Adit EdTech Acquisition Corp. *

Adit EdTech Acquisition Corp. *

Dec 23, 2020 by Kristi Marvin

PROPOSED BUSINESS COMBINATION: GRIID Infrastructure Inc.

ENTERPRISE VALUE: $3.3 billion
ANTICIPATED SYMBOL: GRDI

Adit EdTech Acquisition Corp. proposes to combine with GRIID Infrastructure Inc., a vertically integrated, bitcoin self-mining company.

GRIID, an American infrastructure company, is a vertically integrated bitcoin self-mining company that owns and operates a growing portfolio of bitcoin mining facilities across the United States. Founded in 2018 and headquartered in Cincinnati, Ohio, GRIID has secured one of the largest and lowest-cost power pipelines in the industry with a focus on carbon-free generation partners. With its unique vertically integrated business model and power pipeline, GRIID is leading the global effort to support the Bitcoin network and carbon-free energy markets.

GRIID management reports that it has over 1,300 MW of power (under agreement, MOU or LOI), of which 734 MW will be operational by 2023, with a breakeven bitcoin production cost materially below its peers and a cost of scaled bitcoin production of under $6,225 per BTC.


EXTENSION – 7/13/23 – LINK

  • The SPAC approved the extension from July 14, 2023 to January 14, 2024.
    • 467,396 shares were redeemed for $10.58 per share.
    • $60K per 3-month extension will be deposited into the trust account.

EXTENSION – 4/7/23 – LINK

  • The SPAC approved its auto extension from April 14, 2023 to May 14, 2023
    • An additional $148,045.32 (representing $0.06 per public share) will be deposited into the trust account
    • This is the fourth of six available one-month auto extensions

EXTENSION – 12/27/22 – LINK

  • The SPAC confirmed the extension from January 14, 2023 to July 13, 2023
    • 25,132,578 shares were redeemed at the meeting.

SUBSEQUENT EVENT – 12/19/22 – LINK

  • If the Extension Proposal is approved, the Company plans to deposit up to six monthly payments from its working capital account, on a month-to-month basis, into in the Company’s trust account established in connection with its initial public offering the lesser of:
    • (x) $150,000 or
    • (y) $0.06 per share multiplied by the number of public shares of the Company that are not redeemed in connection with the Special Meeting.
    • Each Contribution is expected to be made on the fifteenth day of each month of the extension, commencing on January 15, 2023.
  • If the Company extends the time to complete a business combination to July 14, 2023, the aggregate amount of contributions expected to be made by the Company would consist of up to the lesser of:
    • (i) $900,000 or
    • (ii) $0.36 per public share that is not redeemed in connection with the Special Meeting. In the event the Company’s working capital account is depleted, Adit EdTech Sponsor LLC or one of more of its affiliates, members or third party designees, or Griid Holdco LLC (“GRIID”) or one of more of its affiliates, members or third party designees intends to lend the Company the remaining Contribution, which may be in the form of a non-interest bearing, unsecured promissory note up to the amount of the maximum aggregate Contributions.

SUBSEQUENT EVENT – 12/7/22 – LINK

  • On December 6, 2022, the Company and EarlyBird entered into an amendment to the Underwriting Agreement.
  • Among other things, the Amendment reduces the amount of the deferred underwriting commission payable to EarlyBird to $6,762,000, which amount, together with reimbursement of EarlyBird’s legal expenses in an amount not to exceed $150,000 (the “Expense Reimbursement”), will be payable as follows:
    • (i) upon the closing of the Company’s initial business combination, in an amount equal to the lesser of:
      • (A) $3,381,000 plus the Expense Reimbursement and
      • (B) the balance of the Company’s trust account established in connection with its initial public offering, after all amounts payable in connection with stockholder redemptions have been so paid and
    • (ii) the remainder pursuant to a convertible promissory note (the “Note”) to be made by the surviving company of the Company’s initial business combination (the “Maker”) upon the consummation of the Company’s initial business combination.

