0001213900-20-011276.txt : 20200507 0001213900-20-011276.hdr.sgml : 20200507 20200507160615 ACCESSION NUMBER: 0001213900-20-011276 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 43 CONFORMED PERIOD OF REPORT: 20200331 FILED AS OF DATE: 20200507 DATE AS OF CHANGE: 20200507 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Leisure Acquisition Corp. CENTRAL INDEX KEY: 0001716947 STANDARD INDUSTRIAL CLASSIFICATION: BLANK CHECKS [6770] IRS NUMBER: 822755287 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-38306 FILM NUMBER: 20856310 BUSINESS ADDRESS: STREET 1: 250 WEST 57TH ST. STREET 2: SUITE 415 CITY: NEW YORK STATE: NY ZIP: 10107 BUSINESS PHONE: (646) 565-6940 MAIL ADDRESS: STREET 1: 250 WEST 57TH ST. STREET 2: SUITE 415 CITY: NEW YORK STATE: NY ZIP: 10107 10-Q 1 f10q0320_leisureacq.htm QUARTERLY REPORT

 

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

☒      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2020

 

☐     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from                  to                   

 

Commission File No. 001-38306

 

LEISURE ACQUISITION CORP.
(Exact name of registrant as specified in its charter)

 

Delaware   82-2755287
(State or other jurisdiction of
incorporation or organization)
  (I.R.S. Employer
Identification No.)
     
250 West 57th Street, Suite 415
New York, New York
  10107
(Address of Principal Executive Offices)   (Zip Code)
     
(646) 565-6940
(Registrant’s telephone number, including area code)
 
N/A
(Former name, former address and former fiscal year, if changed since last report)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
Common Stock, par value $0.0001 per share   LACQ   The Nasdaq Stock Market LLC
Warrants to purchase one share of Common Stock   LACQW   The Nasdaq Stock Market LLC
Units, each consisting of one share of Common Stock and one-half of one Warrant   LACQU   The Nasdaq Stock Market LLC

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

☐   Large accelerated filer ☒   Accelerated filer
☐   Non-accelerated filer ☒   Smaller reporting company
  ☒   Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ☒ No ☐

 

As of May 7, 2020, there were 7,038,573 shares of the Company’s common stock, par value $0.0001, issued and outstanding.

 

 

 

 

 

 

LEISURE ACQUISITION CORP.

 

Quarterly Report on Form 10-Q

 

TABLE OF CONTENTS

 

    Page
     
PART 1 – FINANCIAL INFORMATION  
     
Item 1. Financial Statements 1
     
  Condensed Balance Sheets as of March 31, 2020 (unaudited) and December 31, 2019 1
     
  Condensed Statements of Operations for the Three Months Ended March 31, 2020 and 2019 (unaudited) 2
     
  Condensed Statements of Changes in Stockholders’ Equity for the Three Months Ended March 31, 2020 and 2019 (unaudited) 3
     
  Condensed Statements of Cash Flows for the Three Months Ended March 31, 2020 and 2019 (unaudited) 4
     
  Notes to Condensed Financial Statements (unaudited) 5
     
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 15
     
Item 3. Quantitative and Qualitative Disclosures about Market Risk 19
     
Item 4. Control and Procedures 19
     
PART II – OTHER INFORMATION  
     
Item 1. Legal Proceedings 20
     
Item 1A. Risk Factors 20
     
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 20
     
Item 3. Defaults Upon Senior Securities 20
     
Item 4. Mine Safety Disclosures 20
     
Item 5. Other Information 20
     
Item 6. Exhibits 21
     
SIGNATURES 22

 

i

 

 

PART 1 - FINANCIAL INFORMATION

 

Item 1. Financial Statements.

 

LEISURE ACQUISITION CORP.

CONDENSED BALANCE SHEETS

 

   March 31,   December 31, 
   2020   2019 
   (unaudited)     
ASSETS        
Current Assets        
Cash  $167,951   $1,061,151 
Prepaid expenses   42,375     
Prepaid income taxes   63,946    138,571 
Total Current Assets   274,272    1,199,722 
           
Cash and marketable securities held in Trust Account   61,327,451    195,312,177 
TOTAL ASSETS  $61,601,723   $196,511,899 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY          
Current Liabilities – Accounts payable and accrued expenses  $3,494,215   $2,771,045 
Total Current Liabilities   3,494,215    2,771,045 
           
Promissory note   566,268    566,268 
Convertible promissory notes – related parties   1,000,000     
Due to stockholders   40,000,000     
Deferred underwriting fee payable   7,000,000    7,000,000 
Total Liabilities   52,060,483    10,337,313 
           
Commitments          
           
Common stock subject to possible redemption, 433,788 and 17,501,073 shares at redemption value at March 31, 2020 and December 31, 2019, respectively   4,541,236    181,174,585 
           
Stockholders’ Equity          
Preferred stock, $0.0001 par value; 1,000,000 authorized; none issued and outstanding        
Common stock, $0.0001 par value; 100,000,000 shares authorized; 6,604,785 and 6,375,178 shares issued and outstanding (excluding 433,788 and 17,501,073 shares subject to possible redemption) at March 31, 2020 and December 31, 2019, respectively   660    638 
Additional paid-in capital   2,892,404    2,542,569 
Retained earnings   2,106,940    2,456,794 
Total Stockholders’ Equity   5,000,004    5,000,001 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY  $61,601,723   $196,511,899 

 

The accompanying notes are an integral part of the unaudited condensed financial statements.

 

1

 

 

LEISURE ACQUISITION CORP.

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

 

   Three Months Ended
March 31,
 
   2020   2019 
         
Operating costs  $915,183   $189,174 
Loss from operations   (915,183)   (189,174)
           
Other income:          
Interest income   639,954    1,179,970 
Unrealized loss on marketable securities held in Trust Account       (527)
Other income, net   639,954    1,179,443 
           
(Loss) income before provision for income taxes   (275,229)   990,269 
Provision for income taxes   (74,625)   (214,356)
Net (loss) income  $(349,854)  $775,913 
           
Weighted average shares outstanding, basic and diluted (1)   6,375,178    6,039,072 
           
Basic and diluted net loss per common share (2)  $(0.07)  $(0.04)

 

(1) Excludes an aggregate of 433,788 and 18,952,136 shares subject to possible redemption at March 31, 2020 and 2019, respectively.
(2) Net loss per common share - basic and diluted excludes income attributable to common stock subject to possible redemption of $109,662 and $1,026,960 for the three months ended March 31, 2020 and 2019, respectively (see Note 2).

 

The accompanying notes are an integral part of the unaudited condensed financial statements.

 

2

 

 

LEISURE ACQUISITION CORP.

CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(Unaudited)

 

THREE MONTHS ENDED MARCH 31, 2020

 

   Common Stock   Additional
Paid in
   Retained   Total Stockholders’ 
   Shares   Amount   Capital   Earnings   Equity 
Balance – January 1, 2020   6,375,178   $638   $2,542,569   $2,456,794   $5,000,001 
                          
Change in value of common stock subject to possible redemption   229,607    22    349,835        349,857 
                          
Net loss       —     —     (349,854)   (349,854)
                          
Balance – March 31, 2020 (unaudited)   6,604,785   $660   $2,892,404   $2,106,940   $5,000,004 

  

THREE MONTHS ENDED MARCH 31, 2019

 

   Common Stock   Additional
Paid in
   Retained   Total Stockholders’ 
   Shares   Amount   Capital   Earnings   Equity 
Balance – January 1, 2019   6,039,072   $604   $2,908,557   $2,090,840   $5,000,001 
                          
Change in value of common stock subject to possible redemption   8,792    1    (775,914)       (775,913)
                          
Net income               775,913    775,913 
                          
Balance – March 31, 2019 (unaudited)   6,047,864   $605   $2,132,643   $2,866,753   $5,000,001 

 

 

The accompanying notes are an integral part of the unaudited condensed financial statements.

 

3

 

 

LEISURE ACQUISITION CORP.

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

 

   Three Months Ended
March 31,
 
   2020   2019 
Cash Flows from Operating Activities:        
Net (loss) income  $(349,854)  $775,913 
Adjustments to reconcile net (loss) income to net cash used in operating activities:          
Interest earned on marketable securities held in Trust Account   (639,954)   (1,179,970)
Unrealized loss on marketable securities held in Trust Account       527 
Deferred tax (benefit) provision       (1,874)
Changes in operating assets and liabilities:          
Prepaid expenses   (42,375)   (17,500)
Prepaid income taxes   74,625    170,535 
Accounts payable and accrued expenses   723,170    (87,692)
Income taxes payable       45,695 
Net cash used in operating activities   (234,388)   (294,366)
           
Cash Flows from Investing Activities:          
Investment of cash in Trust Account   (1,698,862)    
Cash withdrawn from Trust Account for redemption of common stock   136,283,492     
Cash withdrawn from Trust Account for franchise taxes   40,050    151,204 
Net cash provided by investing activities   134,624,680    151,204 
           
Cash Flows from Financing Activities:          
Proceeds from convertible promissory notes – related parties   1,000,000     
Redemption of common stock   (136,283,492)    
Payment of offering costs       (8,640)
Net cash used in financing activities   (135,283,492)   (8,640)
           
Net Change in Cash   (893,200)   (151,802)
Cash – Beginning   1,061,151    1,658,398 
Cash – Ending  $167,951   $1,506,596 
           
Non-Cash investing and financing activities:          
Change in value of common stock subject to possible redemption  $(349,857)  $775,913 
Due to stockholders for redemption of common stock  $40,000,000   $ 

 

The accompanying notes are an integral part of the unaudited condensed financial statements.

 

4

 

 

LEISURE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2020

(Unaudited)

 

1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS 

 

Leisure Acquisition Corp. (the “Company”) is a blank check company incorporated in Delaware on September 11, 2017. The Company was formed for the purpose of acquiring, through a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, recapitalization, exchangeable share transaction or other similar business transaction, one or more operating businesses or assets that the Company has not yet identified (a “Business Combination”). 

 

At March 31, 2020, the Company had not yet commenced operations. All activity through March 31, 2020 relates to the Company’s formation, its initial public offering (“Initial Public Offering”), which is described below, identifying a target company for a Business Combination and activities in connection with the proposed acquisition of GTWY Holdings Limited, a Canadian corporation (“GTWY Holdings”) (see Note 6).

 

The registration statement for the Company’s Initial Public Offering was declared effective on December 1, 2017. On December 5, 2017, the Company consummated the Initial Public Offering of 20,000,000 units (“Units” and, with respect to the common stock included in the Units, the “Public Shares”), generating gross proceeds of $200,000,000, which is described in Note 3.

 

Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 6,825,000 warrants (the “Private Placement Warrants”) at a price of $1.00 per warrant in a private placement to Hydra LAC, LLC, an affiliate of Hydra Management, LLC (the “Hydra Sponsor”), MLCP GLL Funding LLC, an affiliate of Matthews Lane Capital Partners, LLC (the “Matthews Lane Sponsor,” and, together with the Hydra Sponsor, the “Sponsors”), HG Vora Special Opportunities Master Fund, Ltd. (“HG Vora”) and certain members of the Company’s management team, generating gross proceeds of $6,825,000, which is described in Note 4.

 

Following the closing of the Initial Public Offering on December 5, 2017, an amount of $200,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the Private Placement Warrants was placed in a trust account (the “Trust Account”) and invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 180 days or less or in any open-ended investment company that holds itself out as a money market fund selected by the Company meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the consummation of a Business Combination or (ii) the distribution of the Trust Account, as described below.

 

Transaction costs amounted to $11,548,735, consisting of $4,000,000 of underwriting fees, $7,000,000 of deferred underwriting fees and $548,735 of Initial Public Offering costs. In addition, at March 31, 2020, cash of $167,951 was held outside of the Trust Account and is available for working capital purposes.

 

The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. The Company’s initial Business Combination must be with one or more target businesses that together have a fair market value equal to at least 80% of the balance in the Trust Account (excluding deferred underwriting commissions and franchise and income taxes payable on the income earned on the Trust Account) at the time of the signing of an agreement to enter into a Business Combination. In addition, the Company’s Business Combination must be approved by HG Vora as a condition to the Contingent Forward Purchase Contract (as described in Note 6). The Company will only complete a Business Combination if the post-Business Combination company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act. There is no assurance that the Company will be able to successfully effect a Business Combination.

 

The Company will provide its stockholders with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The stockholders will be entitled to redeem their shares for a pro rata portion of the amount then on deposit in the Trust Account ($10.00 per share, plus any deposits made to the Trust Account in connection with extension payments and any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay franchise and income taxes). The per share amount to be distributed to stockholders who redeem their shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriters (see Note 7).

 

5

 

 

LEISURE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2020

(Unaudited)

 

The Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 upon consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the outstanding shares voted are voted in favor of the Business Combination. If a stockholder vote is not required by law and the Company does not decide to hold a stockholder vote for business or other legal reasons, the Company will, pursuant to its Second Amended and Restated Certificate of Incorporation, conduct the redemptions pursuant to the tender offer rules of the Securities and Exchange Commission (“SEC”), and file tender offer documents with the SEC prior to completing a Business Combination. If, however, a stockholder approval of the transaction is required by law, or the Company decides to obtain stockholder approval for business or other legal reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks stockholder approval in connection with a Business Combination, the Sponsors and the Company’s other initial stockholders (collectively, the “Initial Stockholders”) have agreed to vote their Founder Shares (as defined in Note 5) and any Public Shares held by them in favor of approving a Business Combination. Additionally, each public stockholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction.

 

Notwithstanding the foregoing, the Company’s Second Amended and Restated Certificate of Incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to an aggregate of 20% or more of the common stock sold in the Initial Public Offering.

