4. Rights Offering and Formation of Black Ridge Acquisition Corp.

6 Months Ended

Jun. 30, 2017

Rights Offering And Formation Of Black Ridge Acquisition Corp.

Rights Offering and Formation of Black Ridge Acquisition Corp.

As further discussed in Note 19 – Subsequent Events, the Company has filed a rights offering to raise capital with the proceeds primarily used to sponsor a special purpose acquisition company (“SPAC”). The Company formed a subsidiary, Black Ridge Acquisition Corp. (“BRAC”), on May 9, 2017 with the purpose of becoming the SPAC which would conduct an initial public offering later in 2017.

The Company has incurred costs through June 30, 2017, which have been classified on the balance sheet as deferred offering costs. Deferred offering costs consist of costs associated with equity offerings of BROG and its subsidiary BRAC. These costs will be reclassified to additional paid-in capital upon a successful offering or be charged to general and administrative expense if the offerings are unsuccessful. Prepaid offering costs consist of the following:

	June 30,		December 31,
	2017		2016
Offering costs associated with BROG’s rights offering	$	49,033	$	–
Offering costs associated with BRAC’s initial public offering		118,613		–
Total prepaid offering costs	$	167,646	$	–