SUBSEQUENT EVENT – 10/19/22 – LINK

  • The SPAC reduced the share consideration from 308,100,000 shares to 58,500,000 shares.
  • The Outside Date was extended until January 14, 2023
  • In the event of a termination, the Amendment provides that:
    • (i) the termination of the Merger Agreement by ADEX if
      • (A) GRIID’s representations and warranties are untrue or GRIID fails to perform any covenant or agreement such that the respective condition to Closing is not satisfied
      • (B) there is an order by a government entity permanently enjoining the Merger
      • (C) GRIID’s members do not approve of the Merger
      • (D) GRIID’s board of managers (or similar body) approves any plan of liquidation, winding up or reorganization for GRIID or any of its subsidiaries or
      • (E) Blockchain provides notice to GRIID or any of GRIID’s subsidiaries of the acceleration of outstanding debt under the Credit Agreement,
    • (ii) the termination of the Merger Agreement by GRIID if there is an order by a government entity permanently enjoining the Merger or
    • (iii) any rejection of the Merger Agreement by GRIID or any of its subsidiaries in bankruptcy, insolvency, reorganizational or similar proceedings, GRIID will pay to ADEX a non-refundable termination fee of $50,000,000.
  • On October 9, 2022, the Company and Blockchain entered into a Fourth Amended and Restated Credit Agreement (the “New Credit Agreement”).
    • The New Credit Agreement provides for a restructured senior secured term loan (the “Loan”) in the amount of $57,433,360.50, which amount represents the outstanding obligations under the Prior Credit Agreement after giving effect to the New Credit Agreement.
    • Blockchain does not have any commitment to extend additional credit to GRIID under the Prior Credit Agreement or the New Credit Agreement.
    • In connection with the execution of the New Credit Agreement, GRIID Blockchain and the Company entered into a settlement and release agreement pursuant to which Blockchain waived any potential defaults under the Prior Credit Agreement and the parties agreed to release each other from any claims related to the Prior Credit Agreement.
  • In addition, the Second Amendment removes certain negative covenants limiting ADEX’s conduct of its business during the period between the signing of the Merger Agreement and the Closing, and permits ADEX to pursue an alternative business combination transaction during the pre-closing period.

SUBSEQUENT EVENT – 9/12/22 – LINK

  • On September 9, 2022, Adit EdTech Acquisition Corp. and Griid Infrastructure LLC entered into a share purchase agreement with GEM Global Yield LLC SCS (the “Purchaser”) and GEM Yield Bahamas Limited (“GYBL”) relating to a share subscription facility.
  • Pursuant to the Agreement, following the consummation of the Company’s merger with Griid Holdco LLC, the Company shall have the right, but not the obligation, from time to time at its option, to issue and sell to the Purchaser up to $200.0 million of the Company’s shares of common stock.
  • The Company will have the right, but not the obligation, from time to time at its sole discretion during the 36-month period from and after the first day on which the Shares are publicly listed on a securities exchange, to direct the Purchaser to purchase up to a specified maximum amount of Shares.
  • The purchase price of the Shares that the Company elects to sell to the Purchaser will be 92% of the average daily closing price of the Shares during a 30-trading day period commencing with the first trading day designated in the notice delivered to the Purchaser.
  • In connection with the execution of the Agreement, GRIID agreed to pay to the Purchaser in installments in connection with placements of Shares under the Agreement a $4.0 million commitment fee payable in Shares or cash, as consideration for the Purchaser’s irrevocable commitment to purchase the Shares.
  • Also, GRIID will be obligated to issue to the Purchaser a warrant expiring on the third anniversary of GRIID’s public listing date, to purchase 2% of the total equity interests (on a fully diluted basis) outstanding immediately after the completion of the Merger, at an exercise price per Share equal to the lesser of:
    • (i) the closing bid price of the Company’s Shares as reported by the New York Stock Exchange on September 9, 2022 and
    • (ii) 90% of the closing price of the Shares on the public listing date.
  • Additionally, GRIID would be obligated to pay a private transaction fee of 1% of the total consideration paid in a private business combination transaction with a counterparty that was introduced to GRIID by the Purchaser or an affiliate of the Purchaser in the event that GRIID consummates such a transaction in lieu of the Merger or any other business combination transaction the result of which is GRIID continuing as a publicly listed company.
  • GRIID has the right to terminate the Agreement at any time, upon 90 trading days’ prior written notice.
  • In the event GRIID terminates the Agreement at its option prior to any public listing (including as a result of the Merger) and GRIID completes a public listing within the two-year period following such termination, GRIID will be obligated to issue the Warrant to the Purchaser.

