Financial Performance - Total revenue for the three months ended June 30, 2024, was $4,711 million, a slight decrease of 0.9% compared to $4,754 million for the same period in 2023[14]. - Cryptocurrency mining revenue increased to $2,255 million for the three months ended June 30, 2024, up 9.7% from $2,055 million in the prior year[14]. - Total operating expenses rose to $10,787 million for the three months ended June 30, 2024, compared to $8,447 million in the same period last year, reflecting a 27.6% increase[14]. - The net income for the three months ended June 30, 2024, was $24,709 million, a significant recovery from a net loss of $10,813 million in the same period of 2023[14]. - Basic and diluted net income per share for the three months ended June 30, 2024, was $0.35, compared to a loss of $0.20 per share in the prior year[14]. - For the six months ended June 30, 2024, the company reported a net income of $18,231 compared to a net loss of $22,045 for the same period in 2023[29]. Assets and Liabilities - Total current assets decreased from $3,335,000 on December 31, 2023, to $2,610,000 on June 30, 2024, representing a decline of approximately 21.7%[12]. - Total liabilities increased from $101,844,000 to $75,509,000, indicating a reduction of approximately 26%[12]. - The total assets decreased from $42,207,000 to $41,595,000, a decline of about 1.5%[12]. - The company has a total shareholders' deficit of $(33,914,000) as of June 30, 2024, compared to $(59,637,000) at the end of 2023, showing an improvement of approximately 43%[12]. - Current liabilities surged from $22,154,000 to $70,524,000, an increase of approximately 218%[12]. - The accumulated deficit improved from $(107,409,000) to $(89,175,000), reflecting a reduction of about 17%[12]. Cash Flow and Financing - Cash reserves significantly dropped from $2,851,000 to $274,000, a decrease of about 90.4%[12]. - The company reported a net cash used in operating activities of $13,634 for the six months ended June 30, 2024, an increase from $10,546 in the prior year[29]. - Cash and cash equivalents as of June 30, 2024, were $274, indicating a reliance on debt financing for operations[30]. - The company entered into a senior secured term loan credit agreement with CleanSpark for a term loan amount of $55,919[31]. - The company extinguished debt totaling $15,000 on June 26, 2024, resulting in a gain on extinguishment of debt of $45,053[32]. Cryptocurrency Operations - The company is highly dependent on a small number of bitcoin mining equipment suppliers, which poses a risk to its operations[6]. - GRIID's cryptocurrency mining operations are solely focused on bitcoin, with significant investments in energy infrastructure and data centers across North America[26]. - The Company generated 5,475 units of cryptocurrency from mining activities during the six months ended June 30, 2024, an increase from 3,644 units in the same period of 2023, representing a growth of approximately 50.5%[54]. - The Company held 1.57 bitcoins with an average cost basis of $61,454 per bitcoin, compared to 8.85 bitcoins with an average cost basis of $27,540 per bitcoin as of June 30, 2023, indicating a significant reduction in holdings[54]. - The total cryptocurrency impairment for the three months ended June 30, 2024, was $97 million, compared to $144 million in the same period of 2023[14]. Equity and Shareholder Information - The company issued 1,999,490 equity shares during the three months ended June 30, 2024, increasing the total common shares to 71,875,428[17]. - The Company incurred $21,140,000 in equity issuance costs related to the reverse recapitalization, with $17,639,000 paid as of August 14, 2024[52]. - The Company granted options to purchase 2,125,000 shares at an exercise price of $0.988 per share on April 16, 2024, with a ten-year expiration[86]. - The Company’s board members received an aggregate of 1,111,110 restricted stock with a fair value of $1.35 per share[100]. Risks and Challenges - The company anticipates potential challenges in maintaining its public company status and the liquidity of its securities[6]. - The Company faces uncertainties in revenue and operating results due to fluctuations in the bitcoin market and regulatory factors[6]. - GRIID's future financial viability is contingent on bitcoin prices remaining stable, highlighting the risks associated with cryptocurrency mining[30]. - The Company anticipates potential risks related to the proposed transaction with CleanSpark, including integration challenges and market conditions[6]. Operational Developments - The CleanSpark Merger Agreement includes an aggregate merger consideration of $155,000, minus the company's outstanding liabilities[28]. - The Company entered into a new hosting agreement with CleanSpark on June 26, 2024, generating $38,000 in revenue for the three months ended June 30, 2024, compared to $0 in the same period of 2023[45]. - Two sites began hosting mining services after June 30, 2024, with Union Data Diner LLC starting on July 26, 2024[105]. - Ava Data LLC entered into PowerFlex Agreements with TVA, participating in demand response programs for monetary credits[102]. - Union Data Diner LLC increased its power supply contract demand from 780 kW to 5,000 kW for on-peak demand[103].

