments or further
extend the time to consummate an initial business combination in order to effectuate our initial business combination.

 The provisions of our amended and restated certificate of incorporation
that relate to our pre-business combination activity (and corresponding provisions of the agreement governing the release of funds from
our trust account) may be amended with the approval of holders of at least 65% of our common stock, which is a lower amendment threshold
than that of some other blank check companies. It may be easier for us, therefore, to amend our amended and restated certificate of incorporation
to facilitate the completion of an initial business combination that some of our stockholders may not support.

 Some other blank check companies have a provision
in their charter which prohibits the amendment of certain of its provisions, including those which relate to a company's pre-business
combination activity, without approval by a certain percentage of our stockholders. In those companies, amendment of these provisions
typically requires approval by 90% of our stockholders attending and voting at an annual meeting. Our amended and restated certificate
of incorporation provides that any of its provisions related to pre-business combination activity (including the requirement to deposit
proceeds of our IPO and the private placement of warrants into the trust account and not release such amounts except in specified circumstances,
and to provide redemption rights to public stockholders as described herein) may be amended if approved by holders of 65% of our common
stock entitled to vote thereon and corresponding provisions of the trust agreement governing the release of funds from our trust account
may be amended if approved by holders of at least 65% of our common stock entitled to vote thereon. In all other instances, our amended
and restated certificate of incorporation may be amended by holders of a majority of our outstanding shares of common stock entitled to
vote thereon, subject to applicable provisions of the DGCL or applicable stock exchange rules. Our sponsor and its permitted transferees,
if any, who collectively beneficially own, on an as converted basis, 40% of our Class A common stock from the closing of our IPO, will
participate in any vote to amend our amended and restated certificate of incorporation and/or trust agreement and will have the discretion
to vote in any manner they choose. As a result, we may be able to amend the provisions of our amended and restated certificate of incorporation
which govern our pre-business combination behavior more easily than some other blank check companies, and this may increase our ability
to complete a business combination with which you do not agree. Our stockholders may pursue remedies against us for any breach of our
amended and restated certificate of incorporation.

 Our sponsor, executive officers and directors have
agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation
that would affect the substance or timing of our obligation to provide holders of shares of Class A common stock the right to have their
shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete an initial
business combination by March 14, 2024 (or such later date approved by the stockholders or the Board in accordance with our amended and
restated certificate of incorporation, including the 2024 Extension), unless we provide our public stockholders with the opportunity to
redeem their Class A common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount
then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to
us to pay our taxes, if any (less up to $100,000 of interest to pay dissolution expenses) divided by the number of then outstanding public
shares. These agreements are contained in letter agreements that we have entered into with our sponsor, directors and each member of our
management team. Our stockholders are not parties to, or third-party beneficiaries of, these agreements and, as a result, will not have
the ability to pursue remedies against our sponsor, executive officers or directors for any breach of these agreements. As a result, in
the event of a breach, our stockholders would need to pursue a stockholder derivative action, subject to applicable law.

 We may be unable to obtain additional financing to complete
our initial business combination or to fund the operations and growth of a target business, which could compel us to restructure or abandon
a particular business combination. If we do not complete our initial business combination, our public stockholders may only receive their
pro rata portion of the funds in the trust account that are available for distribution to public stockholders, and our warrants will
expire worthless.

 Although we believe that the net proceeds of our
IPO and the sale of the private placement warrants will be sufficient to allow us to complete our initial business combination, because
we have not yet selected any prospective target business we cannot ascertain the capital requirements for any particular transaction.
If the net proceeds of our IPO and the sale of the private placement warrants prove to be insufficient, either because of the size of
our initial business combination, the depletion of the available net proceeds in search of a target business, the obligation to redeem
for cash a significant number of shares from stockholders who elect redemption in connection with our initial business combination or
the terms of negotiated transactions to purchase shares in connection with our initial business combination, we may be required to seek
additional financing or to abandon the proposed business combination. We cannot assure you that such financing will be available on acceptable
terms, if at all. The current economic environment may make it difficult for companies to obtain acquisition financing. To the extent
that additional financing proves to be unavailable when needed to complete our initial business combination, we would be compelled to
either restructure the transaction or abandon that particular business combination and seek an alternative target business candidate.
If we do not complete our initial business combination, our public stockholders may only receive their pro rata portion of the funds in
the trust account that are available for distribution to public stockholders and not previously released to us to pay our taxes on the
liquidation of our trust account, and our warrants will expire worthless. In addition, even if we do not need additional financing to
complete our initial business combination, we may require such financing to fund the operations or growth of the target business. The
failure to secure additional financing could have a material adverse effect on the continued development or growth of the target business.
None of our officers, directors or stockholders is required to provide any financing to us in connection with or after our initial business
combination. If we do not complete our initial business combination, our public stockholders may only receive approximately $10.80 per
public share based on the balance of the trust account as of December 29, 2023, on the liquidation of our trust account, and our warrants
will expire worthless.

 Our initial stockholders and the anchor investors control a substantial
interest in us and thus may exert a substantial influence on actions requiring a stockholder vote, potentially in a manner that you do
not support.

 Upon closing of our IPO, our initial stockholders
(including our sponsor) owned, on an as-converted basis, 40% of our issued and outstanding Class A common stock. There was no underwriting
discount or commission paid on any units the anchor investors purchased in our IPO. Accordingly, they may exert a substantial influence
on actions requiring a stockholder vote, potentially in a manner that you do not support, including amendments to our amended and restated
certificate of incorporation. In addition, our Board, whose members were elected by our sponsor, is divided into three classes, each of
which will generally serve for a terms for three years with only one class of directors being elected in each year. We may not hold an
annual meeting of stockholders to elect new directors prior to the completion of our initial business combination, in which case all of
the current directors will continue in office until at least the completion of the business combination. If there is an annual meeting,
as a consequence of our "staggered" board of directors, only a minority of the Board will be considered for election and our
sponsor, because of its ownership position, will have considerable influence regarding the outcome. In addition, prior to the completion
of an initial business combination, holders of a majority of our founder shares may remove a member of the Board for any reason. Accordingly,
our sponsor will continue to exert control at least until the completion of our initial business combination.

 Resources could be wasted in researching acquisitions that are
not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we
do not complete our initial business combination, our public stockholders may only receive their pro rata portion of the funds in the
Trust Account that are available for distribution to public stockholders, and our warrants will expire worthless.

 We anticipate that the investigation of each specific
target business and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require
substantial management time and attention and substantial costs for accountants, attorneys and others. If we decide not to complete a
specific initial business combination, the costs incurred up to that point for the proposed transaction likely would not be recoverable.
Furthermore, if we reach an agreement relating to a specific target business, we may fail to complete our initial business combination
for any number of reasons including those beyond our control. Any such event will result in a loss to us of the related costs incurred
which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we do not complete
our initial business combination, our public stockholders may only receive their pro rata portion of the funds in the Trust Account that
are available for distribution to public stockholders, and our warrants will expire worthless.

 Our key personnel may negotiate employment or consulting agreements
with a target business in connection with a particular business combination, and a particular business combination may be conditioned
on the retention or resignation of such key personnel. These agreements may provide for them to receive compensation following our initial
business combination and as a result, may cause them to have conflicts of interest in determining whether a particular business combination
is the most advantageous.

 Our key personnel may be able to remain with our
company after the completion of our initial business combination only if they are able to negotiate employment or consulting agreements
in connection with the business combination. Such negotiations would take place simultaneously with the negotiation of the business combination
and could provide for such individuals to receive compensation in the form of cash payments and/or our securities for services they would
render to us after the completion of the business combination. Such negotiations also could make such key personnel's retention
or resignation a condition to any such agreement. The personal and financial interests of such individuals may influence their motivation
in identifying and selecting a target business, subject to his or her fiduciary duties under Delaware law. However, we believe the ability
of such individuals to remain with us after the completion of our business combination will not be the determining factor in our decision
as to whether or not we will proceed with any potential business combination. There is no certainty, however, that any of our key personnel
will remain with us after the completion of our business combination. We cannot assure you that any of our key personnel will remain in
senior management or advisory positions with us. The determination as to whether any of our key personnel will remain with us will be
made at the time of our initial business combination. In addition, pursuant to an agreement entered into concurrently with the issuance
and sale of the securities in our IPO, our sponsor, upon completion of an initial business combination, will be entitled to nominate three
individuals for election to our Board, as long as our sponsor holds any securities covered by the registration and stockholder rights
agreement.

 We may have a limited ability to assess the management of a prospective
target business and, as a result, may affect our initial business combination with a target business whose management may not have the
skills, qualifications or abilities to manage a public company.

 When evaluating the desirability of effecting our
initial business combination with a prospective target business, our ability to assess the target business's management may be limited
due to a lack of time, resources or information. Our assessment of the capabilities of the target business's management, therefore,
may prove to be incorrect and such management may lack the skills, qualifications or abilities we suspected. Should the target business's
management not possess the skills, qualifications or abilities necessary to manage a public company, the operations and profitability
of the post-combination business may be negatively impacted. Accordingly, any stockholders who choose to remain stockholders following
the business combination could suffer a reduction in the value of their shares. Such stockholders are unlikely to have a remedy for such
reduction in value unless they are able to successfully claim that the reduction was due to the breach by our officers or directors of
a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that
the proxy solicitation or tender offer materials, as applicable, relating to the business combination contained an actionable material
misstatement or material omission.

 We may issue notes or other debt securities, or otherwise incur
substantial debt, to complete a business combination, which may adversely affect our leverage and financial condition and thus negatively
impact the value of our stockholders' investment in us.

 Although we have no commitments as of the date of this Report to issue
any notes or other debt securities, or to otherwise incur outstanding debt following our IPO, we may choose to incur substantial debt
to complete our initial business combination. We and our officers have agreed that we will not incur any indebtedness unless we have obtained
from the lender a waiver of any right, title, interest or claim of any kind in or to the monies held in the trust account. As such, no
issuance of debt will affect the per-share amount available for redemption from the trust account. Nevertheless, the incurrence of debt
could have a variety of negative effects, including:

 default
and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations

 acceleration
of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants
that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;

 our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand;

 our inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain such financing while the debt security is outstanding;

 our inability to pay dividends on our Class A common stock;

 using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our Class A common stock if declared, our ability to pay expenses, make capital expenditures and acquisitions and fund other general corporate purposes;

 limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;

 increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and

 limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements and execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt.

 We may only be able to complete one business combination with
the proceeds of our IPO and the sale of the private placement warrants, which will cause us to be solely dependent on a single business
which may have a limited number of products or services. This lack of diversification may negatively impact our operations and profitability.

 In connection with the Extension, stockholders holding 18,141,822 shares
of Class A common stock exercised their right to redeem such shares for a pro rata portion of the funds in the trust account. As a result,
approximately $188,132,132 (approximately $10.37 per share) was removed from the trust account to pay such redeeming holders. After the
satisfaction of the June Redemptions, the balance in the trust account as of December 31, 2023 was approximately $114,641,527, which is
available to complete our business combination and pay related fees and expenses. If we receive stockholder approval for and implement
the 2024 Extension, stockholders would have the right to redeem their public shares, which will further reduce the funds in the trust
account available to consummate an initial business combination.

 We may effectuate our initial business combination
with a single target business or multiple target businesses simultaneously or within a short period of time. However, we may not be able
to effectuate our initial business combination with more than one target business because of various factors, including the existence
of complex accounting issues and the requirement that we prepare and file pro forma financial statements with the SEC that present operating
results and the financial condition of several target businesses as if they had been operated on a combined basis. By completing our initial
business combination with only a single entity, our lack of diversification may subject us to numerous economic, competitive and regulatory
developments. Further, we would not be able to diversify our operations or benefit from the possible spreading of risks or offsetting
of losses, unlike other entities which may have the resources to complete several business combinations in different industries or different
areas of a single industry. Accordingly, the prospects for our success may be:

 solely dependent upon the performance of a single business, property or asset; or

 dependent upon the development or market acceptance of a single or limited number of products, processes or services.

 This lack of diversification may subject us to numerous economic, competitive
and regulatory risks, any or all of which may have a substantial adverse impact upon the particular industry in which we may operate subsequent
to our initial business combination.

 We may attempt to simultaneously complete business combinations
with multiple prospective targets, which may hinder our ability to complete our initial business combination and give rise to increased
costs and risks that could negatively impact our operations and profitability.

 If we determine to simultaneously acquire several
businesses that are owned by different sellers, we will need for each of such sellers to agree that our purchase of its business is contingent
on the simultaneous closings of the other business combinations, which may make it more difficult for us, and delay our ability, to complete
our initial business combination. With multiple business combinations, we could also face additional risks, including additional burdens
and costs with respect to possible multiple negotiations and due diligence (if there are multiple sellers) and the additional risks associated
with the subsequent assimilation of the operations and services or products of the acquired companies in a single operating business.
If we are unable to adequately address these risks, it could negatively impact our profitability and results of operations.

 We may attempt to complete our initial business combination with
a private company about which little information is available, which may result in a business combination with a company that is not as
profitable as we suspected, if at all.

 In pursuing our acquisition strategy, we may seek
to effectuate our initial business combination with a privately held company. By definition, very little public information generally
exists about private companies, and we could be required to make our decision on whether to pursue a potential initial business combination
on the basis of limited information, which may result in a business combination with a company that is not as profitable as we suspected,
if at all.

 Our initial business combination and our structure thereafter
may not be tax-efficient to our securityholders.

 Although we will attempt to structure our initial
business combination in a tax-efficient manner, tax structuring considerations are complex, the relevant facts and law are uncertain and
may change, and we may prioritize commercial and other considerations over tax considerations. For example, in connection with our initial
business combination and subject to requisite stockholder approval, we may structure our business combination in a manner that requires
stockholders and/or warrant holders to recognize gain or income for tax purposes. We do not intend to make any cash distributions to stockholders
or warrant holders to pay taxes in connection with our business combination or thereafter. Accordingly, a stockholder or a warrant holder
may need to satisfy any liability resulting from our initial business combination with cash from its own funds or by selling all or a
portion of such holder's shares or warrants.

 If we pursue a target company with operations or opportunities
outside of the United States for our initial business combination, we may face additional burdens in connection with investigating, agreeing
to and completing such initial business combination, and if we effect such initial business combination, we would be subject to a variety
of additional risks that may negatively impact our operations.

 If we pursue a target a company with operations
or opportunities outside of the United States for our initial business combination, we would be subject to risks associated with cross-border
business combinations, including in connection with investigating, agreeing to and completing our initial business combination, conducting
due diligence in a foreign jurisdiction, having such transaction approved by any local governments, regulators or agencies and changes
in the purchase price based on fluctuations in foreign exchange rates.

 If we effect our initial business combination with
such a company, we would be subject to any special considerations or risks associated with companies operating in an international setting,
including any of the following:

 costs
and difficulties inherent in managing cross-border business operations and complying with different commercial and legal requirements
of overseas markets;

 rules and regulations regarding currency redemption;

 laws governing the manner in which future business combinations may be effected;

 exchange
listing and/or delisting requirements;

 tariffs
and trade barriers;

 regulations
related to customs and import/export matters;

 local
or regional economic policies and market conditions;

 unexpected
changes in regulatory requirements;

 longer
payment cycles;

 tax
issues, including limits on our ability to change our tax residence from the United States, complex withholding or other tax regimes
which may apply in connection with our business combination or to our structure following our business combination, variations in tax
laws as compared to the United States, and potential changes in the applicable tax laws in the United States and/or relevant non-U.S.
jurisdictions;

 currency
fluctuations and exchange controls;

 rates
of inflation;

 challenges
in collecting accounts receivable;

 cultural
and language differences;

 employment
regulations;

 underdeveloped
or unpredictable legal or regulatory systems;

 corruption;

 protection
of intellectual property;

 social
unrest, crime, strikes, riots and civil disturbances;

 regime
changes and political upheaval;

 terrorist
attacks, natural disasters and wars such as the recent invasion of Ukraine by Russia;

 deterioration
of political relations with the United States; and

 government
appropriation of assets.

 We may not be able to adequately address these
additional risks. If we were unable to do so, we may be unable to complete such initial business combination, or, if we complete such
combination, our operations might suffer, either of which may adversely impact our business, financial condition and results of operations.

 Our search for a business combination, and any target business
with which we ultimately consummate a business combination, may be materially adversely affected by negative impacts on the global economy,
capital markets or other geopolitical conditions resulting from the invasion of Ukraine by Russia and the Israel-Hamas war, terrorism,
sanctions or other geopolitical events globally, and the status of debt and equity markets.

 United
States and global markets are experiencing volatility and disruption following the escalation of geopolitical tensions, including the
invasion of Ukraine by Russia in February 2022 and the Israel-Hamas war. In response to the invasion of Ukraine by Russia, the North Atlantic
Treaty Organization ("NATO") deployed additional military forces to eastern Europe, and the United States, the United Kingdom,
the European Union and other countries have announced various sanctions and restrictive actions against Russia, Belarus and related individuals
and entities, including the removal of certain financial institutions from the Society for Worldwide Interbank Financial Telecommunication
(SWIFT) payment system. Certain countries, including the United States, have also provided and may continue to provide military aid or
other assistance to Ukraine during the ongoing military conflict, increasing geopolitical tensions with Russia. The invasion of Ukraine
by Russia, the Israel-Hamas war and the resulting measures that have been taken, and could be taken in the future, by NATO, the United
States, the United Kingdom, the European Union and other countries have created global security concerns that could have a lasting impact
on regional and global economies. Although the length and impact of these ongoing military conflicts are highly unpredictable, the conflicts
could lead to market disruptions, including significant volatility in commodity prices, credit and capital markets, as well as supply
chain interruptions. Additionally, these military actions and resulting sanctions could adversely affect the global economy and financial
markets and lead to instability and lack of liquidity in capital markets.

 Any
of the abovementioned factors, or any other negative impact on the global economy, capital markets or other geopolitical conditions resulting
from the invasion of Ukraine by Russia and the Israel-Hamas war, terrorism, sanctions or other geopolitical events globally could adversely
affect our search for a business combination and any target business with which we ultimately consummate a business combination. The extent
and duration of the invasion of Ukraine by Russia and the Israel-Hamas war, resulting sanctions and any related market disruptions are
impossible to predict, but could be substantial, particularly if current or new sanctions continue for an extended period of time or if
geopolitical tensions result in expanded military operations on a global scale. Any such disruptions may also have the effect of heightening
many of the other risks described in this "Risk Factors" section, such as those related to the market for our securities,
cross-border transactions or our ability to raise equity or debt financing in connection with any particular business combination. If
these disruptions or other matters of global concern continue for an extensive period of time, our ability to consummate a business combination,
or the operations of a target business with which we ultimately consummate a business combination, may be materially adversely affected.

 If we effect a business combination with a target company organized
in another jurisdiction, we may take actions in connection with the business combination that could have adverse tax consequences.

 We may effect a business combination with a target
company in another jurisdiction, reincorporate in the jurisdiction in which the target company or business is located, or reincorporate
in another jurisdiction. Such transactions may result in tax liability for a stockholder or warrant holder in the jurisdiction in which
the stockholder or warrant holder is a tax resident (or in which its members are resident if it is a tax transparent entity), in which
the target company is located, or in which we reincorporate. In the event of a reincorporation pursuant to our initial business combination,
such tax liability may attach prior to the completion of redemptions of any of our public shares properly submitted to us for redemption
in connection with such business combination. We do not intend to make any cash distributions to stockholders to pay such taxes. Stockholders
or warrant holders may be subject to withholding taxes or other taxes with respect to their ownership of us after the reincorporation.

 Furthermore, we may effect a business combination
with a target company that has business operations outside of the United States and, possibly, business operations in multiple jurisdictions.
If we effect such a business combination, we could be subject to significant income, withholding and other tax obligations in a number
of jurisdictions with respect to income, operations and subsidiaries related to those jurisdictions. Due to the complexity of tax obligations
and filings in other jurisdictions, we may have a heightened risk related to audits or examinations by taxing authorities. This additional
complexity and risk could have an adverse effect on our after-tax profitability and financial condition.

 If we have not completed an initial business combination by March
14, 2024 (or such later date approved by the stockholders or the Board in accordance with our amended and restated certificate of incorporation,
including the 2024 Extension), our public stockholders may be forced to wait beyond March 14, 2024 (or such later date approved by the
stockholders or the Board in accordance with our amended and restated certificate of incorporation, including the 2024 Extension) before
redemption from our Trust Account.

 If we have not completed an initial business combination
by March 14, 2024 (or such later date approved by the stockholders or the Board in accordance with our amended and restated certificate
of incorporation, including the 2024 Extension), the proceeds then on deposit in the Trust Account, including interest earned on the funds
held in the Trust Account and not previously released to us to pay our taxes, if any (less up to $100,000 of the interest to pay dissolution
expenses), will be used to fund the redemption of our public shares, as further described herein. Any redemption of public stockholders
from the Trust Account will be effected automatically by function of our amended and restated certificate of incorporation prior to any
voluntary winding up. If we are required to wind-up, liquidate the Trust Account and distribute such amount therein, pro rata, to our
public stockholders, as part of any liquidation process, such winding up, liquidation and distribution must comply with the applicable
provisions of the DGCL. In that case, investors may be forced to wait beyond March 14, 2024 (or such later date approved by the stockholders
or the Board in accordance with our amended and restated certificate of incorporation, including the 2024 Extension) before the redemption
proceeds of our Trust Account become available to them, and they receive the return of their pro rata portion of the proceeds from our
Trust Account. We have no obligation to return funds to investors prior to the date of our redemption or liquidation unless we complete
our initial business combination prior thereto and only then in cases where investors have sought to redeem their Class A common stock.
Only upon our redemption or any liquidation will public stockholders be entitled to distributions if we do not complete our initial business
combination.

 Holders of our Class A common stock will not be entitled to vote
on any appointment of directors we hold prior to our initial business combination.

 Prior to our initial business combination, only
holders of our founder shares will have the right to vote on the appointment of our directors. Holders of our public shares will not be
entitled to vote on the appointment of our directors during such time. In addition, prior to the completion of an initial business combination,
holders of a majority of our founder shares may remove a member of the Board for any reason. Accordingly, you may not have any say in
the management of our company prior to the completion of an initial business combination.

 The grant of registration rights to our sponsor may make it more
difficult to complete our initial business combination, and the future exercise of such rights may adversely affect the market price of
the shares of our Class A common stock.

 Pursuant to an agreement entered into concurrently
with the issuance and sale of the securities in our IPO, our sponsor and its permitted transferees can demand that we register the shares
of our Class A common stock into which founder shares are convertible, the private placement warrants and the Class A common stock issuable
upon exercise of the private placement warrants, and warrants that may be issued upon conversion of working capital loans and the Class
A common stock issuable upon conversion of such warrants. The registration rights will be exercisable with respect to the founder shares
and the private placement warrants and the Class A common stock issuable upon exercise of such private placement warrants. The registration
and availability of such a significant number of securities for trading in the public market may have an adverse effect on the market
price of our Class A common stock. In addition, the existence of the registration rights may make our initial business combination more
costly or difficult to conclude. This is because the stockholders of the target business may increase the equity stake they seek in the
combined entity or ask for more cash consideration to offset the negative impact on the market price of our Class A common stock that
is expected when the securities owned by our sponsor or initial stockholders, holders of our private placement warrants or holders of
warrants issued upon conversion of working capital loans, if any, or their permitted transferees are registered.

 We may seek business combination opportunities with a high degree
of complexity that require significant operational improvements, which could delay or prevent us from achieving our desired results.

 We may seek business combination opportunities
with large, highly complex companies that we believe would benefit from operational improvements. While we intend to implement such improvements,
to the extent that our efforts are delayed or we are unable to achieve the desired improvements, the business combination may not be as
successful as we anticipate.

 To the extent we complete our initial business
combination with a large complex business or entity with a complex operating structure, we may also be affected by numerous risks inherent
in the operations of the business with which we combine, which could delay or prevent us from implementing our strategy. Although our
management team will endeavor to evaluate the risks inherent in a particular target business and its operations, we may not be able to
properly ascertain or assess all of the significant risk factors until we complete our business combination. If we are not able to achieve
our desired operational improvements, or the improvements take longer to implement than anticipated, we may not achieve the gains that
we anticipate. Furthermore, some of these risks and complexities may be outside of our control and leave us with no ability to control
or reduce the chances that those risks and complexities will adversely impact a target business. Such combination may not be as successful
as a combination with a smaller, less complex organization.

 Changes in the market for directors and officers liability insurance
could make it more difficult and more expensive for us to negotiate and complete an initial business combination.

 In recent months, the market for directors and
officers liability insurance for special purpose acquisition companies has changed in ways adverse to us and our management team. Fewer
insurance companies are offering quotes for directors and officers liability coverage, the premiums charged for such policies have generally
increased and the terms of such policies have generally become less favorable. These trends may continue into the future.

 The increased cost and decreased availability of
directors and officers liability insurance could make it more difficult and more expensive for us to negotiate an initial business combination.
In order to obtain directors and officers liability insurance or modify its coverage as a result of becoming a public company, the post-business
combination entity might need to incur greater expense, accept less favorable terms or both. However, any failure to obtain adequate directors
and officers liability insurance could have an adverse impact on the post-business combination's ability to attract and retain qualified
officers and directors.

 In addition, even after we were to complete an
initial business combination, our directors and officers could still be subject to potential liability from claims arising from conduct
alleged to have occurred prior to the initial business combination. As a result, in order to protect our directors and officers, the post-business
combination entity may need to purchase additional insurance with respect to any such claims ("run-off insurance"). The need
for run-off insurance would be an added expense for the post-business combination entity, and could interfere with or frustrate our ability
to complete an initial business combination on terms favorable to our investors.

 Risks Relating to Our Sponsor and Management Team

 Our ability to successfully effect our initial business combination
and to be successful thereafter will be totally dependent upon the efforts of our key personnel, some of whom may join us following our
initial business combination. The loss of key personnel could negatively impact the operations and profitability of our post-combination
business.

 Our ability to successfully effect our initial
business combination is dependent upon the efforts of our key personnel. The role of our key personnel in the target business, however,
cannot presently be ascertained. Although some of our key personnel may remain with the target business in senior management, director
or advisory positions following our initial business combination, it is likely that some or all of the management of the target business
will remain in place. While we intend to closely scrutinize any individuals we engage after our initial business combination, we cannot
assure you that our assessment of these individuals will prove to be correct. These individuals may be unfamiliar with the requirements
of operating a company regulated by the SEC, which could cause us to have to expend time and resources helping them become familiar with
such requirements.

 We are dependent upon our executive officers and directors and
their loss could adversely affect our ability to operate.

 Our operations are dependent upon a relatively
small group of individuals and, in particular, our executive officers and directors. We believe that our success depends on the continued
service of our officers and directors, at least until we have completed our initial business combination. In addition, our executive officers
and directors are not required to commit any specified amount of time to our affairs and, accordingly, will have conflicts of interest
in allocating their time among various business activities, including identifying potential business combinations and monitoring the related
due diligence. We do not have an employment agreement with, or key-man insurance on the life of, any of our directors or executive officers.
The unexpected loss of the services of one or more of our directors or executive officers could have a detrimental effect on us.

 The officers and directors of an acquisition
candidate may resign upon completion of our initial business combination. The loss of a business combination target's key personnel
could negatively impact the operations and profitability of our post-combination business.

 The role of an acquisition candidate's key
personnel upon the completion of our initial business combination cannot be ascertained at this time. Although we contemplate that certain
members of an acquisition candidate's management team will remain associated with the acquisition candidate following our initial
business combination, it is possible that members of the management of an acquisition candidate will not wish to remain in place.

 Our executive officers and directors will allocate their time
to other businesses thereby causing conflicts of interest in their determination as to how much time to devote to our affairs. This conflict
of interest could have a negative impact on our ability to complete our initial business combination.

 Our executive officers and directors are not required
to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our
operations and our search for a business combination and their other businesses. We do not intend to have any full-time employees prior
to the completion of our initial business combination. Each of our executive officers and directors is engaged in several other business
endeavors for which he may be entitled to substantial compensation, and our executive officers and directors are not obligated to contribute
any specific number of hours per week to our affairs. In particular, an affiliate of our sponsor and our officers and directors participated
in the formation and management of XPDI I, a special purpose acquisition company that completed its initial business combination with
Core Scientific Holding Co. ("Core Scientific") in January 2022. In addition, our directors and officers and their and our
sponsor's respective affiliates may sponsor, form or participate in other blank check companies similar to ours during the period
in which we are seeking an initial business combination. Such entities may compete with us for business combination opportunities. Our
independent directors also serve as officers and board members for other entities. If our executive officers' and directors'
other business affairs require them to devote substantial amounts of time to such affairs in excess of their current commitment levels,
it could limit their ability to devote time to our affairs which may have a negative impact on our ability to complete our initial business
combination.

 Our officers and directors presently have, and any of them in
the future may have additional, fiduciary or contractual obligations to other entities, including or one or more other blank check companies,
and, accordingly, may have conflicts of interest in allocating their time and determining to which entity a particular business opportunity
should be presented.

 Until we complete our initial business combination,
we intend to engage in the business of identifying and combining with one or more businesses or entities. Each of our officers and directors
presently has, and any of them in the future may have, additional fiduciary or contractual obligations to other entities, including one
or more other blank check companies, pursuant to which such officer or director is or will be required to present a business combination
opportunity to such entity, subject to his or her fiduciary duties under Delaware law. Accordingly, they may have conflicts of interest
in determining to which entity a particular business opportunity should be presented. These conflicts may not be resolved in our favor
and a potential target business may be presented to another entity prior to its presentation to us, subject to their fiduciary duties
under Delaware law. However, we do not believe that any potential conflicts would materially affect our ability to complete our initial
business combination.

 In addition, our directors and officers and our
sponsor or its affiliates may in the future become affiliated with other blank check companies that may have acquisition objectives that
are similar to ours. Accordingly, they may have conflicts of interest in determining to which entity a particular business opportunity
should be presented. These conflicts may not be resolved in our favor and a potential target business may be presented to such other blank
check companies prior to its presentation to us, subject to our officers' and directors' fiduciary duties under Delaware law.
Our amended and restated certificate of incorporation provides that we renounce our interest in any business combination opportunity offered
to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or
officer of the company and it is an opportunity that we are able to complete on a reasonable basis.

 Our executive officers, directors, security holders and their
respective affiliates may have competitive pecuniary interests that conflict with our interests.