 

The Company has until June 30, 2020 to consummate a Business Combination or such later date to the extent its stockholders approve an extension (the “Combination Period”). If the Company is unable to complete a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no more than ten business days thereafter, redeem 100% of the outstanding Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned and not previously released to pay franchise and income taxes (less up to $75,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining stockholders and the Company’s board of directors, proceed to commence a voluntary liquidation and thereby a formal dissolution of the Company, subject in each case to its obligations to provide for claims of creditors and the requirements of applicable law. The underwriters have agreed to waive their rights to the deferred underwriting commission held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period and, in such event, such amounts will be included with the funds held in the Trust Account that will be available to fund the redemption of the Company’s Public Shares. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution (including Trust Account assets) will be less than the $10.00 per Unit in the Initial Public Offering.

 

On November 26, 2019, the Company held a special meeting pursuant to which the Company’s stockholders approved extending the Combination Period from December 5, 2019 to April 5, 2020 (the “Initial Extended Date”). In connection with the approval of the extension, stockholders elected to redeem an aggregate of 1,123,749 shares of the Company’s common stock. As a result, an aggregate of $11,583,473 (or approximately $10.31 per share) was released from the Company’s Trust Account to pay such stockholders

 

The Company agreed to contribute (the “Contribution”) $0.03 for each share of the Company’s common stock that did not redeem in connection with the extension for each monthly period or portion thereof that is needed to complete a Business Combination (commencing on December 6, 2019 and on the 6th day of each subsequent month through the Initial Extended Date). On each of December 5, 2019, January 3, 2020, February 4, 2020 and March 4, 2020, the Company made a Contribution of $0.03 for each of the public shares outstanding, for an aggregate Contribution of $2,265,151, which amounts were deposited into the Trust Account.

 

On December 5, 2019, the Company entered into an expense advancement agreement (the “GTWY Expense Advance Agreement”) with GTWY Holdings (“Potential Target”), pursuant to which the Potential Target committed to provide $566,288 to fund contributions to the Trust Account. The Company drew down the full amount under the GTWY Expense Advance Agreement to fund the required Contribution to the Trust Account for the period December 6, 2019 to January 5, 2020 by issuing an unsecured promissory note to the Potential Target (see Note 5).

 

6

 

 

LEISURE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2020

(Unaudited)

 

On March 26, 2020, the Company held a special meeting pursuant to which the Company’s stockholders approved extending the Combination Period from April 5, 2020 to June 30, 2020 (the “Extended Date”). In connection with the approval of the extension, stockholders elected to redeem an aggregate of 16,837,678 shares of the Company’s common stock. As a result, an aggregate of $176,283,492 (or approximately $10.47 per share) was released from the Company’s Trust Account to pay such stockholders and 7,038,573 shares of common stock are now issued and outstanding. Of the amount paid to redeeming stockholders, $136,283,492 was paid as of March 31, 2020 and the balance of $40,000,000 was paid on April 1, 2020. As such, the amount due to stockholders of $40,000,000 as of March 31, 2020 is reflected as “Due to stockholders” in the accompanying condensed balance sheets.

 

The Initial Stockholders have agreed to (i) waive their redemption rights with respect to their Founder Shares and Public Shares in connection with the completion of a Business Combination, (ii) to waive their rights to liquidating distributions from the Trust Account with respect to their Founder Shares if the Company fails to complete a Business Combination within the Combination Period and (iii) not to propose an amendment to the Company’s Second Amended and Restated Certificate of Incorporation that would affect the substance or timing of the Company’s obligation to redeem 100% of its Public Shares if the Company does not complete a Business Combination, unless the Company provides the public stockholders with the opportunity to redeem their shares in conjunction with any such amendment. However, the Initial Stockholders will be entitled to liquidating distributions with respect to any Public Shares acquired if the Company fails to consummate a Business Combination or liquidates within the Combination Period.

 

In order to protect the amounts held in the Trust Account, the Sponsors have agreed to be liable to the Company if and to the extent any claims by a vendor for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00 per Public Share or (ii) such lesser amount per share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets. This liability will not apply with respect to any claims by a third party who executed a waiver of any right, title, interest or claim of any kind in or to any monies held in the Trust Account or to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsors will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsors will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers, prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.

 

Liquidity and Going Concern

 

As of March 31, 2020, the Company had $167,951 in its operating bank accounts, $61,327,451 in securities held in the Trust Account to be used for a Business Combination or to repurchase or redeem its common stock in connection therewith and working capital deficit of $3,233,889, which excludes $63,946 of prepaid income taxes and $50,000 of franchise taxes payable that will be paid from interest earned on the Trust Account.

 

On January 15, 2020, the Company issued unsecured promissory notes (the “Promissory Notes”) for an aggregate amount of $1,000,000 to its Sponsors and HG Vora. The Company used the funds received to fund its working capital requirements and to fund required Contributions to its Trust Account in connection with the extension of the date by which the Company must complete its Business Combination.

 

The Company will need to raise additional capital through loans or additional investments from its Sponsors, HG Vora, stockholders, officers, directors, or third parties. The Company’s Sponsors and HG Vora may, but are not obligated to, loan the Company funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion, to meet the Company’s working capital needs. Accordingly, the Company may not be able to obtain additional financing. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction, and reducing overhead expenses. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all. These conditions raise substantial doubt about the Company’s ability to continue as a going concern through June 30, 2020, the date that the Company will be required to cease all operations, except for the purpose of winding up, if a Business Combination is not consummated. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.

 

7

 

 

LEISURE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2020

(Unaudited)

 

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 

 

Basis of presentation 

 

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission (the “SEC”). Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. 

 

The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 as filed with the SEC on March 10, 2020, which contains the audited financial statements and notes thereto. The financial information as of December 31, 2019 is derived from the audited financial statements presented in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. The interim results for the three months ended March 31, 2020 are not necessarily indicative of the results to be expected for the year ending December 31, 2020 or for any future interim periods.

 

Use of estimates 

 

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. 

 

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future events. Accordingly, the actual results could differ significantly from the Company’s estimates. 

 

Cash and cash equivalents

 

The Company considers all short-term investments with an original maturity of three months or less, when purchased, to be cash equivalents. The Company did not have any cash equivalents as of March 31, 2020 and December 31, 2019.

 

Marketable securities held in Trust Account

 

At March 31, 2020 and December 31, 2019, the assets held in the Trust Account were substantially held in a money market fund that invests primarily in U.S. Treasury Bills. Through March 31, 2020, the Company withdrew $1,714,842 of interest income from the Trust Account, of which $40,050 was withdrawn during the three months ended March 31, 2020, to pay franchise taxes.

 

Common stock subject to possible redemption

 

The Company accounts for its common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption 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 features certain redemption rights that are considered to be outside of the Company’s control and subject to 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 condensed balance sheets. 

 

8

 

 

LEISURE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2020

(Unaudited)

 

Income taxes

 

The Company complies with the accounting and reporting requirements of Accounting Standards Codification (“ASC”) Topic 740 “Income Taxes,” which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

 

ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of March 31, 2020 and December 31, 2019. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The effective tax rate of (27)% differs from the statutory tax rate of 21% for the three months ended March 31, 2020 primarily due to the non-deductibility of transactional expenses incurred in connection with the search for potential targets for a Business Combination. The effective tax rate of 22% differs from the statutory tax rate of 21% for the three months ended March 31, 2019 due to true-up adjustments from the prior year tax returns.

 

The Company may be subject to potential examination by federal, state and city taxing authorities in the areas of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal, state and city tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.

 

Net loss per common share

 

Net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding for the period. The Company applies the two-class method in calculating earnings per share. Shares of common stock subject to possible redemption at March 31, 2020 and 2019, which are not currently redeemable and are not redeemable at fair value, have been excluded from the calculation of basic loss per share since such shares, if redeemed, only participate in their pro rata share of the Trust Account earnings. The Company has not considered the effect of warrants sold in the Initial Public Offering and private placement to purchase 16,825,000 shares of common stock in the calculation of diluted loss per share, since the exercise of the warrants is contingent upon the occurrence of future events. As a result, diluted loss per common share is the same as basic loss per common share for the periods.

 

Reconciliation of net loss per common share

 

The Company’s net (loss) income is adjusted for the portion of income that is attributable to common stock subject to redemption, as these shares only participate in the earnings of the Trust Account and not the income or losses of the Company. Accordingly, basic and diluted loss per common share is calculated as follows:

 

   Three Months Ended
March 31,
 
   2020   2019 
Net (loss) income  $(349,854)  $775,913 
Less: Income attributable to common stock subject to possible redemption   (109,662)   (1,026,960)
Adjusted net loss   (459,516)   (251,047)
           
Weighted average common shares outstanding, basic and diluted   6,375,178    6,039,072 
           
Basic and diluted net loss per common share  $(0.07)  $(0.04)

 

Concentration of credit risk

 

Financial instruments that potentially subject the Company to concentration of credit risk consist of a cash account in a financial institution, which, at times may exceed the federal depository insurance coverage of $250,000. The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account.

 

9

 

 

LEISURE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2020

(Unaudited)

 

Fair value of financial instruments

 

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement” (“ASC 820”), approximates the carrying amounts represented in the accompanying condensed balance sheets, primarily due to their short-term nature.

 

Recent accounting pronouncements

 

Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s condensed financial statements.

 

3. INITIAL PUBLIC OFFERING

 

Pursuant to the Initial Public Offering, the Company sold 20,000,000 Units at a purchase price of $10.00 per Unit. Each Unit consists of one share of common stock, and one-half of one warrant (“Public Warrant”). Each whole Public Warrant entitles the holder to purchase one share of common stock at an exercise price of $11.50 (see Note 7).

 

4. PRIVATE PLACEMENT

 

Simultaneously with the closing of the Initial Public Offering, affiliates of the Hydra Sponsor and Matthews Lane Sponsor, HG Vora and certain members of management purchased an aggregate of 6,825,000 Private Placement Warrants at $1.00 per Private Placement Warrant, for an aggregate purchase price of $6,825,000. Each Private Placement Warrant entitles the holder to purchase one share of common stock at an exercise price of $11.50. The proceeds from the Private Placement Warrants were added to the proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds of the sale of the Private Placement Warrants will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and the Private Placement Warrants will expire worthless. There will be no redemption rights or liquidating distributions from the Trust Account with respect to the Private Placement Warrants.

 

The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the common stock issuable upon the exercise of the Private Placement Warrants are not transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants are exercisable on a cashless basis and are non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.

 

5. RELATED PARTY TRANSACTIONS

 

Founder Shares

 

On September 11, 2017, the Company issued an aggregate of 7,187,500 shares of common stock to the Initial Stockholders (“Founder Shares”) for an aggregate purchase price of $25,000. On December 5, 2017, certain of the Initial Stockholders surrendered and returned to the Company, for nil consideration, an aggregate of 1,437,500 Founder Shares, which were cancelled, leaving an aggregate of 5,750,000 Founder Shares outstanding. The 5,750,000 Founder Shares included an aggregate of up to 750,000 shares subject to forfeiture by the Initial Stockholders to the extent that the underwriters’ over-allotment was not exercised in full or in part, so that the Initial Stockholders would own 20% of the Company’s issued and outstanding shares after the Initial Public Offering (assuming the Initial Stockholders do not purchase any Public Shares in the Initial Public Offering). The underwriters’ election to exercise their over-allotment option expired unexercised on January 15, 2018 and, as a result, 750,000 Founder Shares were forfeited, resulting in 5,000,000 Founder Shares outstanding as of January 15, 2018.

 

The Initial Stockholders have agreed, subject to certain exceptions, not to transfer, assign or sell any of the Founder Shares until the earlier of (i) one year after the date of the completion of a Business Combination, or (ii) the date on which the last sales price of the Company’s common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations) for any 20 trading days within any 30-trading day period commencing 150 days after a Business Combination, or earlier, in each case, if subsequent to a Business Combination, the Company completes a subsequent liquidation, merger, stock exchange, or other similar transaction which results in all of the Company’s stockholders having the right to exchange their common stock for cash, securities or other property.

 

10

 

 

LEISURE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2020

(Unaudited)

 

Administrative Services Agreement

 

The Company entered into an agreement whereby, commencing on December 1, 2017 through the earlier of the completion of a Business Combination or the Company’s liquidation, the Company will pay Hydra Management, LLC a monthly fee of up to $10,000 for office space, utilities and secretarial and administrative support. For each of the three months ended March 31, 2020 and 2019, the Company incurred $30,000 in fees for these services. As of March 31, 2020 and December 31, 2019, $41,000 and $17,000, respectively, is included in accounts payable and accrued expenses in the accompanying balance sheets.

 

Promissory Note

 

On December 5, 2019, the Company entered into the GTWY Expense Advance Agreement, pursuant to which the Potential Target committed to provide $566,288 to fund contributions to the Trust Account. The Company drew down the full amount under the GTWY Expense Advance Agreement to fund the required Contribution to the Trust Account for the period December 6, 2019 to January 5, 2020 by issuing an unsecured promissory note (the “Note”) to the Potential Target. The Note does not bear interest. If the Company completes an initial Business Combination, the Company would repay the Note out of the proceeds of the Trust Account released to the Company. Otherwise, amounts borrowed under the Note would be repaid only out of funds held by the Company outside the Trust Account. At March 31, 2020, there was $566,268 outstanding under the Note.

