Montana Technologies LLC entered into a business combination agreement to acquire Power & Digital Infrastructure Acquisition II Corp. (NasdaqGM : XPDB) from Pat Eilers and Ted Brombach in a reverse merger transaction for an implied enterprise value of approximately $500 million on June 5, 2023. The Company, which will operate under the name of Montana Technologies will be publicly listed on NASDAQ. As part of the Transactions, equity holders of the Company 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 Class C common unitholders of the Company (after giving effect to the conversion of all outstanding preferred units of the Company 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 (?Class A common stock?), with a value ascribed to each share of Class A common stock of $10.00, (ii) in the case of Class A unitholders of the Company, newly issued shares of Class B common stock, par value $0.0001 per share, of the Combined Company (?Class B common stock?), which Class B common stock will have a number of votes per share such that the equity holders of the Company 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 the Company?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 the Company. The Company?s equity holders (other than Company warrant holders) will also have the opportunity to receive additional equity consideration in the form of additional shares of Class A common stock at $10.00 per share upon achievement of certain milestones related to production capacity and anticipated annualized EBITDA of the Combined Company following the Closing (the ?Earnout Shares? and each issuance of Earnout Shares, an ?Earnout Payment?). The maximum value of the Earnout Shares will be capped at $200 million (the ?Maximum Earnout Value?) and the ability to receive Earnout Shares will expire upon the fifth anniversary of the Closing. A majority of the independent directors of the Combined Company will have sole discretion in determining milestone achievement, the calculations of payments and the dates construction is deemed completed. The grants of the Earnout Shares will be dependent upon board approval to construct lines of production of coated contractors based upon demand from customer commitments beyond three lines of production in the base plan. Following transaction close, Matt Jore is expected to remain in the role of Chief Executive Officer and lead the pro forma Company.

The transaction is expected to close in the fourth quarter of 2023, subject to certain closing conditions, listing requirements, all waiting periods and any extensions thereof applicable to the transactions contemplated by the Merger Agreement under the Hart-Scott-Rodino Act, the approval of each of the proposals set forth in the Registration Statement to be filed by XPDB must have been obtained in accordance with the Delaware General Corporation Law (?DGCL?), XPDB?s organizational documents and the rules and regulations of NASDAQ and is approved by the board of directors of Montana Technologies and Power & Digital Infrastructure. The Company intends to use the funds to execute its strategic global partnerships, scale production, expand its operational leadership team, and for general operating purposes. As of June 7, 2023, the redemption deadline in connection with the vote on the Extension (as defined below), holders of 18,141,822 shares of Class A common stock, par value $0.0001 per share (the ?Class A common stock?), have elected to redeem their shares in connection with the proposal to extend the time by which the Company has to consummate an initial business combination (the ?Extension?), which would result in 10,608,178 shares of Class A common stock remaining outstanding after giving effect to such redemptions.

Barclays is serving as capital markets advisor to XPDB, and Debbie P. Yee, P.C., Adam Garmezy, Scott Myers, James Long, Michael William Morgan, Keyan Norman and Andrew William Daniels of Kirkland & Ellis LLP is serving as legal counsel to Power & Digital Infrastructure Acquisition II Corp. Latham & Watkins LLP is serving as legal counsel to Montana Technologies. Vinson & Elkins is serving as counsel to Barclays.