 We have not adopted a policy that expressly prohibits
our directors, executive officers, security holders or affiliates from having a direct or indirect pecuniary or financial interest in
any investment to be acquired or disposed of by us or in any transaction to which we are a party or have an interest. In fact, we may
enter into a business combination with a target business that is affiliated with our sponsor, our directors or executive officers, although
we do not intend to do so. Nor do we have a policy that expressly prohibits any such persons from engaging for their own account in business
activities of the types conducted by us, including the formation or participation in one or more other blank check companies. Accordingly,
such persons or entities may have a conflict between their interests and ours.

 The personal and financial interests of our directors
and officers may influence their motivation in timely identifying and selecting a target business and completing a business combination.
Consequently, our directors' and officers' discretion in identifying and selecting a suitable target business may result in
a conflict of interest when determining whether the terms, conditions and timing of a particular business combination are appropriate
and in our stockholders' best interest. If this were the case, it would be a breach of their fiduciary duties to us as a matter
of Delaware law and we or our stockholders might have a claim against such individuals for infringing on our stockholders' rights.
However, we might not ultimately be successful in any claim we may make against them for such reason.

 We may engage in a business combination with one or more target
businesses that have relationships with entities that may be affiliated with our sponsor, executive officers, directors or existing holders
which may raise potential conflicts of interest.

 In light of the involvement of our sponsor, executive
officers and directors with other entities, we may decide to acquire one or more businesses affiliated with our sponsor, executive officers,
directors or existing holders. Our directors also serve as officers and board members for other entities. Our directors and officers and
our sponsor or its affiliates may sponsor, form or participate in other blank check companies similar to ours during the period in which
we are seeking an initial business combination. Such entities may compete with us for business combination opportunities. Our sponsor,
including any of its affiliates, officers and directors are not currently aware of any specific opportunities for us to complete our initial
business combination with any entities with which they are affiliated, and there have been no substantive discussions concerning a business
combination with any such entity or entities. Although we will not be specifically focusing on, or targeting, any transaction with any
affiliated entities, we would pursue such a transaction if we determined that such affiliated entity met our criteria for a business combination
as set forth in the section of this Report entitled "Item 1-Evaluation of a Target Business and Structuring of our Initial Business
Combination" and such transaction was approved by a majority of our independent and disinterested directors. Despite our agreement
to obtain an opinion from an independent investment banking firm, or from an independent accounting firm, regarding the fairness to our
company from a financial point of view of a business combination with one or more domestic or international businesses affiliated with
our sponsor, executive officers, directors or existing holders, potential conflicts of interest still may exist and, as a result, the
terms of the business combination may not be as advantageous to our public stockholders as they would be absent any conflicts of interest.

 Since our sponsor, anchor investors, executive officers and directors
will lose their entire investment in us if our initial business combination is not completed (other than with respect to public shares
they may acquire during or after our IPO), and because our sponsor, executive officers and directors who have an interest in founder shares
may profit substantially from a business combination even under circumstances where our public stockholders would experience losses in
connection with their investment, a conflict of interest may arise in determining whether a particular business combination target is
appropriate for our initial business combination.

 In March 2021, our sponsor paid an aggregate of
$25,000, or approximately $0.004 per share, to cover certain of our offering costs in consideration of 5,750,000 shares of our Class B
common stock. In November 2021, we effected a stock dividend of 1,437,500 shares of our Class B common stock, resulting in there being
an aggregate of 7,187,500 shares of our Class B common stock outstanding. We have agreed to sell to the anchor investors 1,078,125 founder
shares and the anchor investors have agreed to purchase from us on the date of the initial business combination an aggregate of 1,078,125
founder shares for an aggregate purchase price of approximately $3,750, or approximately $0.004 per share. Our sponsor has also agreed
that in the event of such purchase by the anchor investors, our sponsor will forfeit to us for no consideration a number of founder shares
equal to the number of founder shares purchased by the anchor investors. In July 2021, our sponsor transferred 30,000 shares of Class
B common stock to each of the four independent director nominees, a total of 120,000 shares of Class B common stock. In November 2021,
our sponsor repurchased 30,000 shares of Class B common stock from a former independent director nominee. Prior to the initial investment
in the company of $25,000 by our sponsor, the company had no assets, tangible or intangible. The number of founder shares issued was determined
based on the expectation that such founder shares would represent 20% of the outstanding shares after our IPO. The founder shares will
be worthless if we do not complete an initial business combination. In addition, our sponsor and the anchor investors purchased an aggregate
of 11,125,000 private placement warrants, each exercisable to purchase one share of our Class A common stock at $11.50 per share, for
a purchase price of approximately $11,125,000, or $1.00 per whole warrant, that will also be worthless if we do not complete a business
combination. Among the private placement warrants, 8,900,000 private placement warrants were purchased by our sponsor and an aggregate
of 2,225,000 private placement warrants were purchased by the anchor investors. Our initial stockholders have agreed (A) to vote any shares
owned by them in favor of any proposed business combination and (B) not to redeem any founder shares in connection with a stockholder
vote to approve a proposed initial business combination. In addition, we may obtain loans from our sponsor, affiliates of our sponsor
or an officer or director, and we may pay our sponsor, officers, directors and any of their respective affiliates fees and expenses in
connection with identifying, investigating and completing an initial business combination. Additionally, in the event that the anchor
investors purchase units (either in our IPO or after) and vote them in favor of our initial business combination, it is possible that
no votes from other public stockholders would be required to approve our initial business combination, depending on the number of shares
that are present at the meeting to approve such transaction. As a result of the founder shares and private placement warrants that our
anchor investors may hold (directly or indirectly), they may have different interests with respect to a vote on an initial business combination
than other public stockholders.

 The personal and financial interests of our executive
officers and directors may influence their motivation in identifying and selecting a target business combination, completing an initial
business combination and influencing the operation of the business following the initial business combination and may result in a misalignment
of interests between the holders of our founder shares and our officers and directors, on the one hand, and our public stockholders, on
the other. In particular, because the founder shares were purchased at approximately $0.004 per share, the holders of our founder shares
(including members of our management team that directly or indirectly own founder shares) could make a substantial profit after our initial
business combination even if our public stockholders lose money on their investment as a result of a decrease in the post-combination
value of their shares of Class A common stock (after accounting for any adjustments in connection with an exchange or other transaction
contemplated by the business combination). For example, a holder of 1,000 founder shares would have paid approximately $4.00 to obtain
such shares. At the time of an initial business combination, such holder would be able to convert such founder shares into 1,000 shares
of our Class A common stock, and would receive the same consideration in connection with our initial business combination as a public
stockholder for the same number of shares of our Class A common stock. If the value of the shares of our Class A common stock on a post-combination
basis (after accounting for any adjustments in connection with an exchange or other transaction contemplated by the business combination)
were to decrease to $5.00 per share of our Class A common stock, the holder of our founder shares would obtain a profit of approximately
$4,996 on account of the 1,000 founder shares that the holder had converted into shares of Class A common stock in connection with the
initial business combination. By contrast, a public stockholder holding 1,000 shares of Class A common stock would lose approximately
$5,000 in connection with the same transaction.

 Further, each of our officers and directors may
have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers
and directors were to be included by a target business as a condition to any agreement with respect to our initial business combination.

 Our management may not be able to maintain control
of a target business after our initial business combination. Upon the loss of control of a target business, new management may not possess
the skills, qualifications or abilities necessary to profitably operate such business. We may structure our initial business combination
so that the post-transaction company in which our public stockholders own shares will own less than 100% of the equity interests or assets
of a target business, but we will only complete such business combination if the post-transaction company owns or acquires 50% or more
of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for us not to
be required to register as an investment company under the Investment Company Act. We will not consider any transaction that does not
meet such criteria. Even if the post-transaction company owns 50% or more of the voting securities of the target, our stockholders prior
to our initial business combination may collectively own a minority interest in the post business combination company, depending on valuations
ascribed to the target and us in the business combination. For example, we could pursue a transaction in which we issue a substantial
number of new shares of our Class A common stock in exchange for all of the outstanding capital stock, shares or other equity interests
of a target. In this case, we would acquire a 100% interest in the target. However, as a result of the issuance of a substantial number
of new shares of our Class A common stock, our stockholders immediately prior to such transaction could own less than a majority of our
issued and outstanding Class A common stock subsequent to such transaction. In addition, other minority stockholders may subsequently
combine their holdings resulting in a single person or group obtaining a larger share of the company's shares than we initially
acquired. Accordingly, this may make it more likely that our management will not be able to maintain control of the target business.

 Risks Relating to Our Securities

 If we were deemed to be an investment company
for purposes of the Investment Company Act, we may be forced to abandon our efforts to consummate an initial business combination and
instead be required to liquidate. To avoid that result, on December 14, 2023, we liquidated the securities held in the trust account
and instead hold all funds in a segregated, interest-bearing bank demand deposit account. Such deposit account carries a variable interest
rate, and we cannot assure you that the initial rate will not decrease or increase significantly. As a result, we will likely receive
reduced interest income, on the funds held in the trust account, which would reduce the dollar amount that XPDB Public Stockholders would
receive upon any redemption or liquidation of the Company.

 On March 30, 2022, the SEC issued the SPAC Rule
Proposals, relating, among other things, to circumstances surrounding SPACs, for example, XPDB potentially being subject to the Investment
Company Act and the regulations thereunder. The SPAC Rule Proposals provide a safe harbor for such companies from the definition of "investment
company" under Section 3(a)(1)(A) of the Investment Company Act, provided that a SPAC satisfies certain criteria. To comply with
the duration limitation of the proposed safe harbor, a SPAC would have a limited time period to announce and complete a de-SPAC transaction.
Specifically, to comply with the safe harbor, the SPAC Rule Proposals would require a SPAC to file a report on Form 8-K announcing that
it has entered into an agreement with a target company for an initial business combination no later than 18 months after the effective
date of the registration statement relating to the SPAC's initial public offering. Such SPAC would then be required to complete
its initial business combination no later than 24 months after the effective date of the registration statement relating to its initial
public offering.

 There is currently uncertainty concerning the applicability
of the Investment Company Act to a SPAC, including a company like ours, that has entered into a definitive agreement within 18 months
after the effective date of the registration statement relating to its initial public offering, but does not consummate its initial business
combination within 24 months after such date. It is possible that a claim could be made that we have been operating as an unregistered
investment company. If we were deemed to be an investment company for purposes of the Investment Company Act, we might be forced to abandon
efforts to consummate an initial business combination and instead be required to liquidate. If we are required to liquidate, our investors
would not be able to realize the benefits of owning shares in a successor operating business, including the potential appreciation in
the value of our shares and warrants following such a transaction, and our warrants would expire worthless.

 Initially, the funds in the trust account were,
since our IPO, held only in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act,
with a maturity of 185 days or less, or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company
Act which invest only in direct U.S. government treasury obligations. However, to mitigate the risk of being deemed to have been operating
as an unregistered investment company (including under the subjective test of Section 3(a)(1)(A) of the Investment Company Act), on December
14, 2023, we instructed the trustee with respect to the trust account to liquidate the U.S. government securities or money market funds
held in the trust account and thereafter to maintain all funds in the trust account in a segregated, interest-bearing demand deposit account
at a national bank until the earlier of consummation of an initial business combination or liquidation. Interest on such demand deposit
account is currently expected to yield approximately 4.5% per annum, but such demand deposit account carries a variable rate and we cannot
assure investors that such rate will not decrease or increase significantly. As a result, we are receiving and will likely receive reduced
interest income on the funds held in the trust account, which would reduce the dollar amount stockholders would receive upon any redemption
or liquidation.

 Changes in laws or regulations, or a failure to comply with any
laws and regulations, may adversely affect our business, including our ability to negotiate and complete our initial business combination
and results of operations.

 We are subject to laws and regulations enacted
by national, regional and local governments. In particular, we are required to comply with certain SEC and other legal requirements. Compliance
with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their
interpretation and application may also change from time to time and those changes could have a material adverse effect on our business,
investments and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied,
could have a material adverse effect on our business, including our ability to negotiate and complete our initial business combination,
and results of operations.

 On January 24, 2024, the SEC adopted new rules
relating to, among other items, enhancing disclosures in business combination transactions involving SPACs and private operating companies
and increasing the potential liability of certain participants in proposed business combination transactions. These rules may materially
increase the costs and time required to negotiate and complete an initial business combination and could potentially impair our ability
to complete an initial business combination.

 On August 16, 2022, the Inflation Reduction Act
of 2022 (the "IR Act") was signed into federal law. The IR Act provides for, among other things, a new U.S. federal 1% excise
tax on certain repurchases (including redemptions) of shares by publicly traded U.S. domestic corporations and certain U.S. domestic subsidiaries
of publicly traded foreign corporations occurring on or after January 1, 2023. The excise tax is imposed on the repurchasing corporation
itself, not its shareholders from which shares are repurchased, and thus could cause a reduction in the value of our Class A common stock.
The amount of the excise tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase. However,
for purposes of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain new shares
issuances against the fair market value of shares repurchases during the same taxable year. In addition, certain exceptions apply to the
excise tax. The U.S. Department of the Treasury (the "Treasury") has been given authority to provide regulations and other
guidance to carry out and prevent the abuse or avoidance of the excise tax. Any share redemption or other share repurchase that occurs
after December 31, 2022, in connection with a business combination, the exercise of a redemption right, the liquidation of our company,
or otherwise, may be subject to the excise tax. Whether and to what extent we would be subject to the excise tax in connection with a
business combination, the exercise of a redemption right, the liquidation of our company, or otherwise will depend on a number of factors,
including (i) the fair market value of the redemptions and repurchases in connection with the business combination or otherwise, (ii)
the structure of a business combination, (iii) the nature and amount of any "PIPE" or other equity issuances in connection
with a business combination (or otherwise issued not in connection with a business combination but issued within the same taxable year
of a business combination) and (iv) the content of regulations and other guidance from the Treasury. In addition, because the excise tax
would be payable by us and not by the redeeming holder, the mechanics of any required payment of the excise tax have not been determined.
The foregoing could cause a reduction in the cash available on hand to complete a business combination and in our ability to complete
a business combination. Further, the application of the excise tax in the event of a liquidation is uncertain.

 If we seek stockholder approval of our initial business combination
and we do not conduct redemptions pursuant to the tender offer rules, and if you or a "group" of stockholders are deemed to
hold in excess of 15% of our Class A common stock, you will lose the ability to redeem all such shares in excess of 15% of our Class A
common stock.

 If we seek stockholder approval of our initial
business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer
rules, our amended and restated certificate of incorporation provides that a public stockholder, together with any affiliate of such stockholder
or any other person with whom such stockholder is acting in concert or as a "group" (as defined under Section 13 of the Exchange
Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 15% of the shares sold in our IPO without
our prior consent (the "excess shares"). However, we would not be restricting our stockholders' ability to vote all
of their shares (including excess shares) for or against our initial business combination. Your inability to redeem the excess shares
will reduce your influence over our ability to complete our initial business combination and you could suffer a material loss on your
investment in us if you sell excess shares in open market transactions. Additionally, you will not receive redemption distributions with
respect to the excess shares if we complete our initial business combination. As a result, you will continue to hold that number of shares
exceeding 15% and, in order to dispose of such shares, would be required to sell your shares in open market transactions, potentially
at a loss.

 The Nasdaq may delist our securities from trading on its exchange,
which could limit investors' ability to make transactions in our securities and subject us to additional trading restrictions.

 Our units, Class A common stock and warrants are
currently listed on the Nasdaq under the symbol "XPDBU", "XPDB" and "XPDBW", respectively. Although
we expect to continue to meet, on a pro forma basis, the minimum initial listing standards set forth in the Nasdaq listing standards,
we cannot assure you that our securities will continue to be listed on the Nasdaq in the future or prior to our initial business combination.
In order to continue listing our securities on the Nasdaq prior to our initial business combination, we must maintain certain financial,
distribution and share price levels. Generally, we must maintain a minimum stockholders' equity (generally $2,000,000) and a minimum
number of holders of our securities (generally 300 public holders).

 Additionally, our units will not be traded after
completion of our initial business combination and, in connection with our initial business combination, we will be required to demonstrate
compliance with the Nasdaq initial listing requirements, which are more rigorous than the Nasdaq continued listing requirements, in order
to continue to maintain the listing of our securities on the Nasdaq.

 For instance, our share price would generally be
required to be at least $4.00 per share and our stockholders' equity would generally be required to be at least $5.0 million and
we would be required to have a minimum of 300 round lot holders of our securities, with at least 50% of such round lot holders holding
securities with a market value of at least $2,500. We cannot assure you that we will be able to meet those initial listing requirements
at that time.

 If the Nasdaq delists any of our securities from
trading on its exchange and we are not able to list our securities on another national securities exchange, we expect our securities could
be quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including:

 a
limited availability of market quotations for our securities;

 reduced
liquidity for our securities;

 a
determination that our Class A common stock are a "penny stock" which will require brokers trading in our Class A common
stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for
our securities;

 a
limited amount of news and analyst coverage; and

 a
decreased ability to issue additional securities or obtain additional financing in the future.

 The National Securities Markets Improvement Act
of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred
to as "covered securities." Because our units, Class A common stock and public warrants are listed on the Nasdaq, our units,
Class A common stock and public warrants qualify as covered securities under the statute. Although the states are preempted from regulating
the sale of our securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and,
if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case.
While we are not aware of a state having used these powers to prohibit or restrict the sale of securities issued by blank check companies,
other than the State of Idaho, certain state securities regulators view blank check companies unfavorably and might use these powers,
or threaten to use these powers, to hinder the sale of securities of blank check companies in their states. Further, if we were no longer
listed on the Nasdaq, our securities would not qualify as covered securities under the statute, and we would be subject to regulation
in each state in which we offer our securities.

 We may issue additional shares of our Class A common stock or
preferred stock to complete our initial business combination or under an employee incentive plan after completion of our initial business
combination. We may also issue shares of our Class A common stock upon the conversion of the founder shares at a ratio greater than one-to-one
at the time of our initial business combination as a result of the anti-dilution provisions contained in our amended and restated certificate
of incorporation. Any such issuances would dilute the interest of our stockholders and likely present other risks.

authorizes the issuance of up to 500,000,000 shares of our Class A common stock, par value $0.0001 per share, 50,000,000 shares of our
Class B common stock, par value $0.0001 per share, and 1,000,000 shares of preferred stock, par value $0.0001 per share. There are 489,391,282
and 42,812,500 authorized but unissued shares of our Class A common stock and Class B common stock, respectively, available for issuance
which amount does not take into account shares reserved for issuance upon exercise of outstanding warrants or shares issuable upon conversion
of the Class B common stock, if any. The Class B common stock is automatically convertible into Class A common stock at the time of our
initial business combination as described herein and in our amended and restated certificate of incorporation. There are currently no
shares of preferred stock issued and outstanding.

 We may issue a substantial number of additional
shares of our Class A common stock or shares of preferred stock to complete our initial business combination or under an employee incentive
plan after completion of our initial business combination. We may also issue Class A common stock to redeem the warrants upon conversion
of the Class B common stock at a ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution
provisions contained in our amended and restated certificate of incorporation. However, our amended and restated certificate of incorporation
provides, among other things, that prior to or in connection with our initial business combination, we may not issue additional shares
that would entitle the holders thereof to (i) receive funds from the Trust Account or (ii) vote on any initial business combination or
on any other proposal presented to stockholders prior to or in connection with the completion of an initial business combination. These
provisions of our amended and restated certificate of incorporation, like all provisions of our amended and restated certificate of incorporation,
may be amended with a stockholder vote. The issuance of additional shares of common stock or shares of preferred stock:

 may
significantly dilute the equity interest of our investors;

 may
subordinate the rights of holders of our Class A common stock if shares of preferred stock are issued with rights senior to those afforded
our Class A common stock;

 could
cause a change in control if a substantial number of shares of our Class A common stock are issued, which may affect, among other things,
our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers
and directors;

 may
adversely affect prevailing market prices for our units, Class A common stock and/or public warrants; and

 will
not result in adjustment to the exercise price of our warrants.

 You will not be permitted to exercise your warrants unless we
register and qualify the issuance of the underlying Class A common stock or certain other exemptions are available.

 If the issuance of the Class A common stock upon
the exercise of the warrants is not registered, qualified or exempt from registration or qualification under the Securities Act and applicable
state securities laws, warrant holders will not be entitled to exercise such warrants and such warrants may have no value and expire worthless.

 We do not plan on keeping a prospectus current
until required pursuant to the warrant agreements. Under the terms of the warrant agreements, we have agreed to use our commercially reasonable
efforts to file a registration statement under the Securities Act covering such shares and maintain a current prospectus relating to the
Class A common stock issuable upon exercise of the warrants until the expiration of the warrants in accordance with the provisions of
the warrant agreements. We cannot assure you that we will be able to do so if, for example, any facts or events arise which represent
a fundamental change in the information set forth in the registration statement or prospectus, the financial statements contained or incorporated
by reference therein are not current or correct or the SEC issues a stop order.

 If the shares of our Class A common stock issuable
upon exercise of the warrants are not registered under the Securities Act, we will be required to permit holders to exercise their warrants
on a cashless basis, in which case the number of shares of our Class A common stock that you will receive upon cashless exercise will
be equal to the quotient obtained by dividing (x) the product of (a) the number of shares of our Class A common stock underlying the warrants
and (b) the excess of the "fair market value" over the exercise price of the warrants by (y) such fair market value. The "fair
market value" shall mean the average last reported sale price of the shares of our Class A common stock for the 10 trading days
ending on the trading day prior to the date on which the notice of exercise is received by the warrant agent.

 However, no such warrant will be exercisable for
cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the
issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder,
unless an exemption from state registration is available.

 Notwithstanding the above, if the shares of our
Class A common stock are at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies
the definition of a "covered security" under Section 18(b)(1) of the Securities Act, we may, at our option, require holders
of public warrants who exercise their public warrants to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities
Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement, but we will be required
to use our commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption
is not available. In no event will we be required to net cash settle any warrant, or issue securities or other compensation in exchange
for the warrants in the event that we are unable to register or qualify the shares underlying the warrants under the Securities Act or
applicable state securities laws and there is no exemption available.

 If the issuance of the shares upon exercise of
the warrants is not so registered or qualified or exempt from registration or qualification, the holder of such warrant will not be entitled
to exercise such warrant and such warrant may have no value and expire worthless. In such event, holders who acquired their warrants as
part of a purchase of units will have paid the full unit purchase price solely for the shares of our Class A common stock included in
the units. There may be a circumstance where an exemption from registration exists for holders of our private placement warrants to exercise
their warrants while a corresponding exemption does not exist for holders of the warrants included as part of units sold in our IPO. In
such an instance, our sponsor and its permitted transferees (which may include our directors and executive officers) would be able to
sell the common stock underlying their warrants while holders of our public warrants would not be able to exercise their warrants and
sell the underlying common stock. There may be a circumstance where an exemption from registration exists for holders of our private placement
warrants to exercise their warrants while a corresponding exemption does not exist for holders of the warrants included as part of units
sold in our IPO. In such an instance, our sponsor and its permitted transferees (which may include our directors and executive officers)
would be able to sell the shares of common stock underlying their warrants while holders of our public warrants would not be able to exercise
their warrants and sell the underlying shares of common stock. If and when the warrants become redeemable by us, we may exercise our redemption
right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws.

 Our public warrant agreement designates the courts of the State
of New York or the United States District Court for the Southern District of New York as the sole and exclusive forum for certain types
of actions and proceedings that may be initiated by holders of our public warrants, which could limit the ability of warrant holders to
obtain a favorable judicial forum for disputes with our company.

 Our public warrant agreement provides that, subject
to applicable law, (i) any action, proceeding or claim against us arising out of or relating in any way to the public warrant agreement,
including under the Securities Act, will be brought and enforced in the courts of the State of New York or the United States District
Court for the Southern District of New York, and (ii) that we irrevocably submit to such jurisdiction, which jurisdiction shall be the
exclusive forum for any such action, proceeding or claim. We will waive any objection to such exclusive jurisdiction and that such courts
represent an inconvenient forum.

 Notwithstanding the foregoing, these provisions
of the public warrant agreements will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other
claim for which the federal district courts of the United States of America are the sole and exclusive forum. Any person or entity purchasing
or otherwise acquiring any interest in any of our public warrants shall be deemed to have notice of and to have consented to the forum
provisions in our public warrant agreement.

 If any action, the subject matter of which is within
the scope of the forum provisions of the public warrant agreement, is filed in a court other than a court of the State of New York or
the United States District Court for the Southern District of New York (a "foreign action") in the name of any holder of our
public warrants, such holder shall be deemed to have consented to: (x) the personal jurisdiction of the state and federal courts located
in the State of New York in connection with any action brought in any such court to enforce the forum provisions (an "enforcement
action"), and (y) having service of process made upon such warrant holder in any such enforcement action by service upon such warrant
holder's counsel in the foreign action as agent for such warrant holder.

 This choice-of-forum provision may limit a warrant
holder's ability to bring a claim in a judicial forum that it finds favorable for disputes with our company, which may discourage
such lawsuits. Warrant holders who are unable to bring their claims in the judicial forum of their choosing may be required to incur additional
costs in pursuit of actions which are subject to our choice-of-forum provision. Alternatively, if a court were to find this provision
of our public warrant agreement inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings,
we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially and adversely affect
our business, financial condition and results of operations and result in a diversion of the time and resources of our management and
Board.

 We may redeem your unexpired public warrants prior to their exercise
at a time that is disadvantageous to you, thereby making your public warrants worthless.

 We have the ability to redeem the outstanding public
warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, if, among other things,
the last reported sale price of the Class A common stock has been at least $18.00 per share for any 20 trading days within a 30 trading
day period ending three business days before we send the notice of redemption to the warrant holders (as adjusted for adjustments to the
number of shares issuable upon exercise or the exercise price of a warrant). If and when the public warrants become redeemable by us,
we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable
state securities laws. Redemption of the outstanding public warrants as described above could force you to (i) exercise your public warrants
and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) sell your public warrants at the then-current
market price when you might otherwise wish to hold your public warrants or (iii) accept the nominal redemption price which, at the time
the outstanding public warrants are called for redemption, we expect would be substantially less than the market value of your public
warrants. None of the private placement warrants will be redeemable by us so long as they are held by our sponsor, the anchor investors
or their respective permitted transferees.

 Our warrants and founder shares may have an adverse effect on
the market price of the shares of our Class A common stock and make it more difficult to effectuate our initial business combination.

 We issued public warrants to purchase 14,375,000
shares of our Class A common stock as part of the units offered in our IPO and, simultaneously with the closing of the IPO, we issued
in a private placement an aggregate of 11,125,000 private placement warrants, each exercisable to purchase one share of our Class A common
stock at $11.50 per share. Our sponsor currently owns an aggregate of 7,097,500 founder shares and our independent directors own 90,000
founder shares. The founder shares are convertible into Class A common stock on a one-for-one basis, subject to adjustment as set forth
herein. In addition, if our sponsor makes any working capital loans, up to $1,500,000 of such loans may be converted into warrants, at
the price of $1.00 per warrant at the option of the lender. Such warrants would be identical to the private placement warrants, including
as to exercise price, exercisability and exercise period.

 To the extent we issue Class A common stock for
any reason, including to effectuate a business combination, the potential for the issuance of a substantial number of additional shares
of our Class A common stock upon exercise of these warrants and conversion rights could make us a less attractive acquisition vehicle
to a target business. Such warrants when exercised will increase the number of issued and outstanding shares of our Class A common stock
and reduce the value of the Class A common stock issued to complete the business transaction. Therefore, our warrants and founder shares
may make it more difficult to effectuate a business transaction or increase the cost of acquiring the target business.

 Because each unit sold in our IPO contains one-half of one public
warrant and only a whole warrant may be exercised, the units may be worth less than units of other blank check companies.

 Each unit sold in our IPO contains one-half of
one public warrant. Pursuant to the public warrant agreement, no fractional warrants will be issued upon separation of the units, and
only whole units will trade. If, upon exercise of the public warrants, a holder would be entitled to receive a fractional interest in
a share, we will, upon exercise, round down to the nearest whole number the number of shares of our Class A common stock to be issued
to the warrant holder. This is different from other offerings similar to ours whose units include one share of common stock and one warrant
to purchase one share of common stock. We have established the components of the units in this way in order to reduce the dilutive effect
of the warrants upon completion of a business combination since the warrants will be exercisable in the aggregate for one-half of the
number of shares compared to units that each contain a whole warrant to purchase one share, thus making us, we believe, a more attractive
merger partner for target businesses. Nevertheless, this unit structure may cause our units to be worth less than if it included a public
warrant to purchase one whole share.

 Our ability to require holders of our public warrants to exercise
such public warrants on a cashless basis after we call the public warrants for redemption or if there is no effective registration statement
covering the Class A common stock issuable upon exercise of these public warrants will cause holders to receive fewer shares of our Class
A common stock upon their exercise of the public warrants than they would have received had they been able to exercise their public warrants
for cash.

 If our shares of Class A common stock are at the
time of any exercise of a warrant not listed on a national securities exchange such that our shares of Class A common stock satisfy the
definition of a "covered security" under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of
public warrants who exercise their public warrants to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities Act
and, in the event we elect to do so, we will not be required to file or maintain in effect a registration statement, but we will use our
commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.
"Cashless exercise" means each holder would pay the exercise price by surrendering warrants in exchange for a number of shares
of our Class A common stock equal to the quotient obtained by dividing (x) the product of (a) the number of shares of our Class A common
stock underlying the warrants and (b) the excess of the "fair market value" over the exercise price of the warrants by (y)
such fair market value. The "fair market value" shall mean the average last reported sale price of the shares of our Class
A common stock for the 10 trading days ending on the trading day prior to the date on which the notice of exercise is received by the
warrant agent.

 In addition, if a post-effective amendment or a
new registration statement covering the Class A common stock issuable upon exercise of the warrants is not effective within a specified
period following the completion of our initial business transaction, warrant holders may, until such time as there is an effective registration
statement and during any period when we shall have failed to maintain an effective registration statement, exercise warrants on a cashless
basis. For purposes of calculating the number of shares issuable upon such cashless exercise, the "fair market value" of warrants
shall be calculated using the volume weighted average sale price of the Class A common stock for the 10 trading days ending on the trading
day prior to the date on which notice of exercise is received by the warrant agent.