 

Related Party Loans

 

In order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, the Hydra Sponsor, an affiliate of the Matthews Lane Sponsor and HG Vora (the “Funding Parties”) loaned an aggregate of $1,000,000 to the Company, in accordance with unsecured promissory notes issued to the Funding Parties (see below), pursuant to an expense advance agreement dated December 1, 2017. The Funding Parties may, but are not obligated to, loan the Company additional funds from time to time or at any time, as may be required (“Working Capital Loans”). The Working Capital Loans would either be paid upon completion of a Business Combination, without interest, or, at the holder’s discretion, up to $1,000,000 of the Working Capital Loans may be converted into warrants at a price of $1.00 per warrant. The warrants would be identical to the Private Placement Warrants. In the event that a Business Combination does not close, the Company may use a portion of the proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans.

 

On January 15, 2020, the Company issued the Promissory Notes to the Sponsors and HG Vora. The Promissory Notes are non-interest bearing. The funds received may be used by the Company to fund the working capital requirements and to fund required Contributions to the Trust Account in connection with the previously approved Extended Date. In the event that the Company is unable to complete an initial Business Combination, the Company may use a portion of the working capital held outside its Trust Account to repay such loaned amounts but no proceeds from the Trust Account would be used for such repayment. The loans are convertible into warrants to purchase shares of common stock, at a price of $1.00 per warrant, at the option of the Sponsors and HG Vora. The warrants would be identical to the Private Placement Warrants. As of March 31, 2020, there was $1,000,000 outstanding under the Promissory Notes.

 

6. COMMITMENTS

 

Registration Rights

 

Pursuant to a registration rights agreement entered into on December 1, 2017, the holders of the Founder Shares, Private Placement Warrants (and their underlying securities), Private Placement Units (and their underlying securities) (as defined below) and any warrants that may be issued upon conversion of the Working Capital Loans (and their underlying securities) are entitled to registration rights. The holders of these securities are entitled to make up to two demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that the Company will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lock-up period. The Company will bear the expenses incurred in connection with the filing of any such registration statements.

 

11

 

 

LEISURE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2020

(Unaudited)

 

Underwriters Agreement

 

The underwriters of the Initial Public Offering are entitled to a deferred fee of three and one-half percent (3.5%) of the gross proceeds of the Initial Public Offering, or $7,000,000. Up to $0.05 per Unit (or up to $1,000,000) of the deferred fee may be paid to third parties (who are members of FINRA) that assist the Company in consummating its initial Business Combination. The election to make such payments to third parties will be solely at the discretion of the Company’s management team, and such third parties will be selected by the management team in their sole and absolute discretion. The deferred fee will be paid in cash upon the closing of a Business Combination from the amounts held in the Trust Account, subject to the terms of the underwriting agreement.

 

Contingent Forward Purchase Contract

 

On December 1, 2017, the strategic investor entered into a contingent forward purchase contract (the “Contingent Forward Purchase Contract”) with the Company to purchase, in a private placement for gross proceeds of $62,500,000 to occur concurrently with the consummation of the Business Combination, 6,250,000 Units on substantially the same terms as the sale of Units in the Initial Public Offering at $10.00 per Unit. On December 27, 2019, the Contingent Forward Purchase Contract was amended to provide that the Contingent Forward Purchase Contract will terminate effective upon the closing in connection with the proposed business combination with GTWY Holdings. As part of the Transaction (as defined below), on December 27, 2019, the strategic investor entered into the Strategic Investor Subscription Agreement, in similar form to and to replace the Contingent Forward Purchase Contract, with GTWY Holdings pursuant to which, among other things the strategic investor agreed to purchase 3,000,000 units of GTWY Holdings’ equity securities (with each unit consisting of one GTWY Holdings Share and one-half of one GTWY Holdings Warrant) for a purchase price of $10.00 per unit.

 

Service Provider Agreement

 

From time to time the Company has entered into and may enter into agreements with various services providers and advisors, including investment banks, to help us identify targets, negotiate terms of potential Business Combinations, consummate a Business Combination and/or provide other services. In connection with these agreements, the Company may be required to pay such service providers and advisors fees in connection with their services to the extent that certain conditions, including the closing of a potential Business Combination, are met. If a Business Combination does not occur, the Company would not expect to be required to pay these contingent fees. There can be no assurance that the Company will complete a Business Combination.

 

Merger Agreement

 

On December 27, 2019, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”), with GTWY Holdings and GTWY Merger Sub Corp., a Delaware corporation and wholly owned subsidiary of GTWY Holdings (“Merger Sub”), relating to a proposed business combination transaction. Pursuant to the Merger Agreement, Merger Sub will merge with and into the Company, with the Company surviving such merger as a wholly owned subsidiary of GTWY Holdings and the stockholders of the Company becoming stockholders of the GTWY Holdings (the “Merger”).

 

GTWY Holdings’ stockholders as of immediately prior to the Arrangement Effective Time (as defined in the Merger Agreement) will be entitled to receive a cash distribution in an aggregate amount equal to GTWY Pre-Closing Distribution Amount (as defined in the Merger Agreement). In addition, GTWY Holdings’ issued and outstanding share capital as of immediately prior to the Arrangement Effective Time, which is expected to have an aggregate value of $222,917,162 (subject to certain adjustments for transaction expenses and deduction of GTWY Pre-Closing Distribution Amount, as further described in the Merger Agreement), will, at the closing of the transactions contemplated by the Merger Agreement (collectively, the “Transactions”), be converted into a number of common shares of GTWY Holdings calculated based on a reference price of $10.00 per share, and retained by GTWY’s existing stockholders.

 

The Transaction will be consummated subject to the deliverables and provisions as further described in the Merger Agreement.

 

12

 

 

LEISURE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2020

(Unaudited)

 

7. STOCKHOLDERS’ EQUITY

 

Preferred Stock — The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per share with such designation, rights and preferences as may be determined from time to time by the Company’s Board of Directors. As of March 31, 2020 and December 31, 2019, there were no shares of preferred stock issued or outstanding.

 

Common Stock — The Company is authorized to issue 100,000,000 shares of common stock with a par value of $0.0001 per share. Holders of the Company’s common stock are entitled to one vote for each share. The underwriters’ election to exercise their over-allotment option expired unexercised on January 15, 2018 and, as a result, 750,000 Founder Shares were forfeited. At March 31, 2020 and December 31, 2019, there were 6,604,785 and 6,375,178 shares of common stock issued and outstanding, respectively, excluding 433,788 and 17,501,073 shares of common stock subject to possible redemption, respectively.

 

Warrants — Public Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants. The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination and (b) 12 months from the closing of the Initial Public Offering; provided in each case that the Company has an effective registration statement under the Securities Act covering the shares of common stock issuable upon exercise of the Public Warrants and a current prospectus relating to them is available. The Company has agreed that as soon as practicable, but in no event later than 15 business days after the closing of a Business Combination, the Company will use its best efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the shares of common stock issuable upon exercise of the Public Warrants. The Company will use its best efforts to cause the same to become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the Public Warrants in accordance with the provisions of the warrant agreement. If any such registration statement has not been declared effective by the 60th business day following the closing of the Business Combination, holders of the Public Warrants shall have the right, during the period beginning on the 61st business day after the closing of the Business Combination and ending upon such registration statement being declared effective by the SEC, and during any other period when the Company shall fail to have maintained an effective registration statement covering the shares of common stock issuable upon exercise of the Public Warrants, to exercise such Public Warrants on a “cashless basis.” Notwithstanding the above, if the Company’s common stock is at the time of any exercise of a Public Warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, the Company will not be required to file or maintain in effect a registration statement, but will be required to use its best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. The Public Warrants will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation.

 

The Company may redeem the Public Warrants:

 

  in whole and not in part;
  at a price of $0.01 per warrant;
  at any time during the exercise period;
  upon a minimum of 30 days’ prior written notice of redemption;
  if, and only if, the last sale price of the Company’s common stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending on the third business day prior to the date on which the Company sends the notice of redemption to the warrant holders; and
  if, and only if, there is a current registration statement in effect with respect to the shares of common stock underlying such warrants.

 

If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement.

 

The exercise price and number of shares of common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuance of common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless.

 

13

 

 

LEISURE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2020

(Unaudited)

 

8. FAIR VALUE MEASUREMENTS

 

The Company follows the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.

 

The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:

 

  Level 1:  Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

 

  Level 2:  Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.
     
  Level 3: Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.

 

The following table presents information about the Company’s assets that are measured at fair value on a recurring basis at March 31, 2020 and December 31, 2019, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:

 

Description  Level  March 31,
2020
   December 31,
2019
 
Assets:           
Cash and marketable securities held in Trust Account  1  $61,327,451   $202,915,739 

 

9. SUBSEQUENT EVENTS

 

The Company evaluates subsequent events and transactions that occur after the balance sheet date up to the date that the condensed financial statements were issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the condensed financial statements.

 

14

 

 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

References in this report (the “Quarterly Report”) to “we,” “us” or the “Company” refer to Leisure Acquisition Corp. References to our “management” or our “management team” refer to our officers and directors, references to the “sponsors” refer, collectively, to Hydra Management, LLC (the “Hydra Sponsor”) and Matthews Lane Capital Partners LLC (the “Matthews Lane Sponsor”), and references to the “strategic investor” or “HG Vora” refer to HG Vora Capital Management LLC on behalf of one or more funds or accounts managed by it. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

 

Special Note Regarding Forward-Looking Statements

 

This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act that are not historical facts, and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Form 10-Q including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”). The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

 

Overview

 

We are a blank check company incorporated on September 11, 2017 in Delaware and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, recapitalization, reorganization or similar business combination with one or more target businesses. We intend to effectuate our Business Combination using cash from the proceeds of our Initial Public Offering, the sale of the Private Placement Warrants that occurred simultaneously with the completion of our Initial Public Offering, the sale of the Private Placement Units under the Contingent Forward Purchase Contract, if any, our capital stock, debt or a combination of cash, stock and debt.

 

The issuance of additional shares of our stock in a Business Combination:

 

  may significantly dilute the equity interest of investors;
  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 officers and directors;
  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;
  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;

 

15

 

 

  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.

 

We are incurring significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete a Business Combination will be successful.

 

Recent Developments 

 

On November 26, 2019, the Company held a special meeting of stockholders at which our stockholders approved extending our Combination Period deadline from December 5, 2019 to April 5, 2020 (the “First Extension”). Our public stockholders were able to elect to redeem their shares in connection with the First Extension for a pro rata portion of the amount then on deposit in the Trust Account ($10.00 per share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to us to pay franchise and income taxes). With respect to public shares not redeemed in connection with the Special Meeting, we agreed to make Contributions of $0.03 for each public share that was not redeemed by stockholders for each monthly period or portion thereof that is needed to complete a business combination (commencing on December 6, 2019 and on the 6th day of each subsequent month through the end of the First Extension), subject to certain conditions. The number of shares of redeemed by public stockholders in connection with the First Extension was 1,123,749 for an aggregate cash redemption amount of $11,583,473.

 

On December 5, 2019, the Company entered into the Expense Advancement Agreement with GTWY pursuant to which GTWY Holding committed to provide $566,288 to fund Contributions to the Trust Account. representing the amount needed to fund the first monthly Contribution during Extension. The Company drew down the full amount under the Expense Advancement Agreement to fund the required Contribution to the Trust Account for the period December 6, 2019 to January 5, 2020 by issuing an unsecured promissory note to GTWY Holdings. The note does not bear interest. If we complete our initial business combination, the amount borrowed under the Expense Advancement Agreement would be repaid out of the proceeds of the Trust Account released to it. Otherwise, amounts borrowed under the Expense Advancement Agreement would be repaid only out of funds held outside the Trust Account. Amounts borrowed pursuant to the Expense Advancement Agreement were deposited to the Trust Account on December 6, 2019.

 

On December 27, 2019, the Company entered into an agreement to consummate the Transactions with GTWY Holdings. The consummation of the Transactions is conditioned upon, among other things, the approval of our stockholders having been obtained, the approval of the Arrangement under Section 192 of the CBCA by the Supreme Court of British Columbia, the expiration or termination of the applicable waiting period under any applicable competition laws, the receipt of any required third party or governmental consents or approvals and the expiration or termination of the applicable waiting period under any applicable competition laws.

 

On January 6, 2020, the Company deposited $566,288 to the Trust Account to fund the required Contribution to the Trust Account for the period January 6, 2020 to February 5, 2020.

 

On January 15, 2020, we drew down $1,000,000 under the Expense Advancement Agreement with our sponsors and strategic investor dated December 1, 2017 to fund general corporate purposes in exchange for issuing unsecured promissory notes. The notes do not bear interest. If we complete an initial business combination, we would repay amounts borrowed under the Expense Advancement Agreement out of the proceeds of the Trust Account released to it; provided, however, that the sponsors and strategic investor have the option to convert the promissory notes into warrants at a price of $1.00 per warrant subject to the same terms and conditions as our private placement warrants. Otherwise, amounts borrowed under the Expense Advancement Agreement would be repaid only out of funds held outside the Trust Account.

 

On each of February 4, 2020 and March 4, 2020, we deposited $566,288 into the Trust Account to fund the required Contribution to the Trust Account for the remaining monthly periods covered by the Extension.

 

On March 26, 2020, we held a special meeting pursuant to which our stockholders approved extending the Combination Period from April 5, 2020 to June 30, 2020 (the “Extended Date”). In connection with the approval of the extension, stockholders elected to redeem an aggregate of 16,837,678 shares of our common stock. As a result, an aggregate of $176,283,492 (or approximately $10.47 per share) was released from our Trust Account to pay such stockholders. Of the amount paid to redeeming stockholders, $136,283,492 was paid as of March 31, 2020 and the balance of $40,000,000 was paid in April 2020.

 

16

 

 

The Company is incurring significant costs in the pursuit of its acquisition plans. We may be required to seek additional resources in the future to fund general corporate purposes and cannot assure you that our plans to complete the Transactions will be successful.

