Adit EdTech(ADEX) - 2021 Q4 - Annual Report

IPO and Fundraising - The company completed its initial public offering (IPO) on January 14, 2021, raising gross proceeds of $240 million from the sale of 24 million units at $10.00 per unit[22]. - An additional 3.6 million units were sold on January 19, 2021, generating gross proceeds of $36 million, bringing total net proceeds from the IPO to $276 million[23]. - The company raised an additional $6.55 million from a private placement of 6.55 million warrants at $1.00 each, concurrent with the IPO[22]. - The company has $266,340,000 available for a business combination, assuming no redemptions, after paying $9,660,000 in deferred underwriting fees[48]. - The company has access to approximately $1,000,000 from IPO proceeds to cover potential claims, with estimated liquidation expenses not exceeding $100,000[80]. Merger Details - The proposed merger with GRIID will result in the conversion of GRIID's membership units into a right to receive a proportionate share of 308.1 million shares of the company's common stock[25]. - The merger agreement was unanimously approved by the boards of directors of both the company and GRIID, indicating strong support for the transaction[24]. - The merger is subject to customary closing conditions, including stockholder approvals and compliance with NYSE listing requirements[28]. - A Voting Agreement has been executed covering approximately 64.0% of GRIID's membership units, requiring votes in favor of the Merger and against alternative transactions[33]. - The Merger Agreement includes a remedy of specific performance and can be terminated under certain circumstances, including failure to close by May 29, 2022, or breach of representations and warranties[29]. Business Combination Requirements - The initial business combination must involve target businesses with a fair market value of at least 80% of the trust account balance at the time of signing a definitive agreement[39]. - The company intends to acquire fundamentally sound businesses that are underperforming and can benefit from management expertise and capital[37]. - The company may structure the initial business combination to acquire less than 100% of the target business, provided it maintains a controlling interest[40]. - The company must maintain net tangible assets of at least $5 million upon consummation of the merger to satisfy closing conditions[28]. - The company has until January 14, 2023, to complete the initial business combination, or it will cease operations and redeem public shares[69]. Redemption and Shareholder Rights - Public stockholders will have the opportunity to redeem shares at a price equal to the amount in the trust account, initially anticipated to be $10.00 per public share[53]. - The company will provide public stockholders the opportunity to redeem shares upon completion of the initial business combination, either through a stockholder meeting or a tender offer[54]. - If stockholder approval is required, the company will conduct redemptions in conjunction with a proxy solicitation and file proxy materials with the SEC[58]. - The company will not redeem public shares unless net tangible assets are at least $5,000,001 prior to or upon consummation of the initial business combination[60]. - Redemption rights will be limited to 15% of shares issued in the IPO to discourage stockholders from blocking the business combination[61]. Risks and Challenges - The company has highlighted risks related to potential conflicts of interest among its management and sponsors regarding the merger[10]. - The company has indicated that the COVID-19 pandemic may materially affect its ability to complete the merger[18]. - The lack of business diversification may expose the company to risks associated with negative developments in a single industry post-combination[49]. - The trust account may be reduced below $10.00 per public share due to claims by creditors, which could impact the ability to complete the initial business combination[78]. - The independent directors may choose not to pursue legal action against the Sponsor for indemnification if deemed too costly relative to recoverable amounts[79]. Compliance and Reporting - The company is required to evaluate internal control procedures for the fiscal year ending December 31, 2022, as mandated by the Sarbanes-Oxley Act[93]. - The company qualifies as an "emerging growth company," allowing it to take advantage of reduced reporting requirements and an extended transition period for new accounting standards[96]. - The company is classified as a "smaller reporting company," which permits it to provide only two years of audited financial statements until certain market value thresholds are met[98]. - As of December 31, 2021, the company was not subject to market or interest rate risk, with IPO proceeds invested in U.S. government securities[266]. - The company intends to redeem public shares promptly after January 14, 2023, without complying with certain Delaware law procedures, potentially exposing stockholders to claims[84].