 If we choose to require holders to exercise their
warrants on a cashless basis, which we may do at our sole discretion, or if holders elect to do so when there is no effective registration
statement, the number of shares of our Class A common stock received by a holder upon exercise will be fewer than it would have been had
such holder exercised his or her warrant for cash. For example, if the holder is exercising 875 public warrants at $11.50 per share through
a cashless exercise when the Class A common stock have a "fair market value" of $17.50 per share when there is no effective
registration statement, then upon the cashless exercise, the holder will receive 300 shares of our Class A common stock. The holder would
have received 875 shares of our Class A common stock if the exercise price was paid in cash. This will have the effect of reducing the
potential "upside" of the holder's investment in our company because the warrant holder will hold a smaller number of
shares of our Class A common stock upon a cashless exercise of the warrants they hold.

 The warrants may become exercisable and redeemable for a security
other than the Class A common stock, and you will not have any information regarding such other security at this time.

 In certain situations, including if we are not
the surviving entity in our initial business combination, the warrants may become exercisable for a security other than the Class A common
stock. As a result, if the surviving company redeems your warrants for securities pursuant to the public warrant agreement, you may receive
a security in a company of which you do not have information at this time. Pursuant to the warrant agreements, the surviving company will
be required to use commercially reasonable efforts to register the issuance of the security underlying the warrants within 20 business
days of the closing of an initial business combination.

 We may amend the terms of the public warrants in a manner that
may be adverse to holders of public warrants with the approval by the holders of at least 50% of the then-outstanding public warrants.
As a result, the exercise price of your warrants could be increased, the exercise period could be shortened and the number of our Class
A common stock purchasable upon exercise of a warrant could be decreased, all without your approval.

 Our public warrants were in registered form under
a public warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The public warrant agreement
provides that the terms of the public warrants may be amended without the consent of any holder for the purpose of (i) curing any ambiguity
or correcting any mistake, including to conform the provisions of the warrant agreements to the description of the terms of the warrants
and the warrant agreement set forth in our IPO prospectus, or defective provision, (ii) amending the provisions relating to cash dividends
on common stock as contemplated by and in accordance with the warrant agreement, or (iii) adding or changing any provisions with respect
to matters or questions arising under the warrant agreement as the parties to the warrant agreement may deem necessary or desirable and
that the parties deem to not adversely affect the rights of the registered holders of the warrants in any material respect. All other
modifications or amendments shall require the vote or written consent of the holders of at least 50% of the then-outstanding public warrants.
Accordingly, we may amend the terms of the public warrants in a manner adverse to a holder if holders of at least 50% of the then-outstanding
public warrants approve of such amendment. Although our ability to amend the terms of the public warrants with the consent of at least
50% of the then-outstanding public warrants is unlimited, examples of such amendments could be amendments to, among other things, increase
the exercise price of the warrants, convert the warrants into cash, shorten the exercise period or decrease the number of Class A common
stock purchasable upon exercise of a warrant.

 Provisions in our amended and restated certificate of incorporation
and Delaware law may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for shares
of our Class A common stock and could entrench management.

contains provisions that may discourage unsolicited takeover proposals that stockholders may consider to be in their best interests. These
provisions include a classified board of directors, the ability of the Board to designate the terms of and issue new series of preferred
stock, advance notice provisions for any stockholder proposals or director nominations, and the fact that prior to the completion of our
initial business combination only holders of shares of our Class B common stock, which have been issued to our sponsor, are entitled to
vote on the appointment of our directors, which may make more difficult the removal of management and may discourage transactions that
otherwise could involve payment of a premium over prevailing market prices for our securities.

 We are also subject to anti-takeover provisions
under Delaware law, which could delay or prevent a change of control. Together these provisions may make the removal of management more
difficult and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities.

 Provisions in our amended and restated certificate of incorporation
and Delaware law may have the effect of discouraging lawsuits against our directors and officers.

requires, unless we consent in writing to the selection of an alternative forum, that (i) any derivative action or proceeding brought
on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee to us or
our stockholders, (iii) any action asserting a claim against us, our directors, officers or employees arising pursuant to any provision
of the DGCL or our amended and restated certificate of incorporation or amended and restated bylaws, or (iv) any action asserting a claim
against us, our directors, officers or employees governed by the internal affairs doctrine may be brought only in the Court of Chancery
in the State of Delaware, except any claim (A) as to which the Court of Chancery of the State of Delaware determines that there is an
indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal
jurisdiction of the Court of Chancery within ten days following such determination), (B) which is vested in the exclusive jurisdiction
of a court or forum other than the Court of Chancery, or (C) for which the Court of Chancery does not have subject matter jurisdiction.
If an action is brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process
on such stockholder's counsel. Although we believe this provision benefits us by providing increased consistency in the application
of Delaware law in the types of lawsuits to which it applies, a court may determine that this provision is unenforceable, and to the extent
it is enforceable, the provision may have the effect of discouraging lawsuits against our directors and officers, although our stockholders
will not be deemed to have waived our compliance with federal securities laws and the rules and regulations thereunder.

 Notwithstanding the foregoing, our amended and
restated certificate of incorporation provides that the exclusive forum provision will not apply to suits brought to enforce a duty or
liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. Section 27 of the
Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act
or the rules and regulations thereunder. Although we believe this provision benefits us by providing increased consistency in the application
of Delaware law in the types of lawsuits to which it applies, the provision may have the effect of discouraging lawsuits against our
directors and officers. Additionally, unless we consent in writing to the selection of an alternative forum, the federal district courts
of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising
under the Securities Act against us or any of our directors, officers, other employees or agents. However, there is uncertainty as to
whether a court would enforce the exclusive forum provisions relating to causes of actions arising under the Securities Act.

 Whether a redemption of Class A common stock will be treated
as a sale of such Class A common stock for U.S. federal income tax purposes will depend on a stockholder's specific facts.

 The U.S. federal income tax treatment of a redemption
of Class A common stock will depend on whether the redemption qualifies as a sale of such Class A common stock under Section 302(a) of
the Internal Revenue Code of 1986, as amended (the "Code"), which will depend largely on the total number of shares of our
stock treated as held by the stockholder electing to redeem Class A common stock (including any shares of stock constructively owned
by the holder as a result of owning private placement warrants or public warrants or otherwise) relative to all of the shares of our
stock outstanding both before and after the redemption. If such redemption is not treated as a sale of Class A common stock for U.S.
federal income tax purposes, the redemption will instead be treated as a corporate distribution of cash from us.

 General Risks

 Cyber incidents or attacks directed at us could result in information
theft, data corruption, operational disruption and/or financial loss.

 We depend on digital technologies, including information
systems, infrastructure and cloud applications and services, including those of third parties with which we may deal. Sophisticated and
deliberate attacks on, or security breaches in, our systems or infrastructure, or the systems or infrastructure of third parties or the
cloud, could lead to corruption or misappropriation of our assets, proprietary information and sensitive or confidential data. As an
early stage company without significant investments in data security protection, we may not be sufficiently protected against such occurrences.
In addition, the recent invasion of Ukraine by Russia, and the impact of sanctions against Russia and the potential for retaliatory acts
from Russia, could result in increased cyber-attacks against U.S. companies. We may not have sufficient resources to adequately protect
against, or to investigate and remediate any vulnerability to, cyber incidents. It is possible that any of these occurrences, or a combination
of them, could have adverse consequences on our business and lead to financial loss.

 We are an emerging growth company and a smaller
reporting company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements
available to emerging growth companies or smaller reporting companies, this could make our securities less attractive to investors and
may make it more difficult to compare our performance with other public companies. We are an "emerging growth company" within
the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various reporting
requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not
being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations
regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding
advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. As a result,
our stockholders may not have access to certain information they may deem important. We could be an emerging growth company for up to
five years, although circumstances could cause us to lose that status earlier, including if the Market Value of our Class A common stock
held by non-affiliates equals or exceeds $700.0 million as of any June 30 th before that time, in which case we would no longer
be an emerging growth company as of the following December 31. We cannot predict whether investors will find our securities less attractive
because we will rely on these exemptions. If some investors find our securities less attractive as a result of our reliance on these
exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market
for our securities and the trading prices of our securities may be more volatile.

 Further, Section 102(b)(1) of the JOBS Act exempts
emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that
is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered
under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company
can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but
any such an election to opt out is irrevocable. We have elected not to opt out of such extended transition period which means that when
a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company,
can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our
financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has
opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards
used.

 Additionally, we are a "smaller reporting
company" as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure
obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting
company until the last day of the fiscal year in which (1) the market value of our common stock held by non-affiliates equals or exceeds
$250 million as of the end of that fiscal year's second fiscal quarter, and (2) our annual revenues exceeded $100 million during
such completed fiscal year and the market value of our common stock held by non-affiliates exceeds $700 million as of the end of that
fiscal year's second fiscal quarter. To the extent we take advantage of such reduced disclosure obligations, it may also make comparison
of our financial statements with other public companies difficult or impossible.

 We would be subject to a second level of U.S. federal income
tax on a portion of our income if we are determined to be a personal holding company (a "PHC") for U.S. federal income tax
purposes.

 A U.S. corporation generally will be classified
as a PHC for U.S. federal income tax purposes in a given taxable year if (i) at any time during the last half of such taxable year, five
or fewer individuals (without regard to their citizenship or residency and including as individuals for this purpose certain entities
such as certain tax exempt organizations, pension funds and charitable trusts) own or are deemed to own (pursuant to certain constructive
ownership rules) more than 50% of the stock of the corporation by value and (ii) at least 60% of the corporation's adjusted ordinary
gross income, as determined for U.S. federal income tax purposes, for such taxable year consists of PHC income (which includes, among
other things, dividends, interest, certain royalties, annuities and, under certain circumstances, rents).

 Depending on the date and size of our initial
business combination, it is possible that at least 60% of our adjusted ordinary gross income may consist of PHC income as discussed above.
In addition, depending on the concentration of our stock in the hands of individuals, including the members of our sponsor and certain
tax exempt organizations, pension funds and charitable trusts, it is possible that more than 50% of our stock may be owned or deemed
owned (pursuant to the constructive ownership rules) by five or fewer individuals during the last half of a taxable year. Thus, no assurance
can be given that we will not become a PHC in the future. If we are or were to become a PHC in a given taxable year, we would be subject
to an additional PHC tax, currently 20%, on our undistributed PHC income, which generally includes our taxable income, subject to certain
adjustments.

 Since only holders of our founder shares will have the right
to vote on the appointment of our directors, upon the listing of our shares on the Nasdaq, the Nasdaq may consider us to be a 'controlled
company' within the meaning of the Nasdaq rules and, as a result, we may qualify for exemptions from certain corporate governance
requirements.

 After the completion of our IPO, only holders
of our founder shares have the right to vote on the appointment of our directors. As a result, the Nasdaq may consider us to be a 'controlled
company' within the meaning of the Nasdaq corporate governance standards. Under the Nasdaq corporate governance standards, a company
of which more than 50% of the voting power is held by an individual, group or another company is a 'controlled company' and
may elect not to comply with certain corporate governance requirements, including the requirements that:

 we
have a board of directors that includes a majority of 'independent directors,' as defined under the rules of the Nasdaq;

 we
have a compensation committee of our Board that is comprised entirely of independent directors with a written charter addressing the
committee's purpose and responsibilities; and

 we
have a nominating and corporate governance committee of our Board that is comprised entirely of independent directors with a written
charter addressing the committee's purpose and responsibilities.

 We do not intend to utilize these exemptions and
intend to comply with the corporate governance requirements of the Nasdaq, subject to applicable phase-in rules. However, if we determine
in the future to utilize some or all of these exemptions, you will not have the same protections afforded to stockholders of companies
that are subject to all of the Nasdaq corporate governance requirements.

 Item 1B. Unresolved Staff Comments

 None.

 Item 1C. Cybersecurity

 As a blank check company, we have no operations and therefore do not
have any operations of our own that face cybersecurity threats. Since our IPO, our sole business activity has been identifying and evaluating
suitable acquisition transaction candidates. Therefore, we do not consider that we face significant cybersecurity risk and have not adopted
any cybersecurity risk management program or formal processes for assessing cybersecurity risk. However, we do depend on the digital technologies
of third parties, and as noted in Item 1A. Risk Factors of this Form 10-K, any sophisticated and deliberate attacks on, or security breaches
in, systems or infrastructure or the cloud that we utilize, including those of third parties, could lead to corruption or misappropriation
of our assets, proprietary information and sensitive or confidential data. Because of our reliance on the technologies of third parties,
we also depend upon the personnel and the processes of third parties to protect against cybersecurity threats, and we have no personnel
or processes of our own for this purpose. Our board of directors oversees risk for our Company, and prior to filings with the SEC, our
board of directors reviews our risk factors, including the descriptions of the risks we face from cybersecurity threats, as described
in Item 1A. Risk Factors of this Form 10-K. In fiscal year 2023, we did not identify any cybersecurity threats that have materially affected
or are reasonably likely to materially affect our business strategy, results of operations, or financial condition.

 Item 2. Properties

 Our executive offices are located at 321 North
Clark Street, Suite 2440, Chicago, IL 60654, and our telephone number is (312) 262-5642. We maintain a corporate website at www.xpdispac.com.
The information contained on or accessible through our corporate website or any other website that we may maintain is not part of this
Report.

 Item 3. Legal Proceedings

 From time to time, we are party to litigation
and subject to claims incident to the ordinary course of business. As our growth continues, we may become party to an increasing number
of litigation matters and claims. The outcome of litigation and claims cannot be predicted with certainty, and the resolution of these
matters could materially affect our future results of operations, cash flows or financial position. We are not presently party to any
legal proceedings that, in the opinion of management, if determined adversely to us, would individually or taken together have a material
adverse effect on our business, operating results, financial condition or cash flows.

 Certain purported shareholders of the Company
sent demand letters (the "Demands") alleging deficiencies and/or omissions in the Registration Statement on Form S-4, filed
by the Company on August 9, 2023. The Demands seek additional disclosures to remedy these purported deficiencies.

 Item 4. Mine Safety Disclosures

 Not applicable.

 Item 5. Market for Registrant's Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities Market Information and Holders

 Our units, shares of Class A common stock and
warrants are each traded on Nasdaq under the symbols "XPDBU", "XPDB" and "XPDBW" respectively. Our
units commenced public trading on December 10, 2021. Our shares of Class A common stock and warrants began separately trading on January
31, 2022.

 On December 31, 2023, there was one holder of
record of our Units, four holders of record of our common stock and one holder of record of our public warrants. We believe a substantially
greater number of beneficial owners hold shares of Class A common stock or public warrants through brokers, banks or other nominees.

 Dividends

 The company has not paid dividends on its common
stock to date and does not intend to pay cash dividends. The payment of cash dividends in the future will be dependent upon revenues
and earnings, if any, capital requirements and general financial condition. The payment of any dividends will be within the discretion
of our Board. It is the present intention of our Board to retain all earnings, if any, for use in our business operations and, accordingly,
the Board does not anticipate declaring any dividends in the foreseeable future.

 Securities Authorized for Issuance Under Equity Compensation Plans

 None.

 Performance Graph

 Not applicable.

 Recent Sales of Unregistered Securities Use of Proceeds from
Registered Offerings.

 In March 2021, our sponsor paid $25,000 to cover
for certain offering costs on behalf of us in exchange for issuance of 5,750,000 shares of our Class B common stock. In November 2021,
we effected a stock dividend of 1,437,500 shares of our Class B common stock, resulting in there being an aggregate of 7,187,500 shares
of our Class B common stock outstanding. We have agreed to sell to the anchor investors 1,078,125 founder shares, and the anchor investors
agreed to purchase from our sponsor on the date of the initial business combination an aggregate of 1,078,125 founder shares for an aggregate
purchase price of approximately $3,750, or approximately $0.004 per share. Our sponsor has also agreed that in the event of such purchase
by the anchor investors, our sponsor will forfeit to us for no consideration a number of founder shares equal to the number of founder
shares purchased by the anchor investors.

 In July 2021, our sponsor transferred 30,000 shares
of Class B common stock to each of the four independent director nominees, a total of 120,000 shares of Class B common stock. In November
2021, our sponsor repurchased 30,000 shares of Class B common stock from a former independent director nominee.

 On December 14, 2021 the company consummated its
IPO of 28,750,000 units, which included the exercise of the underwriters' option to purchase an additional 3,750,000 units at the
initial public offering price to cover over-allotments. Each unit consists of one share of Class A common stock and one-half of one warrant
(the "Public Warrants"), each whole Public Warrant entitling the holder thereof to purchase one share of Class A common stock
at an exercise price of $11.50 per share, subject to adjustment. The units were sold at an offering price of $10.00 per unit, generating
gross proceeds of $287,500,000.

 Simultaneously with the closing of our IPO and
the issuance and sale of the units, we completed the private placement of an aggregate of 11,125,000 private placement warrants at a
price of $1.00 per private placement warrant, generating total proceeds of $11,125,000. The purchase price of the private placement warrants
was added to the net proceeds of our initial public offering and placed in the Trust Account such that the Trust Account held $290,375,000
at the time of closing of our initial public offering. Each whole private placement warrant entitles the holder thereof to purchase one
(1) share of Class A common stock at a price of $11.50 per share, subject to certain adjustments.

 Purchases of Equity Securities by the Issuer and Affiliated Purchasers

 None.

 Item 6. [Reserved.]

 Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.

 References to the "Company,"
"our," "us" or "we" refer to Power & Digital Infrastructure Acquisition II Corp. The following
discussion and analysis of our financial condition and results of operations should be read in conjunction with the audited financial
statements and the notes related thereto which are included in "Item 8. Financial Statements and Supplementary Data" of this
Annual Report on Form 10-K. Certain information contained in the discussion and analysis set forth below includes forward-looking statements.
Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including
those set forth under "Cautionary Note Regarding Forward-Looking Statements," "Item 1.A. Risk Factors" and elsewhere
in this Annual Report on Form 10-K.

 Cautionary Note Regarding Forward-Looking
Statements

 This Annual Report on
Form 10-K includes forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities
Exchange Act. We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking
statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of
activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements
expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such
as "may," "should," "could," "would," "expect," "plan," "anticipate,"
"believe," "estimate," "continue," or the negative of such terms or other similar expressions. Factors
that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other SEC filings.

 Overview

 We are a blank check company
incorporated in Delaware on March 23, 2021, formed for the purpose of effecting a merger, capital stock exchange, asset acquisition,
stock purchase, reorganization or other similar business combination with one or more businesses or entities (a "Business Combination").
We are an emerging growth company and, as such, we are subject to all of the risks associated with emerging growth companies.

 Our sponsor is XPDI Sponsor
II LLC, a Delaware limited liability company (the "Sponsor"). The registration statement for our initial public offering
(the "IPO") was declared effective on December 9, 2021. On December 14, 2021, we consummated our IPO of 28,750,000 units,
which included the exercise of the underwriters' option to purchase an additional 3,750,000 units at the IPO price to cover over-allotments
(the "Over-Allotment Units"), at $10.00 per unit, generating gross proceeds of $287.5 million, and incurring offering costs
of approximately $20.7 million, of which approximately $10.1 million was a deferred discount, which was subsequently reduced to approximately
$6 million following the resignation of BofA Securities, Inc. ("BofA") as an underwriter as described below.

 Simultaneously with the
closing of our IPO, we completed the private placement (the "Private Placement") of 11,125,000 private placement warrants
(the "Private Placement Warrants"), at a price of $1.00 per Private Placement Warrant to our Sponsor and certain funds and
accounts managed by subsidiaries of BlackRock, Inc., an unrelated party (the "Anchor Investors"), generating proceeds of
approximately $11.1 million.

 Upon the closing of the
IPO and the Private Placement on December 14, 2021, approximately $290.4 million ($10.10 per unit) of the net proceeds of the sale of
the units in the IPO, including proceeds from the sale of the Over-Allotment Units and certain of the proceeds from the sale of the Private
Placement Warrants, were deposited into a segregated Trust Account (the "Trust Account") located in the United States with
Continental Stock Transfer & Trust Company acting as trustee and approximately $1.7 million of such net proceeds were deposited in
our operating account to pay expenses in connection with the closing of the IPO and for working capital following the IPO. The proceeds
held in the Trust Account have been (i) held in an interest-bearing bank demand deposit account or (ii) invested in U.S. "government
securities," within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended (the "Investment Company
Act"), having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under
the Investment Company Act, which invest only in direct U.S. government treasury obligations, as determined by the Company, until the
earlier of: (i) the completion of an initial Business Combination and (ii) the distribution of the Trust Account as described below.

 Our management has broad
discretion with respect to the specific application of the net proceeds of the IPO and the sale of Private Placement Warrants, although
substantially all of the net proceeds are intended to be applied generally toward consummating an initial Business Combination. There
is no assurance that we will be able to complete an initial Business Combination successfully. We must complete one or more initial Business
Combinations having an aggregate fair market value of at least 80% of the net assets held in the Trust Account (net of amounts disbursed
to management for working capital purposes and excluding the deferred underwriting commissions and taxes payable on the interest earned
on the Trust Account) at the time of the agreement to enter into the initial Business Combination. However, we will only complete an
initial Business Combination if the post-transaction company owns or acquires 50% or more of the voting securities of the target or otherwise
acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment
Company Act.

 On May 15, 2023, we filed
a definitive proxy statement for the solicitation of proxies in connection with the special meeting in lieu of annual meeting of the
Company's stockholders (the "Extension Special Meeting") to consider and vote on, among other proposals, the extension
of the date by which the Company must consummate an initial business combination from June 14, 2023 (the "Initial Outside Date")
to December 14, 2023 (such date, the "Extended Date"), and to allow the Company, without another stockholder vote, by resolution
of the Company's Board to elect to further extend the Extended Date in one-month increments up to three additional times, or a
total of up to nine months after the Initial Outside Date, until March 14, 2024, unless the closing of a Business Combination shall have
occurred prior thereto or such earlier date as determined by our Board to be in the best interests of the Company (such proposal, the
"Extension Amendment Proposal"), and the amendment of the Company's amended and restated certificate of incorporation
to remove the limitation that the Company may not redeem public shares to the extent that such redemption would result in the Company
having net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (or any successor rule)) of less than $5,000,001 (such proposal, the "Redemption Limitation Amendment
Proposal").

 On June 5, 2023, the Company
entered into the Merger Agreement, and on February 5, 2024, the Company entered into that certain First Amendment to the Merger Agreement
(the "Amendment"), see "Contractual Obligations—Merger Agreement" below.

 At the Extension Special
Meeting on June 9, 2023, the Company's stockholders approved the Extension Amendment Proposal and the Redemption Limitation Amendment
Proposal. In connection with the stockholders' vote at the Extension Special Meeting, the stockholders elected to redeem 18,141,822
shares of Class A common stock at a redemption price of approximately $10.37 per share, for an aggregate redemption amount of approximately
$188,132,132 (the "June Redemptions"). After the satisfaction of the June Redemptions, the balance in the Trust Account as
of December 31, 2023 was approximately $114,641,527. Upon completion of the June Redemptions, 10,608,178 shares of Class A common stock
and 7,187,500 shares of Class B common stock remain issued and outstanding.

 In connection with the approval
of the Extension Amendment Proposal, the company deposited $300,000 in the Trust Account on June 15, 2023, July 10, 2023 and August 10,
2023 and the sponsor deposited $300,000 in the Trust Account on September 8, 2023, October 10, 2023, and November 9, 2023.

 On December 12, 2023, the
Board approved an extension of the date by which the Company must consummate an initial business combination from December 14, 2023 to
January 14, 2024.

 On January 10, 2024, the
Board approved an extension of the date by which the Company must consummate an initial business combination from January 14, 2024 to
February 14, 2024.

 On February 8, 2024, the
Board approved an extension of the date by which the Company must consummate an initial business combination from February 14, 2024 to
March 14, 2024.

 On February 20, 2024, we
filed a definitive proxy statement for the solicitation of proxies in connection with a special meeting of stockholders of the Company
to consider and vote on, among other proposals, the extension of the date by which the Company must consummate an initial business combination
from March 14, 2024 to April 14, 2024, and to allow the Company, without another stockholder vote, by resolution of the Board, to elect
to further extend such date in one-month increments up to three additional times until July 14, 2024 (the "2024 Extension"),
unless the closing of a an initial business combination shall have occurred prior thereto, or such earlier date as determined by the
Board to be in the best interests of the Company.

 Liquidity, Capital Resources and Going Concern

 Our liquidity needs to date
have been satisfied through a capital contribution of $25,000 from our Sponsor to purchase our Class B common stock (the "Founder
Shares"), the related party loan under a promissory note of approximately $115,000 from, our Sponsor, which was repaid in full
on December 17, 2021, and the net proceeds from the consummation of the Private Placement not held in the Trust Account. In addition,
in order to finance transaction costs in connection with an initial Business Combination, our officers, directors and initial stockholders
may, but are not obligated to, provide working capital loans. As of December 31, 2023, there were no amounts outstanding under any working
capital loans.

 In connection with the Company's assessment of going concern
considerations in accordance with the Financial Accounting Standards Board's ("FASB's") Accounting Standards Codification
("ASC") Topic 205-40, "Presentation of Financial Statements – Going Concern," management has determined
that the liquidity needs, mandatory liquidation and subsequent dissolution raises substantial doubt about the Company's ability
to continue as a going concern, which is considered to be one year from the issuance of these financial statements. No adjustments have
been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after March 14, 2024. The financial
statements do not include any adjustment that might be necessary if the Company is unable to continue as a going concern. The Company
intends to complete a Business Combination before the mandatory liquidation date, as it may be extended. Over this time period, the Company
will be using the funds outside of the Trust Account for paying existing accounts payable and meeting conditions to closing the Business
Combination. See Note 10 – Subsequent Events, of the Notes to Consolidated Financial Statements included in "Item 8. Financial
Statements and Supplementary Data" of this report.

 The Company cannot provide
any assurance that new financing will be available to it on commercially acceptable terms, if at all. These conditions raise substantial
doubt about the Company's ability to continue as a going concern through one year from the issuance date of these financial statements.
These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the
liabilities that might be necessary should the Company be unable to continue as a going concern.

 In February 2022, the Russian
Federation and Belarus commenced a military action with the country of Ukraine. As a result of this action, various nations, including
the United States, have instituted economic sanctions against the Russian Federation and Belarus. The recent military conflict between
Israel and militant groups led by Hamas has also caused uncertainty in the global markets. Further, the impact of these actions and related
sanctions on the world economy are not determinable as of the date of these financial statements.

 On August 16, 2022, the
Inflation Reduction Act of 2022 (the "IR Act") was signed into federal law. The IR Act provides for, among other things,
a new U.S. federal 1% excise tax on certain repurchases of stock by publicly traded U.S. domestic corporations and certain U.S. domestic
subsidiaries of publicly traded foreign corporations occurring on or after January 1, 2023. The excise tax is imposed on the repurchasing
corporation itself, not its shareholders from which shares are repurchased. The amount of the excise tax is generally 1% of the fair
market value of the shares repurchased at the time of the repurchase. However, for purposes of calculating the excise tax, repurchasing
corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases
during the same taxable year. In addition, certain exceptions apply to the excise tax. The U.S. Department of the Treasury (the "Treasury")
has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the excise tax.
Any share redemption or other share repurchase that occurs after December 31, 2022, in connection with a Business Combination, extension
vote or otherwise, may be subject to the excise tax. Whether and to what extent we would be subject to the excise tax in connection with
a Business Combination, extension vote or otherwise will depend on a number of factors, including (i) the fair market value of the redemptions
and repurchases in connection with the Business Combination, extension or otherwise, (ii) the structure of a Business Combination, (iii)
the nature and amount of any "PIPE" or other equity issuances in connection with a Business Combination (or otherwise issued
not in connection with a Business Combination but issued within the same taxable year of a Business Combination) and (iv) the content
of regulations and other guidance from the Treasury. In addition, because the excise tax would be payable by us and not by the redeeming
holder, the mechanics of any required payment of the excise tax have not been determined. The foregoing could cause a reduction in the
cash available on hand to complete a Business Combination and in our ability to complete a Business Combination. Further, the application
of the excise tax in the event of a liquidation is uncertain.

 Results of Operations

 Our entire activity since
inception up to December 31, 2023 has been related to our formation, the preparation for the IPO, and since the closing of the IPO, the
search for a prospective initial Business Combination. We will not generate any operating revenues until after the completion of our
initial Business Combination. We generate non-operating income in the form of investment income from the Trust Account. We will continue
to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance),
as well as for due diligence expenses.

 For the year ended December 31, 2023, we had a
net income of approximately $1.2 million, which consisted of approximately $9.1 million of income from investments held in the Trust Account,
and reversal of transaction costs incurred in connection with IPO of approximately $0.2 million, offset by approximately $6.3 million
in operating expenses and approximately $1.8 million in income tax expenses. Operating expenses were comprised of approximately $5.9 million
of general and administrative expenses, $240,000 of general and administrative expenses - related party, and $200,000 of franchise tax
expenses.

 For the year ended December
31, 2022, we had a net income of approximately $2.0 million, which consisted of approximately $4.2 million of income from investments
held in the Trust Account, partially offset by approximately $1.3 million in operating expenses and approximately $802,000 in income
tax expenses. Operating expenses were comprised of approximately $888,000 of general and administrative expenses, $240,000 of general
and administrative expenses - related party, and $215,000 of franchise tax expense.

 Contractual Obligations

 Registration Rights

 The holders of Founder Shares,
Private Placement Warrants and warrants that may be issued upon conversion of working capital loans, if any (and any shares of common
stock issuable upon the exercise of the Private Placement Warrants or warrants issued upon conversion of the working capital loans and
upon conversion of the Founder Shares), were entitled to registration rights pursuant to a registration rights agreement to be signed
prior to the consummation of the IPO (the "Registration Rights Agreement"). These holders are entitled to certain demand
and "piggyback" registration rights. However, the Registration Rights Agreement provides that we will not be required to
effect or permit any registration or cause any registration statement to become effective until termination of the applicable lock-up
period. We will bear the expenses incurred in connection with the filing of any such registration statements.

 Underwriting Agreement

 BofA and Barclays Capital
Inc. ("Barclays"), the underwriters in our IPO, were entitled to an underwriting discount of $0.20 per unit on all units
sold in the IPO, except for the units purchased by the Anchor Investors, or approximately $5.3 million in the aggregate, paid upon the
closing of the IPO.