 

Results of Operations 

 

Our only activities from inception through March 31, 2020 were organizational activities and those necessary to prepare for the Initial Public Offering, identifying a target for our Business Combination and activities in connection with the Transactions. We do not expect to generate any operating revenues until after the completion of our Business Combination. We generate non-operating income in the form of interest income on marketable securities. We are incurring expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence and transaction expenses in connection with completing a Business Combination.

 

For the three months ended March 31, 2020, we had a net loss of $349,854, which consists of operating costs of $915,183 and a provision for income taxes of $74,625, offset by interest income on marketable securities held in the Trust Account of $639,954.

 

For the three months ended March 31, 2019, we had net income of $775,913, which consists of interest income on marketable securities held in the Trust Account of $1,179,970, offset by operating costs of $189,174, an unrealized loss on marketable securities held in our Trust Account of $527 and a provision for income taxes of $214,356.

 

Liquidity and Capital Resources 

 

As of March 31, 2020, we had marketable securities held in the Trust Account of $61,327,451 (including $697,092 of interest income) consisting of U.S. treasury bills with a maturity of 180 days or less. Interest income on the Trust Account will be used by us to pay franchise and income taxes. Through March 31, 2020, we withdrew $1,714,842 of interest earned on the Trust Account to pay franchise and income taxes, of which $40,050 was withdrawn during the three months ended March 31, 2020.

 

We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account (less deferred underwriting commissions and interest income that is used to pay franchise and income taxes) to complete our Business Combination. To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our Business Combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.

 

As of March 31, 2020, we had cash of $167,951 held outside the Trust Account. We intend to use the funds held outside the Trust Account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete a Business Combination, and we have also used such funds to make Contributions to the Trust Account in connection with the First Extension (see “Recent Developments” above).

 

For the three months ended March 31, 2020, cash used in operating activities was $234,388. Net loss of $349,854 includes interest earned on marketable securities held in the Trust Account of $639,954. Changes in operating assets and liabilities provided $755,420 of cash from operating activities.

 

For the three months ended March 31, 2019, cash used in operating activities was $294,366. Net income of $775,913 was affected by interest earned on marketable securities held in the Trust Account of $1,179,970, an unrealized loss on marketable securities held in our Trust Account of $527 and a deferred tax provision of $1,874. Changes in operating assets and liabilities provided $111,038 of cash from operating activities.

 

On December 5, 2019, the Company entered into the Expense Advancement Agreement with GTWY pursuant to which GTWY Holding committed to provide $566,288 to fund Contributions to the Trust Account. representing the amount needed to fund the first monthly Contribution during First Extension. The Company drew down the full amount under the Expense Advancement Agreement to fund the required Contribution to the Trust Account for the period December 6, 2019 to January 5, 2020 by issuing an unsecured promissory note to GTWY Holdings. The note does not bear interest. If we complete our initial Business Combination, the amount borrowed under the Expense Advancement Agreement would be repaid out of the proceeds of the Trust Account released to it. Otherwise, amounts borrowed under the Expense Advancement Agreement would be repaid only out of funds held outside the Trust Account. Amounts borrowed pursuant to the Expense Advancement Agreement were deposited to the Trust Account on December 6, 2019.

 

17

 

 

On December 1, 2017, HG Vora entered into a contingent forward purchase contract with us to purchase, in a private placement for gross proceeds of $62,500,000 to occur concurrently with the consummation of our Business Combination, 6,250,000 Units on the same terms as the sale of Units in the Initial Public Offering at $10.00 per unit. The funds from the sale of the Private Placement Units may be used as part of the consideration to the sellers in the Business Combination; any excess funds from the Private Placement Units may be used for working capital in the post-transaction company. This commitment is independent of the percentage of stockholders electing to redeem their shares and provides us with an increased minimum funding level for the Business Combination. HG Vora’s obligation to purchase our Units under the contingent forward purchase contract is contingent upon, among other things, HG Vora approving the Business Combination, which approval can be withheld for any reason. The contingent forward purchase contract was amended in connection with the Transactions with GTWY Holdings such that it would terminate contingent upon the closing. In place of the contingent forward purchase contract, HG Vora entered into the Strategic Investor Subscription Agreement with GTWY Holdings, pursuant to which it agreed to purchase, in a private placement for gross proceeds of $30,000,000 to occur concurrently with closing of the Transactions, 3,000,000 units in GTWY Holdings on substantially the same terms as the sale of Units in our Initial Public Offering at $10.00 per unit.

 

On January 15, 2020, we issued the promissory notes to our sponsors and the strategic investor in the aggregate amount of $1,000,000 pursuant to our drawdown under the Expense Advancement Agreement. The promissory notes do not bear any interest. The funds received may be used by us to fund our working capital requirements and to fund required Contributions to the Trust Account in connection with the previously approved extension of the date by which we must complete an initial Business Combination. If we complete an initial Business Combination, we would repay such loaned amounts. In the event that we are unable to complete an initial Business Combination, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from the Trust Account would be used for such repayment. The loans are convertible into warrants to purchase shares of common stock, at a price of $1.00 per warrant, at the option of the funding parties. The warrants would be identical to Private Placement Warrants.

 

As of March 31, 2020, we had $167,951 in our operating bank accounts, $61,327,451 in securities held in the Trust Account to be used for a Business Combination or to repurchase or redeem its common stock in connection therewith and working capital deficit of $3,233,889, which excludes $63,946 of prepaid income taxes and $50,000 of franchise taxes payable that will be paid from interest earned on the Trust Account.

 

We will need to raise additional capital through loans or additional investments from our sponsors, HG Vora, stockholders, officers, directors, or third parties. Our sponsors and HG Vora may, but are not obligated to, loan us funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion, to meet our working capital needs. Accordingly, we may not be able to obtain additional financing. If we are unable to raise additional capital, we may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction, and reducing overhead expenses. We cannot provide any assurance that new financing will be available to us on commercially acceptable terms, if at all. These conditions raise substantial doubt about our ability to continue as a going concern through June 30, 2020, the date that we will be required to cease all operations, except for the purpose of winding up, if a Business Combination is not consummated. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should we be unable to continue as a going concern.

 

Off-balance sheet financing arrangements

 

As of March 31, 2020, 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 purchased any non-financial assets.

 

Contractual obligations

 

As of March 31, 2020, we do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement to pay our Hydra sponsor a monthly fee of up to $10,000 for office space, utilities and secretarial and administrative support provided to us. We began incurring these fees on December 1, 2017 and will continue to incur these fees monthly until the earlier of the completion of the Business Combination and our liquidation.

 

The underwriters are entitled to underwriting discounts and commissions of 5.5%, of which 2.0% ($4,000,000) was paid at the closing of the Initial Public Offering, and 3.5% ($7,000,000) was deferred. The deferred discount will become payable to the underwriters from the amounts held in the Trust Account solely in the event that we complete a Business Combination, subject to the terms of the underwriting agreement. The underwriters are not entitled to any interest accrued on the deferred discount.

 

18

 

 

Critical Accounting Policies

 

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following critical accounting policies:

 

Common stock subject to possible redemption

 

We account for our common stock subject to possible conversion in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. Our common stock features certain redemption rights that are considered to be outside of our control and subject to 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 our balance sheets.

 

Net loss per common share

 

We apply the two-class method in calculating earnings per share. Common stock subject to possible redemption which is not currently redeemable and is not redeemable at fair value, has been excluded from the calculation of basic net loss per common share since such shares, if redeemed, only participate in their pro rata share of the Trust Account earnings. Our net income is adjusted for the portion of income that is attributable to common stock subject to possible redemption, as these shares only participate in the earnings of the Trust Account and not our income or losses.

 

Recent Accounting Pronouncements

 

Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on our financial statements.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Following the consummation of our Initial Public Offering, we invested the funds held in the Trust Account in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act, which invest solely in United States Treasuries. Due to the short-term nature of the money market fund’s investments, we do not believe that there will be an associated material exposure to interest rate risk.

 

We have not engaged in any hedging activities since our inception. We do not expect to engage in any hedging activities with respect to the market risk to which we are exposed.

 

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 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 as of March 31, 2020. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15 (e) and 15d-15 (e) under the Exchange Act) were effective.

 

Changes in Internal Control Over Financial Reporting

 

During the most recently completed fiscal quarter, there has been no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

19

 

 

PART II - OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS.

 

None.

 

ITEM 1A. RISK FACTORS.

 

Except as described below, factors that could cause our actual results to differ materially from those in this Quarterly Report are any of the risks described in our Annual Report on Form 10-K filed with the SEC. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. As of the date of this Quarterly Report, there have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K filed with the SEC.

 

Our search for a business combination, and any target business with which we ultimately consummate a business combination, may be materially adversely affected by the recent coronavirus (“COVID-19”) outbreak.

On March 11, 2020, the World Health Organization officially declared the outbreak of the COVID-19 a “pandemic.” The outbreak of COVID-19 has resulted in a widespread health crisis, adversely affecting economies and financial markets worldwide. The business of any potential target business with which we consummate a business combination could be materially and adversely affected by the COVID-19 outbreak. Furthermore, we may be unable to complete a business combination if continued concerns relating to COVID-19 restrict travel, limit the ability to have meetings with potential investors or the target company’s personnel, vendors and services providers are unavailable to negotiate and consummate a transaction in a timely manner. The extent to which COVID-19 impacts our search for a business combination, or the completion of a transaction with a potential target business, will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others. If the disruptions posed by COVID-19 , including its impact on the economy and financial markets, continue for an extensive period of time, our ability to consummate a business combination, or the operations of a target business with which we ultimately consummate a business combination, may be materially adversely affected.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

 

On December 5, 2017, we consummated our Initial Public Offering of 20,000,000 units, with each unit consisting of one share of our common stock, and one-half (1/2) of one warrant, each whole warrant entitling the holder to purchase one share of common stock at a price of $11.50. The units in the Initial Public Offering were sold at an offering price of $10.00 per unit, generating total gross proceeds of $200,000,000. Morgan Stanley & Co., LLC acted as the book running manager and EarlyBirdCapital, Inc. acted as lead manager of the offering. The securities sold in the offering were registered under the Securities Act on registration statement on Form S-1 (No. 333-221330). The SEC declared the registration statement effective on December 1, 2017.

 

We paid a total of $4,000,000 in underwriting discounts and commissions and $548,735 for other costs and expenses related to the Initial Public Offering. In addition, the underwriters agreed to defer $7,000,000 in underwriting discounts and commissions, and up to this amount will be payable upon consummation of the Business Combination. After deducting the underwriting discounts and commissions (excluding the deferred portion of $7,000,000 in underwriting discounts and commissions, which will be released from the Trust Account upon consummation of the Business Combination, if consummated) and the estimated offering expenses, the total net proceeds from our Initial Public Offering and the private placement was $202,276,265, of which $200,000,000 (or $10.00 per unit sold in the Initial Public Offering) was placed in the Trust Account. 

 

There has been no material change in the planned use of proceeds from our Initial Public Offering as described in our final prospectus dated December 1, 2017 which was filed with the SEC.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

 

None.

 

ITEM 4. MINE SAFETY DISCLOSURES.

 

Not applicable.

 

ITEM 5. OTHER INFORMATION.

 

None.

 

20
 

 

ITEM 6. EXHIBITS.

 

The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.

 

No.   Description of Exhibit
3.1(a)   Second Amended and Restated Certificate of Incorporation (1)
3.1(b)   Amendment dated December 5, 2019 to the Second Amended and Restated Certificate of Incorporation (2)
3.1(c)   Amendment dated March 26, 2020 to the Second Amended and Restated Certificate of Incorporation, as amended (3)
10.1   Amendment dated March 26, 2020 to the Investment Management Trust Agreement dated December 1, 2017, as amended, between the Company and the Continental Stock Transfer & Trust Company (3)   
10.2   Form of Promissory Note dated January 15, 2020 relating to the Expense Advancement Agreement dated December 1, 2017 between the Company, HG Vora Special Opportunities Master Fund, Ltd., Hydra Management, LLC and Matthews Lane Capital Partners LLC (4)
10.3   Amendment dated January 30, 2020 to the Transaction Support Agreement dated December 27, 2019 by and among the Company, GTWY Holdings Limited and the support parties named therein (5)
31.1*   Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*   Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**   Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2**   Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*   XBRL Instance Document
101.CAL*   XBRL Taxonomy Extension Calculation Linkbase Document
101.SCH*   XBRL Taxonomy Extension Schema Document
101.DEF*   XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*   XBRL Taxonomy Extension Labels Linkbase Document
101.PRE*   XBRL Taxonomy Extension Presentation Linkbase Document

 

* Filed herewith.

** Furnished. 

 

  (1) Previously filed as an exhibit to our Current Report on Form 8-K filed on December 5, 2017 and incorporated by reference herein.
  (2) Previously filed as an exhibit to our Current Report on Form 8-K filed on December 9, 2019 and incorporated by reference herein.
  (3) Previously filed as an exhibit to our Current Report on Form 8-K filed on March 31, 2020 and incorporated by reference herein.
  (4) Previously filed as an exhibit to our Current Report on Form 8-K filed on January 17, 2020 and incorporated by reference herein.
  (5) Previously filed as an exhibit to our Current Report on Form 8-K filed on January 31, 2020 and incorporated by reference herein.

 

21

 

 

SIGNATURES

 

Pursuant to the requirements of Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  LEISURE ACQUISITION CORP.
     
