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Adit EdTech(ADEX) - 2022 Q3 - Quarterly Report
ADEXAdit EdTech(ADEX)2022-11-13 16:00

Financial Performance - For the three months ended September 30, 2022, the company reported a net income of approximately 676,138,whichincludedachangeinfairvalueofwarrantliabilityofapproximately676,138, which included a change in fair value of warrant liability of approximately 38,000 and interest earned of approximately 1.3million[146].−FortheninemonthsendedSeptember30,2022,thecompanyreportedanetincomeofapproximately1.3 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 4.7million[147].FinancialPosition−AsofSeptember30,2022,thecompanyhadaworkingcapitaldeficitofapproximately4.7 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 31,000willnotbesufficienttooperateforatleastthenext12monthswithoutabusinesscombination[152].−Thecompanyhasincurredsignificantcostsinpursuitoffinancingandacquisitionplans,raisingsubstantialdoubtaboutitsabilitytocontinueasagoingconcern[152].MergerandFinancing−ThecompanyhasenteredintoamergeragreementwithGRIID,whichwasunanimouslyapprovedbybothboardsofdirectors[155][156].−ThemergeragreementincludesaprovisionforGRIIDtorestructureitsseniorsecuredtermloanamountingto31,000 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 200millionofitssharesofcommonstockfollowingthemerger,subjecttocertainconditions[154].AccountingandCompliance−Thecompanyqualifiesasan"emerginggrowthcompany"undertheJOBSAct,allowingittodelaytheadoptionofneworrevisedaccountingstandards[158].−AsofSeptember30,2022,all27,600,000sharesofcommonstocksoldaspartoftheUnitsareclassifiedoutsideofpermanentequityduetotheirredemptionfeature[163].−ThecompanyrecognizeschangesintheredemptionvalueofredeemablesharesimmediatelyupontheIPO,adjustingthecarryingvalueattheendofeachreportingperiod[164].−Earningsandlossesaresharedproratabetweenredeemableandnon−redeemablesharesforthethreeandninemonthsendedSeptember30,2022and2021[165].−Thecompanydoesnotusederivativeinstrumentstohedgeexposurestocashflow,market,orforeigncurrencyrisks[166].−AsofSeptember30,2022,thecompanywasnotsubjecttoanymarketorinterestraterisk,withIPOproceedsinvestedinU.S.governmenttreasurybillsormoneymarketfunds[169].IPODetails−ThecompanycompleteditsIPOonJanuary14,2021,raisinggrossproceedsof200 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].