Financial Performance - Total revenue for Q1 2024 reached $5,821,000, up 30.6% from $4,458,000 in the same period last year[12] - Cryptocurrency mining revenue for Q1 2024 was $3,220,000, a 99.5% increase from $1,614,000 in Q1 2023[12] - The net loss for Q1 2024 was $6,478,000, an improvement from a net loss of $11,231,000 in Q1 2023[12] - Basic and diluted net loss per share for Q1 2024 was $0.10, compared to $0.21 in Q1 2023[12] - For the three months ended March 31, 2024, the net loss was $6,478 thousand, compared to a net loss of $11,231 thousand for the same period in 2023, representing a 42.5% improvement[18] Operating Expenses - Operating expenses increased to $9,872,000 in Q1 2024, compared to $8,273,000 in Q1 2023, reflecting a 19.3% rise[12] - Net cash used in operating activities for the three months ended March 31, 2024, was $9,159 thousand, compared to $5,634 thousand for the same period in 2023, reflecting increased operational costs[18] Assets and Liabilities - Total assets as of March 31, 2024, were $42,209,000, slightly up from $42,207,000 at the end of 2023[10] - Current liabilities decreased to $21,677,000 as of March 31, 2024, from $22,154,000 at the end of 2023[10] - The company’s accumulated deficit increased to $113,884,000 as of March 31, 2024, from $107,409,000 at the end of 2023[10] - The total shareholders' deficit increased to $(60,606,000) as of March 31, 2024, compared to $(59,637,000) at the end of 2023[10] Cryptocurrency Operations - The company reported a total cryptocurrency revenue of $255,000 for the three months ended March 31, 2024, compared to $844,000 for the same period in 2023, reflecting a decrease of approximately 70%[41] - The company generated $3,220,000 in cryptocurrencies from mining activities during the three months ended March 31, 2024, down from $9,137,000 in the same period of 2023[41] - The company reported cryptocurrency mined, net, of $(3,468) thousand for the three months ended March 31, 2024, compared to $(1,874) thousand for the same period in 2023, indicating a significant increase in mining costs[18] Financing and Capital Needs - The company plans to continue relying on debt financing to fund operations, highlighting the need for additional capital in the next fiscal year[20] - The company has received $5,708 thousand in draws related to the GEM facility as of May 15, 2024, indicating ongoing financing efforts[20] - The company incurred approximately $21,140,000 in equity issuance costs related to the reverse recapitalization, with $6,107,000 paid as of May 15, 2024[39] Shareholder Equity and Compensation - The company granted options to purchase 2,125,000 shares of common stock at an exercise price of $0.988 per share on April 16, 2024[92] - The total fair value of shares vested during the three months ended March 31, 2024, was $445, compared to $342 for the same period in 2023[77] - The company has unrecognized compensation expense related to shares of $24 and $106 as of March 31, 2024, and 2023, respectively, expected to be recognized over a weighted average vesting period of 0.74 years[77] Management and Executive Compensation - The company has entered into employment agreements with key executives, including the CEO and CFO, effective April 18, 2024[91] - CEO James D. Kelly III will receive an annual base salary of $500,000 and a target bonus of $500,000[92] - CFO Allan Wallander will receive an annual base salary of $300,000 and a target bonus of $300,000[92] - Chief Research Officer Michael Hamilton will receive an annual base salary of $180,000 and a target bonus of $100,000[92] Market and Operational Risks - The company’s ability to remain a going concern is dependent on bitcoin prices remaining at or above certain levels, reflecting market volatility risks[20] - The company is focused on bitcoin mining operations and is dependent on bitcoin prices remaining at or above certain levels for profitability[20]