Date: May 7, 2020 /s/ Daniel B. Silvers
  Name: Daniel B. Silvers
  Title: Chief Executive Officer
(Principal Executive Officer)
     
Date: May 7, 2020 /s/ George Peng
  Name: George Peng
  Title: Chief Financial Officer, Treasurer and Secretary
(Principal Financial and Accounting Officer)

 

 

22

 

 

EX-31.1 2 f10q0320ex31-1_leisure.htm CERTIFICATION

Exhibit 31.1

 

CERTIFICATIONS

 

I, Daniel B. Silvers, certify that:

 

  1. I have reviewed this Quarterly Report on Form 10-Q of Leisure Acquisition Corp.;

 

  2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

  3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

  4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

  a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

  b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

  c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

  d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

  5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

  (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

  (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: May 7, 2020 By: /s/ Daniel B. Silvers
    Daniel B. Silvers
    Chief Executive Officer
(Principal Executive Officer)

 

EX-31.2 3 f10q0320ex31-2_leisure.htm CERTIFICATION

Exhibit 31.2

 

CERTIFICATIONS

 

I, George Peng, certify that:

 

  1. I have reviewed this Quarterly Report on Form 10-Q of Leisure Acquisition Corp.;

 

  2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

  3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

  4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

  a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

  b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

  c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

  d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

  5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

  (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

  (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: May 7, 2020 By: /s/ George Peng
    George Peng
    Chief Financial Officer
(Principal Financial and Accounting Officer)

 

EX-32.1 4 f10q0320ex32-1_leisure.htm CERTIFICATION

Exhibit 32.1

 

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADDED BY
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of Leisure Acquisition Corp. (the “Company”) on Form 10-Q for the quarterly period ended March 31, 2020, as filed with the Securities and Exchange Commission (the “Report”), I, Daniel B. Silvers, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as added by §906 of the Sarbanes-Oxley Act of 2002, that:

 

  1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

  2. To my knowledge, the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period covered by the Report.

 

Date: May 7, 2020 By: /s/ Daniel B. Silvers
    Daniel B. Silvers
    Chief Executive Officer
(Principal Executive Officer)

 

EX-32.2 5 f10q0320ex32-2_leisure.htm CERTIFICATION

Exhibit 32.2

 

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADDED BY
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of Leisure Acquisition Corp. (the “Company”) on Form 10-Q for the quarterly period ended March 31, 2020, as filed with the Securities and Exchange Commission (the “Report”), I, George Peng, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as added by §906 of the Sarbanes-Oxley Act of 2002, that:

 

  1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

  2. To my knowledge, the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period covered by the Report.

 

Date: May 7, 2020 By: /s/ George Peng
    George Peng
    Chief Financial Officer
(Principal Financial and Accounting Officer)

 

