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ADIT EDTECH ACQUISITION CORP.

(ADEX)
Delayed Nyse  -  03:58 2022-09-30 pm EDT
9.890 USD   -0.10%
09/12Adit Edtech Acquisition Corp. : Entry into a Material Definitive Agreement, Unregistered Sale of Equity Securities, Financial Statements and Exhibits (form 8-K)
AQ
08/26Adit Edtech Acquisition Corp. : Entry into a Material Definitive Agreement, Financial Statements and Exhibits (form 8-K)
AQ
08/15ADIT EDTECH ACQUISITION CORP. Management's Discussion and Analysis of Financial Condition and Results of Operations. (form 10-Q)
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ADIT EDTECH ACQUISITION CORP. Management's Discussion and Analysis of Financial Condition and Results of Operations. (form 10-Q/A)

12/23/2021 | 04:50pm EDT
References to the "Company," "ADIT EDTECH ACQUISITION CORP.," "our," "us" or
"we" refer to ADIT EDTECH ACQUISITION CORP. The following discussion and
analysis of the Company's financial condition and results of operations should
be read in conjunction with the unaudited condensed financial statements and the
notes thereto contained elsewhere in this Quarterly Report on Form
10-Q/A.
Certain information contained in the discussion and analysis set forth below
includes forward-looking statements that involve risks and uncertainties.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on
Form 10-Q/A includes
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Exchange Act. We have based
these forward-looking statements on our current expectations and projections
about future events. These forward-looking statements are subject to known and
unknown risks, uncertainties and assumptions about us that may cause our actual
results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by such forward-looking statements. In some
cases, you can identify forward-looking statements by terminology such as "may,"
"should," "could," "would," "expect," "plan," "anticipate," "believe,"
"estimate," "continue," or the negative of such terms or other similar
expressions. Factors that might cause or contribute to such a discrepancy
include, but are not limited to, those described herein and in our other SEC
filings.
Overview
We are a blank check company incorporated in Delaware and formed for the purpose
of effecting an initial

B

usiness Combination with one or more target businesses. We have not identified any specific target business and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any target business regarding an initial Business Combination with our company. We intend to effectuate our initial Business Combination using cash from the proceeds of the IPO and the private placement of the Private Placement Warrants, our capital stock, debt or a combination of cash, stock and debt. The issuance of additional shares of our capital stock in a Business Combination:

     •    may subordinate the rights of holders of our common stock if preferred
          stock is issued with rights senior to those afforded our common stock;



     •    may subordinate the rights of holders of our common stock if preferred
          stock is issued with rights senior to those afforded our common stock;



     •    could cause a change in control if a substantial number of shares of our
          common stock is issued, which may affect, among other things, our ability
          to use our net operating loss carry forwards, if any, and could result in
          the resignation or removal of our present management team;



     •    may have the effect of delaying or preventing a change of control of us
          by diluting the stock ownership or voting rights of a person seeking to
          obtain control of us; and



     •    may adversely affect prevailing market prices for our common stock and/or
          warrants.

Similarly, if we issue debt securities, it could result in:

     •    default and foreclosure on our assets if our operating revenues after an
          initial Business Combination are insufficient to repay our debt
          obligations;



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     •    acceleration of our obligations to repay the indebtedness even if we make
          all principal and interest payments when due if we breach certain
          covenants that require the maintenance of certain financial ratios or
          reserves without a waiver or renegotiation of that covenant;



     •    our immediate payment of all principal and accrued interest, if any, if
          the debt security is payable on demand;



     •    our inability to obtain necessary additional financing if the debt
          security contains covenants;



     •    restricting our ability to obtain such financing while the debt security
          is outstanding;



  •   our inability to pay dividends on our common stock;



     •    using a substantial portion of our cash flow to pay principal and
          interest on our debt, which will reduce the funds available for dividends
          on our common stock if declared, our ability to pay expenses, make
          capital expenditures and acquisitions, and fund other general corporate
          purposes;



     •    limitations on our flexibility in planning for and reacting to changes in
          our business and in the industry in which we operate;



     •    increased vulnerability to adverse changes in general economic, industry
          and competitive conditions and adverse changes in government regulation;



     •    limitations on our ability to borrow additional amounts for expenses,
          capital expenditures, acquisitions, debt service requirements, and
          execution of our strategy; and



     •    other purposes and other disadvantages compared to our competitors who
          have less debt.