SUBSEQUENT EVENT – 8/26/22 – LINK

  • On August 26, 2022, Adit EdTech Acquisition Corp. and Griid Holdco LLC entered into a waiver agreement pursuant to which each of the parties agreed to waive, until October 1, 2022, its right to terminate the Agreement and Plan of Merger based on the transactions contemplated thereby not having been consummated on or prior to August 27, 2022.

TRANSACTION

  • The proposed transaction values the combined company at an implied fully diluted pro forma enterprise value of approximately $3.3 billion, assuming no redemptions of shares of Adit EdTech by its public stockholders and approximately $125 million of debt outstanding as of the closing (which debt is drawn down under GRIID’s $525 million secured credit facility with Blockchain.com).
  • The transaction is expected to provide approximately $246 million of cash at closing from Adit EdTech’s trust account, after payment of Adit EdTech’s transaction expenses and without giving effect to any redemptions by Adit EdTech public stockholders.
  • Assuming no redemptions, current GRIID equity holders will own approximately 90%, Adit EdTech public stockholders will own approximately 8% and Adit EdTech’s sponsor will own approximately 2% of the outstanding shares of voting stock of the combined company at closing, respectively.
  • The proposed transaction is expected to close in the first quarter of 2022, subject to customary closing conditions, including the receipt of regulatory approvals and approval of Adit EdTech’s stockholders.

NOTABLE CONDITIONS TO CLOSING

  • After giving effect to the transactions contemplated by the Merger Agreement, ADEX has net tangible assets of at least $5,000,001 upon consummation of the Merger

NOTABLE CONDITIONS TO TERMINATION

  • SUBSEQUENT EVENT – LINK
    • In the event of a termination, the Amendment provides that:
    • (i) the termination of the Merger Agreement by ADEX if
      • (A) GRIID’s representations and warranties are untrue or GRIID fails to perform any covenant or agreement such that the respective condition to Closing is not satisfied
      • (B) there is an order by a government entity permanently enjoining the Merger
      • (C) GRIID’s members do not approve of the Merger
      • (D) GRIID’s board of managers (or similar body) approves any plan of liquidation, winding up or reorganization for GRIID or any of its subsidiaries or
      • (E) Blockchain provides notice to GRIID or any of GRIID’s subsidiaries of the acceleration of outstanding debt under the Credit Agreement,
    • (ii) the termination of the Merger Agreement by GRIID if there is an order by a government entity permanently enjoining the Merger or
    • (iii) any rejection of the Merger Agreement by GRIID or any of its subsidiaries in bankruptcy, insolvency, reorganizational or similar proceedings, GRIID will pay to ADEX a non-refundable termination fee of $50,000,000.
    • The Outside Date was extended until January 14, 2023
  • Subsequent Event – On August 26, 2022, Adit EdTech Acquisition Corp. and Griid Holdco LLC entered into a waiver agreement pursuant to which each of the parties agreed to waive, until October 1, 2022, its right to terminate the Agreement and Plan of Merger based on the transactions contemplated thereby not having been consummated on or prior to August 27, 2022.
  • By ADEX or Griid, if (a) the Closing has not occurred by May 29, 2022 (subject to extension for 60 days or 90 days in certain circumstances)
  • Any governmental entity has issued a final, non-appealable order or taken any other action permanently enjoining, restraining or otherwise prohibiting the transactions contemplated by the Merger Agreement

ADVISORS

  • Wells Fargo Securities LLC, acted as the financial advisor to Adit EdTech for capital markets and M&A advisory services.
  • Lincoln International LLC acted as financial advisor to Adit EdTech to provide a fairness opinion.
  • Arthur D. Little LLC acted as advisor to Adit EdTech for technical and commercial due diligence.
  • Edelstein & Company, LLP acted as advisor to Adit EdTech for accounting and tax due diligence and quality of earnings assessment.
  • Evolve Security, LLC acted as cybersecurity advisor to Adit EdTech for external, internal and wireless security testing and assessment.
  • Covington & Burling LLP acted as legal advisor to Adit EdTech.
  • Troutman Pepper Hamilton Sanders LLP acted as legal advisor to GRIID.