Financial Condition - As of December 31, 2023, the company had an unrestricted cash balance of approximately $2.851 million and an accumulated deficit of approximately $132.607 million[103]. - The company has experienced significant operating losses as it has grown, and achieving operational objectives is critical for long-term viability[104]. - The company may face liquidity constraints due to potential failures of financial institutions where it holds cash and cash equivalents, impacting its ability to finance operations[165]. - The company has previously maintained cash accounts exceeding insured limits, which poses a risk if those financial institutions face insolvency[167]. - The company's existing insurance coverage may not be sufficient to cover all potential losses, increasing the risk of financial impact from unforeseen events[170]. - The company maintains insurance policies for its business, but these may not be adequate to protect against all liabilities, potentially exposing it to significant financial risk[171]. - Bitcoin held by the company is not insured by any government-sponsored investor protection program, meaning any loss would not be reimbursed, adversely affecting its financial condition[173]. - The company may face significant costs related to acquisitions, including acquisition-related costs and potential liabilities, which could adversely affect its financial condition[154]. - The profit margins of digital asset mining operations are not high, leading to increased selling pressure on earned bitcoin, which could constrain bitcoin prices[194]. - The reduction in bitcoin rewards may lead to lower profit margins, forcing the company to sell a substantial portion of its bitcoin at potentially low prices, adversely affecting financial condition[197]. Operational Risks - The company's operating results are expected to fluctuate due to the volatile nature of bitcoin prices and the costs associated with bitcoin mining[106]. - The company relies heavily on third-party utility providers for electricity, which accounts for a significant portion of its cost of revenue, and any disruptions could materially impact operations[119]. - The company is dependent on a small number of bitcoin mining equipment suppliers, and any failure to deliver equipment could delay expansion plans[123]. - The company faces risks related to internet disruptions that could adversely affect both the price of bitcoin and its ability to operate effectively[122]. - Supply chain disruptions due to COVID-19 and geopolitical tensions, including the Russia-Ukraine conflict, may materially impact the company's operations and expansion plans[126]. - The company faces challenges in obtaining necessary permits and licenses, which could delay construction and operations, adversely affecting financial performance[128]. - The evolving business model related to cryptocurrency and blockchain technologies increases complexity and uncertainty regarding future business prospects[129]. - The company's future success depends on effectively managing growth and expanding organizational resources to meet increasing operational demands[130]. - Intense competition in the bitcoin mining ecosystem may hinder the company's ability to compete effectively, impacting financial condition and results[132]. - A worldwide shortage of mining equipment due to competitors purchasing at scale could delay the company's ability to acquire new miners[135]. Market and Regulatory Environment - The market price of bitcoin has been impacted by various factors, including the bankruptcy filings of FTX and other crypto companies, leading to increased volatility[108]. - Recent events in the cryptocurrency industry, including bankruptcies of major exchanges, may adversely affect investor sentiment and the company's financial condition[140]. - The restrictive covenants in the credit agreement with Blockchain Access impose significant operational and financial restrictions on the company[109]. - The company is subject to a highly evolving regulatory landscape, with potential adverse effects on its business, reputation, financial condition, and results of operations due to non-compliance with laws and regulations[256]. - Regulatory scrutiny from U.S. agencies may impose new costs and compliance requirements, impacting business operations[251]. - Future regulatory developments could significantly restrict the market for bitcoin, adversely affecting the company's business model[253]. - The IRS classifies digital assets as property for tax purposes, creating potential tax liabilities for the company[243]. - Changes in tax laws could have a material adverse effect on the company's financial condition and results of operations[247]. - Increased regulation of digital asset trading platforms may lead to higher compliance costs for users, including the company[250]. - Public perception of bitcoin as a tool for illegal activities may result in new regulations that could impact its value[254]. Environmental and Social Governance (ESG) Concerns - The company is vulnerable to risks associated with climate change and severe weather conditions, which could disrupt