On January 14, 2021, we completed our IPO of 24,000,000 Units. Each Unit
consists of one share of Common Stock, and
one-half
of one redeemable warrant, each whole warrant entitling the holder thereof to
purchase one share of Common Stock at an exercise price of $11.50 per share,
subject to adjustment, pursuant to the Company's registration statements on Form
S-1
(File Nos.
333-251641
and
333-252021).
The Units were sold at an offering price of $10.00 per Unit, generating gross
proceeds of $240,000,000.
On January 14, 2021, simultaneously with the consummation of the IPO, we
completed a private placement of an aggregate of 6,550,000 Private Placement
Warrants at a price of $1.00 per Private Placement Warrant, generating gross
proceeds of $6,550,000.
On January 15, 2021, the underwriters exercised their over-allotment option in
full, and on January 19, 2021, the underwriters purchased an additional
3,600,000 Units at an offering price of $10.00 per Unit, generating gross
proceeds of $36,000,000. Simultaneously with the closing of the sale of
additional Units, the Company sold an additional 720,000 Private Placement
Warrants at a price of $1.00 per Private Placement Warrant, generating gross
proceeds of $720,000. As of January 19, 2021, an aggregate amount of
$276,000,000 of the net proceeds from the IPO (including the additional
3,600,000 Units and additional 720,000 Private Placement Warrants) were
deposited in the Company's trust account established in connection with the IPO.
We paid a total of $5,520,000 in underwriting discounts and commissions and
$636,086 for other costs and expenses related to the IPO.
Results of Operations
Our entire activity since inception up to September 30, 2021 relates to our
formation, the Initial Public Offering and, since the closing of the Initial
Public Offering, a search for a Business Combination candidate. We will not be
generating any operating revenues until the closing and completion of our
initial Business Combination, at the earliest.

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For the three months ended September 30, 2021, we had net loss of $422,932,
which consisted of $450,588 in formation and operating costs, offset by
$27,656 in interest earned on marketable securities held in the Trust Account.
For the nine months ended September 30, 2021, we had net loss of $592,475 which
consisted of $675,928 in formation and operating costs, offset by $83,453 in
interest earned on marketable securities held in the Trust Account.
Liquidity and Capital Resources
As of September 30, 2021, we had approximately $0.5 million in our operating
bank account, and working capital of approximately $0.4 million.
Prior to the completion of the Initial Public Offering, our liquidity needs had
been satisfied through a capital contribution from the Sponsor of $25,000, to
cover certain offering costs, for the Founder Shares, and the loan under an
unsecured promissory note from the Sponsor of $150,000. Subsequent to the
consummation of the Initial Public Offering and Private Placement, our liquidity
needs have been satisfied through the proceeds from the consummation of the
Private Placement not held in the Trust Account.
In addition, in order to finance transaction costs in connection with a Business
Combination, our Sponsor or an affiliate of the Sponsor, or certain of our
officers and directors may, but are not obligated to, provide us Working Capital
Loans.
On August 6, 2021, the Company issued an unsecured promissory note to the
Sponsor in connection with a Working Capital Loan made by the Sponsor to the
Company pursuant to which the Company may borrow up to $300,000 in the
aggregate. The note is
non-interest
bearing and payable on the earlier to occur of (i) January 14, 2023 or (ii) the
effective date of a Business Combination. Any amounts outstanding under the note
are convertible into warrants, at a price of $1.00 per warrant at the option of
the Sponsor, the terms of which shall be identical to the Private Placement
Warrants. As of the date hereof, the Company borrowed $150,000 under the note.
Based on the foregoing, management believes that we will have sufficient working
capital and borrowing capacity to meet our needs through the earlier of the
consummation of a Business Combination or one year from this filing. Over this
time period, we will be using these funds for paying existing accounts payable,
identifying and evaluating prospective initial Business Combination candidates,
performing due diligence on prospective target businesses, paying for travel
expenditures, selecting the target business to merge with or acquire, and
structuring, negotiating and consummating the Business Combination.
Off-Balance
Sheet Financing Arrangements
As of September 30, 2021, we did not have any
off-balance
sheet arrangements. We have no obligations, assets or liabilities which would be
considered
off-balance
sheet arrangements. We do not participate in transactions that create
relationships with unconsolidated entities or financial partnerships, often
referred to as variable interest entities, which would have been established for
the purpose of facilitating
off-balance
sheet arrangements. We have not entered into any
off-balance
sheet financing arrangements, established any special purpose entities,
guaranteed any debt or commitments of other entities, or entered into any
non-financial
assets.
On November 29, 2021, Adit EdTech Acquisition Corp., a Delaware corporation
("ADEX"), entered into an agreement and plan of merger (the "Merger Agreement")
by and among ADEX, ADEX Merger Sub, LLC, a Delaware limited liability company
and a wholly owned direct subsidiary of ADEX ("Merger Sub"), and Griid Holdco
LLC, a Delaware limited liability company ("Griid"). The Merger Agreement
provides, among other things, that on the terms and subject to the conditions
set forth therein, Merger Sub will merge with and into Griid (the "Merger"), the
separate limited liability company existence of Merger Sub will cease and Griid,
as the surviving company of the merger, will continue its existence under the
Limited Liability Company Act of the State of Delaware as a wholly owned
subsidiary of ADEX.
The Merger Agreement and the transactions contemplated thereby were unanimously
approved by the board of directors of ADEX and the board of managers of Griid.