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DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS</b>&#xa0;</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Leisure Acquisition Corp. (the &#x201c;Company&#x201d;) is a blank check company incorporated in Delaware on September 11, 2017. The Company was formed for the purpose of acquiring, through a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, recapitalization, exchangeable share transaction or other similar business transaction, one or more operating businesses or assets that the Company has not yet identified (a &#x201c;Business Combination&#x201d;).&#xa0;</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">At March 31, 2020, the Company had not yet commenced operations. All activity through March 31, 2020 relates to the Company&#x2019;s formation, its initial public offering (&#x201c;Initial Public Offering&#x201d;), which is described below, identifying a target company for a Business Combination and activities in connection with the proposed acquisition of GTWY Holdings Limited, a Canadian corporation (&#x201c;GTWY Holdings&#x201d;) (see Note 6).</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The registration statement for the Company&#x2019;s Initial Public Offering was declared effective on December 1, 2017. On December 5, 2017, the Company consummated the Initial Public Offering of 20,000,000 units (&#x201c;Units&#x201d; and, with respect to the common stock included in the Units, the &#x201c;Public Shares&#x201d;), generating gross proceeds of $200,000,000, which is described in Note 3.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 6,825,000 warrants (the &#x201c;Private Placement Warrants&#x201d;) at a price of $1.00 per warrant in a private placement to Hydra LAC, LLC, an affiliate of Hydra Management, LLC (the &#x201c;Hydra Sponsor&#x201d;), MLCP GLL Funding LLC, an affiliate of Matthews Lane Capital Partners, LLC (the &#x201c;Matthews Lane Sponsor,&#x201d; and, together with the Hydra Sponsor, the &#x201c;Sponsors&#x201d;), HG Vora Special Opportunities Master Fund, Ltd. (&#x201c;HG Vora&#x201d;) and certain members of the Company&#x2019;s management team, generating gross proceeds of $6,825,000, which is described in Note 4.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Following the closing of the Initial Public Offering on December 5, 2017, an amount of $200,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the Private Placement Warrants was placed in a trust account (the &#x201c;Trust Account&#x201d;) and invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the &#x201c;Investment Company Act&#x201d;), with a maturity of 180 days or less or in any open-ended investment company that holds itself out as a money market fund selected by the Company meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the consummation of a Business Combination or (ii) the distribution of the Trust Account, as described below.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Transaction costs amounted to $11,548,735, consisting of $4,000,000 of underwriting fees, $7,000,000 of deferred underwriting fees and $548,735 of Initial Public Offering costs. In addition, at March 31, 2020, cash of $167,951 was held outside of the Trust Account and is available for working capital purposes.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company&#x2019;s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. The Company&#x2019;s initial Business Combination must be with one or more target businesses that together have a fair market value equal to at least 80% of the balance in the Trust Account (excluding deferred underwriting commissions and franchise and income taxes payable on the income earned on the Trust Account) at the time of the signing of an agreement to enter into a Business Combination. In addition, the Company&#x2019;s Business Combination must be approved by HG Vora as a condition to the Contingent Forward Purchase Contract (as described in Note 6). The Company will only complete a Business Combination if the post-Business Combination company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act. There is no assurance that the Company will be able to successfully effect a Business Combination.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company will provide its stockholders with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The stockholders will be entitled to redeem their shares for a pro rata portion of the amount then on deposit in the Trust Account ($10.00 per share, plus any deposits made to the Trust Account in connection with extension payments and any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay franchise and income taxes). The per share amount to be distributed to stockholders who redeem their shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriters (see Note 7).</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 upon consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the outstanding shares voted are voted in favor of the Business Combination. If a stockholder vote is not required by law and the Company does not decide to hold a stockholder vote for business or other legal reasons, the Company will, pursuant to its Second Amended and Restated Certificate of Incorporation, conduct the redemptions pursuant to the tender offer rules of the Securities and Exchange Commission (&#x201c;SEC&#x201d;), and file tender offer documents with the SEC prior to completing a Business Combination. If, however, a stockholder approval of the transaction is required by law, or the Company decides to obtain stockholder approval for business or other legal reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks stockholder approval in connection with a Business Combination, the Sponsors and the Company&#x2019;s other initial stockholders (collectively, the &#x201c;Initial Stockholders&#x201d;) have agreed to vote their Founder Shares (as defined in Note 5) and any Public Shares held by them in favor of approving a Business Combination. Additionally, each public stockholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Notwithstanding the foregoing, the Company&#x2019;s Second Amended and Restated Certificate of Incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a &#x201c;group&#x201d; (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the &#x201c;Exchange Act&#x201d;)), will be restricted from redeeming its shares with respect to an aggregate of 20% or more of the common stock sold in the Initial Public Offering.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in;">The Company has until June 30, 2020 to consummate a Business Combination or such later date to the extent its stockholders approve an extension (the &#x201c;Combination Period&#x201d;). If the Company is unable to complete a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no more than ten business days thereafter, redeem 100% of the outstanding Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned and not previously released to pay franchise and income taxes (less up to $75,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish public stockholders&#x2019; rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining stockholders and the Company&#x2019;s board of directors, proceed to commence a voluntary liquidation and thereby a formal dissolution of the Company, subject in each case to its obligations to provide for claims of creditors and the requirements of applicable law. The underwriters have agreed to waive their rights to the deferred underwriting commission held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period and, in such event, such amounts will be included with the funds held in the Trust Account that will be available to fund the redemption of the Company&#x2019;s Public Shares. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution (including Trust Account assets) will be less than the $10.00 per Unit in the Initial Public Offering.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On November 26, 2019, the Company held a special meeting pursuant to which the Company&#x2019;s stockholders approved extending the Combination Period from December 5, 2019 to April 5, 2020 (the &#x201c;Initial Extended Date&#x201d;). In connection with the approval of the extension, stockholders elected to redeem an aggregate of 1,123,749 shares of the Company&#x2019;s common stock. As a result, an aggregate of $11,583,473 (or approximately $10.31 per share) was released from the Company&#x2019;s Trust Account to pay such stockholders</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company agreed to contribute (the &#x201c;Contribution&#x201d;) $0.03 for each share of the Company&#x2019;s common stock that did not redeem in connection with the extension for each monthly period or portion thereof that is needed to complete a Business Combination (commencing on December 6, 2019 and on the 6<sup>th</sup> day of each subsequent month through the Initial Extended Date). On each of December 5, 2019, January 3, 2020, February 4, 2020 and March 4, 2020, the Company made a Contribution of $0.03 for each of the public shares outstanding, for an aggregate Contribution of $2,265,151, which amounts were deposited into the Trust Account.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On December 5, 2019, the Company entered into an expense advancement agreement (the &#x201c;GTWY Expense Advance Agreement&#x201d;) with GTWY Holdings (&#x201c;Potential Target&#x201d;), pursuant to which the Potential Target committed to provide $566,288 to fund contributions to the Trust Account. The Company drew down the full amount under the GTWY Expense Advance Agreement to fund the required Contribution to the Trust Account for the period December 6, 2019 to January 5, 2020 by issuing an unsecured promissory note to the Potential Target (see Note 5).</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On March 26, 2020, the Company held a special meeting pursuant to which the Company&#x2019;s stockholders approved extending the Combination Period from April 5, 2020 to June 30, 2020 (the &#x201c;Extended Date&#x201d;). In connection with the approval of the extension, stockholders elected to redeem an aggregate of 16,837,678 shares of the Company&#x2019;s common stock. As a result, an aggregate of $176,283,492 (or approximately $10.47 per share) was released from the Company&#x2019;s Trust Account to pay such stockholders and 7,038,573 shares of common stock are now issued and outstanding. Of the amount paid to redeeming stockholders, $136,283,492 was paid as of March 31, 2020 and the balance of $40,000,000 was paid on April 1, 2020. As such, the amount due to stockholders of $40,000,000 as of March 31, 2020 is reflected as &#x201c;Due to stockholders&#x201d; in the accompanying condensed balance sheets.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Initial Stockholders have agreed to (i) waive their redemption rights with respect to their Founder Shares and Public Shares in connection with the completion of a Business Combination, (ii) to waive their rights to liquidating distributions from the Trust Account with respect to their Founder Shares if the Company fails to complete a Business Combination within the Combination Period and (iii) not to propose an amendment to the Company&#x2019;s Second Amended and Restated Certificate of Incorporation that would affect the substance or timing of the Company&#x2019;s obligation to redeem 100% of its Public Shares if the Company does not complete a Business Combination, unless the Company provides the public stockholders with the opportunity to redeem their shares in conjunction with any such amendment. However, the Initial Stockholders will be entitled to liquidating distributions with respect to any Public Shares acquired if the Company fails to consummate a Business Combination or liquidates within the Combination Period.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In order to protect the amounts held in the Trust Account, the Sponsors have agreed to be liable to the Company if and to the extent any claims by a vendor for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00 per Public Share or (ii) such lesser amount per share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets. This liability will not apply with respect to any claims by a third party who executed a waiver of any right, title, interest or claim of any kind in or to any monies held in the Trust Account or to any claims under the Company&#x2019;s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the &#x201c;Securities Act&#x201d;). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsors will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsors will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers, prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Liquidity&#xa0;and Going Concern</b></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of March 31, 2020, the Company had $167,951 in its operating bank accounts, $61,327,451 in securities held in the Trust Account to be used for a Business Combination or to repurchase or redeem its common stock in connection therewith and working capital deficit of $3,233,889, which excludes $63,946 of prepaid income taxes and $50,000 of franchise taxes payable that will be paid from interest earned on the Trust Account.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On January 15, 2020, the Company issued unsecured promissory notes (the &#x201c;Promissory Notes&#x201d;) for an aggregate amount of $1,000,000 to its Sponsors and HG Vora. The Company used the funds received to fund its working capital requirements and to fund required Contributions to its Trust Account in connection with the extension of the date by which the Company must complete its Business Combination.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company will need to raise additional capital through loans or additional investments from its Sponsors, HG Vora, stockholders, officers, directors, or third parties. The Company&#x2019;s Sponsors and HG Vora may, but are not obligated to, loan the Company funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion, to meet the Company&#x2019;s working capital needs. Accordingly, the Company may not be able to obtain additional financing. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction, and reducing overhead expenses. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all. These conditions raise substantial doubt about the Company&#x2019;s ability to continue as a going concern through June 30, 2020, the date that the Company will be required to cease all operations, except for the purpose of winding up, if a Business Combination is not consummated. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.</p><br/> 20000000 200000000 6825000 1.00 6825000 200000000 10.00 11548735 4000000 7000000 548735 167951 0.80 0.50 10.00 5000001 0.20 If the Company is unable to complete a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no more than ten business days thereafter, redeem 100% of the outstanding Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned and not previously released to pay franchise and income taxes (less up to $75,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish public stockholders&#x2019; rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining stockholders and the Company&#x2019;s board of directors, proceed to commence a voluntary liquidation and thereby a formal dissolution of the Company, subject in each case to its obligations to provide for claims of creditors and the requirements of applicable law. 75000 the Company held a special meeting pursuant to which the Company&#x2019;s stockholders approved extending the Combination Period from December 5, 2019 to April 5, 2020 (the &#x201c;Initial Extended Date&#x201d;). In connection with the approval of the extension, stockholders elected to redeem an aggregate of 1,123,749 shares of the Company&#x2019;s common stock. As a result, an aggregate of $11,583,473 (or approximately $10.31 per share) was released from the Company&#x2019;s Trust Account to pay such stockholders The Company agreed to contribute (the &#x201c;Contribution&#x201d;) $0.03 for each share of the Company&#x2019;s common stock that did not redeem in connection with the extension for each monthly period or portion thereof that is needed to complete a Business Combination (commencing on December 6, 2019 and on the 6th day of each subsequent month through the Initial Extended Date). On each of December 5, 2019, January 3, 2020, February 4, 2020 and March 4, 2020, the Company made a Contribution of $0.03 for each of the public shares outstanding, for an aggregate Contribution of $2,265,151, which amounts were deposited into the Trust Account. 1123749 11583473 10.31 0.03 0.03 2265151 566288 16837678 176283492 10.47 7038573 40000000 1.00 10.00 167951 61327451 3233889 50000 1000000 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</b>&#xa0;</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Basis of presentation</b>&#xa0;</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (&#x201c;GAAP&#x201d;) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission (the &#x201c;SEC&#x201d;). Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.&#xa0;</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The accompanying unaudited condensed financial statements should be read in conjunction with the Company&#x2019;s Annual Report on Form 10-K for the year ended December 31, 2019 as filed with the SEC on March 10, 2020, which contains the audited financial statements and notes thereto. The financial information as of December 31, 2019 is derived from the audited financial statements presented in the Company&#x2019;s Annual Report on Form 10-K for the year ended December 31, 2019. The interim results for the three months ended March 31, 2020 are not necessarily indicative of the results to be expected for the year ending December 31, 2020 or for any future interim periods.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Use of estimates</b>&#xa0;</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.&#xa0;</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future events. Accordingly, the actual results could differ significantly from the Company&#x2019;s estimates.&#xa0;</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Cash and cash equivalents</b></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company considers all short-term investments with an original maturity of three months or less, when purchased, to be cash equivalents. The Company did not have any cash equivalents as of March 31, 2020 and December 31, 2019.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Marketable securities held in Trust Account</b></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in;">At March 31, 2020 and December 31, 2019, the assets held in the Trust Account were substantially held in a money market fund that invests primarily in U.S. Treasury Bills. Through March 31, 2020, the Company withdrew $1,714,842 of interest income from the Trust Account, of which $40,050 was withdrawn during the three months ended March 31, 2020, to pay franchise taxes.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Common stock subject to possible redemption</b></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company accounts for its common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification (&#x201c;ASC&#x201d;) Topic 480 &#x201c;Distinguishing Liabilities from Equity.&#x201d; Common stock subject to mandatory redemption 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&#x2019;s control) is classified as temporary equity. At all other times, common stock is classified as stockholders&#x2019; equity. The Company&#x2019;s common stock features certain redemption rights that are considered to be outside of the Company&#x2019;s control and subject to occurrence of uncertain future events. Accordingly, common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders&#x2019; equity section of the Company&#x2019;s condensed balance sheets.&#xa0;</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Income taxes</b></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company complies with the accounting and reporting requirements of Accounting Standards Codification (&#x201c;ASC&#x201d;) Topic 740 &#x201c;Income Taxes,&#x201d; which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of March 31, 2020 and December 31, 2019. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The effective tax rate of (27)% differs from the statutory tax rate of 21% for the three months ended March 31, 2020 primarily due to the non-deductibility of transactional expenses incurred in connection with the search for potential targets for a Business Combination. The effective tax rate of 22% differs from the statutory tax rate of 21% for the three months ended March 31, 2019 due to true-up adjustments from the prior year tax returns.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company may be subject to potential examination by federal, state and city taxing authorities in the areas of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal, state and city tax laws. The Company&#x2019;s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Net loss per common share</b></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding for the period. The Company applies the two-class method in calculating earnings per share. Shares of common stock subject to possible redemption at March 31, 2020 and 2019, which are not currently redeemable and are not redeemable at fair value, have been excluded from the calculation of basic loss per share since such shares, if redeemed, only participate in their pro rata share of the Trust Account earnings. The Company has not considered the effect of warrants sold in the Initial Public Offering and private placement to purchase 16,825,000 shares of common stock in the calculation of diluted loss per share, since the exercise of the warrants is contingent upon the occurrence of future events. As a result, diluted loss per common share is the same as basic loss per common share for the periods.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Reconciliation of net loss per common share</b></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company&#x2019;s net (loss) income is adjusted for the portion of income that is attributable to common stock subject to redemption, as these shares only participate in the earnings of the Trust Account and not the income or losses of the Company. Accordingly, basic and diluted loss per common share is calculated as follows:</p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td> <td colspan="6" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Three Months Ended<br /> March 31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left; text-indent: -9pt; padding-left: 9pt">Net (loss) income</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">(349,854</td><td style="width: 1%; text-align: left">)</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">775,913</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt">Less: Income attributable to common stock subject to possible redemption</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(109,662</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(1,026,960</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 4pt; text-indent: -9pt; padding-left: 9pt">Adjusted net loss</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">&#xa0;</td><td style="border-bottom: Black 4pt double; text-align: right">(459,516</td><td style="padding-bottom: 4pt; text-align: left">)</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">&#xa0;</td><td style="border-bottom: Black 4pt double; text-align: right">(251,047</td><td style="padding-bottom: 4pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; "> <td style="text-indent: -9pt; padding-left: 9pt">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 4pt; text-indent: -9pt; padding-left: 9pt">Weighted average common shares outstanding, basic and diluted</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">&#xa0;</td><td style="border-bottom: Black 4pt double; text-align: right">6,375,178</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">&#xa0;</td><td style="border-bottom: Black 4pt double; text-align: right">6,039,072</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-indent: -9pt; padding-left: 9pt">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 4pt; text-indent: -9pt; padding-left: 9pt">Basic and diluted net loss per common share</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">(0.07</td><td style="padding-bottom: 4pt; text-align: left">)</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">(0.04</td><td style="padding-bottom: 4pt; text-align: left">)</td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Concentration of credit risk</b></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Financial instruments that potentially subject the Company to concentration of credit risk consist of a cash account in a financial institution, which, at times may exceed the federal depository insurance coverage of $250,000. The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Fair value of financial instruments</b></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The fair value of the Company&#x2019;s assets and liabilities, which qualify as financial instruments under ASC Topic 820, &#x201c;Fair Value Measurement&#x201d; (&#x201c;ASC 820&#x201d;), approximates the carrying amounts represented in the accompanying condensed balance sheets, primarily due to their short-term nature.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Recent accounting pronouncements</b></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company&#x2019;s condensed financial statements.</p><br/> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Basis of presentation</b>&#xa0;</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (&#x201c;GAAP&#x201d;) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission (the &#x201c;SEC&#x201d;). Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.&#xa0;</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The accompanying unaudited condensed financial statements should be read in conjunction with the Company&#x2019;s Annual Report on Form 10-K for the year ended December 31, 2019 as filed with the SEC on March 10, 2020, which contains the audited financial statements and notes thereto. The financial information as of December 31, 2019 is derived from the audited financial statements presented in the Company&#x2019;s Annual Report on Form 10-K for the year ended December 31, 2019. The interim results for the three months ended March 31, 2020 are not necessarily indicative of the results to be expected for the year ending December 31, 2020 or for any future interim periods.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Use of estimates</b>&#xa0;</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.&#xa0;</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future events. Accordingly, the actual results could differ significantly from the Company&#x2019;s estimates.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Cash and cash equivalents</b></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company considers all short-term investments with an original maturity of three months or less, when purchased, to be cash equivalents. The Company did not have any cash equivalents as of March 31, 2020 and December 31, 2019</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Marketable securities held in Trust Account</b></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in;">At March 31, 2020 and December 31, 2019, the assets held in the Trust Account were substantially held in a money market fund that invests primarily in U.S. Treasury Bills. Through March 31, 2020, the Company withdrew $1,714,842 of interest income from the Trust Account, of which $40,050 was withdrawn during the three months ended March 31, 2020, to pay franchise taxes.</p> 1714842 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Common stock subject to possible redemption</b></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company accounts for its common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification (&#x201c;ASC&#x201d;) Topic 480 &#x201c;Distinguishing Liabilities from Equity.&#x201d; Common stock subject to mandatory redemption 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&#x2019;s control) is classified as temporary equity. At all other times, common stock is classified as stockholders&#x2019; equity. The Company&#x2019;s common stock features certain redemption rights that are considered to be outside of the Company&#x2019;s control and subject to occurrence of uncertain future events. Accordingly, common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders&#x2019; equity section of the Company&#x2019;s condensed balance sheets.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Income taxes</b></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company complies with the accounting and reporting requirements of Accounting Standards Codification (&#x201c;ASC&#x201d;) Topic 740 &#x201c;Income Taxes,&#x201d; which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of March 31, 2020 and December 31, 2019. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The effective tax rate of (27)% differs from the statutory tax rate of 21% for the three months ended March 31, 2020 primarily due to the non-deductibility of transactional expenses incurred in connection with the search for potential targets for a Business Combination. The effective tax rate of 22% differs from the statutory tax rate of 21% for the three months ended March 31, 2019 due to true-up adjustments from the prior year tax returns.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company may be subject to potential examination by federal, state and city taxing authorities in the areas of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal, state and city tax laws. The Company&#x2019;s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.</p> -0.27 0.21 0.22 0.21 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Net loss per common share</b></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding for the period. The Company applies the two-class method in calculating earnings per share. Shares of common stock subject to possible redemption at March 31, 2020 and 2019, which are not currently redeemable and are not redeemable at fair value, have been excluded from the calculation of basic loss per share since such shares, if redeemed, only participate in their pro rata share of the Trust Account earnings. The Company has not considered the effect of warrants sold in the Initial Public Offering and private placement to purchase 16,825,000 shares of common stock in the calculation of diluted loss per share, since the exercise of the warrants is contingent upon the occurrence of future events. As a result, diluted loss per common share is the same as basic loss per common share for the periods.</p> 16825000 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Reconciliation of net loss per common share</b></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company&#x2019;s net (loss) income is adjusted for the portion of income that is attributable to common stock subject to redemption, as these shares only participate in the earnings of the Trust Account and not the income or losses of the Company. Accordingly, basic and diluted loss per common share is calculated as follows:</p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td> <td colspan="6" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Three Months Ended<br /> March 31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left; text-indent: -9pt; padding-left: 9pt">Net (loss) income</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">(349,854</td><td style="width: 1%; text-align: left">)</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">775,913</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt">Less: Income attributable to common stock subject to possible redemption</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(109,662</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(1,026,960</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 4pt; text-indent: -9pt; padding-left: 9pt">Adjusted net loss</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">&#xa0;</td><td style="border-bottom: Black 4pt double; text-align: right">(459,516</td><td style="padding-bottom: 4pt; text-align: left">)</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">&#xa0;</td><td style="border-bottom: Black 4pt double; text-align: right">(251,047</td><td style="padding-bottom: 4pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; "> <td style="text-indent: -9pt; padding-left: 9pt">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 4pt; text-indent: -9pt; padding-left: 9pt">Weighted average common shares outstanding, basic and diluted</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">&#xa0;</td><td style="border-bottom: Black 4pt double; text-align: right">6,375,178</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">&#xa0;</td><td style="border-bottom: Black 4pt double; text-align: right">6,039,072</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-indent: -9pt; padding-left: 9pt">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 4pt; text-indent: -9pt; padding-left: 9pt">Basic and diluted net loss per common share</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">(0.07</td><td style="padding-bottom: 4pt; text-align: left">)</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">(0.04</td><td style="padding-bottom: 4pt; text-align: left">)</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Concentration of credit risk</b></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Financial instruments that potentially subject the Company to concentration of credit risk consist of a cash account in a financial institution, which, at times may exceed the federal depository insurance coverage of $250,000. The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account.