Ault Disruptive Technologies (ADRT) - 2024 Q2 - Quarterly Report

Financial Performance - For the three months ended June 30, 2024, the company reported a net loss of $246,152 compared to a net income of$525,344 for the same period in 2023[125]. - For the six months ended June 30, 2024, the company had a net loss of $555,963, while for the same period in 2023, it reported a net income of$1,081,016[126]. - The company has not generated any operating revenues as it is still in the process of searching for a business combination candidate[125]. - Net loss per share is calculated by dividing net loss by the weighted average number of shares outstanding, with no dilutive securities reported[145]. IPO and Capital Structure - The company generated gross proceeds of $115,000,000 from the IPO, selling 11,500,000 units at$10.00 per unit[118]. - A total of 11,311,125 shares were tendered for redemption at a per-share price of $10.61, resulting in approximately$120,064,000 being redeemed from the Trust Account[131]. - The underwriters of the IPO are entitled to a deferred fee of $3,450,000, which will be waived if the business combination is not completed[139]. Business Combination and Liquidation - The company has until December 20, 2024, to consummate a business combination, or it will face mandatory liquidation[123]. - The company intends to use substantially all funds held in the Trust Account to complete its initial business combination[134]. - The company anticipates needing to borrow additional funds through Working Capital Loans to operate until a business combination is consummated[135]. - The company may need to raise additional capital through loans or investments, with no assurance of obtaining financing on commercially acceptable terms[138]. Debt and Financial Obligations - As of June 30, 2024, the company had an outstanding principal advance balance of$950,681 under a line of credit agreement[132]. - The company has no long-term debt or capital lease obligations, only a monthly fee of $10,000 to an affiliate of the Sponsor for office space and services[139]. - An unsecured promissory note of$1,500,000 from the Sponsor is repayable in full upon consummation of an initial business combination[140]. Investments and Financial Instruments - The company’s investments held in the Trust Account included $794,112 as of June 30, 2024, characterized as Level 1 investments[133]. - The company does not use derivative instruments to hedge exposures and evaluates financial instruments for classification as liabilities or equity[146]. Accounting and Reporting - The company is classified as an "emerging growth company" and can take advantage of certain exemptions from reporting requirements[141]. - The common stock subject to possible redemption is classified as temporary equity, affecting the balance sheet presentation[143]. - Recent accounting standards, such as ASU 2022-03 and ASU 2023-09, are not expected to have a material impact on the financial statements[150][151]. - The company has not identified any critical accounting estimates that could materially differ from actual results[149].