IPO and Financial Proceeds - The company completed its IPO on January 14, 2021, raising gross proceeds of $240 million from the sale of 24 million units at $10.00 per unit[19]. - An additional 3.6 million units were sold on January 19, 2021, generating gross proceeds of $36 million, bringing total net proceeds to $276 million deposited in the trust account[21]. - As of December 31, 2022, approximately $25 million remained in the trust account after stockholders redeemed 25,132,578 IPO Shares for about $253.6 million[22]. - Stockholders holding 25,132,578 IPO Shares redeemed their shares for approximately $253.6 million, equating to about $10.09 per share, leaving approximately $25.0 million in the trust account as of December 31, 2022[72]. Merger Agreement and Conditions - The proposed merger with GRIID involves converting GRIID's membership units into a proportionate share of 58.5 million shares of the company's common stock[25]. - The merger agreement has undergone multiple amendments, with the latest on February 8, 2023, and was unanimously approved by both boards[23]. - The Merger Agreement requires the approval of stockholders and GRIID members holding at least the requisite number of units for consummation[27]. - The company must have net tangible assets (NTA) of at least $5,000,001 upon consummation of the Merger[27]. - A Voting Agreement has been executed covering approximately 64.0% of GRIID's membership units, requiring votes in favor of the Merger[31]. - The Merger Agreement includes a termination date of January 14, 2023, with specific conditions under which it may be terminated[29]. Risks and Challenges - The company has no operating history and is subject to mandatory liquidation if it fails to complete a business combination by the extension date[16]. - Risks include potential conflicts of interest post-merger and the possibility of write-downs or impairments affecting financial condition and stock price[16]. - The company has limited resources and faces significant competition for business combination opportunities, which may hinder its ability to complete a merger[17]. - Public stockholders may only receive approximately $10.00 per share upon redemption, or less, if the business combination is unsuccessful[17]. - The company has no specified maximum redemption threshold, which may complicate the completion of a desirable business combination[17]. - The lack of business diversification may pose risks as the company's success may depend entirely on the performance of a single business post-combination[48]. Redemption and Shareholder Rights - The company will not redeem any IPO Shares unless the net tangible assets (NTA) are at least $5,000,001 immediately prior to or upon consummation of the initial business combination[60]. - If the initial business combination is not completed, 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[69]. - The company expects to seek stockholder approval to remove limitations on redeeming or repurchasing IPO Shares in connection with the consummation of an initial business combination[61]. - The redemption offer will remain open for at least 20 business days, and the company will not complete the initial business combination until the expiration of the tender offer period[56]. - The company may require public stockholders to tender their certificates or deliver their shares electronically to exercise redemption rights[65]. - If stockholder approval is required, the company will distribute proxy materials and provide public stockholders with redemption rights upon completion of the initial business combination[58]. Operations and Management - The company intends to file a resale shelf registration statement within 30 days of Closing for shares related to the Investor Rights Agreement[32]. - The initial business combination must involve target businesses with a fair market value equal to at least 80% of the value of the trust account[39]. - The company aims to acquire businesses that are fundamentally sound but underperforming their potential[39]. - The management team intends to devote necessary time to affairs until the initial business combination is completed, which may lead to conflicts of interest[45]. - The company currently has three executive officers who will devote necessary time to affairs until the initial business combination is completed[92]. Financial Reporting and Compliance - The company has filed a registration statement on Form S-4 with the SEC regarding a proposed merger, which includes a proxy statement and prospectus[91]. - The company is classified as an "emerging growth company" under the JOBS Act, allowing it to benefit from certain reporting exemptions[97]. - The company will maintain its status as an emerging growth company until it has total annual gross revenue of at least $1.235 billion or the market value of its common stock held by non-affiliates exceeds $700 million[99]. - The company is also classified as a "smaller reporting company," allowing it to provide only two years of audited financial statements until certain market value and revenue thresholds are met[100]. - The company intends to take advantage of the extended transition period for complying with new accounting standards as an emerging growth company[98]. - The company may face increased time and costs to develop internal controls for compliance with the Sarbanes-Oxley Act if it acquires a target company not in compliance[96]. Trust Account and Liquidation - The trust account may be subject to claims from creditors, which could reduce the amount available for stockholder redemptions[89]. - The company cannot assure that it will have sufficient funds to pay all creditors' claims before making distributions to stockholders[79]. - The company will seek waivers from vendors and service providers regarding claims to the trust account, but there is no guarantee that such waivers will be obtained[80]. - The company may request the release of up to $100,000 of accrued interest from the trust account to cover dissolution costs if necessary[77]. - The company intends to redeem IPO Shares as soon as possible after the applicable extension date, which may expose stockholders to claims from creditors[86]. - Stockholders may be liable for claims against the corporation to the extent of distributions received during dissolution[85].
GRIID(GRDI) - 2022 Q4 - Annual Report