 BofA and Barclays were also
entitled to an additional fee of $0.35 per unit, or $10,062,500 in the aggregate. The deferred fee will become payable to the underwriters
from the amounts held in the Trust Account solely in the event that we complete an initial Business Combination, subject to the terms
of the underwriting agreement.

 On June 20, 2023, BofA formally notified the Company in writing that
it had resigned and withdrew from its role in the Business Combination and thereby, for no additional consideration, waived its entitlement
to its portion of the Deferred Discount despite having already completed the services and obligations that would entitle BofA to payment
under the terms of the underwriting agreement. As a result, the reduction in deferred fees was allocated on a pro rata basis between additional
paid-in capital and other income based upon the original amount of the deferred underwriting fees allocation to the liability-classified
instruments in the IPO. Therefore, the deferred underwriting fee was reduced by $4,025,000, of which $205,275 is reflected in the consolidated
statement of operations as other income and $3,819,725 is charged to additional paid-in capital in the statement of stockholders'
deficit. As a result of the waiver, and pursuant to that agreement dated June 4, 2023 among Barclays Capital Inc., the Company and XPDI
Sponsor II LLC, the outstanding deferred underwriting fee payable upon closing of the Business Combination was reduced to approximately
$6.0 million.

 Administrative Support Services

 Commencing on December 9,
2021, we have agreed to pay affiliates of our Sponsor a total of $20,000 per month for office space and administrative support services.
Upon completion of our initial Business Combination or our liquidation, we will cease paying these monthly fees. In connection with our
initial Business Combination, we will make a cash payment in an aggregate amount of up to $3,000,000 to affiliates of our Sponsor or Anchor
Investors for any financial advisory, placement agency or other similar investment banking or consulting services that affiliates of our
Sponsor or Anchor Investors have provided and may continue to provide to us in connection with our initial Business Combination, and may
reimburse to affiliates of our Sponsor or Anchor Investors for any out-of-pocket expenses incurred by it in connection with the performance
of such services.

 Merger Agreement

 On June 5, 2023, the Company
and XPDB Merger Sub, LLC, a Delaware limited liability company and wholly owned subsidiary of the Company ("Merger Sub"),
entered into an Agreement and Plan of Merger (as it may be amended, supplemented or otherwise modified from time to time in accordance
with its terms, the "Merger Agreement") with Montana Technologies LLC, a Delaware limited liability company ("Montana"),
pursuant to which Merger Sub will merge with and into Montana, with Montana surviving the Merger as a wholly owned subsidiary of the Company
(the "Merger" and, along with the transactions contemplated in the Merger Agreement, the "Proposed Transactions").
Following the closing of the Proposed Transactions (the "Closing"), the Company will be renamed "Montana Technologies
Corporation" (the "Combined Company").

 As part of the Business Combination,
equity holders of Montana will receive aggregate consideration of approximately $421.9 million (subject to adjustment as described in
the Merger Agreement), payable (i) in the case of Class B and holders of Class C common units of Montana, in the form of newly issued
shares of Class A common stock, par value $0.0001 per share, of the Combined Company ("Combined Company Class A common stock"),
with a $10.00 value ascribed to each such share and which will entitle the holder thereof to one vote per share on all matters submitted
to a vote of the holders of common stock, whether voting separately as a class or otherwise, (ii) in the case of holders of Class A common
units of Montana, in the form of newly issued shares of Class B common stock, par value $0.0001 per share, of the Combined Company ("Combined
Company Class B common stock") with a $10.00 value ascribed to each such share and which will entitle the holder thereof to a number
of votes per share such that the equity holders of Montana as of immediately prior to the Closing will, immediately following the Closing,
collectively own shares representing at least 80% of the voting power of all classes of capital stock of the Combined Company entitled
to vote on matters submitted to a vote of the stockholders of the Combined Company and (iii) in the case of Montana's option holders
and warrant holders, in the form of options and warrants of the Combined Company, respectively, having substantially similar terms to
the applicable options and warrants of Montana.

 Montana's equity holders
(other than warrant holders) will also have the opportunity to receive additional equity consideration (in each case, in accordance with
their respective pro rata share) in the form of shares of Combined Company Class A common stock with a $10.00 value ascribed to each share
(the "Earnout Shares"), only upon full completion of construction and operational viability (including all permitting, regulatory
approvals and necessary or useful inspections) of new production capacity of Montana's key components or assemblies based solely
on demand from bona fide customer commitments evidenced by binding contracts (or in the discretion of a majority of the independent members
of the board of directors of the Combined Company, a non-binding letter of intent or indication of interest or similar writing that is
substantially likely to become a binding contract) with a known price or pricing formula that exceeds a level of production capacity that
is expected to generate Annualized EBITDA of more than $150,000,000 (the "Threshold Annualized EBITDA"), which shall be determined
by a majority of the independent members of the board of directors of the Combined Company in its sole discretion, equal to (i) the ratio
of (x) (1) the Annualized EBITDA that is expected from such new production capacity (the "Expected Annualized EBITDA") less
(2) (A) the Threshold Annualized EBITDA plus (B) all previously Expected Annualized EBITDA amounts associated with previous new production
capacities for which previous earnouts were achieved, divided by (y) $150,000,000 multiplied by (ii) $200,000,000, provided that
the aggregate Expected Annualized EBITDA may not exceed $300,000,000.

 The maximum value of the
Earnout Shares will be capped at $200 million and the ability to receive Earnout Shares will expire on the fifth anniversary of the Closing.
A majority of the independent members of the board of directors of the Combined Company then serving will have sole discretion in determining,
among other things, the achievement of the applicable milestones, the calculations of payments of Earnout Shares to the applicable Montana
equity holders, the dates on which construction and operational viability of new production capacity is deemed completed and whether to
consent to a transfer of the applicable Montana equity holder's right to receive Earnout Shares. Earnout Shares issuable in respect
of Montana options outstanding as of immediately prior to the effective time of the Merger may be issued to the holder of such Montana
option only if such holder continues to provide services (whether as an employee, director or individual independent contractor) to the
Combined Company or one of its subsidiaries through the date on which such Earnout Shares are issued, as determined by a majority of the
independent members of the Combined Company Board.

 As of the date of the Merger
Agreement, 100.0% of the total outstanding Class A common units of Montana and 72.7% of the total outstanding Class B common units of
Montana (or an aggregate of approximately 76.6% of the total outstanding Class A common units and Class B common units of Montana in the
aggregate) were held by unitholders that are expected to continue as directors, officers or employees of the Combined Company. The retention
of certain holders of options of Montana who will continue as directors, officers or employees of the Combined Company (whose responsibilities
are expected to include continued technology development and commercial execution) is integral to the achievement of the milestones that
will determine whether Earnout Shares are payable. Montana does not believe that such targets are achievable absent the continued involvement
of such persons. The Combined Company is expected to provide competitive compensation, benefits and equity awards (pursuant to the terms
of the Montana Technologies Corporation 2023 Incentive Award Plan) to these individuals following the Merger in order to incentivize these
individuals to continue to provide services to the Combined Company.

 On February 5, 2024, the
Company, Merger Sub, and Montana entered into the Amendment to the Merger Agreement, amending the Merger Agreement to, among other things,
(i) amend the definition of Aggregate Transaction Proceeds and (ii) reduce the Aggregate Transaction Proceeds condition from $85 million
to $50 million.

 Sponsor Support Agreement

 In connection with the execution
of the Merger Agreement and pursuant to the terms of the Sponsor Support Agreement (the "Sponsor Support Agreement") entered
into among the Sponsor, the Company, Montana and other holders of the Company's Class B common stock, $0.0001 par value per share
(the "Class B common stock"), the Sponsor and the other holders of Class B common stock agreed to, among other things, (i)
vote any Class A common stock, $0.0001 par value per share (the "Class A common stock"), of the Company or Class B common
stock (collectively, the "Sponsor Securities"), held of record or thereafter acquired in favor of the proposals presented
by the Company at a special meeting to approve the Proposed Transactions, (ii) be bound by certain other covenants and agreements related
to the Proposed Transactions, (iii) be bound by certain transfer restrictions with respect to the Sponsor Securities and (iv) waive certain
antidilution protections with respect to the Sponsor Securities, in each case, on the terms and subject to the conditions set forth in
the Sponsor Support Agreement. In addition, pursuant to the terms of the Sponsor Support Agreement, the Sponsor has agreed to waive its
redemption rights with respect to any Sponsor Securities in connection with the completion of a Business Combination (which waiver was
provided in connection with the IPO and without any separate consideration paid in connection with providing such waiver), has agreed
not to transfer any Public Shares and Founder Shares held by it during the time prior to (i) Closing or (ii) the termination of the Merger
Agreement, has agreed to waive anti-dilution protections and has agreed to subject certain of the shares of Combined Company Class A common
stock held by Sponsor following the conversion of the Founder Shares as of the Closing to certain vesting provisions. Specifically, the
Sponsor Support Agreement provides that as of immediately prior to (but subject to) the Closing, 1,380,736 shares of Combined Company
Class A common stock held by the Sponsor following the conversion of the Founder Shares as of the Closing (the "Subject Vesting
Shares") will be subject to an earnout, with the Subject Vesting Shares vesting during the period beginning on the date of Closing
and ending five (5) years following the date of Closing (i) simultaneously with the Earnout Payments made to the Montana equity holders
in a proportionate amount to the payment achieved in relation to the maximum issuance of Earnout Shares of equity interests of $200 million
(the "Performance Vesting Trigger") and (ii) up to 50% of the Subject Vesting Shares (including any vested Subject Vesting
Shares from the Performance Vesting Trigger) vesting on any day following the Closing when the closing price of a share of Combined Company
Class A common stock on the Nasdaq (the "Closing Share Price") equals or exceeds $12.00 (as adjusted for stock splits, stock
dividends, reorganizations, recapitalizations and the like) and all remaining Subject Vesting Shares vesting when the Closing Share Price
equals or exceeds $14.00 (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like).

 The Sponsor Support Agreement
will terminate on the earlier of (i) the date the Business Combination becomes effective and (ii) the termination of the Merger Agreement
in accordance with its terms.

 Investment Agreement

 On September 29, 2023, we
entered into an Investment Agreement (the "Investment Agreement") with Montana, Contemporary Amperex Technology Co., Limited
("CATL"), CATL US Inc., an affiliate of CATL ("CATL US") and Contemporary Amperex Technology USA Inc. an affiliate
of CATL ("CATL USA," and, together with CATL US and CATL, the "CATL Parties"), pursuant to which the CATL Parties
agreed, among other things, that they will not, directly or indirectly, (i) acquire any additional units of the Combined Company, (ii)
seek election to, or to place a representative on, Montana's board of managers or the board of directors of the Combined Company,
or (iii) acquire any securities of the Combined Company if, following such acquisition, the CATL Parties and their affiliates would hold,
in the aggregate, an interest in the Combined Company of greater than 9.8% on either an economic or voting basis (the "CATL Ownership
Limit"). In the event the CATL Parties and their affiliates exceed the CATL Ownership Limit, the CATL Parties have agreed, following
written notice from the Combined Company, to divest within five business days such number of Combined Company securities as shall be necessary
to cause the CATL Ownership Limit not to be exceeded. In addition, at any time the CATL Ownership Limit is exceeded, the CATL Parties
have agreed to vote any voting power they hold in excess of 9.8% in accordance with the recommendation of the board of directors of the
Combined Company.

 The CATL Parties agreed that
they will not, and will cause their affiliates not to, access, obtain, or seek to access or obtain Montana or the Combined Company's
trade secrets, know-how, or other confidential, proprietary, or competitively sensitive information (excluding any such information that
Montana is obligated to provide to CATL US, CAMT, or CAMT's subsidiaries pursuant to that certain Amended and Restated Joint Venture
Agreement for CAMT, dated as of September 29, 2023, by and among Montana, CAMT Climate Solutions, Ltd. ("CAMT") and CATL US),
including by reverse engineering, or seeking to reverse engineer, any of Montana's products.

 Montana has agreed to use
its reasonable best efforts to assist CATL USA in selling, prior to the consummation of the Business Combination, units of Montana representing
at least 2% of Montana's issued and outstanding units at a price per unit that is not materially lower than the price per unit implied
by the valuation of Montana in connection with the Business Combination. In so assisting CATL USA, Montana is not obligated to incur any
expenses or grant any concessions, nor is it obligated to prioritize any sale by CATL USA over its own capital raising or financing activities.

 The Investment Agreement
contains customary representations and warranties and may be terminated only with the written consent of the parties thereto.

 Carrier Letter Agreement

 On January 7, 2024, we entered
into a letter agreement with Montana and Carrier Corporation, an affiliate of Carrier Global Corporation (NYSE: CARR), a global leader
in intelligent climate and energy solutions (collectively with its affiliates, "Carrier"), pursuant to which Carrier, Montana
and the Company agreed, among other things, to provide Carrier the right to nominate one (1) designee, subject to the approval of the
Company, for election to the board of directors of the Combined Company for so long as Carrier satisfies certain investment conditions,
following the business combination between the Company and Montana.

 Other Agreements

 On November 12, 2023, we entered
into an arrangement pursuant to which, under certain circumstances, up to 2% of the proceeds of the capital raised in transactions arranged
by certain third parties from investors located in certain limited jurisdictions may be paid to such third parties. On December 14, 2023,
Montana agreed to reimburse, and did reimburse, the Company 50% of certain expenses incurred by third parties and paid by the Company
in connection with this arrangement.

 Critical Accounting Estimates

 We prepare our consolidated financial
statements in accordance with U.S. generally accepted accounting principles, which require our management to make estimates that
affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the balance sheet
dates, as well as the reported amounts of revenues and expenses during the reporting periods. To the extent that there are material
differences between these estimates and actual results, our financial condition or results of operations would be affected. We base
our estimates on our own historical experience and other assumptions that we believe are reasonable after taking into account our
circumstances and expectations for the future based on available information. We evaluate these estimates on an ongoing basis.

 We consider an accounting estimate to be critical
if: (i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate
was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period or use of different estimates that
we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations.
There are items within our financial statements that require estimation but are not deemed critical, as defined above.

 For a detailed discussion of our significant accounting
policies and related judgements, see Note 2 – Summary of Significant Accounting Policies, of the Notes to Consolidated Financial
Statements included in "Item 8. Financial Statements and Supplementary Data" of this report.

 Derivative Warrant Liabilities

 We do not use derivative
instruments to hedge exposures to cash flow, market, or foreign currency risks. Management evaluates all of our financial instruments,
including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded
derivatives, pursuant to Financial Accounting Standards Board's ("FASB") Accounting Standards Codification ("ASC")
Topic 480 "Distinguishing Liabilities from Equity" ("ASC 480") and FASB ASC Topic 815-40, "Derivatives and
Hedging - Contracts in Entity's Own Stock" ("ASC 815"). The classification of derivative instruments, including
whether such instruments should be classified as liabilities or as equity, is re-assessed at the end of each reporting period.

 The Public Warrants and the
Private Placement Warrants are not precluded from equity classification, based on the guidance in ASC 480 and ASC 815. Equity-classified
contracts are initially measured at fair value (or allocated value). Subsequent changes in fair value are not recognized as long as the
contracts continue to be classified in equity.

 Class A Common Shares Subject to Possible Redemption

 We account for our Class
A common stock subject to possible redemption in accordance with the guidance in ASC 480. Class A common stock subject to mandatory redemption
(if any) is classified as liability instruments and are measured at fair value. Conditionally redeemable Class A common stock (including
Class A common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the
occurrence of uncertain events not solely within our control) are classified as temporary equity. At all other times, Class A common stock
is classified as stockholders' equity. Our Class A common stock feature certain redemption rights that are considered to be outside
of our control and subject to the occurrence of uncertain future events. Accordingly, all of our outstanding shares of Class A common
stock is presented at redemption value as temporary equity, outside of the stockholders' equity section of our balance sheets.

 Under ASC 480, we have elected
to recognize changes in the redemption value immediately as they occur and adjust the carrying value of the security to equal the redemption
value at the end of the reporting period. This method would view the end of the reporting period as if it were also the redemption date
of the security. Effective with the closing of the IPO, we recognized the accretion from initial book value to redemption amount, which
resulted in charges against additional paid-in capital (to the extent available) and accumulated deficit.

 Net Income per Common Share

 We comply with accounting
and disclosure requirements of FASB ASC Topic 260, "Earnings Per Share." We have two classes of shares, which are referred
to as Class A common stock and Class B common stock. Income and losses are shared pro rata between the two classes of shares. Net income
per common share is calculated by dividing the net income by the weighted average shares of common stock outstanding for the respective
period.

 The calculation of diluted
net income does not consider the effect of the Public Warrants and the Private Placement Warrants to purchase an aggregate of 25,500,000
shares of Class A common stock in the calculation of diluted income per share, because their exercise is contingent upon future events
and their inclusion would be anti-dilutive under the treasury stock method. As a result, diluted net income per share is the same as basic
net income per share for the year ended December 31, 2023 and 2022. Accretion associated with the redeemable Class A common stock is excluded
from earnings per share as the redemption value approximates fair value.

 Recent Accounting Pronouncements

 In December 2023, the FASB
issued Accounting Standards Updated ("ASU") 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU
2023-09), which requires disclosure of incremental income tax information within the rate reconciliation and expanded disclosures of income
taxes paid, among other disclosure requirements. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. Early adoption
is permitted. The Company's management does not believe the adoption of ASU 2023-09 will have a material impact on its financial
statements and disclosures.

 Our management does not believe
that there are any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect
on our consolidated balance sheets.

 Off-Balance Sheet Arrangements and Contractual
Obligations

 As of December 31, 2023,
we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K and did not have any commitments
or contractual obligations.

 JOBS Act

 The Jumpstart Our Business
Startups Act of 2012, or the JOBS Act, contains provisions that, among other things, relax certain reporting requirements for qualifying
public companies. We qualify as an "emerging growth company" and under the JOBS Act are allowed to comply with new or revised
accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption
of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates
on which adoption of such standards is required for non- emerging growth companies. As a result, the financial statements may not be comparable
to companies that comply with new or revised accounting pronouncements as of public company effective dates.

 Additionally, we are in the
process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain
conditions set forth in the JOBS Act, if, as an "emerging growth company," we choose to rely on such exemptions we may not
be required to, among other things, (i) provide an auditor's attestation report on our system of internal controls over financial
reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public
companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by
the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about
the audit and the financial statements (auditor discussion and analysis) and (iv) disclose certain executive compensation related items
such as the correlation between executive compensation and performance and comparisons of the CEO's compensation to median employee
compensation. These exemptions will apply for a period of five years following the completion of our IPO or until we are no longer an
"emerging growth company," whichever is earlier.

 Item 7A. Quantitative and Qualitative Disclosures About Market
Risk.

 We are a smaller reporting
company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and are not required
to provide the information otherwise required under this item.

 Item 8. Financial Statements and Supplementary Data.

 This information appears following
Item 15 of this Annual Report and is included herein by reference.

 Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure.

 None.

 Item 9A. Controls and Procedures.

 Evaluation of Disclosure Controls and Procedures

 Disclosure controls and procedures
are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted
under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC's rules and
forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required
to be disclosed in company reports filed or submitted under the Exchange Act is accumulated and communicated to management, including
our principal executive officer and principal financial and accounting officer, to allow timely decisions regarding required disclosure.

 As of December 31, 2023, as
required by Rules 13a-15 and 15d-15 under the Exchange Act, our principal executive officer and principal financial and accounting
officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures. Based
upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures
(as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were not effective due to a material weakness in internal
control over financial reporting relating to accounting issues for accrued general and administrative expenses as well as
the preparation of the Company's tax provision. Additionally, this material weakness could result in a misstatement of the
carrying value of accounts payable or accrued expenses and the reported amount of general and administrative expenses and income tax
expense in the financial statements that would not be prevented or detected on a timely basis. As a result, our management performed
additional analysis as deemed necessary to ensure that our financial statements were prepared in accordance with generally accepted
principles in the United States of America. Accordingly, management believes that the financial statements included in this Annual
Report present fairly, in all material respects, the Company's financial position, result of operations and cash flows of the
periods presented.

 Management's Report on Internal Controls Over Financial Reporting

 As required by SEC rules
and regulations implementing Section 404 of the Sarbanes-Oxley Act, our management is responsible for establishing and maintaining adequate
internal control over financial reporting. Our internal control over financial reporting is designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of our financial statements for external reporting purposes in accordance with
GAAP. Our internal control over financial reporting includes those policies and procedures that:

 1.
 pertain
to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets
of our company;

 2.
 provide
reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP,
and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and

 3.
 provide
reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could
have a material effect on the financial statements.

 Because of its inherent limitations,
internal control over financial reporting may not prevent or detect errors or misstatements in our financial statements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree or compliance with the policies or procedures may deteriorate. Management assessed the effectiveness of
our internal control over financial reporting at December 31, 2023. In making these assessments, management used the criteria set forth
by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control — Integrated Framework (2013).
Based on our assessments and those criteria, management determined that our internal controls over financial reporting were not effective
as of December 31, 2023, for the reasons described above.

 This Report does not include
an attestation report of internal controls from our independent registered public accounting firm due to our status as an emerging growth
company under the JOBS Act.

 Changes in Internal Control over Financial Reporting

 There were no changes in our
internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act)
during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control
over financial reporting.

 Item 9B. Other Information.

 During the three months ended December 31, 2023, none of our directors
or "officers" (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated a "Rule 10b5-1 trading arrangement"
or "non-Rule 10b5-1 trading arrangement" (as each term is defined in Item 408(a) of Regulation S-K).

 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent
Inspections.

 Not applicable.

 Item 10. Directors, Executive Officers and Corporate Governance.

 Our officers and directors are as follows:

 Name

 Age

 Position

 Theodore J. Brombach

 Chairman of the Board

 Patrick C. Eilers

 Chief Executive Officer and Director

 James P. Nygaard, Jr.

 Chief Financial Officer

 Paul Dabbar

 Paul Gaynor

 Scott Widham

 John B. Sexton

 Vice President

 John P. McGarrity

 General Counsel and Secretary

 Theodore J. Brombach serves as Chairman
of the Board. Mr. Brombach is a founding partner of XMS Capital and serves as the firm's Co-Managing Partner and has served in such
role since 2006. He is also the Chief Executive Officer of XA Investments LLC, an alternative asset management firm he co-founded in 2016.
Mr. Brombach is the President and Chief Executive Officer and a Trustee of XAI Octagon Floating Rate & Alternative Income Term Trust
(NYSE: XFLT), a closed end fund investing in alternative credit investments, and has served in such role since 2017. He has over 30 years
of investment banking experience in Chicago, New York and London. Mr. Brombach served as the Chairman of XPDI I from December 2020 until
the completion of its merger with Core Scientific in January 2022. Prior to founding XMS Capital, Mr. Brombach was a Managing Director
and co-head of Midwest Investment Banking at Morgan Stanley, which he joined in 1990. At XMS Capital, he has led numerous mergers and
acquisitions and capital raising transactions across a number of industry sectors. Mr. Brombach is a director of RiverWood Bank. Mr. Brombach
earned a Bachelor of Arts from the University of Notre Dame and a Master of Business Administration from the Kellogg Graduate School of
Management at Northwestern University.

 Mr. Brombach's qualifications to serve on
our Board include his extensive executive, director and leadership experience, including over 30 years in investment banking experience.

 Patrick C. Eilers serves as our Chief
Executive Officer and is a member of the Board. Mr. Eilers is the founder and has served since 2019 as the Managing Partner of TEP, a
private equity firm focused on the energy & power transition, in particular its impact on the electrical grid, with an expertise in
(i) renewable energy, (ii) energy storage, technology, equipment & services, and (iii) transitional energy infrastructure. Mr. Eilers
has over 20 years of investment experience focused on the energy & power transition. Mr. Eilers served as Chief Executive Officer
and Director of XPDI I from December 2020 until the completion of its merger with Core Scientific in January 2022. Prior to founding TEP,
Mr. Eilers was a Managing Director on the BlackRock Infrastructure Platform, where he also served as an Investment Committee member for
BlackRock's Global Renewable Power Fund, Global Energy & Power Infrastructure Fund, and chaired the Energy & Power Private
Equity Fund. Prior to joining BlackRock in 2016, he also worked at Madison Dearborn Partners overseeing the firm's energy, power,
and chemicals practices for 10 years. Mr. Eilers earned a Bachelor of Science in Biology and Mechanical Engineering from the University
of Notre Dame and a Master of Business Administration from the Kellogg School of Management at Northwestern University.

 Mr. Eilers' qualifications to serve on our
Board include his extensive executive, director and leadership experience in private equity and investment banking, including extensive
knowledge relating to the power generation, power infrastructure, transmission, and battery storage industries.

 James P. Nygaard, Jr. serves as our
Chief Financial Officer. Mr. Nygaard is a Managing Director of XMS Capital and is responsible for leading mergers and acquisitions execution
activities at the firm. With 27 years of investment banking experience, he has completed several strategic transactions, financings, and
corporate finance advisory assignments for a diverse range of clients across a variety of industry sectors. Mr. Nygaard served as Chief
Financial Officer of XPDI I from December 2020 until the completion of its merger with Core Scientific in January 2022. Prior to joining
XMS Capital at the end of 2007, Mr. Nygaard spent 12 years in the Investment Banking Division of Morgan Stanley where he assumed various
roles within the corporate finance, mergers and acquisitions and administrative practices of the firm. While at Morgan Stanley, Mr. Nygaard
led coverage and strategic execution efforts for a number of Midwest-based companies, including 3M, Anheuser-Busch, ConAgra Brands, Ford
Motor Company, and General Mills.

 Mr. Nygaard graduated summa cum laude from the
University of Illinois at Urbana-Champaign with a Bachelor of Arts in Economics, where he was valedictorian of his department and received
Bronze Tablet Honors, the university's highest academic distinction.

 Paul Dabbar serves on the Board.
Mr. Dabbar is currently the President and Chief Executive Officer of Bohr Quantum Technology Corp, a quantum communications company, and
has served as Chief Executive Officer since 2021. Mr. Dabbar has served on the board of directors of Dominion Energy, Inc. (NYSE: D) since
November 2023 and served on the board of directors of XPDI I from February 2021 until the completion of its merger with Core Scientific
in January 2022. Prior to Bohr Quantum, Mr. Dabbar served as Under Secretary for Science at the U.S. Department of Energy from 2017 to
2021, managing the operations of, and investing capital at the seventeen U.S. National Laboratories, conducting research and development
in energy, technology and the sciences. Mr. Dabbar was previously a Managing Director in investment banking at J.P. Morgan Chase &
Co., in energy and mergers & acquisitions from 1996 to 2017. Mr. Dabbar was also previously a nuclear submarine officer in the U.S.
Navy. Mr. Dabbar earned a Bachelor of Science from the U.S. Naval Academy and an MBA from Columbia University.

 Mr. Dabbar's qualifications to serve on our
Board include his extensive leadership experience in the communications and energy industry.

 Paul Gaynor serves on the Board.
Mr. Gaynor is currently the Chief Executive Officer of Longroad Energy, a renewable energy company. Mr. Gaynor served on the board of
directors of XPDI I from February 2021 until the completion of its merger with Core Scientific in January 2022. Prior to co-founding Longroad
Energy, Mr. Gaynor served as CEO of First Wind, which he founded in 2004. Mr. Gaynor has also held various roles within Singapore Power,
PSG International, GE Capital, and GE Power Systems. Mr. Gaynor earned a Bachelor of Science in Mechanical Engineering from Worcester
Polytechnic Institute and an MBA from University of Chicago.

 Mr. Gaynor's qualifications to serve on our
Board include his extensive executive and leadership experience in the power generation and power infrastructure industries.

 Scott Widham serves on the Board.
Mr. Widham brings over 30 years of broad-based management and operations experience in the digital transformation and telecommunications
industry. Mr. Widham is currently Chairman of Ezee Fiber, providing telecom services to government, enterprise, carrier and residences
in Texas. Mr. Widham served on the board of directors of XPDI I from February 2021 until the completion of its merger with Core Scientific
in January 2022. Previously, he served as President of Never fail from 2018 to 2019, CEO of Alpheus Communications from 2011 to 2017 and,
prior to Alpheus, as CEO of Cobridge Communications, Broadwing Communications, and Capital Cable. Mr. Widham also served as EVP of Corecomm
and was a Director at MTV Networks. Mr. Widham earned a B.B.A. from the University of Texas at Austin.

 Mr. Widham's qualifications to serve on our
Board include his over 30 years of executive, financial and leadership experience in the telecommunications industry.

 John B. Sexton serves on our management
team as a Vice President. Mr. Sexton is a Vice President for TEP where he focuses on control, and growth equity investments in companies
making North America's power and energy systems increasingly sustainable and smart. Prior to joining TEP in 2021, Mr. Sexton served
as an Associate with Marathon Capital's investment banking division where he served since 2018, working across mergers and acquisitions
transactions and tax equity financings in the renewables, carbon capture and energy services sectors. Mr. Sexton earned his Bachelor of
Business Administration in Finance in 2018, while minoring in Sustainability at the University of Notre Dame.

 John P. McGarrity serves on our management
team as General Counsel and Secretary. Mr. McGarrity is managing director and chief administrative officer for XMS Capital and general
counsel of XMS Holdings LLC. Mr. McGarrity has over 30 years of experience in legal and product development positions, primarily in the
financial services industry. Prior to joining XMS, and its asset management affiliate XA Investments LLC, in 2016, Mr. McGarrity was managing
director and general counsel of River Branch Holdings, a boutique international merchant bank that was acquired by Piper Jaffray. Mr.
McGarrity is the former executive vice president and head of product development for Man Investments, Inc., the North American subsidiary
of Man Group PLC. Previously, Mr. McGarrity served as a director on the capital markets desk at Bank One, N.A. Prior to that, he was the
Associate General Counsel and Secretary of Unicom Corporation, which merged with PECO Energy Company to become Exelon Corporation. Mr.
McGarrity began his career at Sidley Austin LLP, where he was a partner in its corporate and securities group. Mr. McGarrity earned his
B.B.A., cum laude, in finance and philosophy at the University of Notre Dame. He earned his J.D., magna cum laude, at the University of
Illinois College of Law, where he was an editor of the University of Illinois Law Review.

