Business Combination - The proposed business combination with Lottery.com involves a total consideration of approximately $444 million, calculated based on 40,000,000 shares of common stock at $11.00 per share [139]. - Upon closing, Lottery.com shareholders may receive up to 6,000,000 additional shares based on performance milestones related to the stock price [139]. - The business combination with Lottery.com requires stockholder approval and the effectiveness of a registration statement with the SEC [140]. - The company has extended the deadline for completing a business combination multiple times, with the latest extension to September 1, 2021 [146]. Financial Performance - As of March 31, 2021, the company reported a net income of $200,913, driven by a gain on the change in fair value of derivative liabilities of $853,000 and interest income of $933 [149]. - Cash used in operating activities for the three months ended March 31, 2021, was $474,001, with net income affected by various factors including a gain on derivative liabilities [152]. - The company has not generated any operating revenues to date and only incurs expenses related to being a public company and due diligence for the proposed acquisition [148]. - The company applies the two-class method in calculating earnings per share, with net income (loss) per common share calculated based on interest income earned on the Trust Account [172]. Cash and Investments - The company had marketable securities held in the Trust Account amounting to $63,366,019, including approximately $1,497,000 of interest income [151]. - As of March 31, 2021, the company had cash of $114,036 held outside the Trust Account, intended for identifying and evaluating target businesses [155]. - The company intends to use substantially all funds in the Trust Account for acquiring a target business and related expenses [154]. - The company has invested the net proceeds from the Initial Public Offering in U.S. government treasury bills or money market funds, minimizing exposure to interest rate risk [175]. Capital Needs - The company may need to raise additional capital through loans or investments from initial stockholders, officers, or directors to meet working capital needs [162]. - Up to $200,000 of loans may be convertible into Private Units at a price of $10.00 per unit at the lender's option [161]. Fees and Obligations - The underwriter is entitled to a deferred fee of 2.5% of the gross proceeds of the Initial Public Offering, amounting to $5,031,250, payable upon the closing of a Business Combination [165]. - The company has no long-term debt or capital lease obligations, with a monthly fee of $7,500 payable to VK Consulting, Inc. for services [164]. - Common stock subject to possible redemption is classified as temporary equity and presented at redemption value [171]. - The company does not have any off-balance sheet arrangements as of March 31, 2021 [163]. Accounting and Management - Management does not believe that recently issued accounting standards will materially affect the financial statements for the periods ended March 31, 2021 [173].
Lottery(LTRY) - 2021 Q1 - Quarterly Report