operations and adversely affect financial performance[156]. - The ongoing geopolitical tensions, particularly the conflict between Russia and Ukraine, could lead to market disruptions and impact the company's operations and financial results[159]. - The company currently relies on non-renewable energy sources for approximately 26% of its data center energy needs, which may be impacted by increasing regulation on energy sources[261]. - New York passed a law banning certain bitcoin mining operations that run on carbon-based power sources, affecting the company's ability to expand or renew permits unless it uses 100% renewable energy[261]. - Legislative changes regarding climate change could impose additional costs on the company, particularly related to energy consumption for bitcoin mining operations[294]. - Concerns about greenhouse gas emissions may lead to environmental taxes or penalties, adversely affecting the company's financial condition and operations[296]. - Increasing scrutiny on Environmental, Social and Governance (ESG) practices may lead to additional costs and risks for the company[297]. - The SEC's focus on climate-related disclosures could hinder the company's access to capital if it fails to meet evolving ESG expectations[298]. Management and Human Resources - Management's limited experience in running a public company may affect the company's ability to comply with regulatory requirements and manage operations effectively[147]. - The company relies heavily on the skills and services of its management team, including key executives such as the CEO and CFO, to ensure effective business operations and future growth[148]. - Competition for skilled employees is intense, which may hinder the company's ability to attract and retain qualified personnel, potentially impacting business performance[151]. - The company has limited experience in acquisitions, which may affect its ability to successfully integrate acquired businesses and achieve anticipated synergies[153]. - The effectiveness of the company's compliance and risk management methods is uncertain, potentially impacting its financial condition and operating results[299]. Legal and Compliance Risks - The company may be subject to material litigation and regulatory investigations, which could result in substantial legal costs and impact its business operations[182]. - The company faces risks related to the potential insolvency of custodians, which could delay or prevent asset recovery[241]. - Heightened regulatory scrutiny may increase the risk of litigation and legal proceedings against the company, potentially requiring material future cash payments[259]. - The company is subject to various data privacy laws and regulations, and failure to comply may result in significant fines, penalties, and reputational damage[286]. - The California Consumer Privacy Act (CCPA) imposes increased privacy obligations and potential civil penalties for violations, which could raise compliance costs for the company[287]. Technological and Market Dynamics - The lack of liquid markets in bitcoin and potential market manipulation could decrease liquidity and increase volatility, adversely affecting the company's ability to monetize mined bitcoin[191]. - If a malicious actor gains control of more than 50% of the processing power on the bitcoin blockchain, it could manipulate transactions, adversely affecting the company's operations[192]. - The company must invest significant capital to maintain or grow its processing power on networks, as increased processing power on networks leads to declining transaction fees and rewards[214]. - A decrease in the price of computer servers may increase competition for transaction fees, potentially leading to a decline in revenue for the company[215]. - The bitcoin market is subject to extreme volatility, which could adversely affect the company's ability to monetize mined bitcoin[217]. - The company relies on custodians like Coinbase Prime, Foundry, and Blockchain.com for bitcoin storage, which poses counterparty risks[240]. - The open-source nature of the bitcoin network means that developer support may not be guaranteed, which could impact the network's stability and the company's operations[229]. - Changes in financial accounting standards for cryptocurrency assets could necessitate changes in the company's accounting methods, adversely affecting financial statements[232]. - The volatility of bitcoin prices has led to increased credit pressures in the cryptocurrency industry, affecting liquidity[239].