</p> 250000 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Fair value of financial instruments</b></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The fair value of the Company&#x2019;s assets and liabilities, which qualify as financial instruments under ASC Topic 820, &#x201c;Fair Value Measurement&#x201d; (&#x201c;ASC 820&#x201d;), approximates the carrying amounts represented in the accompanying condensed balance sheets, primarily due to their short-term nature.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Recent accounting pronouncements</b></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company&#x2019;s condensed financial statements.</p> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td> <td colspan="6" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Three Months Ended<br /> March 31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left; text-indent: -9pt; padding-left: 9pt">Net (loss) income</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">(349,854</td><td style="width: 1%; text-align: left">)</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">775,913</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt">Less: Income attributable to common stock subject to possible redemption</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(109,662</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(1,026,960</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 4pt; text-indent: -9pt; padding-left: 9pt">Adjusted net loss</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">&#xa0;</td><td style="border-bottom: Black 4pt double; text-align: right">(459,516</td><td style="padding-bottom: 4pt; text-align: left">)</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">&#xa0;</td><td style="border-bottom: Black 4pt double; text-align: right">(251,047</td><td style="padding-bottom: 4pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; "> <td style="text-indent: -9pt; padding-left: 9pt">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 4pt; text-indent: -9pt; padding-left: 9pt">Weighted average common shares outstanding, basic and diluted</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">&#xa0;</td><td style="border-bottom: Black 4pt double; text-align: right">6,375,178</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">&#xa0;</td><td style="border-bottom: Black 4pt double; text-align: right">6,039,072</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-indent: -9pt; padding-left: 9pt">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 4pt; text-indent: -9pt; padding-left: 9pt">Basic and diluted net loss per common share</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">(0.07</td><td style="padding-bottom: 4pt; text-align: left">)</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">(0.04</td><td style="padding-bottom: 4pt; text-align: left">)</td></tr> </table> 109662 1026960 -459516 -251047 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>3. INITIAL PUBLIC OFFERING</b></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Pursuant to the Initial Public Offering, the Company sold 20,000,000 Units at a purchase price of $10.00 per Unit. Each Unit consists of one share of common stock, and one-half of one warrant (&#x201c;Public Warrant&#x201d;). Each whole Public Warrant entitles the holder to purchase one share of common stock at an exercise price of $11.50 (see Note 7).</p><br/> 20000000 10.00 Each Unit consists of one share of common stock, and one-half of one warrant (&#x201c;Public Warrant&#x201d;). Each whole Public Warrant entitles the holder to purchase one share of common stock at an exercise price of $11.50 11.50 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>4. PRIVATE PLACEMENT</b></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Simultaneously with the closing of the Initial Public Offering, affiliates of the Hydra Sponsor and Matthews Lane Sponsor, HG Vora and certain members of management purchased an aggregate of 6,825,000 Private Placement Warrants at $1.00 per Private Placement Warrant, for an aggregate purchase price of $6,825,000. Each Private Placement Warrant entitles the holder to purchase one share of common stock at an exercise price of $11.50. The proceeds from the Private Placement Warrants were added to the proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds of the sale of the Private Placement Warrants will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and the Private Placement Warrants will expire worthless. There will be no redemption rights or liquidating distributions from the Trust Account with respect to the Private Placement Warrants.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the common stock issuable upon the exercise of the Private Placement Warrants are not transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants are exercisable on a cashless basis and are non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.</p><br/> 1.00 6825000 Each Private Placement Warrant entitles the holder to purchase one share of common stock at an exercise price of $11.50. 0.1150 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>5. RELATED PARTY TRANSACTIONS</b></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Founder Shares</b></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On September 11, 2017, the Company issued an aggregate of 7,187,500 shares of common stock to the Initial Stockholders (&#x201c;Founder Shares&#x201d;) for an aggregate purchase price of $25,000. On December 5, 2017, certain of the Initial Stockholders surrendered and returned to the Company, for nil consideration, an aggregate of 1,437,500 Founder Shares, which were cancelled, leaving an aggregate of 5,750,000 Founder Shares outstanding. The 5,750,000 Founder Shares included an aggregate of up to 750,000 shares subject to forfeiture by the Initial Stockholders to the extent that the underwriters&#x2019; over-allotment was not exercised in full or in part, so that the Initial Stockholders would own 20% of the Company&#x2019;s issued and outstanding shares after the Initial Public Offering (assuming the Initial Stockholders do not purchase any Public Shares in the Initial Public Offering). The underwriters&#x2019; election to exercise their over-allotment option expired unexercised on January 15, 2018 and, as a result, 750,000 Founder Shares were forfeited, resulting in 5,000,000 Founder Shares outstanding as of January 15, 2018.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Initial Stockholders have agreed, subject to certain exceptions, not to transfer, assign or sell any of the Founder Shares until the earlier of (i) one year after the date of the completion of a Business Combination, or (ii) the date on which the last sales price of the Company&#x2019;s common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations) for any 20 trading days within any 30-trading day period commencing 150 days after a Business Combination, or earlier, in each case, if subsequent to a Business Combination, the Company completes a subsequent liquidation, merger, stock exchange, or other similar transaction which results in all of the Company&#x2019;s stockholders having the right to exchange their common stock for cash, securities or other property.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Administrative Services Agreement</b></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company entered into an agreement whereby, commencing on December 1, 2017 through the earlier of the completion of a Business Combination or the Company&#x2019;s liquidation, the Company will pay Hydra Management, LLC a monthly fee of up to $10,000 for office space, utilities and secretarial and administrative support. For each of the three months ended March 31, 2020 and 2019, the Company incurred $30,000 in fees for these services. As of March 31, 2020 and December 31, 2019, $41,000 and $17,000, respectively, is included in accounts payable and accrued expenses in the accompanying balance sheets.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Promissory Note</b></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On December 5, 2019, the Company entered into the GTWY Expense Advance Agreement, pursuant to which the Potential Target committed to provide $566,288 to fund contributions to the Trust Account. The Company drew down the full amount under the GTWY Expense Advance Agreement to fund the required Contribution to the Trust Account for the period December 6, 2019 to January 5, 2020 by issuing an unsecured promissory note (the &#x201c;Note&#x201d;) to the Potential Target. The Note does not bear interest. If the Company completes an initial Business Combination, the Company would repay the Note out of the proceeds of the Trust Account released to the Company. Otherwise, amounts borrowed under the Note would be repaid only out of funds held by the Company outside the Trust Account. At March 31, 2020, there was $566,268 outstanding under the Note.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Related Party Loans</b></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, the Hydra Sponsor, an affiliate of the Matthews Lane Sponsor and HG Vora (the &#x201c;Funding Parties&#x201d;) loaned an aggregate of $1,000,000 to the Company, in accordance with unsecured promissory notes issued to the Funding Parties (see below), pursuant to an expense advance agreement dated December 1, 2017. The Funding Parties may, but are not obligated to, loan the Company additional funds from time to time or at any time, as may be required (&#x201c;Working Capital Loans&#x201d;). The Working Capital Loans would either be paid upon completion of a Business Combination, without interest, or, at the holder&#x2019;s discretion, up to $1,000,000 of the Working Capital Loans may be converted into warrants at a price of $1.00 per warrant. The warrants would be identical to the Private Placement Warrants. In the event that a Business Combination does not close, the Company may use a portion of the proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On January 15, 2020, the Company issued the Promissory Notes to the Sponsors and HG Vora. The Promissory Notes are non-interest bearing. The funds received may be used by the Company to fund the working capital requirements and to fund required Contributions to the Trust Account in connection with the previously approved Extended Date. In the event that the Company is unable to complete an initial Business Combination, the Company may use a portion of the working capital held outside its Trust Account to repay such loaned amounts but no proceeds from the Trust Account would be used for such repayment. The loans are convertible into warrants to purchase shares of common stock, at a price of $1.00 per warrant, at the option of the Sponsors and HG Vora. The warrants would be identical to the Private Placement Warrants. As of March 31, 2020, there was $1,000,000 outstanding under the Promissory Notes.</p><br/> 7187500 25000 1437500 5750000 750000 0.20 750000 5000000 (i) one year after the date of the completion of a Business Combination, or (ii) the date on which the last sales price of the Company&#x2019;s common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations) for any 20 trading days within any 30-trading day period commencing 150 days after a Business Combination, or earlier, in each case, if subsequent to a Business Combination, the Company completes a subsequent liquidation, merger, stock exchange, or other similar transaction which results in all of the Company&#x2019;s stockholders having the right to exchange their common stock for cash, securities or other property. 10000 30000 30000 41000 17000 566288 566268 1000000 1000000 1.00 1.00 1000000 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>6. COMMITMENTS</b></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Registration Rights</b></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Pursuant to a registration rights agreement entered into on December 1, 2017, the holders of the Founder Shares, Private Placement Warrants (and their underlying securities), Private Placement Units (and their underlying securities) (as defined below) and any warrants that may be issued upon conversion of the Working Capital Loans (and their underlying securities) are entitled to registration rights. The holders of these securities are entitled to make up to two demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain &#x201c;piggy-back&#x201d; registration rights with respect to registration statements filed subsequent to the completion of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that the Company will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lock-up period. The Company will bear the expenses incurred in connection with the filing of any such registration statements.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Underwriters Agreement</b></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The underwriters of the Initial Public Offering are entitled to a deferred fee of three and one-half percent (3.5%) of the gross proceeds of the Initial Public Offering, or $7,000,000. Up to $0.05 per Unit (or up to $1,000,000) of the deferred fee may be paid to third parties (who are members of FINRA) that assist the Company in consummating its initial Business Combination. The election to make such payments to third parties will be solely at the discretion of the Company&#x2019;s management team, and such third parties will be selected by the management team in their sole and absolute discretion. The deferred fee will be paid in cash upon the closing of a Business Combination from the amounts held in the Trust Account, subject to the terms of the underwriting agreement.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Contingent Forward Purchase Contract</b></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On December 1, 2017, the strategic investor entered into a contingent forward purchase contract (the &#x201c;Contingent Forward Purchase Contract&#x201d;) with the Company to purchase, in a private placement for gross proceeds of $62,500,000 to occur concurrently with the consummation of the Business Combination, 6,250,000 Units on substantially the same terms as the sale of Units in the Initial Public Offering at $10.00 per Unit. On December 27, 2019, the Contingent Forward Purchase Contract was amended to provide that the Contingent Forward Purchase Contract will terminate effective upon the closing in connection with the proposed business combination with GTWY Holdings. As part of the Transaction (as defined below), on December 27, 2019, the strategic investor entered into the Strategic Investor Subscription Agreement, in similar form to and to replace the Contingent Forward Purchase Contract, with GTWY Holdings pursuant to which, among other things the strategic investor agreed to purchase 3,000,000 units of GTWY Holdings&#x2019; equity securities (with each unit consisting of one GTWY Holdings Share and one-half of one GTWY Holdings Warrant) for a purchase price of $10.00 per unit.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Service Provider Agreement</b></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">From time to time the Company has entered into and may enter into agreements with various services providers&#xa0;and advisors, including investment banks, to help us identify targets,&#xa0;negotiate&#xa0;terms of potential Business Combinations, consummate a Business Combination and/or provide&#xa0;other services.&#xa0;In&#xa0;connection with these agreements, the Company may be required to pay such service providers&#xa0;and advisors&#xa0;fees in connection with their services to the extent that certain conditions, including the closing of a potential Business Combination, are met.&#xa0;If&#xa0;a&#xa0;Business Combination does not occur,&#xa0;the Company would not expect to be required to pay these&#xa0;contingent fees.&#xa0;There can be no assurance that the Company will complete&#xa0;a&#xa0;Business Combination.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Merger Agreement</b></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On December 27, 2019, the Company entered into an Agreement and Plan of Merger (the &#x201c;Merger Agreement&#x201d;), with GTWY Holdings and GTWY Merger Sub Corp., a Delaware corporation and wholly owned subsidiary of GTWY Holdings (&#x201c;Merger Sub&#x201d;), relating to a proposed business combination transaction. Pursuant to the Merger Agreement, Merger Sub will merge with and into the Company, with the Company surviving such merger as a wholly owned subsidiary of GTWY Holdings and the stockholders of the Company becoming stockholders of the GTWY Holdings (the &#x201c;Merger&#x201d;).</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">GTWY Holdings&#x2019; stockholders as of immediately prior to the Arrangement Effective Time (as defined in the Merger Agreement) will be entitled to receive a cash distribution in an aggregate amount equal to GTWY Pre-Closing Distribution Amount (as defined in the Merger Agreement). In addition, GTWY Holdings&#x2019; issued and outstanding share capital as of immediately prior to the Arrangement Effective Time, which is expected to have an aggregate value of $222,917,162 (subject to certain adjustments for transaction expenses and deduction of GTWY Pre-Closing Distribution Amount, as further described in the Merger Agreement), will, at the closing of the transactions contemplated by the Merger Agreement (collectively, the &#x201c;Transactions&#x201d;), be converted into a number of common shares of GTWY Holdings calculated based on a reference price of $10.00 per share, and retained by GTWY&#x2019;s existing stockholders.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Transaction will be consummated subject to the deliverables and provisions as further described in the Merger Agreement.</p><br/> 0.035 7000000 62500000 6250000 10.00 The underwriters of the Initial Public Offering are entitled to a deferred fee of three and one-half percent (3.5%) of the gross proceeds of the Initial Public Offering, or $7,000,000. Up to $0.05 per Unit (or up to $1,000,000) of the deferred fee may be paid to third parties (who are members of FINRA) that assist the Company in consummating its initial Business Combination. the strategic investor entered into the Strategic Investor Subscription Agreement, in similar form to and to replace the Contingent Forward Purchase Contract, with GTWY Holdings pursuant to which, among other things the strategic investor agreed to purchase 3,000,000 units of GTWY Holdings&#x2019; equity securities (with each unit consisting of one GTWY Holdings Share and one-half of one GTWY Holdings Warrant) for a purchase price of $10.00 per unit. In addition, GTWY Holdings&#x2019; issued and outstanding share capital as of immediately prior to the Arrangement Effective Time, which is expected to have an aggregate value of $222,917,162 (subject to certain adjustments for transaction expenses and deduction of GTWY Pre-Closing Distribution Amount, as further described in the Merger Agreement), will, at the closing of the transactions contemplated by the Merger Agreement (collectively, the &#x201c;Transactions&#x201d;), be converted into a number of common shares of GTWY Holdings calculated based on a reference price of $10.00 per share, and retained by GTWY&#x2019;s existing stockholders. <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>7. STOCKHOLDERS&#x2019; EQUITY</b></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>Preferred Stock</i></b> &#x2014; The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per share with such designation, rights and preferences as may be determined from time to time by the Company&#x2019;s Board of Directors. As of March 31, 2020 and December 31, 2019, there were no shares of preferred stock issued or outstanding.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>Common Stock</i></b> &#x2014; The Company is authorized to issue 100,000,000 shares of common stock with a par value of $0.0001 per share. Holders of the Company&#x2019;s common stock are entitled to one vote for each share. The underwriters&#x2019; election to exercise their over-allotment option expired unexercised on January 15, 2018 and, as a result, 750,000 Founder Shares were forfeited. At March 31, 2020 and December 31, 2019, there were 6,604,785 and 6,375,178 shares of common stock issued and outstanding, respectively, excluding 433,788 and 17,501,073 shares of common stock subject to possible redemption, respectively.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>Warrants</i></b> &#x2014; Public Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants. The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination and (b) 12 months from the closing of the Initial Public Offering; provided in each case that the Company has an effective registration statement under the Securities Act covering the shares of common stock issuable upon exercise of the Public Warrants and a current prospectus relating to them is available. The Company has agreed that as soon as practicable, but in no event later than 15 business days after the closing of a Business Combination, the Company will use its best efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the shares of common stock issuable upon exercise of the Public Warrants. The Company will use its best efforts to cause the same to become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the Public Warrants in accordance with the provisions of the warrant agreement. If any such registration statement has not been declared effective by the 60<sup>th</sup> business day following the closing of the Business Combination, holders of the Public Warrants shall have the right, during the period beginning on the 61<sup>st</sup> business day after the closing of the Business Combination and ending upon such registration statement being declared effective by the SEC, and during any other period when the Company shall fail to have maintained an effective registration statement covering the shares of common stock issuable upon exercise of the Public Warrants, to exercise such Public Warrants on a &#x201c;cashless basis.&#x201d; Notwithstanding the above, if the Company&#x2019;s common stock is at the time of any exercise of a Public Warrant not listed on a national securities exchange such that it satisfies the definition of a &#x201c;covered security&#x201d; under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a &#x201c;cashless basis&#x201d; in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, the Company will not be required to file or maintain in effect a registration statement, but will be required to use its best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. The Public Warrants will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company may redeem the Public Warrants:</p><br/><table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 0.5in; padding-right: 0.8pt">&#xa0;</td> <td style="width: 0.25in; padding-right: 0.8pt"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#x25cf;</font></td> <td style="padding-right: 0.8pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">in whole and not in part;</font></td></tr> <tr style="vertical-align: top"> <td style="padding-right: 0.8pt">&#xa0;</td> <td style="padding-right: 0.8pt"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#x25cf;</font></td> <td style="padding-right: 0.8pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">at a price of $0.01 per warrant;</font></td></tr> <tr style="vertical-align: top"> <td style="padding-right: 0.8pt">&#xa0;</td> <td style="padding-right: 0.8pt"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#x25cf;</font></td> <td style="padding-right: 0.8pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">at any time during the exercise period;</font></td></tr> <tr style="vertical-align: top"> <td style="padding-right: 0.8pt">&#xa0;</td> <td style="padding-right: 0.8pt"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#x25cf;</font></td> <td style="padding-right: 0.8pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">upon a minimum of 30 days&#x2019; prior written notice of redemption;</font></td></tr> <tr style="vertical-align: top"> <td style="padding-right: 0.8pt">&#xa0;</td> <td style="padding-right: 0.8pt"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#x25cf;</font></td> <td style="padding-right: 0.8pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">if, and only if, the last sale price of the Company&#x2019;s common stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending on the third business day prior to the date on which the Company sends the notice of redemption to the warrant holders; and</font></td></tr> <tr style="vertical-align: top"> <td style="padding-right: 0.8pt">&#xa0;</td> <td style="padding-right: 0.8pt"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#x25cf;</font></td> <td style="padding-right: 0.8pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">if, and only if, there is a current registration statement in effect with respect to the shares of common stock underlying such warrants.</font></td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a &#x201c;cashless basis,&#x201d; as described in the warrant agreement.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The exercise price and number of shares of common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuance of common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company&#x2019;s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless.</p><br/> Holders of the Company&#x2019;s common stock are entitled to one vote for each share. 750000 433788 17501073 five years 0.01 Company&#x2019;s common stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending on the third business day prior to the date on which the Company sends the notice of redemption to the warrant holders <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>8. FAIR VALUE MEASUREMENTS</b></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company follows the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The fair value of the Company&#x2019;s financial assets and liabilities reflects management&#x2019;s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:</p><br/><table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 0.5in; padding-right: 0.8pt">&#xa0;</td> <td style="padding-left: 0in; white-space: nowrap; width: 0.5in; padding-right: 0.8pt"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Level 1:&#xa0;</font></td> <td style="padding-right: 0.8pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.</font></td></tr> </table><br/><table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 0.5in; padding-right: 0.8pt">&#xa0;</td> <td style="white-space: nowrap; width: 0.5in; padding-right: 0.8pt"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Level 2:&#xa0;</font></td> <td style="padding-right: 0.8pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.</font></td></tr> <tr style="vertical-align: top"> <td style="padding-right: 0.8pt">&#xa0;</td> <td style="white-space: nowrap; padding-right: 0.8pt">&#xa0;</td> <td style="padding-right: 0.8pt; text-align: justify">&#xa0;</td></tr> <tr style="vertical-align: top"> <td style="padding-right: 0.8pt">&#xa0;</td> <td style="white-space: nowrap; padding-right: 0.8pt"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Level 3:</font></td> <td style="padding-right: 0.8pt; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.</font></td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table presents information about the Company&#x2019;s assets that are measured at fair value on a recurring basis at March 31, 2020 and December 31, 2019, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:</p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; font-weight: bold; border-bottom: Black 1.5pt solid">Description</td><td style="white-space: nowrap; font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Level</td><td style="white-space: nowrap; font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">March 31,<br /> 2020</td><td style="white-space: nowrap; padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="white-space: nowrap; font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December&#xa0;31,<br /> 2019</td><td style="white-space: nowrap; padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>Assets:</td><td>&#xa0;</td> <td style="text-align: right">&#xa0;</td><td>&#xa0;</td> <td colspan="2" style="text-align: right">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2" style="text-align: right">&#xa0;</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%; text-align: left">Cash and marketable securities held in Trust Account</td><td style="width: 1%">&#xa0;</td> <td style="width: 11%; text-align: center">1</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">61,327,451</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">202,915,739</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> </table><br/> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; font-weight: bold; border-bottom: Black 1.5pt solid">Description</td><td style="white-space: nowrap; font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Level</td><td style="white-space: nowrap; font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">March 31,<br /> 2020</td><td style="white-space: nowrap; padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="white-space: nowrap; font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December&#xa0;31,<br /> 2019</td><td style="white-space: nowrap; padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>Assets:</td><td>&#xa0;</td> <td style="text-align: right">&#xa0;</td><td>&#xa0;</td> <td colspan="2" style="text-align: right">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2" style="text-align: right">&#xa0;</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%; text-align: left">Cash and marketable securities held in Trust Account</td><td style="width: 1%">&#xa0;</td> <td style="width: 11%; text-align: center">1</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; 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A0#% @ QH"G4*RM;ZBM @ UPH !@ M ( !]P@ 'AL+W=O&PO=V]R:W-H965T&UL4$L! A0# M% @ QH"G4.+9?5&PO=V]R:W-H965T&UL4$L! A0#% @ QH"G4+\[VU>U M 0 T@, !@ ( !F1P 'AL+W=O !X;"]W;W)K&PO=V]R:W-H965T&UL4$L! A0#% @ QH"G4.,Y@=.U 0 T@, !D M ( !7"( 'AL+W=O&PO=V]R:W-H M965T&UL4$L! M A0#% @ QH"G4/B HZJU 0 T@, !D ( !)"@ 'AL M+W=O&PO=V]R:W-H965T&UL4$L! A0#% @ QH"G M4!4 "+8_ @ U < !D ( !ZRT 'AL+W=O&PO=V]R:W-H965T&UL4$L! A0#% @ QH"G4$">^4P'!0 :QL M !D ( !/30 'AL+W=O&PO=V]R:W-H965TX[ !X;"]W;W)K&UL4$L! A0#% @ QH"G4#Y-&PO=V]R:W-H965T M&UL4$L! A0# M% @ QH"G4+/TB[A] @ D@D !D ( !1D< 'AL+W=O M&PO=V]R:W-H965T&UL4$L! A0#% @ QH"G4'>S M^UL*1 K2P! !0 ( !(T\ 'AL+W-H87)E9%-T&UL4$L! A0#% @ QH"G4!4IZF0Y @ W0D T ( ! M7Y, 'AL+W-T>6QE&PO=V]R:V)O;VLN>&UL4$L! A0#% @ MQH"G4.+-MX%< 0 9A$ !H ( !(9D 'AL+U]R96QS+W=O M XML 13 R11.htm IDEA: XBRL DOCUMENT v3.20.1
RELATED PARTY TRANSACTIONS
3 Months Ended
Mar. 31, 2020
Related Party Transactions [Abstract]  
Related Party Transactions Disclosure [Text Block]

