Adit EdTech(ADEX) - 2024 Q1 - Quarterly Report

Financial Performance - Total revenue for Q1 2024 reached $5,821,000, up 30.6$4,458,000 in the same period last year[12] - Cryptocurrency mining revenue for Q1 2024 was $3,220,000, a 99.5$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]