Core Insights - GRIID Infrastructure Inc. has completed its business combination with Adit EdTech Acquisition Corp., resulting in the company being renamed GRIID Infrastructure Inc. [1] - GRIID's common stock is expected to begin trading on Cboe Canada under the ticker symbol "GRDI" starting January 2, 2024, with plans to list on a U.S. exchange [1] Company Overview - GRIID is a bitcoin mining company founded in 2018, operating mining facilities since 2019, and focuses on a low-cost, low-carbon energy mix [3] - The company has established long-term power relationships to secure affordable and environmentally responsible energy, supporting its vertically integrated self-mining business model [3] - GRIID is headquartered in Cincinnati, Ohio, with additional facilities in Austin, Texas, and Rutledge, Tennessee, and maintains mining operations in New York and Tennessee [3]

IPO and Financing Activities - The company completed its IPO on January 14, 2021, selling 24,000,000 units at $10.00 per unit, generating gross proceeds of $240,000,000[130] - Simultaneously with the IPO, the company completed a private placement of 6,550,000 Private Placement Warrants at $1.00 per warrant, generating $6,550,000[130] - The IPO underwriters exercised their over-allotment option, purchasing an additional 3,600,000 units at $10.00 per unit, generating $36,000,000[131] - The company may issue and sell up to $200.0 million of its common stock to GEM Global Yield LLC SCS following the merger, subject to certain conditions[153] Financial Performance and Liquidity - The company had a net loss of $0.2 million for the three months ended September 30, 2023, compared to a net income of $0.7 million for the same period in 2022[136] - For the nine months ended September 30, 2023, the company reported a net loss of $1.9 million, compared to a net income of $4.6 million for the same period in 2022[137] - As of September 30, 2023, the company had approximately $0.2 million in its operating bank account[138] - As of September 30, 2023, the company had approximately $0.2 million in its operating bank account, which is insufficient to sustain operations for the next 12 months without a business combination[150] Debt and Borrowings - The company borrowed $502,683 under the Working Capital Note as of September 30, 2023[139] - The company drew $150,000 and $200,000 from the GRIID Note on July 18, 2023, and August 8, 2023, respectively, for working capital purposes[147] - The GRIID Note allows borrowing up to $1.8 million, with interest at the Applicable Federal Rate, and is payable upon liquidation or merger closing[148] - The company had no long-term debt, capital lease obligations, or operating lease obligations as of September 30, 2023[155] Share Redemptions - Holders of 25,132,578 shares of common stock redeemed their shares for approximately $253.6 million on December 23, 2022[133] - Holders of 467,396 shares of common stock redeemed their shares for approximately $4.9 million on July 11, 2023[146] Business Combination and Liquidation - The company has until January 14, 2024, to complete a business combination or face liquidation[132] - The company extended the deadline for completing an initial business combination to January 14, 2024, with GRIID Infrastructure depositing $240,000 into the Trust Account for the first four months of the extension[147] Accounting and Reporting - The company qualifies as an "emerging growth company" under the JOBS Act, allowing delayed adoption of new accounting standards and reduced reporting requirements[156][158] - The company classified Private Placement Warrants as liabilities at fair value, subject to re-measurement at each balance sheet date[166] - The company is assessing the impact of ASU 2020-06, which simplifies accounting for convertible instruments, effective for fiscal years beginning after December 15, 2023[167] Off-Balance Sheet Arrangements - As of September 30, 2023, the company had no off-balance sheet financing arrangements or obligations[152]

Financial Performance - The company reported a net loss of approximately $0.7 million for the three months ended June 30, 2023, compared to a net income of approximately $2.7 million for the same period in 2022[138]. - For the six months ended June 30, 2023, the company had a net loss of approximately $1.6 million, while for the same period in 2022, it reported a net income of approximately $3.9 million[139]. - As of June 30, 2023, the company had approximately $0.1 million in its operating bank account and a working capital deficit of approximately $7.7 million[140]. - As of June 30, 2023, the company had approximately $0.1 million in the operating bank account, raising substantial doubt about its ability to continue as a going concern for the next 12 months[153]. IPO and Trust Account - The company completed its IPO on January 14, 2021, raising gross proceeds of $240 million from the sale of 24,000,000 units at an offering price of $10.00 per unit[132]. - Following the IPO, the company had an aggregate amount of $276 million of net proceeds deposited in its trust account[133]. - On December 23, 2022, shareholders redeemed