 Number and Terms of Office of Officers and Directors

 Our Board is divided into three classes, with only
one class of directors being elected in each year, and with each class (except for those directors appointed prior to our first annual
meeting of stockholders) serving a three-year term. In accordance with the Nasdaq corporate governance requirements, we are not required
to hold an annual meeting until one year after our first fiscal year end following our listing on the Nasdaq. The term of office of the
first class of directors, consisting of Mr. Gaynor, will expire at our first annual meeting of stockholders. The term of office of the
second class of directors, consisting of Mr. Dabbar and Mr. Widham, will expire at our second annual meeting of the stockholders. The
term of office of the third class of directors, consisting of Mr. Brombach and Mr. Eilers, will expire at our third annual meeting of
stockholders. We may not hold an annual meeting of stockholders until after we complete our initial business combination.

 Prior to the completion of an initial business
combination, any vacancy on the Board may be filled by a nominee chosen by holders of a majority of our Founder Shares. In addition, prior
to the completion of an initial business combination, holders of a majority of our Founder Shares may remove a member of the Board for
any reason.

 Pursuant to an agreement entered into concurrently
with the IPO, our sponsor, upon completion of an initial business combination, will be entitled to nominate three individuals for election
to our Board, as long as our sponsor holds any securities covered by the registration and stockholders rights agreement.

 Our officers are appointed by the Board and serve
at the discretion of the Board, rather than for specific terms of office. Our Board is authorized to nominate persons to the offices set
forth in our amended and restated certificate of incorporation as it deems appropriate. Our amended and restated certificate of incorporation
provides that our officers may consist of one or more chairman of the Board, chief executive officer, president, chief financial officer,
vice president, secretary, treasurer and such other offices as may be determined by the Board.

 Director Independence

 The Nasdaq listing standards require that a majority
of our Board be independent within one year of our initial public offering. An "independent director" is defined generally
as a person that, in the opinion of the company's board of directors, has no material relationship with the listed company (either
directly or as a partner, stockholder or officer of an organization that has a relationship with the company). Our Board has determined
that Mr. Dabbar, Mr. Gaynor and Mr. Widham are "independent directors" as defined in the Nasdaq listing standards and applicable
SEC rules. Our independent directors will have regularly scheduled meetings at which only independent directors are present.

 Executive Officer and Director Compensation

 None of our executive officers or directors have
received any cash compensation for services rendered to us. Commencing on December 9, 2021, we have agreed to reimburse affiliates of
our sponsor for office space and administrative support services provided to us in the amount of $20,000 per month. Furthermore, in connection
with our initial Business Combination, we will make a cash payment in an aggregate amount of up to $3,000,000 to affiliates of our Sponsor
or Anchor Investors for any financial advisory, placement agency or other similar investment banking or consulting services that affiliates
of our Sponsor or Anchor Investors have provided and may continue to provide to us in connection with our initial Business Combination,
and may reimburse to affiliates of our Sponsor or Anchor Investors for any out-of-pocket expenses incurred by it in connection with the
performance of such services. Our audit committee will review on a quarterly basis all payments that were made to our sponsor, executive
officers or directors, or our or their affiliates. Any such payments prior to an initial business combination will be made using funds
held outside the Trust Account. Other than quarterly audit committee review of such reimbursements, we do not expect to have any additional
controls in place governing our reimbursement payments to our directors and executive officers for their out-of-pocket expenses incurred
in connection with our activities on our behalf in connection with identifying and completing an initial business combination. Other than
these payments and reimbursements, no compensation of any kind, including finder's and consulting fees, will be paid by the company
to our sponsor, executive officers and directors, or any of their respective affiliates, prior to completion of our initial business combination.

 After the completion of our initial business combination,
directors or members of our management team who remain with us may be paid consulting or management fees from the Combined Company. All
of these fees will be fully disclosed to stockholders, to the extent then known, in the proxy solicitation materials or tender offer materials
furnished to our stockholders in connection with a proposed business combination. We have not established any limit on the amount of such
fees that may be paid by the Combined Company to our directors or members of management. It is unlikely the amount of such compensation
will be known at the time of the proposed business combination, because the directors of the post combination business will be responsible
for determining executive officer and director compensation. Any compensation to be paid to our executive officers will be determined,
or recommended to the Board for determination, either by a compensation committee constituted solely by independent directors or by a
majority of the independent directors on our Board.

 We do not intend to take any action to ensure that
members of our management team maintain their positions with us after the completion of our initial business combination, although it
is possible that some or all of our executive officers and directors may negotiate employment or consulting arrangements to remain with
us after our initial business combination. The existence or terms of any such employment or consulting arrangements to retain their positions
with us may influence our management's motivation in identifying or selecting a target business but we do not believe that the ability
of our management to remain with us after the completion of our initial business combination will be a determining factor in our decision
to proceed with any potential business combination. We are not party to any agreements with our executive officers and directors that
provide for benefits upon termination of employment.

 Committees of the Board of Directors

 Our Board has three standing committees: an audit
committee, a compensation committee and a corporate governance and nominating committee. Subject to phase-in rules and a limited exception,
the rules of the Nasdaq and Rule 10A of the Exchange Act require that the audit committee of a listed company be comprised solely of independent
directors. Subject to phase-in rules and a limited exception, the rules of the Nasdaq require that the compensation committee of a listed
company be comprised solely of independent directors.

 Audit Committee

 We have established an audit committee of the Board.
Mr. Gaynor, Mr. Widham and Mr. Dabbar serve as members of our audit committee. Our Board has determined that each of Mr. Gaynor, Mr. Widham
and Mr. Dabbar are independent under the Nasdaq listing standards and applicable SEC rules. Mr. Gaynor serves as the chairman of the audit
committee. Each member of the audit committee is financially literate and our Board has determined that Mr. Gaynor qualifies as an "audit
committee financial expert" as defined in applicable SEC rules.

 We have adopted an audit committee charter, which
details the primary functions of the audit committee, including:

 appointing, compensating and overseeing our independent registered public accounting firm

 reviewing and approving the annual audit plan for the company

 overseeing the integrity of our financial statements and our compliance with legal and regulatory requirements

 discussing the annual audited financial statements and unaudited quarterly financial statements with management and the independent registered public accounting firm

 pre-approving all audit services and permitted non-audit services to be performed by our independent registered public accounting firm, including the fees and terms of the services to be performed

 appointing or replacing the independent registered public accounting firm

 monitoring our environmental sustainability and governance practices

 establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or reports which raise material issues regarding our financial statements or accounting policies

 discussing earnings press releases and financial information provided to analysts and rating agencies

 discussing with management our policies and practices with respect to risk assessment and risk management

 reviewing any material transaction between our Chief Financial Officer that has been approved in accordance with our Code of Ethics for our officers, and providing prior written approval of any material transaction between us and our Chief Executive Officer and

 producing an annual report for inclusion in our proxy statement, in accordance with applicable rules and regulations.

 The audit committee is a separately designated
standing committee established in accordance with Section 3(a)(58)(A) of the Exchange Act.

 Compensation Committee

 We have established a compensation committee of
the Board. The members of our compensation committee are Mr. Gaynor, Mr. Widham, and Mr. Dabbar, and Mr. Widham serves as chairman of
the compensation committee. Under the Nasdaq listing standards and applicable SEC rules, we are required to have a compensation committee
composed entirely of independent directors. Our Board has determined that each of Mr. Gaynor, Mr. Widham, and Mr. Dabbar are independent.

 We have adopted a compensation committee charter,
which details the primary functions of the compensation committee, including:

 reviewing and approving corporate goals and objectives relevant to our Chief Executive Officer's compensation (if any), evaluating our Chief Executive Officer's performance in light of those goals and objectives, and setting our Chief Executive Officer's compensation level (if any) based on this evaluation

 setting salaries and approving incentive compensation and equity awards, as well as compensation policies, for all other officers who file reports of their ownership, and changes in ownership, of the company's common stock under Section 16(a) of the Exchange Act (the "Section 16 Officers"), as designated by our Board

 making recommendations to the Board with respect to incentive compensation programs and equity-based plans that are subject to Board approval

 approving any employment or severance agreements with our Section 16 Officers

 granting any awards under equity compensation plans and annual bonus plans to our Chief Executive Officer and the Section 16 Officers

 approving the compensation of our directors and

 producing an annual report on executive compensation for inclusion in our proxy statement, in accordance with applicable rules and regulations.

 The charter also provides that the compensation
committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, legal counsel or other adviser and will
be directly responsible for the appointment, compensation and oversight of the work of any such adviser.

 However, before engaging or receiving advice from
a compensation consultant, external legal counsel or any other adviser, the compensation committee will consider the independence of each
such adviser, including the factors required by the Nasdaq and the SEC.

 Compensation Committee Interlocks and Insider Participation

 None of our executive officers currently serves,
and in the past year has not served, as a member of the compensation committee of any entity that has one or more executive officers serving
on our Board.

 Corporate Governance and Nominating Committee

 We have established a corporate governance and
nominating committee of our Board. The members of our corporate governance and nominating committee are Mr. Gaynor, Mr. Widham, and Mr.
Dabbar, and Mr. Dabbar serves as chairman of the corporate governance and nominating committee. Under the Nasdaq listing standards, we
are required to have a corporate governance and nominating committee composed entirely of independent directors. Our Board has determined
that each of Mr. Gaynor, Mr. Widham, and Mr. Dabbar are independent.

 We have adopted a corporate governance and nominating
committee charter, which details the primary functions of the corporate governance and nominating committee, including:

 identifying individuals qualified to become members of the Board and making recommendations to the Board regarding nominees for election

 reviewing the independence of each director and making a recommendation to the Board with respect to each director's independence

 developing and recommending to the Board the corporate governance principles applicable to us and reviewing our corporate governance guidelines at least annually

 making recommendations to the Board with respect to the membership of the audit, compensation and corporate governance and nominating committees

 overseeing the evaluation of the performance of the Board and its committees on a continuing basis, including an annual self-evaluation of the performance of the corporate governance and nominating committee

 considering the adequacy of our governance structures and policies, including as they relate to our environmental sustainability and governance practices

 considering director nominees recommended by stockholders and

 reviewing our overall corporate governance and reporting to the Board on its findings and any recommendations.

 Guidelines for Selecting Director Nominees

 The guidelines for selecting nominees, which are
specified in the corporate governance and nominating committee charter, generally provide that persons to be nominated:

 should possess personal qualities and characteristics, accomplishments and reputation in the business community

 should have current knowledge and contacts in the communities in which we do business and in our industry or other industries relevant to our business

 should have the ability and willingness to commit adequate time to the Board and committee matters

 should demonstrate ability and willingness to commit adequate time to the Board and committee matters

 should possess the fit of the individual's skills and personality with those of other directors and potential directors in building a board of directors that is effective, collegial and responsive to our needs and

 should demonstrate diversity of viewpoints, background, experience, and other demographics, and all aspects of diversity in order to enable the Board to perform its duties and responsibilities effectively, including candidates with a diversity of age, gender, nationality, race, ethnicity, and sexual orientation.

 Each year in connection with the nomination of
candidates for election to the Board, the corporate governance and nominating committee will evaluate the background of each candidate,
including candidates that may be submitted by our stockholders.

 Code of Ethics

 We have adopted a Code of Ethics applicable to
our directors, officers and employees. A copy of the Code of Ethics will be provided without charge upon written request to our principal
executive offices. We intend to disclose any amendments to or waivers of certain provisions of our Code of Ethics in a Current Report
on Form 8-K.

 Conflicts of Interest

 In general, officers and directors of a corporation
incorporated under the laws of the State of Delaware are required to present business opportunities to a corporation if:

 the corporation could financially undertake the opportunity

 the opportunity is within the corporation's line of business and

 it would not be fair to our company and its stockholders for the opportunity not to be brought to the attention of the corporation.

 Certain of our officers and directors presently
have, and any of them in the future may have additional, fiduciary or contractual obligations to other entities, including one or more
other blank check companies, or other entities that are affiliates of our sponsor, pursuant to which such officer or director is or will
be required to present a business combination opportunity to such entity. Accordingly, if our sponsor, its affiliates or our officers
or directors becomes aware of a business combination opportunity that is suitable for an entity to which he or she has then-current fiduciary
or contractual obligations, including one or more other blank check companies, he or she will honor his or her fiduciary or contractual
obligations to present such business combination opportunity to such entity, subject to their fiduciary duties under Delaware law. We
do not believe, however, that the fiduciary duties or contractual obligations of our officers or directors will materially affect our
ability to complete our initial business combination.

 Below is a table summarizing the entities to which
our executive officers and directors currently have fiduciary duties, contractual obligations or other material management relationships:

 Individual

 Entity

 Entity's Business

 Affiliation

 Theodore J. Brombach

 XMS Capital Partners, LLC

XA Investments LLC

XAI Octagon Floating Rate &

Alternative Income Term Trust

RiverWood Bank

 Investment Banking

Financial Services

Financial Services

Banking

 Founder/Partner

 Chief Executive Officer

 President, Chief Executive Officer and Trustee

 Patrick C. Eilers

 Transition Equity Partners, LLC

 Private Equity

 Founder/Managing Partner

 James P. Nygaard, Jr.

 XMS Capital Partners, LLC

 Investment Banking

 Managing Director

 Paul Dabbar

 Bohr Quantum Technology Corp.

 Dominion Energy, Inc.

 Communications

 Energy

 President and Chief Executive Officer

 Paul Gaynor

 Longroad Energy

 Energy

 Chief Executive Officer

 Scott Widham

 Widham Capital Investment

 Management

 President

 John B. Sexton

 Transition Equity Partners, LLC

 Private Equity

 Vice President

 John P. McGarrity

 XMS Capital Partners, LLC

 Investment Banking

 Managing Director and Chief Administrative Officer

 XMS Holdings LLC

 Financial Services

 General Counsel

 Potential investors should also be aware of the
following other potential conflicts of interest:

 Our executive officers and directors are not required to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our operations and our search for a business combination and their other businesses. We do not intend to have any full-time employees prior to the completion of our initial business combination. Each of our executive officers and directors is engaged in several other business endeavors for which he may be entitled to substantial compensation, and our executive officers and directors are not obligated to contribute any specific number of hours per week to our affairs.

 Our sponsor subscribed for Founder Shares prior to the date of the IPO and purchased Private Placement Warrants in a transaction that closed simultaneously with the closing of our IPO.

 Our sponsor, directors, each other member of our management team and the Anchor Investors have entered into agreements with us, pursuant to which they have agreed to waive their redemption rights with respect to their Founder Shares and public shares in connection with (i) the completion of our initial business combination and (ii) a stockholder vote to approve an amendment to our amended and restated certificate of incorporation that would affect the substance or timing of our obligation to provide holders of shares of Class A common stock the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we have not completed an initial business combination by March 14, 2024 (or such later date approved by the stockholders or the Board in accordance with our amended and restated certificate of incorporation, including the 2024 Extension). Additionally, our initial stockholders and the Anchor Investors have agreed to waive their rights to liquidating distributions from the Trust Account with respect to its Founder Shares if we do not complete our initial business combination within the prescribed time frame. If we do not complete our initial business combination within the prescribed time frame, the Private Placement Warrants will expire worthless. Except as described herein, our initial stockholders and the Anchor Investors have agreed not to transfer, assign or sell any of their Founder Shares until the earlier of (A) one year after the completion of our initial business combination or (B) subsequent to completion of our initial business combination, (x) the date on which the last reported sale price of our Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, or (y) the date on which we complete a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of our stockholders having the right to exchange their common stock for cash, securities or other property. The Private Placement Warrants will not be transferable until 30 days following the completion of our initial business combination. Because each of our executive officers and directors will own common stock or warrants directly or indirectly, they may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination.

 Our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors is included by a target business as a condition to any agreement with respect to our initial business combination.

 TEP Montana LLC, controlled by Mr. Eilers, is invested in Montana Technologies LLC (MT), the target of the business combination with the Company. Mr. Brombach, John Spence, Mr. Nygaard and Mr. McGarrity are investors in XMS MT Holdings LLC, which Messrs. Brombach and Spence control, which also is an investor in MT.

 We are not prohibited from pursuing an initial
business combination with a business combination target that is affiliated with our sponsor, officers or directors or making the acquisition
through a joint venture or other form of shared ownership with our sponsor, officers or directors. In the event we seek to complete our
initial business combination with a business combination target that is affiliated with our sponsor, executive officers or directors,
we, or a committee of independent directors, would obtain an opinion from an independent investment banking firm or from an independent
accounting firm, that such initial business combination is fair to our company from a financial point of view. We are not required to
obtain such an opinion in any other context. Furthermore, in no event will our sponsor or any of our existing officers or directors, or
any of their respective affiliates, be paid by the company any finder's fee, consulting fee or other compensation prior to, or for
any services they render in order to effectuate, the completion of our initial business combination (regardless of the type of transaction
that it is), except for reimbursement for out-of-pocket expenses incurred in connection with activities on our behalf such as identifying
potential target businesses and performing due diligence on suitable business combinations, advisory fees and consulting fees in an aggregate
amount of up to $3,000,000 that will be paid to XMS Capital and TEP in connection with the Business Combination and $20,000 per month
for office space, secretarial and administrative services.

 We cannot assure you that any of the above-mentioned
conflicts will be resolved in our favor.

 In the event that we submit our initial business
combination to our public stockholders for a vote, our sponsor, directors and each member of our management team have agreed to vote their
Founder Shares, and our sponsor, directors and each member of our management team have agreed to vote any shares purchased during or after
the offering, in favor of our initial business combination.

 Limitation on Liability and Indemnification of Officers and Directors

provides that our officers and directors will be indemnified by us to the fullest extent authorized by Delaware law, as it now exists
or may in the future be amended. In addition, our amended and restated certificate of incorporation provides that our directors will not
be personally liable for monetary damages to us or our stockholders for breaches of their fiduciary duty as directors, unless they violated
their duty of loyalty to us or our stockholders, acted in bad faith, knowingly or intentionally violated the law, authorized unlawful
payments of dividends, unlawful stock purchases or unlawful redemptions, or derived an improper personal benefit from their actions as
directors.

 We have entered into agreements with our officers
and directors to provide contractual indemnification in addition to the indemnification provided for in our amended and restated certificate
of incorporation. Our amended and restated bylaws also permit us to secure insurance on behalf of any officer, director or employee for
any liability arising out of his or her actions, regardless of whether Delaware law would permit such indemnification.

 We have purchased a policy of directors'
and officers' liability insurance that insures our officers and directors against the cost of defense, settlement or payment of
a judgment in some circumstances and insures us against our obligations to indemnify our officers and directors. Our officers and directors
have agreed to waive any right, title, interest or claim of any kind in or to any monies in the Trust Account, and have agreed to waive
any right, title, interest or claim of any kind they may have in the future as a result of, or arising out of, any services provided to
us and will not seek recourse against the Trust Account for any reason whatsoever (except to the extent they are entitled to funds from
the Trust Account due to their ownership of public shares). Accordingly, any indemnification provided will only be able to be satisfied
by us if (i) we have sufficient funds outside of the Trust Account or (ii) we complete an initial business combination.

 Our indemnification obligations may discourage
stockholders from bringing a lawsuit against our officers or directors for breach of their fiduciary duty. These provisions also may have
the effect of reducing the likelihood of derivative litigation against our officers and directors, even though such an action, if successful,
might otherwise benefit us and our stockholders. Furthermore, a stockholder's investment may be adversely affected to the extent
we pay the costs of settlement and damage awards against our officers and directors pursuant to these indemnification provisions.

 We believe that these provisions, the insurance
and the indemnity agreements are necessary to attract and retain talented and experienced officers and directors.

 Item 11. Executive Compensation.

 Executive Officer and Director Compensation

 None of our executive officers or directors have
received any cash compensation for services rendered to us. Commencing on December 9, 2021, we have agreed to reimburse affiliates of
our sponsor for office space and administrative support services provided to us in the amount of $20,000 per month. Furthermore, in connection
with our initial Business Combination, we will make a cash payment in an aggregate amount of up to $3,000,000 to affiliates of our Sponsor
or Anchor Investors for any financial advisory, placement agency or other similar investment banking or consulting services that affiliates
of our Sponsor or Anchor Investors have provided and may continue to provide to us in connection with our initial Business Combination,
and may reimburse to affiliates of our Sponsor or Anchor Investors for any out-of-pocket expenses incurred by it in connection with the
performance of such services. Our audit committee will review on a quarterly basis all payments that were made to our sponsor, executive
officers or directors, or our or their affiliates. Any such payments prior to an initial business combination will be made using funds
held outside the Trust Account. Other than quarterly audit committee review of such reimbursements, we do not expect to have any additional
controls in place governing our reimbursement payments to our directors and executive officers for their out-of-pocket expenses incurred
in connection with our activities on our behalf in connection with identifying and completing an initial business combination. Other than
these payments and reimbursements, no compensation of any kind, including finder's and consulting fees, will be paid by the company
to our sponsor, executive officers and directors, or any of their respective affiliates, prior to completion of our initial business combination.

 After the completion of our initial business combination,
directors or members of our management team who remain with us may be paid consulting or management fees from the Combined Company. All
of these fees will be fully disclosed to stockholders, to the extent then known, in the proxy solicitation materials or tender offer materials
furnished to our stockholders in connection with a proposed business combination. We have not established any limit on the amount of such
fees that may be paid by the Combined Company to our directors or members of management. It is unlikely the amount of such compensation
will be known at the time of the proposed business combination, because the directors of the postcombination business will be responsible
for determining executive officer and director compensation. Any compensation to be paid to our executive officers will be determined,
or recommended to the Board for determination, either by a compensation committee constituted solely by independent directors or by a
majority of the independent directors on our Board.

 We do not intend to take any action to ensure that
members of our management team maintain their positions with us after the completion of our initial business combination, although it
is possible that some or all of our executive officers and directors may negotiate employment or consulting arrangements to remain with
us after our initial business combination. The existence or terms of any such employment or consulting arrangements to retain their positions
with us may influence our management's motivation in identifying or selecting a target business but we do not believe that the ability
of our management to remain with us after the completion of our initial business combination will be a determining factor in our decision
to proceed with any potential business combination. We are not party to any agreements with our executive officers and directors that
provide for benefits upon termination of employment.

 Item 12. Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters.

 The following table sets forth information regarding
the beneficial ownership of our common stock as of December 31, 2023, based on information obtained from the persons named below, with
respect to the beneficial ownership of our shares of common stock, by:

 each person known by us to be the beneficial owner of more than 5% of our outstanding shares of our common stock

 each of our executive officers, directors and director nominees that beneficially owns shares of our common stock and

 all our executive officers and directors as a group.

 In the table below, percentage ownership is based
on 10,608,178 shares of Class A common stock (which includes shares of Class A common stock that are underlying the units) and 7,187,500
shares of Class B common stock outstanding as of December 31, 2023. The table below does not include the shares of Class A common stock
underlying the Private Placement Warrants held by our sponsor because these securities are not exercisable within 60 days of this Report.

 Number of
 shares of
 Class A
 common stock
 beneficially
 owned (2)

 Number of
 shares of
 Class B
 common stock
 beneficially
 owned

 Approximate
 percentage of
 outstanding
 Common Stock

 Approximate
 percentage of
 class

 Name of Beneficial Owner

 Principal Stockholder

 XPDI Sponsor II
 LLC (1)

 —

 7,097,500

 39.88
 %

 98.75
 %

 Directors and Named Executive Officers of the Company:

 Theodore J. Brombach (2)

 —

 7,097,500

 39.88
 %

 98.75
 %

 Patrick C. Eilers (3)

 —

 7,097,500

 39.88
 %

 98.75
 %

 James P. Nygaard, Jr.

 —

 —

 —

 —

 John B. Sexton

 —

 —

 —

 —

 John P. McGarrity

 —

 —

 —

 —

 Paul Dabbar

 —

 30,000

 *

 *

 Paul Gaynor

 —

 30,000

 *

 *

 Scott Widham

 —

 30,000

 *

 *

 All officers and directors as a group (8 individuals)

 —

 40.39
 %

 100.00
 %

 5% Holders of a Class of Shares:

 Westchester Capital Management, LLC (4)

 699,844

 —

 3.93
 %

 6.60
 %

 Cowen and Company, LLC (5)

 715,000

 —

 4.02
 %

 6.74
 %

 Radcliffe (6)

 727,998

 —

 4.09
 %

 6.86
 %

 Periscope Capital Inc. (7)

 898,485

 —

 5.05
 %

 8.47
 %

 Fir Tree Capital Management LP (8)

 1,019,221

 —

 5.72
 %

 9.61
 %

 Walleye Capital LLC (9)

 1,219,754

 —

 6.85
 %

 11.50
 %

 *
 Less than one percent.

 (1)
 Unless otherwise noted, the business address of each of our
stockholders is 321 North Clark Street Suite 2440 Chicago, IL 60654.

 (2)
 Interests shown consist solely of founder shares, classified
as Class B common stock. Such shares will automatically convert into Class A common stock at the time of our initial business
combination as described in the section entitled "Description of Securities."

 (3)
 XPDI Sponsor II LLC is the record holder of the shares
reported herein. XPDI Sponsor II LLC is controlled by its managing members, Messrs. Brombach and Eilers. Accordingly, all of the
shares held by our sponsor may be deemed to be beneficially held by Messrs. Brombach and Eilers. Each such person disclaims beneficial
ownership of these securities, except to the extent, if any, of his pecuniary interest therein.

 (4)
 Pursuant to a Schedule 13G (the "Westchester 13G")
filed by such persons as a group with the SEC on February 14, 2024, (i) Westchester Capital Management, LLC, a Delaware limited
liability company ("Westchester"), may be deemed the beneficial owner of 699,844 shares of Class A Common Stock, as a result
of holding directly or indirectly, 672,849 shares of Class A Common Stock, with shared voting power and shared dispositive power with
respect to such Class A Common Stock and 26,995 shares of Class A Common Stock, with sole voting power and sole dispositive power, (ii)
Westchester Capital Partners, LLC, a Delaware limited Liability company ("WCP"), may be deemed the beneficial owner of 307
shares of Class A Common Stock, as a result of holding directly or indirectly, 307 shares of Class A Common Stock, with sole voting power
and sole dispositive power, (iii) Virtus Investment Advisers, Inc., a Massachusetts corporation ("Virtus"), may be deemed
the beneficial owner of 672,849 shares of Class A Common Stock, as a result of holding directly or indirectly, 672,849 shares of
Class A Common Stock, with shared voting power and shared dispositive power with respect to such Class A Common Stock and (iv) The Merger
Fund, a Massachusetts business trust ("MF"), may be deemed the beneficial owner of 658,824 shares of Class A Common Stock,
as a result of holding directly or indirectly, 658,824 shares of Class A Common Stock, with shared voting power and shared dispositive
power with respect to such Class A Common Stock. Westchester and WCP are located at 100 Summit Drive, Valhalla, NY 10595, Virtus is located
at One Financial Plaza, Hartford, CT 06103, and MF is located at 101 Munson Street, Greenfield, MA 01301-9683.

 Virtus, a registered investment adviser, serves as the investment adviser to each of MF, The Merger
 Fund VL ("MF VL"), Virtus Westchester Event-Driven Fund ("EDF") and Virtus Westchester Credit Event Fund
 ("CEF"). Westchester, a registered investment adviser, serves as sub-advisor to each of MF, MF VL, EDF, CEF,
 JNL/Westchester Capital Event Driven Fund ("JNL"), JNL Multi-Manager Alternative Fund ("JARB") and Principal
 Funds, Inc. – Global Multi-Strategy Fund ("PRIN"). WCP, a registered investment adviser, serves as Investment
 adviser to Westchester Capital Master Trust ("Master Trust", together with MF, MF VL, EDF, CEF, JNL, JARB and PRIN, the
 "Funds"). The Funds directly hold Common Stock of the Company for the benefit of the investors in those Funds. Mr. Roy
 Behren and Mr. Michael T. Shannon each serve as Co-Presidents of Westchester and WCP. Westchester and WCP often make acquisitions
 in, and dispose of, securities of an issuer on the same terms and conditions and at the same time. Based on the foregoing and the
 relationships described herein, these parties may be deemed to constitute a "group" for purposes of Section 13(g)(3) of
 the Act.

 (5)
 Cowen and Company, LLC is the record holder of the shares
reported herein. The business address for Cowen and Company, LLC is 599 Lexington Ave., New York, NY 10022, based on a Schedule 13G filed
on February 5, 2024.

 (6)
 Pursuant to a Schedule 13G filed by such persons as a
group ("Radcliffe") with the SEC on June 14, 2023, (i) each of Radcliffe Capital Management, L.P., a Delaware limited
partnership, RGC Management, LLC, a Delaware limited liability company, Steven B. Katznelson, a citizen of Canada, the United States
of America and the United Kingdom, and Christopher Hinkel, a citizen of the United States of America, may be deemed the beneficial owner
of 727,998 shares of Class A Common Stock, as a result of holding directly or indirectly, 727,998 Class A Common Stock, with
shared voting power and shared dispositive power with respect to such Class A Common Stock and (ii) each of Radcliffe SPAC
Master Fund, L.P., a Cayman Islands limited partnership, and Radcliffe SPAC GP, LLC, a Delaware limited liability company may be deemed
the beneficial owner of 712,207 shares of Class A Common Stock, as a result of holding directly or indirectly, 712,207 Class A Common
Stock, with shared voting power and shared dispositive power with respect to such Class A Common Stock. The business address for Radcliffe
is 50 Monument Road, Suite 300, Bala Cynwyd, PA 19004.

 (7)
 According to a Schedule 13G filed on February 9, 2024, Periscope
Capital Inc. is the beneficial owner of 342,275 shares of Common Stock, with shared voting power and shared dispositive power with respect
to such Class A Common Stock, and acts as investment manager of, and exercises investment discretion with respect to, certain private
investment funds that collectively directly own 556,210 shares of Common Stock. The business address for Periscope Capital Inc. is 333
Bay Street, Suite 1240, Toronto, Ontario, Canada M5H 2R2.

 (8)
 Fir Tree Capital Management LP, a Delaware limited partnership,
is the record holder of the shares reported herein. The business address for Fir Tree Capital Management LP is 500 5th Avenue, 9th Floor,
New York, New York 10110, based on a Schedule 13G filed on February 14, 2024.

 (9)
 Walleye Capital LLC, a Minnesota limited liability company,
is the record holder of the shares reported herein. The business address for Walleye Capital LLC is 2800 Niagara Lane N, Plymouth, MN 55447,
based on a Schedule 13G filed on January 10, 2024.

 There can be no assurance that our Anchor Investors
will retain any public shares upon the completion of our initial business combination. Our Anchor Investors will have the same rights
to the funds held in the Trust Account with respect to the common stock underlying the units they purchased in the IPO as the rights afforded
to our public stockholders.