MANAGEMENT & BOARD


Executive Officers

David L. Shrier, 47
Director, President and Chief Executive Officer

Mr. Shrier is a globally recognized education innovator and technology futurist who is actively sought after to advise on strategic growth. Mr. Shrier is currently the co-founder and Managing Director of Esme Learning Solutions, an artificial intelligence-enabled adult digital education provider that partners with top universities to transform student outcomes, a role he has held since forming the company with Ms. Elizabeth Porter, our Chief Technology Officer and Secretary, in February 2019. Mr. Shrier also serves as a board member of Esme Learning. Adit is a significant investor in Esme Learning. Mr. Shrier is also co-founder of Riff Analytics, an artificial intelligence collaboration software company (where Adit is also an investor), and served as its chairman of the board of directors from its inception in June 2017 until July 2020. He has been a non-executive director of Copper Technologies (UK) Ltd since November 2020. Mr. Shrier holds a part-time appointment as a Professor of Practice in the Department of Management & Innovation at Imperial College London Business School which he began in December 2020. Since August 2017, Mr. Shrier has had a part-time appointment as Associate Fellow with Saïd Business School, University of Oxford. Between February 2013 and November 2020, Mr. Shrier held a variety of instructional and administrative roles at the Massachusetts Institute of Technology, including New Ventures Officer, Managing Director, Connection Science & Engineering and most recently, Lecturer, Media Arts & Sciences. His classes at MIT and Oxford, developed in collaboration with Professor Alex ‘Sandy’ Pentland, have engaged over 15,000 innovators in more than 150 countries on topics such as fintech, blockchain, and data analytics through groundbreaking online classes. Previously, Mr. Shrier has held a variety of management roles in privately funded companies including, most recently, Distilled Identity, where he served as Chief Executive Officer from June 2017 to May 2020. Mr. Shrier’s consulting firm, Visionary Future LLC, has been operating together with its predecessor Far Horizons Management since 1999 to advise corporate, government, and nongovernmental clients on strategic growth opportunities and technology innovation. Throughout his career, Mr. Shrier has worked in and with growth companies, Fortune 1,000 firms, and academia, including board and advisory positions and professional roles within large public companies (General Electric, Dun & Bradstreet), private companies (Millennium Advisors, Kyriba), partnerships (Ernst & Young, Lazard) and governments and government-related entities (Dubai, Commonwealth Secretariat), in addition to developing new revenue-generating growth opportunities for leading academic institutions (MIT, University of Oxford). Mr. Shrier holds a number of unpaid advisory roles with various government and government affiliated entities, and one private nonprofit university. Since September 2017, Mr. Shrier has served as a member of FINRA’s fintech advisory Committee. Mr. Shrier is a senior advisor to the UK government’s Revenue & Customs department (HMRC) since December 2019 as well as UK Department for International Trade’s fintech steering board since March 2018. Since October 2020, Mr. Shrier has also been an advisor to the European Parliament’s Science & Technology Committee, which is chaired by Eva Kaili. Mr. Shrier is also on the advisory board for WorldQuant University, which offers a totally free online master’s degree in financial engineering, where he has served since April 2016.


John J. D’Agostino, 45
Chief Financial Officer and Treasurer

Mr. D’Agostino has 15 years of experience in financial services, having served on more than 10 boards of directors of asset management firms as well as on audit committees. Mr. D’Agostino has served as a Managing Director at DMS Governance since May 2015, where he provides guidance and independent oversight to ensure adherence to governance, regulatory and compliance requirements. Mr. D’Agostino has served as a director in a wide range of industries, with notable expertise in technology-driven companies and complex investment vehicles. Since May 2017, Mr. D’Agostino has served as a director of Midpoint Holdings Ltd., a UK-headquartered payments institution specializing in cross-border payments and foreign exchange. Mr. D’Agostino has significant experience in corporate governance and regulation and regularly advises U.S. and international government regulatory agencies. Mr. D’Agostino began his career as Vice President and Head of Strategy of the New York Mercantile Exchange, where he led the effort to develop the first Middle East energy derivatives exchange in partnership with the Dubai Government. Mr. D’Agostino graduated from the Harvard Business School, where he received his Master’s degree in Business Administration. Mr. D’Agostino also holds Series 7 (General Securities Representative), 24 (General Securities Principal) and 33 (Financial Instruments) licenses issued by FINRA.