approximately 25,132,578 shares for a pro rata portion of approximately $253.6 million from the trust account, equating to approximately $10.09 per share[135]. - Following redemptions, 2,000,026 IPO shares remained outstanding after the July 11, 2023 stockholder vote[166]. Business Combination and Extensions - The company has until January 14, 2024, to complete a business combination, or it will cease operations and liquidate[134]. - GRIID Infrastructure deposited an aggregate of $888,272 into the trust account, representing $0.06 per IPO share per month, to extend the initial business combination deadline to July 14, 2023[148]. - Stockholder approval was obtained on July 11, 2023, allowing for two additional three-month extensions, with 467,396 shares redeemed for approximately $4.9 million, or $10.58 per share[149]. - The board extended the deadline for the initial business combination to October 14, 2023, with GRIID Infrastructure depositing $120,000, or $0.03 per public share, for the first two months of this extension[150]. - If a business combination is not completed by the extension date, the company will cease operations, redeem all public shares, and liquidate[154]. Financing Arrangements - The company issued a Working Capital Note allowing borrowing up to $1 million, with $502,683 borrowed as of June 30, 2023[142]. - The company entered into a Credit Agreement providing for a restructured senior secured term loan of approximately $57.4 million[143]. - The company amended its underwriting agreement, reducing the deferred underwriting commission to $6.762 million, payable upon the closing of its initial business combination[145]. - The GRIID Note allows borrowing up to $1.8 million, with interest at the Applicable Federal Rate, payable upon liquidation decision or merger closing[151]. - As of June 30, 2023, there were no off-balance sheet financing arrangements or long-term liabilities reported[155][158]. Financial Instruments and Accounting Standards - The company does not use derivative instruments to hedge exposures and evaluates financial instruments for derivative classification[168]. - The company is assessing the impact of ASU No. 2020-06 on its financial position, with early adoption permitted[170].

Financial Performance - As of March 31, 2023, the company reported a net loss of approximately $0.9 million, with operating costs of approximately $0.9 million and interest earned of approximately $0.2 million[146]. - The company has not generated any operating revenues as it is still in the process of searching for a business combination candidate[146]. - As of March 31, 2023, the company has approximately $0.2 million in the operating bank account and $0.7 million due from a related party, which is insufficient to operate for the next 12 months without a business combination[160]. - If a business combination is not completed by the extension date, the company will cease operations, redeem all Public Shares, and liquidate, raising substantial doubt about its ability to continue as a going concern[161]. Capital Structure - 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[142]. - A total of 25,132,578 shares were redeemed for approximately $253.6 million, equating to about $10.09 per share[145]. - Following redemptions, the company has 2,467,422 IPO Shares outstanding after 25,132,578 shares were redeemed for approximately $253.6 million[174]. - The company issued a working capital note allowing borrowing up to $1 million, with $502,683 borrowed as of March 31, 2023[151]. - The company entered into a credit agreement providing for a restructured senior secured term loan of approximately $57.4 million[152]. - The company has a deferred underwriting commission of $6.76 million payable upon the closing of its initial business combination[153]. - A share purchase agreement allows the company to issue and sell up to $200 million of its common stock following a merger, subject to certain conditions[164]. Business Combination and Extensions - The company has until June 14, 2023, to complete a business combination, with the possibility of six one-month extensions[144]. - On December 23, 2022, stockholders approved an amendment allowing up to six one-month extensions for completing a business combination[173]. Financial Position and Risks - The company had a working capital deficit of approximately $5.6 million as of March 31, 2023, excluding approximately $0.8 million in federal income tax payable[149]. - The company has no off-balance sheet arrangements or long-term debt as of March 31, 2023[162][166]. - As of March 31, 2023, the company was not subject to any market or interest rate risk, with net proceeds from the IPO held solely in cash[179]. Accounting and Financial Reporting - The company is assessing the impact of ASU No. 2020-06 on its financial position, results of operations, or cash flows[177]. - Management believes that no recently issued accounting standards will materially affect the consolidated financial statements[178]. - The company does not use derivative instruments to hedge exposures and evaluates financial instruments to determine their classification[175].