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Contractual Obligations
At September 30, 2021, we did not have any long-term debt, capital lease
obligations, operating lease obligations or long-term liabilities.
JOBS Act
On April 5, 2012, the JOBS Act was signed into law. The JOBS Act contains
provisions that, among other things, relax certain reporting requirements for
qualifying public companies. We will qualify as an "emerging growth company" and
under the JOBS Act will be allowed to comply with new or revised accounting
pronouncements based on the effective date for private (not publicly traded)
companies. We are electing to delay the adoption of new or revised accounting
standards, and as a result, we may not comply with new or revised accounting
standards on the relevant dates on which adoption of such standards is required
for
non-emerging
growth companies. As a result, our financial statements may not be comparable to
companies that comply with new or revised accounting pronouncements as of public
company effective dates.
Additionally, we are in the process of evaluating the benefits of relying on the
other reduced reporting requirements provided by the JOBS Act. Subject to
certain conditions set forth in the JOBS Act, if, as an "emerging growth
company", we choose to rely on such exemptions we may not be required to, among
other things, (i) provide an auditor's attestation report on our system of
internal controls over financial reporting pursuant to Section 404, (ii) provide
all of the compensation disclosure that may be required of
non-emerging
growth public companies under the Dodd-Frank Wall Street Reform and Consumer
Protection Act, (iii) comply with any requirement that may be adopted by the
PCAOB regarding mandatory audit firm rotation or a supplement to the auditor's
report providing additional information about the audit and the financial
statements (auditor discussion and analysis), and (iv) disclose certain
executive compensation related items such as the correlation between executive
compensation and performance and comparisons of the CEO's compensation to median
employee compensation. These exemptions will apply for a period of five years
following the completion of the IPO or until we are no longer an "emerging
growth company," whichever is earlier.
Critical Accounting Policies
Management's discussion and analysis of our results of operations and liquidity
and capital resources are based on our unaudited condensed financial
information. We describe our significant accounting policies in Note
3-Significant Accounting Policies, of the Notes to Financial Statements included
in this Quarterly Report on Form
10-Q.
Our unaudited condensed financial statements have been prepared in accordance
with U.S. GAAP. Certain of our accounting policies require that management apply
significant judgments in defining the appropriate assumptions integral to
financial estimates. On an ongoing basis, management reviews the accounting
policies, assumptions, estimates and judgments to ensure that our financial
statements are presented fairly and in accordance with U.S. GAAP. Judgments are
based on historical experience, terms of existing contracts, industry trends and
information available from outside sources, as appropriate. However, by their
nature, judgments are subject to an inherent degree of uncertainty, and,
therefore, actual results could differ from our estimates.
We have identified the following as our critical accounting policies:
Common Stock Subject to Possible Redemption
The Company accounts for its common stock subject to possible redemption in
accordance with the guidance in ASC Topic 480, "Distinguishing Liabilities from
Equity." Common stock subject to mandatory redemption (if any) is classified as
a liability instrument and is measured at fair value. Conditionally redeemable
common stock (including common stock that feature redemption rights that are
either within the control of the holder or subject to redemption upon the
occurrence of uncertain events not solely within the Company's control) is
classified as temporary equity. At all other times, common stock is classified
as stockholders' equity. The Company's common stock feature certain redemption
rights that is considered to be outside of the Company's control and subject to
the occurrence of uncertain future events. Accordingly, common stock subject to
possible redemption is presented at redemption value as temporary equity,
outside of the stockholders' equity section of the Company's balance sheets.

