Allied Gaming & Entertainment (AGAE) - 2019 Q2 - Quarterly Report

Financial Performance - For the three months ended June 30, 2019, the company reported a net income of $338,704, with operating expenses of $279,455 and other income from the Trust Account of $818,035 [125]. - The company had a net income of $671,115 for the six months ended June 30, 2019, with operating expenses totaling $576,533 and other income from the Trust Account of $1,634,103 [127]. - The company has a provision for income taxes of $199,876 for the three months ended June 30, 2019 [125]. Liquidity and Capital Structure - As of June 30, 2019, the company had negative working capital of approximately $40,195, raising doubts about its ability to continue as a going concern [131]. - The company has liquidity needs satisfied through various sources, including approximately $518,000 from the sale of units and $875,000 from notes payable to the sponsor [129]. - As of June 30, 2019, the Sponsor has loaned the Company $750,000 in convertible promissory notes, which are payable upon the consummation of a Business Combination [137]. - An additional loan of $30,000 was provided by the Sponsor on July 10, 2019, to supplement the Trust Account for non-redeeming shareholders [138]. Business Combination and Acquisitions - The company plans to acquire Allied Esports and WPT, with a total consideration of 11,602,754 shares of common stock and 3,800,003 warrants to purchase shares [117]. - The business combination agreement was amended to reduce the debt repayment to Ourgame from $35 million to $10 million, with a remaining balance of $23.8 million to be repaid through cash and stock [119]. Public Company Status - The company expects to incur increased expenses due to being a public company, including legal and financial reporting costs [124]. - The company has not generated any revenues to date and will not do so until the completion of its initial business combination [124]. Equity and Earnings Per Share - Common stock subject to possible redemption is classified as temporary equity and presented at redemption value on the balance sheet as of June 30, 2019 [141]. - The Company applies the two-class method for calculating earnings per share, excluding common stock subject to possible redemption from the basic net loss per common share calculation [142]. Risk Management - As of June 30, 2019, the Company had no off-balance sheet arrangements and was not subject to material market or interest rate risk [143]. - Funds in the Trust Account are invested in U.S. government treasury bills, notes, or bonds with maturities of 180 days or less, minimizing exposure to interest rate risk [143]. Sponsor Arrangements - The Company pays the Sponsor a monthly fee of $10,000 for general and administrative services, with no cap on reimbursement for out-of-pocket expenses incurred on behalf of the Company [139].