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[23]. - Following the IPO, an additional 3.6 million units were sold, generating gross proceeds of $36 million, bringing total net proceeds to $276 million deposited in the trust account[24]. - 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[25]. - 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[74]. Merger and Business Combination - The company is pursuing a merger with GRIID, which was unanimously approved by both boards and involves converting GRIID's membership units into 58.5 million shares of the company's common stock[26][28]. - The Merger Agreement requires stockholder approval, with a requisite vote needed for consummation[30]. - The company must maintain net tangible assets (NTA) of at least $5,000,001 upon consummation of the Merger[30]. - A Voting Agreement has been established covering approximately 64.0% of GRIID's membership units, mandating votes in favor of the Merger[35]. - The Merger Agreement includes a termination date of January 14, 2023, with specific conditions under which it may be terminated[32]. - The initial business combination must involve target businesses with a fair market value equal to at least 80% of the trust account value[42]. - The company aims to acquire fundamentally sound businesses that are underperforming their potential and require management expertise[40]. Risks and Challenges - The company has faced challenges in meeting NYSE continued listing standards due to redemptions related to the extension approval[12]. - Risks include potential conflicts of interest from sponsors and management, as well as the possibility of mandatory liquidation if a business combination is not completed[11][13]. - The company has no operating history and is classified as a blank check company, which may complicate future business combinations[20]. - The lack of business diversification may expose the company to significant risks associated with economic and regulatory developments in a single industry[51]. - The company will cease operations and liquidate if it fails to complete an initial business combination by the applicable extension date[75]. Redemption and Shareholder Rights - Public stockholders may only receive approximately $10.00 per share upon redemption, or less in certain circumstances, if the company fails to complete a business combination[18]. - 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[63]. - If the initial business combination is not completed by the applicable extension date, the company will redeem the IPO Shares at a per-share price equal to the aggregate amount in the trust account, divided by the number of outstanding IPO Shares[75]. - The company expects to seek stockholder approval to remove limitations on redeeming or repurchasing IPO Shares in connection with the initial business combination[64]. - 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[59]. - The company’s Sponsor, directors, and officers have waived their redemption rights with respect to founder shares and any IPO Shares acquired after the IPO[56]. - If stockholder approval is required, the company will conduct redemptions in conjunction with a proxy solicitation and file proxy materials with the SEC[61]. Management and Operations - The management team intends to devote necessary time to affairs until the initial business combination is completed, though conflicts of interest may arise[49]. - The company may seek to recruit additional managers to enhance the management of the target business post-combination, but there is no assurance that suitable candidates will be available[55]. - The management team currently consists of three executive officers who will devote necessary time to the company's affairs until the initial business combination is completed[95]. Regulatory and Reporting Obligations - The company is required to file periodic reports with the SEC, including annual and quarterly reports[96]. - Audited financial statements of the prospective target business will be provided to stockholders as part of the tender offer materials[98]. - The company must evaluate its internal control procedures for the fiscal year ending December 31, 2022, as required by the Sarbanes-Oxley Act[99]. - The company qualifies as an "emerging growth company" under the JOBS Act, allowing it to take advantage of certain reporting exemptions[100]. - The company can delay the adoption of new accounting standards until they apply to private companies, benefiting from an extended transition period[101]. - The company will remain an emerging growth company until it achieves 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[102]. - The company is classified as a "smaller reporting company," allowing it to provide only two years of audited financial statements[103]. Financial Management and Trust Account - As of December 31, 2022, the company was not subject to any market or interest rate risk, with net proceeds from its IPO invested in U.S. government treasury bills or money market funds[270]. - The company has instructed its trustee to liquidate U.S. government treasury obligations and hold all funds in cash until the consummation of its initial business combination or liquidation[271]. - The expected per-share redemption amount upon dissolution is approximately $10.00, but actual amounts may be less due to creditor claims[80]. - The company may request up to $100,000 of accrued interest from the trust account to cover dissolution expenses if necessary[80]. - The Sponsor is liable to ensure that the trust account does not fall below $10.00 per IPO Share, but there is uncertainty regarding the Sponsor's ability to fulfill this obligation[82]. - If the trust account is reduced below $10.00 per IPO Share due to creditor claims, stockholders may receive less than the expected redemption amount[85]. - The company intends to redeem IPO Shares promptly if a business combination is not completed by the extension date, which may expose stockholders to liability for creditor claims[88]. - The company has filed a registration statement with the SEC regarding a proposed merger, which includes a proxy statement and prospectus[94].