 Our initial stockholders have agreed (a) to vote
any Founder Shares owned by them in favor of any proposed business combination and (b) not to redeem any Founder Shares in connection
with a stockholder vote to approve a proposed initial business combination.

 Our sponsor is deemed to be our "promoter"
as such term is defined under the federal securities laws.

 Changes in Control

 None.

 Item 13. Certain Relationships and Related Transactions, and Director
Independence.

 Founder Shares

 In March 2021, our sponsor paid an aggregate of
$25,000, or approximately $0.004 per share, to cover certain of our offering costs in consideration of 5,750,000 shares of our Class B
common stock. In November 2021, we effected a stock dividend of 1,437,500 shares of our Class B common stock, resulting in there being
an aggregate of 7,187,500 shares of our Class B common stock outstanding. We have agreed to sell to the Anchor Investors 1,078,125 Founder
Shares, and the Anchor Investors have agreed to purchase from us on the date of the initial business combination an aggregate of 1,078,125
Founder Shares for an aggregate purchase price of approximately $3,750 or approximately $0.004 per share. Our sponsor has also agreed
that in the event of such purchase by the Anchor Investors, our sponsor will forfeit to us for no consideration a number of Founder Shares
equal to the number of Founder Shares purchased by the Anchor Investors.

 In July 2021, our sponsor transferred 30,000 shares
of Class B common stock to each of the four independent director nominees, a total of shares of 120,000 Class B common stock. In November
2021, our sponsor repurchased 30,000 shares of Class B common stock from a former independent director nominee. The number of Founder
Shares issued was determined based on the expectation that such Founder Shares would represent 20% of the outstanding shares upon completion
of our IPO. The Founder Shares (including the Class A common stock issuable upon exercise thereof) may not, subject to certain limited
exceptions, be transferred, assigned or sold by the holder.

 Our sponsor and the Anchor Investors purchased
an aggregate of 11,125,000 Private Placement Warrants for a purchase price of $1.00 per whole warrant in a private placement that occurred
simultaneously with the closing of our IPO. Among the Private Placement Warrants, 8,900,000 Private Placement Warrants were purchased
by our sponsor and an aggregate of 2,225,000 Private Placement Warrants were purchased by the Anchor Investors. As such, our sponsor and
Anchor Investors' interest in this transaction is valued at approximately $11,125,000. Each Private Placement Warrant entitles the
holder to purchase one share of our Class A common stock at $11.50 per share. The Private Placement Warrants (including the Class A common
stock issuable upon exercise thereof) may not, subject to certain limited exceptions, be transferred, assigned or sold by the holder.

 The Anchor Investors have also agreed that if,
in connection with an initial business combination, the Sponsor decides (i) to forfeit (other than the Sponsor's contemplated forfeiture
to us described above in this section), transfer to a third person, exchange, subject to transfer, vesting or conditional forfeiture provisions
or amend the terms of all or any portion of the Founder Shares or the Private Placement Warrants or (ii) to enter into any other arrangements
with respect to the Founder Shares or the Private Placement Warrants, including voting in favor of any amendment to the terms of the Founder
Shares or the Private Placement Warrants (each, a "change in investment"), such change in investment shall apply pro rata
to the Anchor Investors and the Sponsor based on the relative number of Founder Shares or Private Placement Warrants to be held by the
Sponsor (after giving effect to the Sponsor's contemplated forfeiture to us described above in this section) upon completion of
the initial business combination provided, however that in no event will such change in investment apply to more than 75% of the
Founder Shares to be purchased by the Anchor Investors (but for the avoidance of doubt may apply to up to 100% of the Private Placement
Warrants to be purchased by the Anchor Investors).

 As more fully discussed in the section of this
Report entitled "Item 10-Conflicts of Interest," if any of our sponsor or its affiliates, our officers or directors becomes
aware of a business combination opportunity that falls within the line of business of any entity to which he or she has then current fiduciary
or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such opportunity to such entity.
Our officers and directors currently have certain relevant fiduciary duties or contractual obligations that may take priority over their
duties to us.

 We currently maintain our executive offices at
321 North Clark Street Suite 2440 Chicago, IL 60654. The cost for our use of this space is included in the $20,000 per month fee we have
agreed to pay affiliates of our sponsor for office space and administrative support services since the date that our securities were first
listed on the Nasdaq. Upon completion of our initial business combination or our liquidation, we will cease paying these monthly fees.

 In connection with our initial Business Combination,
we will make a cash payment in an aggregate amount of up to $3,000,000 to affiliates of our Sponsor or Anchor Investors for any financial
advisory, placement agency or other similar investment banking or consulting services that affiliates of our Sponsor or Anchor Investors
have provided and may continue to provide to us in connection with our initial Business Combination, and may reimburse to affiliates of
our Sponsor or Anchor Investors for any out-of-pocket expenses incurred by it in connection with the performance of such services.

 Except as otherwise disclosed in this Report, no
compensation of any kind, including finder's and consulting fees, will be paid to our sponsor, officers and directors, or any of
their respective affiliates, for services rendered prior to or in connection with the completion of an initial business combination. However,
these individuals will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying
potential target businesses and performing due diligence on suitable business combinations. Our audit committee will review on a quarterly
basis all payments that were made to our sponsor, officers, directors or our or their affiliates and will determine which expenses and
the amount of expenses that will be reimbursed. There is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred by
such persons in connection with activities on our behalf.

 The Anchor Investors have agreed that if, in connection
with an initial business combination, the Sponsor decides (i) to forfeit (other than the Sponsor's contemplated forfeiture to us
described above in this section), transfer to a third person, exchange, subject to transfer, vesting or conditional forfeiture provisions
or amend the terms of all or any portion of the Founder Shares or (ii) to enter into any other arrangements with respect to the Founder
Shares, including voting in favor of any amendment to the terms of the Founder Shares (each, a "change in investment"), such
change in investment will apply pro rata to the Anchor Investors and the Sponsor based on the relative number of Founder Shares to be
purchased or held, as applicable, by the Sponsor (after giving effect to the Sponsor's contemplated forfeiture to us described above
in this section) upon completion of the initial business combination provided, however that in no event will such change in investment
reduce the Founder Shares to be purchased by the Anchor Investors by more than 75%. By way of example and without limiting the foregoing,
in the event our Sponsor forfeits or transfers 50% or 100%, respectively, of the Founder Shares as part of our initial business combination
(other than the Sponsor's contemplated forfeiture to us described above in this section), the number of Founder Shares to be purchased
by the Anchor Investors will be reduced by 50% or 75%, respectively.

 There can be no assurance that our Anchor Investors
will retain any public shares upon the completion of our initial business combination. Our Anchor Investors will have the same rights
to the funds held in the Trust Account with respect to the common stock underlying the units they purchased in the IPO as the rights afforded
to our public stockholders.

 Our sponsor agreed to loan us an aggregate of up
to $300,000 to cover expenses related to the IPO pursuant to a promissory note (as amended and restated on July 1, 2021, the "promissory
note"). This promissory note was non-interest bearing and payable upon the completion of the IPO. As of December 14, 2021, we had
borrowed approximately $115,000 under the promissory note. We fully repaid the promissory note on December 17, 2021.

 In addition, in order to finance transaction costs
in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our officers and
directors may, but are not obligated to, loan us funds as may be required. If we complete an initial business combination, we would repay
such loaned amounts. In the event that the initial business combination does not close, we may use a portion of the working capital held
outside the Trust Account to repay such loaned amounts but no proceeds from our Trust Account would be used for such repayment. Up to
$1,500,000 of such loans may be convertible into warrants at a price of $1.00 per warrant at the option of the lender. The warrants would
be identical to the Private Placement Warrants, including as to exercise price, exercisability and exercise period. The terms of such
loans by our officers and directors, if any, have not been determined and no written agreements exist with respect to such loans. We do
not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will be
willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our Trust Account.

 After our initial business combination, members
of our management team who remain with us may be paid consulting, management or other fees from the Combined Company with any and all
amounts being fully disclosed to our stockholders, to the extent then known, in the tender offer or proxy solicitation materials, as applicable,
furnished to our stockholders. It is unlikely the amount of such compensation will be known at the time of distribution of such tender
offer materials or at the time of a stockholder meeting held to consider our initial business combination, as applicable, as it will be
up to the directors of the post-combination business to determine executive and director compensation.

 We have entered into a registration and stockholders
rights agreement pursuant to which our initial stockholders and the Anchor Investors will be entitled to certain registration rights with
respect to the Private Placement Warrants, the warrants issuable upon conversion of working capital loans (if any) and the shares of our
Class A common stock issuable upon exercise of the foregoing and upon conversion of the Founder Shares and, upon completion of our initial
business combination, to nominate three individuals for election to our Board, as long as our initial stockholders and the Anchor Investors
hold any securities covered by the registration and stockholder rights agreement.

 Policy for Approval of Related Party Transactions

 The audit committee of our Board has adopted a
charter, providing for the review, approval and/or ratification of "related party transactions," which are those transactions
required to be disclosed pursuant to Item 404 of Regulation S-K as promulgated by the SEC, by the audit committee. At its meetings, the
audit committee shall be provided with the details of each new, existing or proposed related party transaction, including the terms of
the transaction, any contractual restrictions that the company has already committed to, the business purpose of the transaction and the
benefits of the transaction to the company and to the relevant related party. Any member of the committee who has an interest in the related
party transaction under review by the committee shall abstain from voting on the approval of the related party transaction, but may, if
so requested by the chairman of the committee, participate in some or all of the committee's discussions of the related party transaction.
Upon completion of its review of the related party transaction, the committee may determine to permit or to prohibit the related party
transaction.

 Item 14. Principal Accountant Fees and Services.

 The firm of Marcum LLP ("Marcum")
served as our independent registered public accounting firm from March 23, 2021 (inception) through December 31, 2023. The following is
a summary of fees paid to Marcum for services rendered:

 Audit Fees. Audit fees
consist of fees billed for professional services rendered for the audit of our year-end financial statements, reviews of our quarterly
financial statements and services that are normally provided by our independent registered public accounting firm in connection with
statutory and regulatory filings. The aggregate fees by Marcum for audit fees, inclusive of required filings with the SEC for the year
ended December 31, 2023 and 2022, and of services rendered in connection with our IPO, totaled $385,200 and $115,000, respectively.

 Audit-Related Fees.
Audit-related fees consist of fees for assurance and related services that are reasonably related to performance of the audit or review
of our year-end financial statements and are not reported under "Audit Fees." These services include attest services that
are not required by statute or regulation and consultation concerning financial accounting and reporting standards. During the year ended
December 31, 2023 and 2022 we paid Marcum $0 and $0, respectively, in audit-related fees.

 Tax Fees. Tax fees
consist of fees billed for professional services relating to tax compliance, tax planning and tax advice. During the year ended December
31, 2023 and 2022 we paid Marcum $18,625 and $0, respectively, in tax related fees.

 All Other Fees. All
other fees consist of fees billed for all other services. We did not pay Marcum any audit-related fees during the year ended December
31, 2023 and 2022.

 Pre-Approval Policy

 Our audit committee was formed
upon the pricing of our initial public offering. As a result, the audit committee did not pre-approve all of the foregoing services, although
any services rendered prior to the formation of our audit committee were approved by our Board. Since the formation of our audit committee,
and on a going-forward basis, the audit committee has and will pre-approve all auditing services and permitted non-audit services to be
performed for us by our auditors, including the fees and terms thereof (subject to the de minimis exceptions for non-audit services described
in the Exchange Act which are approved by the audit committee prior to the completion of the audit).

 Item 15. Exhibits, Financial Statement
Schedules

 (a)
 The
following documents are filed as part of this Form 10-K:

 (1)
 Consolidated
Financial Statements:

 Report of Independent Registered Public Accounting Firm

 Financial Statements:

 Consolidated Balance Sheets

 Consolidated Statements of Operations

 Consolidated Statements of Changes in Stockholders' Deficit

 Consolidated Statements of Cash Flows

 Notes to Consolidated Financial Statements

 F-7 to F-25

 (2)

 Financial Statement Schedules:

 (3)

 Exhibits

 We hereby file as part of this Report the exhibits
listed in the attached Exhibit Index. Exhibits which are incorporated herein by reference can be inspected and copied at the public reference
facilities maintained by the SEC, 100 F Street, N.E., Room 1580, Washington, D.C. 20549. Copies of such material can also be obtained
from the Public Reference Section of the SEC, 100 F Street, N.E., Washington, D.C. 20549, at prescribed rates or on the SEC website at
www.sec.gov.

 Exhibit
 No.

 Description

 2.1

 Agreement and Plan of Merger, dated as of June 5, 2023, by and among Power & Digital Infrastructure Acquisition II Corp., XPDB Merger Sub, LLC and Montana Technologies LLC. (incorporated by reference to Exhibit 2.1 of the Company's Form 8-K (File No. 001-441151), filed with the SEC on June 5, 2023).

 3.1

 Amended and Restated Certificate of Incorporation. (1)

 3.2

 Amendment to Amended and Restated Certificate of Incorporation. (2)

 3.3

 Amended and Restated Bylaws.*

 4.1

 Public Warrant Agreement between Continental Stock Transfer & Trust Company and the company. (1)

 4.2

 Private Warrant Agreement between Continental Stock Transfer & Trust Company and the company. (1)

 4.3

 Specimen Unit Certificate. (3)

 4.4

 Specimen Class A Common Stock Certificate. (3)

 4.5

 Specimen Public Warrant Certificate. (3)

 4.6

 Specimen Private Warrant Certificate. (3)

 4.7

 Description of Registrant's Securities.*

 10.1

 Investment Management Trust Agreement between Continental Stock Transfer & Trust Company and the company. (1)

 10.2

 Amendment No. 1 to Investment Management Trust Agreement, dated as of December 14, 2023, between Power & Digital Infrastructure Acquisition II Corp. and Continental Stock Transfer & Trust Company (incorporated by reference to Exhibit 10.1 of the Company's Form 8-K (File No. 001-441151), filed with the SEC on December 14, 2023).

 10.3

 Registration and Stockholder Rights Agreement among the company, our sponsor and certain equityholders party thereto. (1)

 10.4

 Private Placement Warrants Purchase Agreement between the company and our sponsor. (1)

 10.5

 Administrative Support Agreement between the company and our sponsor. (1)

 10.6

 Letter Agreement among the company, our sponsor and each of the officers and directors of the company named therein. (1)

 10.7

 Securities Subscription Agreement, dated March 30, 2021, between the company and our sponsor. (3)

 10.8

 Form of Securities Subscription Agreement, between the company and our anchor investors. (4)

 10.9

 Sponsor Support Agreement, dated as of June 5, 2023, by and among Power & Digital Infrastructure Acquisition II Corp., XPDB Merger Sub, LLC and Montana Technologies LLC. (incorporated by reference to Exhibit 2.1 of the Company's Form 8-K (File No. 001-441151), filed with the SEC on June 5, 2023.

 10.10

 Investment Agreement, dated as of September 29, 2023, by and among Montana Technologies LLC, Power & Digital Infrastructure Acquisition II Corp., Contemporary Amperex Technology Co., Limited, CATL US INC. and Contemporary Amperex Technology USA Inc. (incorporated by reference to Exhibit 10.15 of the Company's Registration Statement on Form S-4/A (Registration No. 333-273821), filed with the SEC on October 2, 2023).

 10.11

 Letter Agreement (incorporated by reference to Exhibit 10.18 to the Company's proxy statement/prospectus on Form S-4, filed with the SEC on January 10, 2024).

 10.12

 First Amendment to Agreement and Plan of Merger, dated as of February 5, 2024, by and among Power & Digital Infrastructure Acquisition II Corp., XPDB Merger Sub, LLC and Montana Technologies, LLC. (incorporated by reference to Exhibit 10.1 of the Company's Form 8-K (File No. 001-441151), filed with the SEC on February 5, 2024).

 14.1

 Code of Ethics.*

 31.1

 Certification of the Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a).*

 31.2

 Certification of the Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a).*

 32.1

 Certification of the Chief Executive Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350.**

 32.2

 Certification of the Chief Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350.**

 101.INS

 101.SCH

 101.CAL

 101.DEF

 101.LAB

 101.PRE

 *
 Filed
herewith

 **
 Furnished
herewith

 (1)

 Previously filed as an exhibit to our Current Report on Form 8-K filed on December 14, 2021 and incorporated by reference herein.

 (2)

 Previously filed as an exhibit to our Current Report on Form 8-K filed on June 13, 2023 and incorporated by reference herein.

 (3)

 Previously filed as an exhibit to our Registration Statement on Form S-1 filed on November 18, 2021 and incorporated by reference herein.

 (4)

 Previously filed as an exhibit to Amendment No. 1 to our Registration Statement on Form S-1 filed on December 6, 2021 and incorporated by reference herein.

 Item 16. Form 10-K Summary

 Not applicable.

 SIGNATURES

 Pursuant to the requirements of Section 13 or 15(d)
of the Securities Act of 1934, the registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned,
thereunto duly authorized.

 POWER & DIGITAL INFRASTRUCTURE II CORP.

 /s/ Patrick C. Eilers

 Name:

 Patrick C. Eilers

 Title:

 Chief Executive Officer and Director

(Principal Executive Officer)

 POWER OF ATTORNEY

 KNOW ALL PERSONS BY THESE PRESENTS, that each person
whose signature appears below hereby constitutes and appoints each of Patrick C. Eilers and James P. Nygaard, Jr., and each of them acting
alone, as his or her true and lawful attorneys-in-fact and agents, each with full power of substitution and resubstitution, for him or
her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K,
and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully for all intents and purposes as he or she might or could do in person, hereby ratifying and
confirming all that each of said attorneys-in-fact and agents, or his or her substitute or substitutes may lawfully do or cause to be
done by virtue hereof.

 Pursuant to the requirements of the Securities
Exchange Act of 1934, this Annual Report on Form 10-K has been signed below by the following persons on behalf of the registrant and in
the capacities and on the dates indicated.

 Name

 Position

 Date

 /s/ Patrick C. Eilers

 Chief Executive Officer and Director

 Patrick C. Eilers

 ( Principal Executive Officer)

 /s/ James P. Nygaard, Jr.

 Chief Financial Officer

 James P. Nygaard, Jr.

 ( Principal Financial and

Accounting Officer)

 /s/ Theodore J. Brombach

 Chairman of the Board of Directors

 Theodore J. Brombach

 /s/ Paul Dabbar

 Paul Dabbar

 /s/ Paul Gaynor

 Paul Gaynor

 /s/ Scott Widham

 Scott Widham

 POWER & DIGITAL INFRASTRUCTURE ACQUISITION
II CORP.

TO FINANCIAL STATEMENTS

 Report of Independent Registered Public Accounting Firm (PCAOB ID Number 688)

 Financial Statements:

 Consolidated Balance Sheets

 Consolidated Statements of Operations

 Consolidated Statements of Changes in Stockholders' Deficit

 Consolidated Statements of Cash Flows

 Notes to Consolidated Financial Statements

 F- 1

 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM

 To the Stockholders and Board of Directors of

 Power & Digital Infrastructure Acquisition II Corp.

 Opinion on the Financial Statements

 We have audited the accompanying consolidated balance sheets of Power &
Digital Infrastructure Acquisition II Corp. (the "Company") as of December 31, 2023 and 2022, the related consolidated statements
of operations, changes in stockholders' deficit and cash flows for each of the two years in the period ended December 31,
2023, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements
present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its
operations and its cash flows for each of the two years in the period ended December 31, 2023, in conformity with accounting principles
generally accepted in the United States of America.

 Explanatory Paragraph – Going Concern

 The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. As described in Note 1 to the financial statements, the Company is a Special Purpose Acquisition
Corporation that was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization
or similar business combination with one or more businesses or entities on or before March 14, 2024 by depositing into the Trust Account
a specified amount for each of the one-month extensions through March 14, 2024. On June 5, 2023, the Company entered into an agreement
and plan of merger with a business combination target; however, the completion of this transaction is subject to the approval of the Company's
stockholders among other conditions. There is no assurance that the Company will obtain the necessary approvals, satisfy the required
closing conditions, or raise the additional capital it needs to fund further business operations prior to March 14, 2024, if at all. These
matters raise substantial doubt about the Company's ability to continue as a going concern. Management's plans with regard
to these matters are also described in Note 1. The financial statements do not include any adjustments that may be necessary should the
Company be unable to continue as a going concern.

 Basis for Opinion

 These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public
accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to
be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations
of the Securities and Exchange Commission and the PCAOB.

 We conducted our audits in accordance with the standards of the PCAOB.
Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are
free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an
audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control
over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over
financial reporting. Accordingly, we express no such opinion.

 Our audits included performing procedures to assess the risks of material
misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures
included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included
evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation
of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 /s/ Marcum llp

 Marcum llp

 We have served as the Company's auditor since 2021.

 New York, NY

 F- 2

 CONSOLIDATED BALANCE
SHEETS

 2023

 2022

 Assets:

 Current assets:

 Cash

 $
 59,167

 $
 1,287,986

 Prepaid expenses

 —

 284,405

 Total current assets

 59,167

 1,572,391

 Investments held in Trust Account

 114,641,527

 294,395,846

 Total Assets

 $
 114,700,694

 $
 295,968,237

 Liabilities, Class A Common Stock Subject to Possible Redemption and Stockholders' Deficit:

 Current liabilities:

 Accounts payable

 $
 695,515

 $
 267,297

 Accrued expenses

 5,737,714

 660,491

 Advance from related party

 900,000

 —

 Excise tax payable

 1,881,321

 —

 Income tax payable

 171,836

 802,367

 Franchise tax payable

 124,250

 72,289

 Total current liabilities

 9,510,636

 1,802,444

 Deferred underwriting commissions

 6,037,500

 10,062,500

 Total Liabilities

 15,548,136

 11,864,944

 Commitments and Contingencies

 Class A common stock; 10,608,178 and 28,750,000 shares subject to possible redemption at $ 10.76 and $ 10.20 per share as of December 31, 2023 and 2022, respectively

 114,128,755

 293,293,429

 Stockholders' Deficit:

 Preferred stock, $ 0.0001 par value; 1,000,000 shares authorized; none issued and outstanding

 —

 —

 Class A common stock, $ 0.0001 par value; 500,000,000 shares authorized; no non-redeemable shares issued or outstanding (excluding 10,608,178 and 28,750,000 shares subject to possible redemption as of December 31, 2023 and 2022, respectively) as of December 31, 2023 and 2022

 —

 —

 Class B common stock, $ 0.0001 par value; 50,000,000 shares authorized; 7,187,500 shares issued or outstanding as of as of December 31, 2023 and 2022

 Additional paid-in capital

 —

 —

 Accumulated deficit

 ( 14,976,916
)

 ( 9,190,855
)

 Total stockholders' deficit

 ( 14,976,197
)

 ( 9,190,136
)

 Total Liabilities, Class A Common Stock Subject to Possible Redemption and Stockholders' Deficit

 $
 114,700,694

 $
 295,968,237

 The accompanying notes are an integral part
of these consolidated financial statements.

 F- 3

 CONSOLIDATED
STATEMENTS OF OPERATIONS

 For the Year Ended

 2023

 2022

 General and administrative expenses

 $
 5,889,740

 $
 887,745

 General and administrative expenses - related party

 240,000

 240,000

 Franchise tax expenses

 200,000

 215,408

 Loss from operations

 ( 6,329,740
)

 ( 1,343,153
)

 Other income:

 Other income attributable to derecognition of deferred underwriting fee allocated to offering costs

 205,275

 —

 Income from investments held in Trust Account

 9,126,178

 4,187,504

 Total other income

 9,331,453

 4,187,504

 Income before provision for income taxes

 3,001,713

 2,844,351

 Provision for income taxes

 ( 1,758,720
)

 ( 802,367
)

 Net income

 $
 1,242,993

 $
 2,041,984

 Weighted average shares outstanding of Class A common stock, basic and diluted

 18,709,868

 28,750,000

 Basic and diluted net income per share, Class A common stock

 $
 0.05

 $
 0.06

 Weighted average shares outstanding of Class B common stock, basic and diluted

 Basic and diluted net income per share, Class B common stock

 $
 0.05

 $
 0.06

 The accompanying notes are an integral part
of these consolidated financial statements.

 F- 4

 CONSOLIDATED
STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT

 FOR THE YEAR ENDED DECEMBER 31, 2023
AND 2022

 Common Stock

 Additional

 Total

 Class A

 Class B

 Paid-In

 Accumulated

 Stockholders '

 Shares

 Amount

 Shares

 Amount

 Capital

 Deficit

 Deficit

 Balance - December 31, 2021

 —

 $
 —

 $

 —

 $
 ( 8,314,410
)

 $
 ( 8,313,691
)

 Increase in redemption value of Class A common stock subject to possible redemption

 —

 —

 —

 —

 —

 ( 2,918,429
)

 ( 2,918,429
)

 Net income

 —

 —

 —

 —

 —

 2,041,984

 2,041,984

 Balance - December 31, 2022

 —

 —

 —

 ( 9,190,855
)

 ( 9,190,136
)

 Increase in redemption value of Class A common stock subject to possible redemption

 —

 —

 —

 —

 ( 3,819,725
)

 ( 5,147,733
)

 ( 8,967,458
)

 Excise tax payable attributable to redemption of common stock

 —

 —

 —

 —

 —

 ( 1,881,321
)

 ( 1,881,321
)

 Waived deferred underwriting discount

 —

 —

 —

 —

 3,819,725

 —

 3,819,725

 Net income

 —

 —

 —

 —

 —

 1,242,993

 1,242,993

 Balance – December 31, 2023

 —

 $
 —

 $

 $
 —

 $
 ( 14,976,916
)

 $
 ( 14,976,197
)

 The accompanying notes are an integral part
of these consolidated financial statements.

 F- 5

 CONSOLIDATED STATEMENTS OF CASH
FLOWS

 For the Year Ended

 2023

 2022

 Cash Flows from Operating Activities:

 Net income

 $
 1,242,993

 $
 2,041,984

 Adjustments to reconcile net income to net cash used in operating activities:

 Income from investments held in Trust Account

 ( 9,126,178
)

 ( 4,187,504
)

 Other income attributable to derecognition of deferred underwriting fee allocated to offering costs

 ( 205,275
)

 —

 Changes in operating assets and liabilities:

 Prepaid expenses

 284,405

 329,567

 Advance from related party

 900,000

 —

 Accounts payable

 428,218

 ( 880,791
)

 Accrued expenses

 5,077,223

 250,114

 Income tax payable

 ( 630,531
)

 802,367

 Franchise tax payable

 51,961

 ( 79,906
)

 Net cash used in operating activities

 ( 1,977,184
)

 ( 1,724,169
)

 Cash Flows from Investing Activities:

 Investment income released from Trust Account to pay for taxes

 2,548,365

 167,553

 Cash withdrawn for redemptions

 188,132,132

 —

 Extension payments deposited in Trust Account

 ( 1,800,000
)

 —

 Net cash provided by investing activities

 188,880,497

 167,553

 Cash Flows from Financing Activities:

 Redemption of common stock

 ( 188,132,132
)

 —

 Net cash used in financing activities

 ( 188,132,132
)

 —

 Net decrease in cash

 ( 1,228,819
)

 ( 1,556,616
)

 Cash - beginning of the period

 1,287,986

 2,844,602

 Cash - end of the period

 $
 59,167

 $
 1,287,986

 Supplemental cash flow information:

 Federal income taxes paid

 $
 2,389,251

 $
 —

 Supplemental disclosure of noncash activities:

 Remeasurement of Class A common stock subject to possible redemption

 $
 8,967,458

 $
 2,918,429

 Excise tax payable attributable to redemption of common stock

 $
 1,881,321

 $
 —

 Reversal of transaction costs incurred in connection with IPO

 $
 4,025,000

 $
 —

 The accompanying notes are an integral part
of these consolidated financial statements.

 F- 6

 NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

 NOTE 1 - DESCRIPTION OF
ORGANIZATION AND BUSINESS OPERATIONS

 Power & Digital Infrastructure
Acquisition II Corp. (the "Company") is a blank check company incorporated in Delaware on March 23, 2021. The Company was
formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business
combination with one or more businesses or entities (the "Business Combination"). The Company is an emerging growth company
and, as such, the Company is subject to all of the risks associated with emerging growth companies.

 As of December 31, 2023,
the Company had not commenced any operations. All activity for the period from March 23, 2021 (inception) through December 31, 2023 relates
to the Company's formation and the initial public offering ("Initial Public Offering"), as described below, and subsequent
to the Initial Public Offering, identifying a target company for a Business Combination. The Company will not generate any operating revenues
until after the completion of its initial Business Combination, at the earliest. The Company will generate non-operating income in the
form of interest income on cash and cash equivalents from the proceeds derived from the Initial Public Offering. The Company has selected
December 31 as its fiscal year end.

 The Company's sponsor
is XPDI Sponsor II LLC, a Delaware limited liability company (the "Sponsor"). The registration statement for the Company's
Initial Public Offering was declared effective on December 9, 2021. On December 14, 2021, the Company consummated its Initial Public Offering
of 28,750,000 units (the "Units" and, with respect to the Class A common stock, $ 0.0001 par value per share ("Class
A common stock") included in the Units being offered, the "Public Shares"), which included the exercise of the underwriters'
option to purchase an additional 3,750,000 Units at the initial public offering price to cover over-allotments (the "Over-Allotment
Units"), at $ 10.00 per Unit, generating gross proceeds of $ 287.5 million, and incurring offering costs of approximately $ 20.7 million,
of which approximately $ 10.1 million was for deferred underwriting fees (see Note 5).

 Simultaneously with the closing
of the Initial Public Offering, the Company consummated the private placement ("Private Placement") of 11,125,000 warrants
(each, a "Private Placement Warrant" and collectively, the "Private Placement Warrants"), at a price of $ 1.00
per Private Placement Warrant to the Sponsor and certain funds and accounts managed by subsidiaries of BlackRock, Inc., an unrelated party
(the "Anchor Investors"), generating proceeds of approximately $ 11.1 million (Note 4).

 Upon the closing of the Initial
Public Offering and the Private Placement, approximately $ 290.4 million ($ 10.10 per Unit) of the net proceeds of the sale of the Units
in the Initial Public Offering and of the Private Placement Warrants in the Private Placement were placed in a trust account ("Trust
Account") located in the United States with Continental Stock Transfer & Trust Company acting as trustee, and invested only
in U.S. "government securities," within the meaning of Section 2(a)(16) of the Investment Company Act 1940, as amended (the
"Investment Company Act"), having a maturity of 185 days or less or in money market funds meeting certain conditions under
Rule 2a-7 promulgated under the Investment Company Act, which invest only in direct U.S. government treasury obligations, as determined
by the Company, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the Trust Account as described
below.

