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[30]. - An additional 3.6 million units were sold through the underwriters' over-allotment option, generating an extra $36 million, bringing total net proceeds to $276 million[32]. - The company has deposited $240 million of net proceeds from the IPO and private placement into a trust account for public stockholders[31]. - The company has $266,340,000 available for a business combination, assuming no redemptions and after paying $9,660,000 in deferred underwriting fees[63]. - The company intends to complete its initial business combination using cash from the IPO proceeds, private placement warrants, capital stock, or debt[64]. Business Focus and Strategy - The company intends to focus on the education, training, and edtech industries, which are projected to grow from $163 billion in 2019 to over $400 billion by 2025, reflecting a compound annual growth rate of 16.3%[34]. - The company aims to create a sustainable education platform with attractive returns on invested capital and robust free cash flow generation[29]. - The company plans to leverage long-term trends such as digitization, automation, and globalization to create value in the edtech sector[35]. - The company believes that the edtech sector is underrepresented in public markets, presenting opportunities for consolidation and growth[34]. - The company aims to create a selective consolidation platform for private companies in the edtech sector, focusing on those with strong growth potential and access to capital markets[37]. - The acquisition strategy will target private education, training, and edtech companies that exhibit stable or accelerating growth, significant size, and profitability[39]. - The company intends to focus on target companies located in North America, while also considering those with a global platform that includes North America[40]. Business Combination and Due Diligence - The initial business combination must involve target businesses with a fair market value of at least 80% of the balance in the trust account at the time of signing a definitive agreement[45]. - The company plans to structure the initial business combination so that the post-transaction entity will own or acquire 100% of the target business's equity interests or assets[46]. - The management team will conduct extensive due diligence, including commercial and industry reviews, to evaluate prospective target businesses[47]. - The management team will conduct thorough due diligence on prospective target businesses, including meetings with management and reviews of financial information[75]. - The management team has developed a broad network of contacts and relationships that will provide numerous potential business combination targets[58]. Stockholder Considerations and Redemption - Public stockholders will have the opportunity to redeem shares at a price of $10.00 per share upon completion of the initial business combination[92]. - The redemption process will allow stockholders to redeem shares either through a stockholder meeting or a tender offer, with the decision made at the company's discretion[93]. - If stockholder approval is required, a majority of outstanding shares must vote in favor of the business combination for it to proceed[100]. - The company will not redeem shares unless net tangible assets are at least $5,000,001 prior to or upon consummation of the initial business combination[101]. - Stockholders will be restricted from redeeming more than 15% of shares issued in the IPO to prevent blocking the business combination[102]. Risks and Challenges - The company may face challenges in completing its initial business combination by the January 14, 2023 deadline, which could affect stockholder returns[10]. - The company may not have the resources to diversify operations, potentially exposing it to risks associated with a single line of business[77]. - There is no assurance that key personnel will remain in senior management positions after the business combination[79]. - The company may face intense competition from other entities with similar business objectives, which could limit its ability to acquire larger target businesses[128]. Regulatory and Reporting Requirements - The company is required to file periodic reports with the SEC, including audited financial statements of the prospective target business[130]. - As an "emerging growth company," the company is eligible for certain exemptions from reporting requirements, which may affect the attractiveness of its securities to investors[135]. - The company will remain an emerging growth company until it achieves total annual gross revenue of at least $1.07 billion or the market value of its common stock held by non-affiliates exceeds $700 million[137]. - The company is classified as a "smaller reporting company" and will maintain this status until the market value of its common stock held by non-affiliates exceeds $250 million or annual revenues exceed $100 million[138]. Financial Management and Liabilities - The company may engage Adit or another affiliate as a financial advisor for the initial business combination, paying customary financial advisory fees[60]. - The company may seek additional funds through private offerings of debt or equity securities in connection with the business combination[66]. - The sponsor is liable if claims reduce the trust account funds below $10.00 per public share, which could impact the ability to complete the initial business combination[118]. - If the trust account value falls below $10.00 per public share, independent directors may consider legal action against the sponsor to enforce indemnification obligations[119]. - The company has access to approximately $1,000,000 from IPO proceeds to cover potential claims, with liquidation expenses estimated at no more than $100,000[120].
Adit EdTech(ADEX) - 2020 Q4 - Annual Report