Financial Performance - For the three months ended September 30, 2022, the company reported a net income of approximately $676,138, which included a change in fair value of warrant liability of approximately $38,000 and interest earned of approximately $1.3 million [146]. - For the nine months ended September 30, 2022, the company reported a net income of approximately $625,385, which included a change in fair value of warrant liability of approximately $4.7 million [147]. Financial Position - As of September 30, 2022, the company had a working capital deficit of approximately $3.7 million, excluding franchise tax payable [148]. - The company anticipates that its operating bank account balance of approximately $31,000 will not be sufficient to operate for at least the next 12 months without a business combination [152]. - The company has incurred significant costs in pursuit of financing and acquisition plans, raising substantial doubt about its ability to continue as a going concern [152]. Merger and Financing - The company has entered into a merger agreement with GRIID, which was unanimously approved by both boards of directors [155][156]. - The merger agreement includes a provision for GRIID to restructure its senior secured term loan amounting to $57,433,360.50 [150]. - The company has the option to issue and sell up to $200 million of its shares of common stock following the merger, subject to certain conditions [154]. Accounting and Compliance - The company qualifies as an "emerging growth company" under the JOBS Act, allowing it to delay the adoption of new or revised accounting standards [158]. - As of September 30, 2022, all 27,600,000 shares of common stock sold as part of the Units are classified outside of permanent equity due to their redemption feature [163]. - The company recognizes changes in the redemption value of redeemable shares immediately upon the IPO, adjusting the carrying value at the end of each reporting period [164]. - Earnings and losses are shared pro rata between redeemable and non-redeemable shares for the three and nine months ended September 30, 2022 and 2021 [165]. - The company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks [166]. - As of September 30, 2022, the company was not subject to any market or interest rate risk, with IPO proceeds invested in U.S. government treasury bills or money market funds [169]. IPO Details - 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 [142]. - The company has not entered into any off-balance sheet financing arrangements as of September 30, 2022 [154].

Financial Performance - The company had a net income of approximately $2.7 million for the three months ended June 30, 2022, primarily due to a change in fair value of warrant liability of approximately $2.9 million [131]. - For the six months ended June 30, 2022, the company reported a net income of approximately $3.9 million, with a change in fair value of warrant liability contributing approximately $4.7 million [132]. - As of June 30, 2022, the company had approximately $0.1 million in its operating bank account and a working capital deficit of approximately $3.4 million [134]. Capital Structure - The company completed its IPO on January 14, 2021, raising gross proceeds of $240 million from the sale of 24,000,000 Units at an offering price of $10.00 per Unit [129]. - The underwriters exercised their over-allotment option, resulting in an additional $36 million in gross proceeds from the sale of 3,600,000 Units [130]. - The company has no long-term debt or off-balance sheet financing arrangements as of June 30, 2022 [139][137]. Mergers and Acquisitions - The company entered into a Merger Agreement on November 29, 2021, to merge with GRIID, which was unanimously approved by both boards [138]. Liquidity and Cash Flow - The company anticipates that its current cash balance will not be sufficient to operate for at least the next 12 months without a business combination [136]. - The company issued an unsecured promissory note to the Sponsor for a Working Capital Loan, allowing borrowing up to $300,000, with $150,000 borrowed as of June 30, 2022 [135]. Equity and Liabilities - All 27,600,000 shares of common stock sold as part of the Units contain a redemption feature, classified outside of permanent equity as of June 30, 2022 [145]. - As of June 30, 2022, Private Placement Warrants were classified as liabilities at fair value due to not meeting equity treatment criteria, impacting financial statements [150]. - The Private Placement Warrants were modified on December 23, 2021, resulting in their treatment as derivative liability instruments [150]. Risk Management - As of June 30, 2022, the company was not subject to any market or interest rate risk following the IPO [151]. - Proceeds from the IPO have been invested in U.S. government treasury bills, notes, or bonds with a maturity of 180 days or less [151]. - The company believes there will be no material exposure to interest rate risk due to the short-term nature of its investments [151].