 While the Company's
management has broad discretion with respect to the specific application of the cash held outside of the Trust Account, substantially
all of the net proceeds from the Initial Public Offering and the sale of the Private Placement Warrants, which are placed in the Trust
Account, are intended to be applied generally toward completing a Business Combination. There is no assurance that the Company will be
able to complete a Business Combination successfully. The Company must complete one or more initial Business Combinations having an aggregate
fair market value of at least 80 % of the net assets held in the Trust Account (excluding the deferred underwriting commissions and taxes
payable by us on the income earned on the Trust Account) at the time of the agreement to enter into the initial Business Combination.
However, the Company only intends to complete a Business Combination if the post-transaction company owns or acquires 50 % or more of the
issued and outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not
to be required to register as an investment company under the Investment Company Act.

 F- 7

 NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

 The Company will provide
the holders (the "Public Stockholders") of the Company's Public Shares with the opportunity to redeem all or a portion
of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve
the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of
a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The Public Stockholders will be
entitled to redeem their Public Shares for a pro rata portion of the amount then held in the Trust Account (initially at $ 10.10 per Public
Share). The per-share amount to be distributed to Public Stockholders who redeem their Public Shares will not be reduced by the deferred
underwriting commissions the Company will pay to the underwriters (as discussed in Note 5). All of the Public Shares contain a redemption
feature which allows for the redemption of such Public Shares in connection with the liquidation, if there is a stockholder vote or tender
offer in connection with the initial Business Combination and in connection with certain amendments to the Amended and Restated Certificate
of Incorporation (the "Amended and Restated Certificate of Incorporation"). These Public Shares were recorded at a redemption
value and classified as temporary equity in accordance with the Financial Accounting Standards Board's ("FASB") Accounting
Standards Codification ("ASC") Topic 480 "Distinguishing Liabilities from Equity" ("ASC 480"). The
Company will proceed with a Business Combination if a majority of the shares voted are voted in favor of the Business Combination.

 If a stockholder vote is
not required by law and the Company does not decide to hold a stockholder vote for business or other legal reasons, the Company will,
pursuant to its Amended and Restated Certificate of Incorporation, conduct the redemptions pursuant to the tender offer rules of the U.S.
Securities and Exchange Commission ("SEC") and file tender offer documents with the SEC prior to completing a Business Combination.
If, however, stockholder approval of the transaction is required by law, or the Company decides to obtain stockholder approval for business
or legal reasons, the Company will offer to redeem the Public Shares in conjunction with a proxy solicitation pursuant to the proxy rules
and not pursuant to the tender offer rules. Additionally, each Public Stockholder may elect to redeem their Public Shares irrespective
of whether they vote for or against the proposed transaction. If the Company seeks stockholder approval in connection with a Business
Combination, the initial stockholders (as defined below) agreed to vote their Founder Shares (as defined below in Note 4) and any Public
Shares purchased during or after the Initial Public Offering in favor of a Business Combination. In addition, the initial stockholders
agreed to waive their redemption rights with respect to their Founder Shares and Public Shares in connection with the completion of a
Business Combination.

 The Amended and Restated
Certificate of Incorporation provides that a Public Stockholder, together with any affiliate of such stockholder or any other person with
whom such stockholder is acting in concert or as a "group" (as defined under Section 13 of the Securities Exchange Act of
1934, as amended (the "Exchange Act")), will be restricted from redeeming its shares with respect to more than an aggregate
of 15 % of the Public Shares, without the prior consent of the Company.

 On May 5, 2023, the Company
filed a preliminary proxy statement (the "Proxy Statement") for the solicitation of proxies in connection with the special
meeting in lieu of Annual Meeting of the Company's stockholders (the "Special Meeting") to consider and vote on, among
other proposals, the extension of the date by which the Company must consummate an initial Business Combination from June 14, 2023 (the
"Initial Outside Date") to December 14, 2023 (such date, the "Extended Date"), and to allow the Company, without
another stockholder vote, by resolution of the Company's board of directors to elect to further extend the Extended Date in one-month
increments up to three additional times, or a total of up to nine months after the Initial Outside Date, until March 14, 2024 (the "Combination
Period"), unless the closing of a Business Combination shall have occurred prior thereto or such earlier date as determined by our
board of directors to be in the best interests of the Company (such proposal, the "Extension Amendment Proposal"), and the
amendment of the Company's amended and restated certificate of incorporation to remove the limitation that the Company may not redeem
public shares to the extent that such redemption would result in the Company having net tangible assets (as determined in accordance with
Rule 3a51-1(g)(1) of the Exchange Act, as amended, (or any successor rule)) of less than $ 5,000,001 (such proposal, the "Redemption
Limitation Amendment Proposal").

 F- 8

 At the Special Meeting on
June 9, 2023, the Company's stockholders approved the Extension Amendment Proposal and the Redemption Limitation Amendment Proposal.
In connection with the stockholders' vote at the Special Meeting, the stockholders elected to redeem 18,141,822 shares of Class
A common stock at a redemption price of approximately $ 10.37 per share, for an aggregate redemption amount of $ 188,132,132 (the "Redemption").
After the satisfaction of the Redemption, the balance in the Trust Account as of December 31, 2023 was approximately $ 114,641,527. Upon
completion of the Redemption, 10,608,178 shares of Class A common stock and 7,187,500 shares of Class B common stock remain issued and
outstanding.

 In connection with the approval
of the Extension Amendment Proposal, the company deposited $ 300,000 in the Trust Account on June 15, 2023, July 10, 2023 and August 10,
2023 and the sponsor deposited $ 300,000 in the Trust Account on September 8, 2023, October 10, 2023, and November 9, 2023.

 On December 12, 2023, January
10, 2024 and February 8, 2024, pursuant to Paragraph TWENTY FOURTH of the Amended and Restated Certificate of Incorporation, the Company's
board of directors approved an extension of the Deadline Date (as defined in the Amended and Restated Certificate of Incorporation) from
December 14, 2023 to January 14, 2023, from January 14, 2023 to February 14, 2023 and from February 14, 2024 to March 14, 2024, respectively.

 On August 7, 2023 and September
8, 2023, a previous target of a potential business combination paid the Company $ 300,000 and $ 200,000, respectively, as a partial reimbursement
of expenses incurred by the Company in connection with due diligence and negotiations and related activities with respect to such potential
business combination, which were terminated in March of 2023.

 On December 14, 2023, the
Company and Continental Stock Transfer & Trust Company ("CST") entered into Amendment No. 1 to Investment Management Trust
Agreement, dated December 9, 2021, by and between the Company and CST, to allow CST, upon written instruction of the Company, to (i) hold
the funds in the Company's Trust Account uninvested, (ii) hold the funds in an interest-bearing bank demand deposit account or (iii)
invest and reinvest the funds in solely United States government securities having a maturity of 185 days or less, or in money market
funds that invest only in direct U.S. government treasury obligations.

 If the Company is unable to complete a Business
Combination within the Combination Period, as it may be extended, or such later date as approved by holders of a majority of the voting
power of the Company's then outstanding shares of common stock that are voted at a meeting to extend such Combination Period, voting
together as a single class, or the Board in accordance with the Company's amended and restated certificate of incorporation, the
Company will (1) cease all operations except for the purpose of winding up; (2) as promptly as reasonably possible but not more than 10
business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit
in the Trust Account, including interest (less up to $ 100,000 of interest to pay dissolution expenses and which interest shall be net
of taxes payable by us), divided by the number of then issued and outstanding Public Shares, which redemption will completely extinguish
Public Stockholders' rights as stockholders (including the right to receive further liquidating distributions, if any); and (3)
as promptly as reasonably possible following such redemption, subject to the approval of the remaining stockholders and the Company's
board of directors, liquidate and dissolve, subject in each case to the Company's obligations under Delaware law to provide for
claims of creditors and the requirements of other applicable law.

 The holders of the Founder
Shares (the "initial stockholders") agreed not to propose an amendment to the Amended and Restated Certificate of Incorporation
(A) to modify the substance or timing of the Company's obligation to allow redemption in connection with its initial Business Combination
or to redeem 100 % of the Public Shares if the Company has not consummated an initial Business Combination within the Combination Period
or (B) with respect to any other provisions of the Amended and Restated Certificate of Incorporation relating to stockholders' rights
or pre-initial Business Combination activity, unless the Company provides the Public Stockholders with the opportunity to redeem their
Public Shares in conjunction with any such amendment.

 F- 9

 The initial stockholders and Anchor Investors agreed
to waive their rights to liquidating distributions from the Trust Account with respect to the Founder Shares if the Company fails to complete
a Business Combination within the Combination Period. However, if the initial stockholders and Anchor Investors acquire Public Shares
in or after the Initial Public Offering, they will be entitled to liquidating distributions from the Trust Account with respect to such
Public Shares if the Company fails to complete a Business Combination within the Combination Period. The underwriters agreed to waive
their rights to the deferred underwriting commission (see Note 5) held in the Trust Account in the event the Company does not complete
a Business Combination within in the Combination Period and, in such event, such amounts will be included with the other funds held in
the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible
that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will be only $ 10.80,
based on the balance of the trust account as of December 29, 2023. In order to protect the amounts held in the Trust Account, the Sponsor
agreed to be liable to the Company if and to the extent any claims by a third party (except for the Company's independent registered
public accounting firm) for services rendered or products sold to the Company, or a prospective target business with which the Company
has discussed entering into a transaction agreement (a "Target"), reduce the amount of funds in the Trust Account to below
(i) the $ 10.10 per Public Share initially deposited in the Trust Account, or (ii) the lesser amount per Public Share held in the Trust
Account as of the date of the liquidation of the Trust Account due to reductions in the value of the Trust assets, in each case net of
interest which may be withdrawn to pay taxes, provided that such liability will not apply to any claims by a third party or Target that
executed a waiver of any and all rights to seek access to the Trust Account nor will it apply to any claims under the Company's
indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act
of 1933, as amended (the "Securities Act"). In the event that an executed waiver is deemed to be unenforceable against a third
party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce
the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors,
service providers (other than the Company's independent registered public accounting firm), prospective target businesses or other
entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any
kind in or to monies held in the Trust Account.

 Merger Agreement

 On June 5, 2023, the Company
and XPDB Merger Sub, LLC, a Delaware limited liability company and wholly owned subsidiary of the Company ("Merger Sub"),
entered into an Agreement and Plan of Merger (as it may be amended, supplemented or otherwise modified from time to time in accordance
with its terms, the "Merger Agreement") with Montana Technologies LLC, a Delaware limited liability company ("Montana"),
pursuant to which Merger Sub will merge with and into Montana, with Montana surviving the Merger as a wholly owned subsidiary of the Company
(the "Merger" and, along with the transactions contemplated in the Merger Agreement, the "Proposed Transactions").
Following the closing of the Proposed Transactions (the "Closing"), the Company will be renamed "Montana Technologies
Corporation" (the "Combined Company").

 As part of the Transactions,
equity holders of Montana will receive aggregate consideration of approximately $ 421.9 million (subject to adjustment as described in
the Merger Agreement), payable (i) in the case of Class B and holders of Class C common units of Montana (after giving effect to the conversion
of all outstanding preferred units of Montana into Class B common units, which conversion will occur prior to the Closing), newly issued
shares of Class A common stock, par value $ 0.0001 per share, of the Combined Company ("Combined Company Class A common stock"),
with a value ascribed to each share of Combined Company Class A common stock of $ 10.00, (ii) in the case of holders of Class A common
units of Montana, newly issued shares of Class B common stock, par value $ 0.0001 per share, of the Combined Company ("Combined Company
Class B common stock"), which Combined Company Class B common stock will have a number of votes per share such that the equity holders
of Montana as of immediately prior to the Closing will collectively own at least 80 % of the voting power of all classes of stock of the
Combined Company entitled to vote immediately following the Closing and (iii) in the case of Montana's option holders and warrant
holders, options and warrants of the Combined Company, respectively, having substantially similar terms to the applicable options and
warrants of Montana.

 F- 10

 Montana's equity holders
(other than warrant holders) will also have the opportunity to receive additional equity consideration (in each case, in accordance with
their respective pro rata share) in the form of shares of Combined Company Class A common stock with a $ 10.00 value ascribed to each share
(the "Earnout Shares"), only upon full completion of construction and operational viability (including all permitting, regulatory
approvals and necessary or useful inspections) of new production capacity of Montana's key components or assemblies based solely
on demand from bona fide customer commitments evidenced by binding contracts (or in the discretion of a majority of the independent members
of the board of directors of the Combined Company, a non-binding letter of intent or indication of interest or similar writing that is
substantially likely to become a binding contract) with a known price or pricing formula that exceeds a level of production capacity that
is expected to generate Annualized EBITDA of more than $ 150,000,000 (the "Threshold Annualized EBITDA"), which shall be determined
by a majority of the independent members of the board of directors of the Combined Company in its sole discretion, equal to (i) the ratio
of (x) (1) the Annualized EBITDA that is expected from such new production capacity (the "Expected Annualized EBITDA") less
(2) (A) the Threshold Annualized EBITDA plus (B) all previously Expected Annualized EBITDA amounts associated with previous new production
capacities for which previous earnouts were achieved, divided by (y) $150,000,000 multiplied by (ii) $200,000,000, provided that the aggregate
Expected Annualized EBITDA may not exceed $300,000,000. The maximum value of the Earnout Shares will be capped at $ 200 million and the
ability to receive Earnout Shares will expire on the fifth anniversary of the Closing. A majority of the independent members of the board
of directors of the Combined Company then serving will have sole discretion in determining, among other things, the achievement of the
applicable milestones, the calculations of payments of Earnout Shares to the applicable Montana equity holders, the dates on which construction
and operational viability of new production capacity is deemed completed and whether to consent to a transfer of the applicable Montana
equity holder's right to receive Earnout Shares. Earnout Shares issuable in respect of Montana options outstanding as of immediately
prior to the effective time of the Merger may be issued to the holder of such Montana option only if such holder continues to provide
services (whether as an employee, director or individual independent contractor) to the Combined Company or one of its subsidiaries through
the date on which such Earnout Shares are issued, as determined by a majority of the independent members of the Combined Company Board.
As of the date of the Merger Agreement, 100.0 % of the total outstanding Class A common units of Montana and 72.7 % of the total outstanding
Class B common units of Montana (or an aggregate of approximately 76.6 % of the total outstanding Class A common units and Class B common
units of Montana in the aggregate) were held by unitholders that are expected to continue as directors, officers or employees of the Combined
Company. The retention of certain holders of options of Montana who will continue as directors, officers or employees of the Combined
Company (whose responsibilities are expected to include continued technology development and commercial execution) is integral to the
achievement of the milestones that will determine whether Earnout Shares are payable. Montana does not believe that such targets are achievable
absent the continued involvement of such persons. The Combined Company is expected to provide competitive compensation, benefits and equity
awards (pursuant to the terms of the Montana Technologies Corporation 2023 Incentive Award Plan) to these individuals following the Merger
in order to incentivize these individuals to continue to provide services to the Combined Company.

 Sponsor Support Agreement

 In connection with the execution
of the Merger Agreement, the Sponsor entered into a sponsor support agreement (the "Sponsor Support Agreement") with the Company,
Montana and other holders of the Company's Class B common stock, $ 0.0001 par value per share ("Class B common stock").

 The Sponsor Support Agreement
provides that as of immediately prior to (but subject to) the Closing, 1,380,736 (or 20 %) of the Class B common stock held by the Sponsor
as of the Closing will be subject to certain time and performance-based vesting provisions.

 The Sponsor Support Agreement
will terminate on the earlier of (i) the date the Proposed Transactions become effective or (ii) the termination of the Merger Agreement
in accordance with its terms.

 F- 11

 Investment Agreement

 On September 29, 2023, the
Company entered into an Investment Agreement (the "Investment Agreement") with Montana Technologies LLC ("Montana"),
Contemporary Amperex Technology Co., Limited ("CATL"), CATL US Inc., an affiliate of CATL ("CATL US") and Contemporary
Amperex Technology USA Inc. an affiliate of CATL ("CATL USA," and, together with CATL US and CATL, the "CATL Parties"),
pursuant to which the CATL Parties agreed, among other things, that they will not, directly or indirectly, (i) acquire any additional
units of the Company following the consummation of its proposed business combination with Montana (the "Business Combination,"
and such surviving company, the "Post-Combination Company"), (ii) seek election to, or to place a representative on, Montana's
board of managers or the board of directors of the Post-Combination Company, or (iii) acquire any securities of the Post-Combination Company
if, following such acquisition, the CATL Parties and their affiliates would hold, in the aggregate, an interest in the Post-Combination
Company of greater than 9.8 % on either an economic or voting basis (the "CATL Ownership Limit"). In the event the CATL Parties
and their affiliates exceed the CATL Ownership Limit, the CATL Parties have agreed, following written notice from the Post-Combination
Company, to divest within five business days such number of Post-Combination Company securities as shall be necessary to cause the CATL
Ownership Limit not to be exceeded. In addition, at any time the CATL Ownership Limit is exceeded, the CATL Parties have agreed to vote
any voting power they hold in excess of 9.8 % in accordance with the recommendation of the board of directors of the Post-Combination Company.

 The CATL Parties agreed that
they will not, and will cause their affiliates not to, access, obtain, or seek to access or obtain Montana or the Post-Combination Company's
trade secrets, know-how, or other confidential, proprietary, or competitively sensitive information (excluding any such information that
Montana is obligated to provide to CATL US, CAMT, or CAMT's subsidiaries pursuant to that certain Amended and Restated Joint Venture
Agreement for CAMT, dated as of September 29, 2023, by and among Montana, CAMT Climate Solutions, Ltd. ("CAMT") and CATL US),
including by reverse engineering, or seeking to reverse engineer, any of Montana's products.

 Montana has agreed to use
its reasonable best efforts to assist CATL USA in selling, prior to the consummation of the Business Combination, units of Montana representing
at least 2 % of Montana's issued and outstanding units at a price per unit that is not materially lower than the price per unit implied
by the valuation of Montana in connection with the Business Combination. In so assisting CATL USA, Montana is not obligated to incur any
expenses or grant any concessions, nor is it obligated to prioritize any sale by CATL USA over its own capital raising or financing activities.

 The Investment Agreement
contains customary representations and warranties and may be terminated only with the written consent of the parties thereto.

 Liquidity, Capital Resources and Going Concern

 As of December 31, 2023,
the Company had approximately $ 59,000 in cash and working capital deficit of approximately $ 9.5 million.

 The Company's liquidity
needs prior to the consummation of the Initial Public Offering were satisfied through the payment of $ 25,000 from the Sponsor to cover
certain offering costs on behalf of the Company in exchange for issuance of Founder Shares (as defined in Note 4) and a loan from a related
party of approximately $ 115,000 under the Note (as defined in Note 4). The Company fully repaid the Note on December 17, 2021. Subsequent
to the consummation of the Initial Public Offering, the Company's liquidity has been satisfied through the net proceeds from the
consummation of the Initial Public Offering and the Private Placement held outside of the Trust Account.

 In addition, in order to
finance transaction costs in connection with a Business Combination, the Sponsor, members of the Company's founding team or any
of their affiliates may, but are not obligated to, loan the Company funds under the Working Capital Loans (as defined and described in
Note 4).

 F- 12

 In connection with the Company's assessment of going concern
considerations in accordance with FASB ASC Topic 205-40, "Presentation of Financial Statements – Going Concern," management
has determined that the liquidity needs, mandatory liquidation and subsequent dissolution raises substantial doubt about the Company's
ability to continue as a going concern, which is considered to be one year from the issuance of these financial statements. No adjustments
have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after March 14, 2024. The
financial statements do not include any adjustment that might be necessary if the Company is unable to continue as a going concern. The
Company intends to complete a Business Combination before the mandatory liquidation date, as it may be extended. Over this time period,
the Company will be using the funds outside of the Trust Account for paying existing accounts payable and meeting conditions to closing
the Business Combination. See Note 10 – Subsequent Events, of the Notes to Consolidated Financial Statements included in "Item
8. Financial Statements and Supplementary Data" of this report.

 The Company cannot provide
any assurance that new financing will be available to it on commercially acceptable terms, if at all. These conditions raise substantial
doubt about the Company's ability to continue as a going concern through one year from the issuance date of these financial statements.
These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the
liabilities that might be necessary should the Company be unable to continue as a going concern.

 Risks and Uncertainties

 Management is currently evaluating
the impact of the COVID-19 pandemic on the Company and has concluded that while it is reasonably possible that the virus could have a
negative effect on the Company's financial position, results of its operations and/or search for a Target, the specific impact is
not readily determinable as of the date of the financial statements. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

 In February 2022, the Russian
Federation and Belarus commenced a military action with the country of Ukraine. As a result of this action, various nations, including
the United States, have instituted economic sanctions against the Russian Federation and Belarus. The recent military conflict between
Israel and militant groups led by Hamas has also caused uncertainty in the global markets. Further, the impact of these actions and related
sanctions on the world economy are not determinable as of the date of these financial statements.

 Certain purported shareholders
of the Company sent demand letters (the "Demands") alleging deficiencies and/or omissions in the Registration Statement on
Form S-4, filed by the Company on August 9, 2023. The Demands seek additional disclosures to remedy these purported deficiencies.

 NOTE 2 - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES

 Basis of Presentation

 The accompanying
consolidated financial statement is presented in conformity with accounting principles generally accepted in the United States of America
("GAAP") and pursuant to the rules and regulations of the SEC.

 Principles of Consolidation

 The accompanying consolidated
financial statements include the accounts of the Company and its wholly owned subsidiary, XPDB Merger Sub, LLC. There has been no intercompany
activity since inception.

 F- 13

 Emerging Growth Company

 The Company is an "emerging
growth company," as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012
(the "JOBS Act"), and it may take advantage of certain exemptions from various reporting requirements that are applicable
to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the
independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure
obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding
a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

 Further, Section 102(b)(1)
of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until
private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class
of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS
Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that
apply to non-emerging growth companies but any such an election to opt out is irrevocable. The Company has elected not to opt out of such
extended transition period, which means that when a standard is issued or revised and it has different application dates for public or
private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt
the new or revised standard. This may make comparison of the Company's financial statements with another public company that is
neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult
or impossible because of the potential differences in accounting standards used.

 Use of Estimates

 The preparation of financial
statements in conformity with GAAP requires the Company's management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements.
Actual results could differ from those estimates.

 Concentration of Credit Risk

 Financial instruments that
potentially subject the Company to concentration of credit risk consist of a cash account in a financial institution which, at times,
may exceed the Federal Depository Insurance Corporation coverage of $ 250,000. The Company has not experienced losses on this account and
management believes the Company is not exposed to significant risks on such account.

 Cash and Cash Equivalents

 The Company considers all
short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company had no cash
equivalents as of December 31, 2023 and 2022.

 Investments Held in Trust Account

 The Company's portfolio of investments is comprised of U.S. government
securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less, or investments
in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government
treasury obligations and generally have a readily determinable fair value, or a combination thereof. When the Company's investments
held in the Trust Account are comprised of U.S. government securities, the investments are classified as trading securities. When the
Company's investments held in the Trust Account are comprised of money market funds, the investments are recognized at fair value.
Trading securities and investments in money market funds are presented on the consolidated balance sheets at fair value at the end of
each reporting period. The change in fair value of these securities is included in income from investments held in the Trust Account in
the accompanying statement of operations. The estimated fair values of investments held in the Trust Account are determined using available
market information.

 To mitigate the risk of being deemed to have been operating as an unregistered
investment company (including under the subjective test of Section 3(a)(1)(A) of the Investment Company Act), on December 14, 2023, the
Company instructed the trustee with respect to the Trust Account to liquidate the U.S. government securities or money market funds held
in the Trust Account and thereafter to maintain all funds in the Trust Account in a segregated, interest-bearing demand deposit account
at a national bank until the earlier of consummation of an initial business combination or liquidation.

 F- 14

 Fair Value of Financial Instruments

 The fair value of the Company's
assets and liabilities, which qualify as financial instruments under FASB ASC Topic 820, "Fair Value Measurements and Disclosures,"
approximates the carrying amounts represented in the consolidated balance sheets, primarily due to their short-term nature.

 Fair Value Measurements

 Fair value is defined as
the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants
at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value.
The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements)
and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:

 Level
1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;

 Level
2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices
for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and

 Level
3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions,
such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

 In some circumstances, the
inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair
value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the
fair value measurement.

 Derivative Financial Instruments

 The Company does not use
derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial
instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify
as embedded derivatives, pursuant to ASC 480 and ASC 815, "Derivatives and Hedging" ("ASC 815"). The classification
of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end
of each reporting period.

 The warrants issued in the
Initial Public Offering ("Public Warrants") and the Private Placement Warrants are not precluded from equity classification,
based on the guidance in ASC 480 and ASC 815. Equity-classified contracts are initially measured at fair value (or allocated value). Subsequent
changes in fair value are not recognized as long as the contracts continue to be classified in equity.

 Offering Costs Associated with the Initial
Public Offering

 Offering costs consisted
of legal, accounting, underwriting fees and other costs incurred that were directly related to the Initial Public Offering. Upon completion
of the Initial Public Offering, offering costs were allocated to the separable financial instruments issued in the Initial Public Offering
on a relative fair value basis, compared to total proceeds received. Offering costs associated with the Class A common stock were charged
to the carrying value of Class A common stock subject to possible redemption upon the completion of the Initial Public Offering. Offering
costs associated with the Public Warrants and the Private Placement Warrants were recognized net in equity.

 Class A Common Stock Subject to Possible
Redemption

 The Company accounts for
its Class A common stock subject to possible redemption in accordance with the guidance in ASC 480. Shares of Class A common stock subject
to mandatory redemption (if any) are classified as liability instruments and are measured at fair value. Conditionally redeemable shares
of Class A common stock (including shares of Class A common stock that feature redemption rights that are either within the control of
the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company's control) are classified
as temporary equity. At all other times, shares of Class A common stock are classified as stockholders' equity. Shares of Class
A common stock of the Company feature certain redemption rights that are considered to be outside of the Company's control and subject
to the occurrence of uncertain future events. Accordingly, as of December 31, 2023 and 2022, 10,608,178 and 28,750,000, respectively,
shares of Class A common stock subject to possible redemption were presented as temporary equity, outside of the stockholders' equity
section of the Company's consolidated balance sheets.

 In connection with the stockholders'
vote at the Special Meeting, the stockholders elected to redeem 18,141,822 shares of Class A common stock at a redemption price of approximately
$ 10.37 per share, for an aggregate redemption amount of approximately $ 188,132,132. After the satisfaction of the Redemption, the balance
in the Trust Account as of December 31, 2023 was approximately $ 114,641,527. Upon completion of the Redemption, 10,608,178 shares of Class
A common stock and 7,187,500 shares of Class B common stock remain issued and outstanding.

 F- 15

 Under ASC 480, the Company
has elected to recognize changes in the redemption value immediately as they occur and adjust the carrying value of the security to equal
the redemption value at the end of the reporting period. This method would view the end of the reporting period as if it were also the
redemption date of the security. Effective with the closing of the Initial Public Offering, the Company recognized the accretion from
initial book value to redemption amount, which resulted in charges against additional paid-in capital (to the extent available) and accumulated
deficit.

 Income Taxes

 The Company complies with
the accounting and reporting requirements of FASB ASC Topic 740, "Income Taxes" ("ASC 740"), which requires an
asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed
for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible
amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income.
Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

 FASB ASC Topic 740 prescribes
a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or
expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained
upon examination by taxing authorities. There were no unrecognized tax benefits as of December 31, 2023 and 2022. The Company recognizes
accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued for the payment of
interest and penalties as of December 31, 2023 and 2022. The Company is currently not aware of any issues under review that could result
in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major
taxing authorities since inception.

 Net Income per Common Share

 The Company complies with
accounting and disclosure requirements of FASB ASC Topic 260, "Earnings Per Share." The Company has two classes of shares,
which are referred to as Class A common stock and Class B common stock. Income and losses are shared pro rata between the two classes
of shares. Net income per common share is calculated by dividing the net income by the weighted average shares of common stock outstanding
for the respective period.

 The calculation of diluted
net income does not consider the effect of the Public Warrants and the Private Placement Warrants to purchase an aggregate of 25,500,000
Class A common stock in the calculation of diluted income per share, because their exercise is contingent upon future events and their
inclusion would be anti-dilutive under the treasury stock method. As a result, diluted net income per share is the same as basic net income
per share for the year ended December 31, 2023 and 2022. Accretion associated with the redeemable Class A common stock is excluded from
earnings per share as the redemption value approximates fair value.

 For The Year Ended

 2023

 2022

 Class A

 Class B

 Class A

 Class B

 Basic and diluted net income per common stock

 Numerator:

 Allocation of net income

 $
 898,015

 $
 344,978

 $
 1,633,587

 $
 408,397

 Denominator:

 Basic and diluted weighted average common stock outstanding

 18,709,868

 28,750,000

 Basic and diluted net income per common stock

 $
 0.05

 $
 0.05

 $
 0.06

 $
 0.06

 F- 16

 Recent Accounting Pronouncements

 In December 2023, the FASB
issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which requires disclosure of incremental
income tax information within the rate reconciliation and expanded disclosures of income taxes paid, among other disclosure requirements.
ASU 2023-09 is effective for fiscal years beginning after December 15, 2025. Early adoption is permitted. The Company's management
does not believe the adoption of ASU 2023-09 will have a material impact on its financial statements and disclosures.

 Management does not believe
that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company's
consolidated financial statements.

 NOTE 3 - INITIAL PUBLIC
OFFERING

 On December 14, 2021, the
Company consummated its Initial Public Offering of 28,750,000 Units, which included the exercise of the underwriters' option to
purchase an additional 3,750,000 Over-Allotment Units at the initial public offering price, generating gross proceeds of $ 287.5 million,
and incurring offering costs of approximately $ 20.7 million, of which approximately $ 10.1 million was for deferred underwriting fees.

 Each Unit consists of one
share of Class A common stock, and one-half of one redeemable warrant. Each Public Warrant entitles the holder to purchase one share of
Class A common stock at a price of $ 11.50 per share, subject to adjustment (see Note 7).