Elizabeth B. Porter, 50
Chief Technology Officer and Secretary

Throughout her career, Ms. Porter has led multiple product and engineering teams to deliver high value, customer-focused educational technology products in product design, business strategy and operational roles. Ms. Porter has worked with clients in technology, education, and publishing to develop product strategy and vision, provide technical direction and architecture, and conceive end-to-end solutions that meet business needs. Ms. Porter served as Vice President of Product of EdX, a non-profit massive open online course (MOOC) provider founded by MIT and Harvard University, from May 2014 to December 2015. Ms. Porter held executive roles at Pearson Education, a company that provides education publishing and assessment services to schools, corporations and students with more than 22,500 employees operating in 70 countries (including former Vice President with special focus on higher education online offering) from January 2010 to April 2014, as well as directing product development teams at Mathsoft Inc. (subsequently acquired by PTC) from April 2006 until August 2008, Extension Engine (from May 2016 to December 2018), an edtech consultancy that specializes in the development of highly customized online courses and programs, and University of Texas at Austin (from May 2018 to December 2019). Ms. Porter has been the managing partner of Geeklight, LLC, an edtech consulting business, since May 2016. She has also served as Chief Executive Officer, co-founder and board member of Riff Analytics, a conversation analytics company that works primarily with educational institutions and providers delivering platform software and custom data analytics reporting, since September 2017. Ms. Porter has also headed the course development and delivery teams at Esme Learning in her capacity as Managing Director, board member and co-founder since February 2019. Esme Learning is an online learning solutions development company that works with universities and corporations to create and deliver high-end, high-touch online courses for working professionals. Ms. Porter’s engagements in higher education include roles as researcher and lecturer at the MIT Media Lab since September 2016 and Boston University Questrom School of Business since July 2016. She also serves as board member, treasurer and trustee of Oakwood School, a non-profit private school, since June 2015. Ms. Porter graduated from Cornell University, where she received her B.A. in English Literature and M.A. in Mathematics Teacher Education.


Board of Directors

Eric L. Munson, 59
Non-executive Chairman

In 2014, Mr. Munson co-founded Adit. Mr. Munson has over 35 years of principal investment experience that spanned alternative asset management, corporate finance, mutual funds, private equity and venture capital, having built, developed and managed 24 different funds, invested in 48 privately-held companies, and executed hundreds of private transactions. Previously, Mr. Munson worked at Hambrecht & Quist, Morgan Stanley, Franklin/Templeton, Seneca, Wentworth Hauser & Violich, Acorn Partners, among other financial institutions.


Jacob Cohen, 47
Director 

Since June 2012, Mr. Cohen has served as Senior Associate Dean at MIT Sloan for Degree Programs and Senior Lecturer in Accounting & Law. Mr. Cohen oversees the undergraduate and the portfolio of master’s programs in addition to all student services from admissions to career development. From 2008 to 2011, Mr. Cohen was the Dean of the MBA Program at INSEAD, directing strategy and operations for campuses in France, Singapore, and Abu Dhabi. Under his leadership, INSEAD expanded its degree programs and received its highest rankings ever among business school MBA programs. Mr. Cohen also served as a member of the Deans’ Leadership Team, overseeing the academic experience across all programs. In 2012, Mr. Cohen spent his post-deanship sabbatical teaching financial management as a Judge Fellow at Cambridge University and as a Research Fellow studying corporate social responsibility reporting at Oxford University’s Smith School of Enterprise and the Environment. Before joining INSEAD in 2003, Mr. Cohen was a Senior Teaching Fellow at Harvard Business School in the Accounting & Management Group. Throughout his career, Mr. Cohen has developed and taught in many online programs utilizing various digital platforms. Prior to his academic career, Mr. Cohen worked as an accountant at KPMG LLP in Philadelphia, and as a mergers & acquisitions consultant for PricewaterhouseCoopers LLP in New York City. As an academic, Mr. Cohen has consulted for a number of organizations, including BCG, Bain, Blackstone, ArcelorMittal, Schlumberger, Bel, Accenture, and BMO Capital. Mr. Cohen earned a J.D. and a Master of Science in Accounting from Syracuse University in 1998, and a Bachelor of Science in Accounting from Lehigh University in 1995.