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Net Income (Loss) Per Share of Common Stock
Net income (loss) per share of common stock is computed by dividing net income
(loss) by the weighted average number of common share outstanding for each of
the periods. The warrants are exercisable to purchase 21,070,000 shares of
common stock in the aggregate.
Item
 3. Quantitative and Qualitative Disclosures about Market Risk
.
All activity from October 15, 2020 (date of inception) through September 30,
2021 relates to our formation, the preparation for our IPO and the search for
targets for our initial Business Combination. We did not have any financial
instruments that were exposed to market risks on September 30, 2021.
Item 4. Controls and Procedures.
Disclosure controls and procedures are controls and other procedures that are
designed to ensure that information required to be disclosed in our reports
filed or submitted under Securities Exchange Act of 1934, as amended (the
"Exchange Act") is recorded, processed, summarized and reported within the time
periods specified in the SEC's rules and forms. Disclosure controls and
procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed in our reports filed or
submitted under the Exchange Act is accumulated and communicated to our
management, including our Chief Executive Officer and Chief Financial Officer,
to allow timely decisions regarding required disclosure.
Evaluation of Disclosure Controls and Procedures
As required by Rules
13a-15
and
15d-15
under the Exchange Act, our Chief Executive Officer and Chief Financial Officer
carried out an evaluation of the effectiveness of the design and operation of
our disclosure controls and procedures. Based upon their evaluation, our Chief
Executive Officer and Chief Financial Officer concluded that our disclosure
controls and procedures were not effective as of March 31, 2021, June 30, 2021
or September 30, 2021 (the "Affected Periods"), due to the material weakness in
accounting for complex financial instruments. In light of this material
weakness, we performed additional analysis as deemed necessary to ensure that
our unaudited interim financial statements were prepared in accordance with U.S.
generally accepted accounting principles.
It is noted that the
non-cash
adjustments to the financial statements do not impact the amounts previously
reported for our cash and cash equivalents or total assets. In light of this
material weakness, we performed additional analysis as deemed necessary to
ensure that our unaudited interim financial statements were prepared in
accordance with U.S. generally accepted accounting principles.
Changes in Internal Control over Financial Reporting
In light of the material weakness described above, we have enhanced our
processes to identify and appropriately apply applicable accounting requirements
to better evaluate and understand the nuances of the complex accounting
standards that apply to our financial statements. Our plans at this time include
providing enhanced access to accounting literature, research materials and
documents and increased communication among our personnel and third-party
professionals with whom we consult regarding complex accounting applications.
The elements of our remediation plan can only be accomplished over time, and we
can offer no assurance that these initiatives will ultimately have the intended
effects. Except as set forth above, there was no change in our internal control
over financial reporting that occurred during the Affected Periods that has
materially affected, or is reasonably likely to materially affect, our internal
control over financial reporting.

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