 NOTE 4 - RELATED PARTY TRANSACTIONS

 Founder Shares

 On March 30, 2021, the Sponsor
paid $ 25,000 to cover for certain offering costs on behalf of the Company in exchange for issuance of 5,750,000 shares of the Company's
Class B common stock, par value $ 0.0001 per share, (the "Founder Shares"). In November 2021, the Company effected a stock
dividend of 1,437,500 shares of Class B common stock, resulting in there being an aggregate of 7,187,500 shares of Class B common stock
outstanding. All shares and associated amounts have been retroactively restated to reflect the stock dividend. The initial stockholders
agreed to forfeit up to an aggregate of 937,500 Founder Shares, so that the Founder Shares would represent 20.0 % of the Company's
issued and outstanding shares after the Initial Public Offering. The underwriters exercised their over-allotment option in full on December
14, 2021; thus, these 937,500 Founder Shares were no longer subject to forfeiture.

 In July 2021, the Sponsor
transferred 30,000 Founder Shares to each of the four independent director nominees, a total of 120,000 Founder Shares. In November 2021,
the Sponsor repurchased 30,000 shares of Class B common stock from a former independent director nominee at a price of $ 120. The transfer
of the Founder Shares is in the scope of FASB ASC Topic 718, "Compensation-Stock Compensation" ("ASC 718"). Under
ASC 718, stock-based compensation associated with equity-classified awards is measured at fair value upon the grant date. The Founders
Shares were granted subject to a performance condition (i.e., the occurrence of a Business Combination). Compensation expense related
to the Founders Shares is recognized only when the performance condition is probable of occurrence under the applicable accounting literature
in this circumstance. As of December 31, 2023 and 2022, the Company determined that a Business Combination is not considered probable,
and therefore, no stock-based compensation expense has been recognized. As of December 31, 2023 and 2022, stock-based compensation of
approximately $ 516,000 will be recognized at the date a Business Combination is considered probable (i.e., upon completion of a Business
Combination).

 F- 17

 In exchange for the Anchor
Investors participating in the Initial Public Offering and the Private Placement, the Company agreed to sell 1,078,125 Founder Shares
to the Anchor Investors, and the Anchor Investors agreed to purchase from the Company on the date of the initial Business Combination
such Founder Shares. The Sponsor also agreed that in the event of such purchase by the Anchor Investors, the Sponsor will forfeit to the
Company for no consideration a number of Founder Shares equal to the number of Founder Shares purchased by the Anchor Investors. Further,
the Anchor Investors agreed that, if they do not own an aggregate of at least certain amount of Public Shares (such amount, the "Anchor
Threshold") at the time of any stockholder vote with respect to an initial Business Combination or the business day immediately
prior to the completion of the initial Business Combination, the number of Founder Shares to be purchased by such Anchor Investors from
the Company will be reduced pro rata by a fraction, the numerator of which will equal the Anchor Threshold less the number of Public Shares
held by such Anchor Investors after giving effect to any redemptions of the Public Shares by such Anchor Investors and their affiliates,
and the denominator of which will equal the Anchor Threshold; provided, however, in no event will such pro rata reduction in the number
of Founder Shares to be purchased by the Anchor Investors reduce the number of Founder Shares to be purchased by more than 75 %. The Company
determined that the excess of the fair value of the Founder Shares to be acquired by the Anchor Investors upon the closing of the initial
Business Combination (in which case the Sponsor also agreed to forfeit to the Company for no consideration a number of Founder Shares
equal to the number of Founder Shares purchased by the Anchor Investors) should be recognized as an offering cost by the Company in accordance
with SEC Staff Accounting Bulletin Topic 5A, "Expenses of Offerings." The Company estimated the aggregate fair value of the
Sponsor's agreement to sell Founder Shares to the Anchor Investors to be approximately $ 4.7 million using a Monte Carlo simulation.
Accordingly, the additional offering cost is allocated to the separable financial instruments issued in the Initial Public Offering on
a relative fair value basis, compared to total proceeds received. The allocated portion of the additional offering cost associated with
the Class A common stock was charged to the carrying value of Class A common stock subject to possible redemption upon the completion
of the Initial Public Offering.

 The initial stockholders
and the Anchor Investors agreed, subject to limited exceptions, not to transfer, assign or sell any of the Founder Shares until the earlier
to occur of: (A) one year after the completion of the initial Business Combination; and (B) subsequent to the initial Business Combination
(x) if the last reported sale price of the Class A common stock equals or exceeds $ 12.00 per share (as adjusted for stock splits, stock
dividends, reorganizations, recapitalizations and the like) for any 20-trading days within any 30-trading day period commencing at least
150 days after the initial Business Combination or (y) the date on which the Company completes a liquidation, merger, capital stock exchange,
reorganization or other similar transaction that results in all of the Company's stockholders having the right to exchange their
shares of common stock for cash, securities or other property. Any permitted transferees would be subject to the same restrictions and
other agreements of the initial stockholders and the Anchor Investors with respect to any Founder Shares.

 Private Placement Warrants

 Simultaneously with the closing
of the Initial Public Offering, the Company consummated the Private Placement of 11,125,000 Private Placement Warrants, at a price of
$ 1.00 per Private Placement Warrant to the Sponsor and the Anchor Investors, generating proceeds of approximately $ 11.1 million.

 Each Private Placement Warrant
is exercisable for one whole share of Class A common stock at a price of $ 11.50 per share. A portion of the proceeds from the sale of
the Private Placement Warrants was added to the proceeds from the Initial Public Offering held in the Trust Account. If the Company does
not complete a Business Combination within the Combination Period, the Private Placement Warrants will expire worthless.

 The purchasers of the Private
Placement Warrants agreed, subject to limited exceptions, not to transfer, assign or sell any of their Private Placement Warrants (except
to permitted transferees) until 30 days after the completion of the initial Business Combination.

 Related Party Loans

 On March 30, 2021, the Sponsor
agreed to loan the Company an aggregate of up to $ 300,000 to cover expenses related to the Initial Public Offering pursuant to a promissory
note (as amended and restated on July 1, 2021, the "Note"). This loan was non-interest bearing and payable upon the completion
of the Initial Public Offering. As of December 14, 2021, the Company borrowed approximately $ 115,000 under the Note. The Company fully
repaid the Note on December 17, 2021.

 F- 18

 In addition, in order to
finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company's
officers and directors may, but are not obligated to, loan the Company funds as may be required ("Working Capital Loans").
If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account
released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the
event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the
Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. The Working Capital
Loans would either be repaid upon completion of a Business Combination or, at the lender's discretion, up to $ 1.5 million of such
Working Capital Loans may be convertible into warrants of the post Business Combination entity at a price of $ 1.00 per warrant. The warrants
would be identical to the Private Placement Warrants. Except for the foregoing, the terms of such Working Capital Loans, if any, have
not been determined and no written agreements exist with respect to such loans. As of December 31, 2023 and 2022, the Company had no borrowings
under the Working Capital Loans.

 Advance from Related Party

 On September 10, 2023, October 10, 2023 and November
9, 2023, the Sponsor contributed $ 300,000 to the Trust Account in connection with extending the Company's termination date pursuant
to the approval of the Extension Amendment Proposal. As of December 31, 2023, the Sponsor had advanced $ 900,000 to the Company.

 Administrative Services Agreement

 Commencing on December 9,
2021 through the earlier of consummation of the initial Business Combination and the Company's liquidation, the Company agreed to
pay affiliates of the Sponsor a total of $ 20,000 per month for office space, administrative and support services. During the year ended
December 31, 2023 and 2022, the Company incurred $ 240,000 of such fees, which are recognized in general and administrative expenses –
related party, in the accompanying consolidated statements of operations. As of December 31, 2023 and 2022, the Company had $ 500,000 and
$ 260,000, respectively, payable in connection with such agreement, included as accrued expenses in the accompanying consolidated balance
sheets.

 Other Agreements

 On November 12, 2023, the Company entered into an arrangement pursuant
to which, under certain circumstances, up to 2 % of the proceeds of the capital raised in transactions arranged by certain third parties
from investors located in certain limited jurisdictions may be paid to such third parties. On December 14, 2023, Montana agreed to reimburse,
and did reimburse, the Company 50 % of certain expenses incurred by third parties and paid by the Company in connection with this arrangement.

 NOTE 5 - COMMITMENTS AND CONTINGENCIES

 Registration Rights

 The holders of Founder Shares,
Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans, if any (and any shares of common
stock issuable upon the exercise of the Private Placement Warrants or warrants issued upon conversion of the Working Capital Loans and
upon conversion of the Founder Shares), were entitled to registration rights pursuant to a registration rights agreement to be signed
prior to the consummation of the Initial Public Offering. These holders are entitled to certain demand and "piggyback" registration
rights. However, the registration rights agreement provides that the Company will not be required to effect or permit any registration
or cause any registration statement to become effective until termination of the applicable lock-up period. The Company will bear the
expenses incurred in connection with the filing of any such registration statements.

 Underwriting Agreement

 The underwriters were entitled
to an underwriting discount of $ 0.20 per Unit on all Units sold in the Initial Public Offering, except for the Units purchased by the
Anchor Investors, or approximately $ 5.3 million in the aggregate, paid upon the closing of the Initial Public Offering.

 An additional fee of $ 0.35
per Unit, or approximately $ 10.1 million in the aggregate will be payable to the underwriters for deferred underwriting commissions. The
deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes
a Business Combination, subject to the terms of the underwriting agreement.

 F- 19

 On June 20, 2023, BofA Securities, Inc. waived its entitlement to the
payment of any deferred discount to be paid under the terms of underwriting agreement. As a result, the reduction in deferred fees was
allocated on a pro rata basis between additional paid-in capital and other income based upon the original amount of the deferred underwriting
fees allocation to the liability-classified instruments in the initial public offering. Therefore, the deferred underwriting fee was reduced
by $ 4,025,000, of which $ 205,275 is reflected in the consolidated statement of operations as other income and $ 3,819,725 is charged to
additional paid-in capital in the statement of stockholders' deficit. As a result of the waiver, and pursuant to that agreement
dated June 4, 2023 among Barclays Capital Inc., the Company and XPDI Sponsor II LLC, the outstanding deferred underwriting fee payable
upon closing of the Business Combination was reduced to approximately $ 6.0 million.

 Inflation Reduction Act of 2022

 On August 16, 2022, the Inflation
Reduction Act of 2022 (the "IR Act") was signed into federal law. The IR Act provides for, among other things, a new U.S.
federal 1 % excise tax on certain repurchases of stock by publicly traded U.S. domestic corporations and certain U.S. domestic subsidiaries
of publicly traded foreign corporations occurring on or after January 1, 2023. The excise tax is imposed on the repurchasing corporation
itself, not its shareholders from which shares are repurchased. The amount of the excise tax is generally 1 % of the fair market value
of the shares repurchased at the time of the repurchase. However, for purposes of calculating the excise tax, repurchasing corporations
are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the
same taxable year. In addition, certain exceptions apply to the excise tax. The U.S. Department of the Treasury (the "Treasury")
has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the excise tax.
Any share redemption or other share repurchase that occurs after December 31, 2022, in connection with a Business Combination, extension
vote or otherwise, may be subject to the excise tax. Whether and to what extent the Company would be subject to the excise tax in connection
with a Business Combination, extension vote or otherwise will depend on a number of factors, including (i) the fair market value of the
redemptions and repurchases in connection with the Business Combination, extension or otherwise, (ii) the structure of a Business Combination,
(iii) the nature and amount of any "PIPE" or other equity issuances in connection with a Business Combination (or otherwise
issued not in connection with a Business Combination but issued within the same taxable year of a Business Combination) and (iv) the content
of regulations and other guidance from the Treasury. In addition, because the excise tax would be payable by the Company and not by the
redeeming holder, the mechanics of any required payment of the excise tax have not been determined. The foregoing could cause a reduction
in the cash available on hand to complete a Business Combination and in the Company's ability to complete a Business Combination.

 On June 9, 2023, the Company's
stockholders redeemed 18,141,822 shares of Class A shares of common stock for a total of $ 188,132,132. The Company evaluated the classification
and accounting of the stock redemption under ASC 450, "Contingencies". ASC 450 states that when a loss contingency exists
the likelihood that the future event(s) will confirm the loss or impairment of an asset or the incurrence of a liability can range from
probable to remote. A contingent liability must be reviewed at each reporting period to determine appropriate treatment. The Company evaluated
the current status and probability of completing a Business Combination as of December 31, 2023 and concluded that it is probable that
a contingent liability should be recorded. As of December 31, 2023, the Company recorded $ 1,881,321 of excise tax liability calculated
as 1 % of shares redeemed on June 9, 2023.

 NOTE 6 - CLASS A COMMON STOCK SUBJECT TO
POSSIBLE REDEMPTION

 The Company's Class
A common stock feature certain redemption rights that are considered to be outside of the Company's control and subject to the occurrence
of future events. The Company is authorized to issue 500,000,000 shares of Class A common stock with a par value of $ 0.0001 per share.
Holders of the Company's Class A common stock are entitled to one vote for each share. As of December 31, 2023 and 2022, there were
 10,608,178 and 28,750,000, respectively, shares of Class A common stock outstanding, which were all subject to possible redemption and
classified outside of permanent equity in the accompanying consolidated balance sheets.

 In connection with the stockholders'
vote at the Special Meeting, the stockholders elected to redeem 18,141,822 shares of Class A common stock at a redemption price of approximately
$ 10.37 per share, for an aggregate redemption amount of approximately $ 188,132,132. After the satisfaction of the Redemption, the balance
in the Trust Account as of December 31, 2023 was approximately $ 114,641,527. Upon completion of the Redemption, 10,608,178 shares of Class
A common stock and 7,187,500 shares of Class B common stock remain issued and outstanding.

 F- 20

 The Class A common stock
subject to possible redemption reflected on the consolidated balance sheets is reconciled on the following table:

 Gross proceeds

 $
 287,500,000

 Less:

 Proceeds allocated to Public Warrants

 ( 14,662,500
)

 Issuance costs allocated to Class A common stock

 ( 19,627,833
)

 Plus:

 Adjust carrying value to initial redemption value

 40,083,762

 Class A common stock subject to possible redemption as of December 31, 2022

 293,293,429

 Less:

 Redemption

 ( 188,132,132
)

 Plus:

 Remeasurement of carrying value to initial redemption value

 8,967,458

 Class A common stock subject to possible redemption as of December 31, 2023

 $
 114,128,755

 NOTE 7 - STOCKHOLDERS'
DEFICIT

 Preferred Stock
– The Company is authorized to issue 1,000,000 shares of preferred stock, par value $ 0.0001 per share, with such designations, voting
and other rights and preferences as may be determined from time to time by the Company's board of directors. As of December 31,
2023 and 2022, there were no shares of preferred stock issued or outstanding.

 Class A Common Stock
– The Company is authorized to issue 500,000,000 shares of Class A common stock with a par value of $ 0.0001 per share. As of December
31, 2023 and 2022, there were 10,608,178 and 28,750,000, respectively, shares of Class A common stock issued and outstanding, all of which
were subject to possible redemption and were classified outside of permanent equity in the accompanying consolidated balance sheets (see
Note 6).

 In connection with the stockholders'
vote at the Special Meeting, the stockholders elected to redeem 18,141,822 shares of Class A common stock at a redemption price of approximately
$ 10.37 per share, for an aggregate redemption amount of approximately $ 188,132,132. After the satisfaction of the Redemption, the balance
in the Trust Account as of December 31, 2023 was approximately $ 114,641,527. Upon completion of the Redemption, 10,608,178 shares of Class
A common stock and 7,187,500 shares of Class B common stock remain issued and outstanding.

 There are 489,391,282 authorized but unissued shares of our Class A
common stock available for issuance which amount does not take into account shares reserved for issuance upon exercise of outstanding
warrants or shares issuable upon conversion of the Class B common stock, if any.

 Class B Common Stock
– The Company is authorized to issue 50,000,000 shares of Class B common stock with a par value of $ 0.0001 per share. As of December
31, 2023 and 2022, there were 7,187,500 shares of Class B common stock issued and outstanding.

 There are 42,812,500 authorized but unissued shares of our Class B
common stock available for issuance which amount does not take into account shares reserved for issuance upon exercise of outstanding
warrants or shares issuable upon conversion of the Class B common stock, if any. The Class B common stock is automatically convertible
into Class A common stock at the time of our initial business combination as described herein and in our amended and restated certificate
of incorporation.

 Common stockholders of record
are entitled to one vote for each share held on all matters to be voted on by stockholders and vote together as a single class, except
as required by law; provided, that, prior to the Company's initial Business Combination, holders of the Class B common stock will
have the right to appoint all of the Company's directors and remove members of the board of directors for any reason, and holders
of the Class A common stock will not be entitled to vote on the appointment of directors during such time.

 The Class B common stock
will automatically convert into Class A common stock at the time of the initial Business Combination, or earlier at the option of the
holder, on a one-for-one basis, subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like,
and subject to further adjustment as provided herein. In the case that additional shares of Class A common stock, or equity-linked securities,
are issued or deemed issued in excess of the amounts issued in the Initial Public Offering and related to the closing of the initial Business
Combination, the ratio at which the shares of Class B common stock will convert into shares of Class A common stock will be adjusted (unless
the holders of a majority of the issued and outstanding shares of the Class B common stock agree to waive such anti-dilution adjustment
with respect to any such issuance or deemed issuance) so that the number of shares of Class A common stock issuable upon conversion of
all shares of Class B common stock will equal, in the aggregate, on an as-converted basis, 20 % of the sum of all shares of common stock
issued and outstanding upon the completion of the Initial Public Offering plus all shares of Class A common stock and equity-linked securities
issued or deemed issued in connection with the initial Business Combination, excluding any shares or equity-linked securities issued,
or to be issued, to any seller in the initial Business Combination.

 F- 21

 Warrants –
As of December 31, 2023 and 2022, the Company has 14,375,000 and 11,125,000 Public Warrants and Private Placement Warrants outstanding,
respectively. Public Warrants may only be exercised for a whole number of shares. No fractional Public Warrants will be issued upon separation
of the Units and only whole Public Warrants will trade. The Public Warrants will become exercisable on the later of (a) 30 days after
the completion of a Business Combination or (b) 12 months from the closing of the Initial Public Offering; provided in each case that
the Company has an effective registration statement under the Securities Act covering the shares of Class A common stock issuable upon
exercise of the Public Warrants and a current prospectus relating to them is available (or the Company permits holders to exercise their
Public Warrants on a cashless basis and such cashless exercise is exempt from registration under the Securities Act). The Company agreed
that as soon as practicable, but in no event later than 20 business days after the closing of its initial Business Combination, the Company
will use its commercially reasonable efforts to file with the SEC and have an effective registration statement covering the shares of
Class A common stock issuable upon exercise of the warrants and will use its commercially reasonable efforts to cause the same to become
effective within 60 business days after the closing of the Company's initial Business Combination and to maintain a current prospectus
relating to those shares of Class A common stock until the warrants expire or are redeemed. If the shares issuable upon exercise of the
warrants are not registered under the Securities Act in accordance with the above requirements, the Company will be required to permit
holders to exercise their warrants on a cashless basis. However, no warrant will be exercisable for cash or on a cashless basis, and the
Company will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon
such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption from registration
is available. Notwithstanding the above, if the Company's shares of Class A common stock are at the time of any exercise of a warrant
not listed on a national securities exchange such that they satisfy the definition of a "covered security" under Section 18(b)(1)
of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a cashless
basis in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, it will not be required to file
or maintain in effect a registration statement, and in the event the Company does not so elect, it will use its commercially reasonable
efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.

 The warrants have an exercise
price of $ 11.50 per share, subject to adjustments, and will expire five years after the completion of a Business Combination
or earlier upon redemption or liquidation. In addition, if (x) the Company issues additional shares of Class A common stock or equity-linked
securities for capital raising purposes in connection with the closing of the initial Business Combination at an issue price or effective
issue price of less than $ 9.20 per share of Class A common stock (with such issue price or effective issue price to be determined in good
faith by the Company's board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking
into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the "Newly Issued
Price"), (y) the aggregate gross proceeds from such issuances represent more than 60 % of the total equity proceeds, and interest
thereon, available for the funding of the initial Business Combination on the date of the completion of the initial Business Combination
(net of redemptions), and (z) the volume weighted average trading price of the Class A common stock during the 20 trading day period starting
on the trading day prior to the day on which the Company completes the initial Business Combination (such price, the "Market Value")
is below $ 9.20 per share, then the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115 % of the higher
of the Market Value and the Newly Issued Price, the $ 18.00 per share redemption trigger prices described below under "Redemption
of warrants when the price per share of Class A common stock equals or exceeds $ 18.00 " to be equal to 180 % of the higher of the
Market Value and the Newly Issued Price described below under "Redemption of warrants when the price per share of Class A common
stock equals or exceeds $ 18.00 " will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly
Issued Price.

 The Private Placement Warrants
will be non-redeemable and will be exercisable on a cashless basis at the option of the holder.

 F- 22

 Redemption of Public Warrants
when the price per share of Class A common stock equals or exceeds $ 18.00:

 Once the warrants become
exercisable, the Company may call the outstanding warrants for redemption (except as described herein with respect to the Private Placement
Warrants):

 in
whole and not in part;

 at
a price of $ 0.01 per warrant;

 upon
a minimum of 30 days' prior written notice of redemption to each warrant holder; and

 if,
and only if, the last reported sale price of Class A common stock for any 20 trading days within a 30 -trading day period ending on the
third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders equals or exceeds $ 18.00
per share (as adjusted).

 Unless the Company has elected
to require Public Warrant holders to exercise such warrants on a cashless basis, the Company will not redeem the Public Warrants as described
above unless a registration statement under the Securities Act covering the issuance of the shares of Class A common stock issuable upon
exercise of the warrants is then effective and a current prospectus relating to those shares of Class A common stock is available throughout
the 30-day redemption period. If and when the Public Warrants become redeemable by the Company, the Company may exercise its redemption
right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws.

 If the Company is unable
to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders
of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company's
assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless.

 NOTE 8 - INCOME TAX

 The Company's
taxable income primarily consists of interest income on the Trust Account. The Company's general and administrative expenses are
generally considered start-up costs and are not currently deductible.

 The income tax
provision for the year ended December 31, 2023 and 2022 consists of the following:

 2023

 2022

 Current

 Federal

 $
 1,758,720

 $
 802,367

 State

 —

 —

 Deferred

 Federal

 ( 427,576
)

 ( 205,053
)

 State

 ( 266,934

)

 —

 Change in valuation allowance

 694,510

 205,053

 Income tax provision

 $
 1,758,720

 $
 802,367

 The Company's net deferred tax
assets (liability) at December 31, 2023 and 2022 are as follows:

 2023

 2022

 Deferred tax assets (liability)

 Net operating loss carryforward

 $
 —

 $
 —

 Startup/Organization Expenses

 1,013,851

 319,341

 Total deferred tax assets (liability)

 1,013,851

 319,341

 Valuation Allowance

 ( 1,013,851
)

 ( 319,341
)

 Deferred tax assets (liability)

 $
 —

 $
 —

 F- 23

 As of December
31, 2023 and 2022, the Company had $ 0 and $ 0 of U.S. federal net operating loss carryovers, respectively, available to offset future taxable
income, which do not expire.

 In assessing the
realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax
assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income
during the periods in which temporary differences representing net future deductible amounts become deductible. Management considers the
scheduled reversal of deferred tax assets, projected future taxable income and tax planning strategies in making this assessment. After
consideration of all of the information available, management believes that significant uncertainty exists with respect to future realization
of the deferred tax assets and has therefore established a full valuation allowance. At December 31, 2023 and 2022, the valuation allowance
was $ 1,013,851 and $ 319,341, respectively.

 A reconciliation of the statutory federal
income tax rate (benefit) to the Company's effective tax rate (benefit) at December 31, 2023 and 2022 is as follows:

 2023

 2022

 Statutory federal income tax rate

 21.00
 %

 21.00
 %

 Statutory state income tax rate

 7.51
 %

 —
 %

 Merger and acquisition expenses

 24.78
 %

 —
 %

 Change in apportionment and tax rate

 ( 16.40
)%

 —
 %

 Reversal of transaction costs incurred in connection with IPO

 ( 1.44
)%

 —

 %

 Valuation allowance

 23.14
 %

 7.20
 %

 Income tax provision

 58.59
 %

 28.20
 %

 NOTE 9 - FAIR VALUE
MEASUREMENTS

 The following table presents
information about the Company's assets that are measured at fair value on a recurring basis as of December 31, 2023 and 2022 and
indicates the fair value hierarchy of the valuation techniques that the Company utilized to determine such fair value.

 Description

 Level 1

 Level 2

 Level 3

 December 31, 2023 – Assets

 Investments held in Trust Account

 $
 114,641,527

 —

 —

 December 31, 2022 – Assets

 Investments held in Trust Account

 $
 294,395,846

 —

 —

 Transfers to/from Levels
1, 2, and 3 are recognized at the beginning of the reporting period. There were no transfers between levels for the period from March
23, 2021 (inception) through December 31, 2023.

 Level 1 assets include investments
in money market funds or U.S. Treasury securities. The Company uses inputs such as actual trade data, benchmark yields, quoted market
prices from dealers or brokers, and other similar sources to determine the fair value of its investments.

 NOTE 10 - SUBSEQUENT
EVENTS

 The Company evaluated subsequent
events and transactions that occurred after the balance sheet date up to the date that the consolidated financial statements were issued.
Based upon this review the Company did not identify any subsequent events that would have required adjustment or disclosure in the consolidated
financial statements other than described below.

 On August 9, 2023, the Company
filed with the SEC a registration statement on Form S-4 (as amended on October 2, 2023, October 27, 2023, December 4, 2023, December 26,
2023, and January 10, 2024, the "Form S-4") in connection with our proposed business combination with Montana. The Form S-4
was declared effective by the SEC on January 17, 2024.

 F- 24

 On January 7, 2024, the Company
entered into a letter agreement (the "Letter Agreement") with Montana Technologies LLC, a Delaware limited liability company
("Montana Technologies") and Carrier Corporation, an affiliate of Carrier Global Corporation (NYSE: CARR), a global leader
in intelligent climate and energy solutions (collectively with its affiliates, "Carrier"), pursuant to which Carrier, Montana
Technologies and the Company agreed, among other things, to provide Carrier the right to nominate one (1) designee, subject to the approval
of the Company, for election to the board of directors for so long as Carrier satisfies certain investment conditions, following the business
combination between the Company and Montana Technologies.

 On January 7, 2024, Montana Technologies entered
into a common unit subscription agreement with Carrier pursuant to which, subject to the conditions set forth therein, Carrier agreed
to purchase from Montana Technologies, and Montana Technologies agreed to issue and sell to Carrier, a number of Montana Class B Common
Units as will convert into 1,176,471 shares of Class A common stock (such shares, the "Conversion Shares") upon the closing
of the previously announced business combination between Montana Technologies and the Company (the "Subscription"). The Subscription,
if consummated, will take place prior to the closing of the business combination and the Conversion Shares, if and when issued upon the
closing of the business combination, will be issued as part of the consideration relating thereto.

 On January 25, 2024, Montana
Technologies entered into a joint venture formation framework agreement (the "Framework Agreement") with GE Ventures LLC,
a Delaware limited liability company ("GE Vernova"), and, solely for the purposes specified therein, GE Vernova LLC, a Delaware
limited liability company ("GE Vernova Parent"), pursuant to which Montana Technologies and GE Vernova have agreed, subject
to the terms and conditions of the Framework Agreement, including certain closing conditions specified therein, to form a joint venture
(the "AirJoule JV") in which each of Montana Technologies and GE Vernova will hold a 50 % interest. The purpose of the AirJoule
JV is to incorporate GE Vernova's proprietary sorbent materials into systems that utilize Montana Technologies' AirJoule
water capture technology and to manufacture and bring products incorporating the combined technologies to market in the Americas, Africa,
and Australia.

 On January 10, 2024, and
February 8, 2024, pursuant to Paragraph TWENTY FOURTH of the Amended and Restated Certificate of Incorporation of the Company, the Company's
board of directors approved an extension of the Deadline Date (as defined in the Amended and Restated Certificate of Incorporation) from
January 14, 2024 to February 14, 2024 and from February 14, 2024 to March 14, 2024, respectively.

 On February 5, 2024, the
Company, XPDB Merger Sub, LLC, and Montana entered into that certain First Amendment to Agreement and Plan of Merger (the "Amendment"),
amending the Business Combination Agreement, to, among other things, (i) amend the definition of Aggregate Transaction Proceeds and (ii)
reduce the Aggregate Transaction Proceeds condition from $ 85 million to $ 50 million.

 On February 20, 2024, the
Company filed a definitive proxy statement for the solicitation of proxies in connection with a special meeting of stockholders of the
Company to consider and vote on, among other proposals, the extension of the date by which the Company must consummate an initial business
combination from March 14, 2024 to April 14, 2024, and to allow the Company, without another stockholder vote, by resolution of the Board,
to elect to further extend such date in one-month increments up to three additional times until July 14, 2024 (the "2024 Extension"),
unless the closing of a an initial business combination shall have occurred prior thereto, or such earlier date as determined by the Board
to be in the best interests of the Company.

 On
February 21, 2024, the Company entered into an arrangement with a financial advisor and marketing agent in connection with its proposed
business combination for a total service charge of $ 400,000. The first installment in the amount of $ 125,000 was paid on February 21,
2024. The remaining balance in the amount of $ 275,000 will be paid upon closing of the business combination from the flow of funds.

 On March 8, 2024, the Company
and Rice Investment Group ("Rice") entered into a subscription agreement pursuant to which the Company agreed to sell 588,235
shares of Class A common stock to Rice for an aggregate purchase price of approximately $ 5.0 million, contingent on the closing of the
business combination. The subscription agreement provides that, subject to certain conditions set forth therein, the Company may be required
to issue to Rice up to an additional 840,336 shares of Class A common stock if the trading price of the Class A common stock falls below
the per share purchase price within one year of the closing of the business combination.

 F- 25

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 us-gaap: FairValueInputsLevel3Member

 2024-01-07
 2024-01-07

 xpdb: GEVernovaMember

 2024-01-25

 srt: MaximumMember

 2024-02-05

 srt: MinimumMember

 2024-02-05

 2024-03-21
 2024-03-21

 2024-03-08
 2024-03-08