Sharmila Kassam, 46
Director

Ms. Kassam is a proven business professional and institutional investor. In September 2019, Ms. Kassam founded Aligned Capital Investing, a consulting firm focused on global institutional investors and investment managers. Ms. Kassam has also served as Advisory Board Member at Sweetwater Private Equity since August 2020, as Hedge Fund Board Member at Fundamental Credit Opportunities since November 2019, as a policy advisor and instructor for Institutional Limited Partners Association (ILPA) since July 2015 and as Senior Fellow at Milken Institute Center for Financial Markets since September 2019. Ms. Kassam was formerly the deputy Chief Investment Officer at the Employees Retirement System of Texas (ERS) where she worked for over a decade from January 2008 until May 2019. As a member of ERS’s investments division, she co-managed with the Chief Investment Officer investments in all asset classes, an internal investment team and external managers and pursued new investment structures. Ms. Kassam was a voting member of multiple investment committees for the $29 billion ERS Retirement Trust Fund and actively worked with the $2.9 billion Texa$aver 401(k) / 457 Program, a voluntary defined contribution plan. Prior to her role as deputy Chief Investment Officer at the ERS, she served as an assistant general counsel at ERS for five years during the initial stages of its private equity program, leading legal negotiations with multiple fund sponsors and later working closely with the private real estate and hedge fund teams as they developed their programs. Ms. Kassam also spent time promoting best practices in the industry through Institutional Limited Partners Association (ILPA), Alignment of Interest (AOI), Chartered Alternative Investment Analyst Association (CAIA), and the CFA Institute. Ms. Kassam was also previously an associate at the law firm of Wilson, Sonsini, Goodrich and Rosati, where she focused on securities, mergers and acquisitions and corporate governance. Ms. Kassam also worked at multiple start-ups and technology companies in financial and management roles prior to entering the legal profession. Ms. Kassam began her career as an audit associate at Coopers & Lybrand (now PriceWaterhouseCoopers). Ms. Kassam is a licensed certified public accountant and also licensed to practice law in California and Texas. Ms. Kassam graduated from the University of Texas at Austin, where she received a Bachelor of Business Administration in accounting, with honors, and a J.D. from the University of Texas at Austin.


Sheldon Levy, 71
Director

Mr. Levy is a higher education leader and visionary with a passion for innovation, entrepreneurship and the digital economy. Mr. Levy has been an instrumental figure in Canada’s innovation ecosystem in the last decade, spearheading the creation of such organizations as Ryerson’s Digital Media Zone (DMZ), the Brookfield Institute for Innovation + Entrepreneurship, and Scale Up Ventures, Inc. As President and Vice Chancellor of Ryerson University from 2005 to 2015, Mr. Levy drove the creation of the Digital Media Zone (DMZ), an early-stage incubator for student entrepreneurs which has since become an international success. Mr. Levy is also a founder and advisor to Ryerson Futures Inc., an accelerator that has exported the DMZ concept to such locations as Calgary and Mumbai. From 2015 to 2017, Mr. Levy served as Ontario’s Deputy Minister of Advanced Education and Skills Development, where he helped prioritize innovation and entrepreneurship throughout Ontario’s postsecondary education and training system. From 2017 to December 2019, Mr. Levy was the Chief Executive Officer of NEXT Canada, an organization that provides mentorship, education, networks and funding to Canada’s most promising entrepreneurs. From December 2018 to June 2020, Mr. Levy acted as Special Advisor to Canada’s Minister of Small Business and Export Promotion, Mary Ng, on the issue of scaling up small and medium-sized businesses. In September 2019, Mr. Levy joined the Board of Directors of Baycrest Health Sciences. Mr. Levy previously served as President of Oakville’s Sheridan College from 1997 to 2001, overseeing the growth of its renowned animation department during the early years of computer-generated imaging. Mr. Levey’s other prior positions have included Vice President, Finance and Strategy, University of Ontario Institute of Technology; Vice President of Governmental and Institutional Relations, University of Toronto; and Vice President Institutional Affairs, York University. Mr. Levy graduated from York University, where he received his MSc. He was also awarded honorary doctorates from York University, Lakehead University and Mount Allison University.