5. RELATED PARTY TRANSACTIONS


Founder Shares


On September 11, 2017, the Company issued an aggregate of 7,187,500 shares of common stock to the Initial Stockholders (“Founder Shares”) for an aggregate purchase price of $25,000. On December 5, 2017, certain of the Initial Stockholders surrendered and returned to the Company, for nil consideration, an aggregate of 1,437,500 Founder Shares, which were cancelled, leaving an aggregate of 5,750,000 Founder Shares outstanding. The 5,750,000 Founder Shares included an aggregate of up to 750,000 shares subject to forfeiture by the Initial Stockholders to the extent that the underwriters’ over-allotment was not exercised in full or in part, so that the Initial Stockholders would own 20% of the Company’s issued and outstanding shares after the Initial Public Offering (assuming the Initial Stockholders do not purchase any Public Shares in the Initial Public Offering). The underwriters’ election to exercise their over-allotment option expired unexercised on January 15, 2018 and, as a result, 750,000 Founder Shares were forfeited, resulting in 5,000,000 Founder Shares outstanding as of January 15, 2018.


The Initial Stockholders have agreed, subject to certain exceptions, not to transfer, assign or sell any of the Founder Shares until the earlier of (i) one year after the date of the completion of a Business Combination, or (ii) the date on which the last sales price of the Company’s common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations) for any 20 trading days within any 30-trading day period commencing 150 days after a Business Combination, or earlier, in each case, if subsequent to a Business Combination, the Company completes a subsequent liquidation, merger, stock exchange, or other similar transaction which results in all of the Company’s stockholders having the right to exchange their common stock for cash, securities or other property.


Administrative Services Agreement


The Company entered into an agreement whereby, commencing on December 1, 2017 through the earlier of the completion of a Business Combination or the Company’s liquidation, the Company will pay Hydra Management, LLC a monthly fee of up to $10,000 for office space, utilities and secretarial and administrative support. For each of the three months ended March 31, 2020 and 2019, the Company incurred $30,000 in fees for these services. As of March 31, 2020 and December 31, 2019, $41,000 and $17,000, respectively, is included in accounts payable and accrued expenses in the accompanying balance sheets.


Promissory Note


On December 5, 2019, the Company entered into the GTWY Expense Advance Agreement, pursuant to which the Potential Target committed to provide $566,288 to fund contributions to the Trust Account. The Company drew down the full amount under the GTWY Expense Advance Agreement to fund the required Contribution to the Trust Account for the period December 6, 2019 to January 5, 2020 by issuing an unsecured promissory note (the “Note”) to the Potential Target. The Note does not bear interest. If the Company completes an initial Business Combination, the Company would repay the Note out of the proceeds of the Trust Account released to the Company. Otherwise, amounts borrowed under the Note would be repaid only out of funds held by the Company outside the Trust Account. At March 31, 2020, there was $566,268 outstanding under the Note.


Related Party Loans


In order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, the Hydra Sponsor, an affiliate of the Matthews Lane Sponsor and HG Vora (the “Funding Parties”) loaned an aggregate of $1,000,000 to the Company, in accordance with unsecured promissory notes issued to the Funding Parties (see below), pursuant to an expense advance agreement dated December 1, 2017. The Funding Parties may, but are not obligated to, loan the Company additional funds from time to time or at any time, as may be required (“Working Capital Loans”). The Working Capital Loans would either be paid upon completion of a Business Combination, without interest, or, at the holder’s discretion, up to $1,000,000 of the Working Capital Loans may be converted into warrants at a price of $1.00 per warrant. The warrants would be identical to the Private Placement Warrants. In the event that a Business Combination does not close, the Company may use a portion of the proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans.


On January 15, 2020, the Company issued the Promissory Notes to the Sponsors and HG Vora. The Promissory Notes are non-interest bearing. The funds received may be used by the Company to fund the working capital requirements and to fund required Contributions to the Trust Account in connection with the previously approved Extended Date. In the event that the Company is unable to complete an initial Business Combination, the Company may use a portion of the working capital held outside its Trust Account to repay such loaned amounts but no proceeds from the Trust Account would be used for such repayment. The loans are convertible into warrants to purchase shares of common stock, at a price of $1.00 per warrant, at the option of the Sponsors and HG Vora. The warrants would be identical to the Private Placement Warrants. As of March 31, 2020, there was $1,000,000 outstanding under the Promissory Notes.


XML 14 R15.htm IDEA: XBRL DOCUMENT v3.20.1
SUBSEQUENT EVENTS
3 Months Ended
Mar. 31, 2020
Subsequent Events [Abstract]  
Subsequent Events [Text Block]

9. SUBSEQUENT EVENTS


The Company evaluates subsequent events and transactions that occur after the balance sheet date up to the date that the condensed financial statements were issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the condensed financial statements.


XML 15 R19.htm IDEA: XBRL DOCUMENT v3.20.1
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (Details) - USD ($)
1 Months Ended 3 Months Ended
Jan. 15, 2020
Dec. 05, 2019
Nov. 26, 2019
Dec. 05, 2017
Apr. 01, 2020
Mar. 26, 2020
Mar. 31, 2020
Dec. 31, 2019
Mar. 31, 2019
Dec. 31, 2018
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (Details) [Line Items]                    
Number of units issued in transaction (in Shares)       20,000,000            
Unit price (in Dollars per share)       $ 10.00            
Transaction costs             $ 11,548,735      
Underwriting fees             4,000,000      
Deferred underwriting fees             7,000,000      
Offering cost             548,735      
Cash held outside of trust account available for working capital purposes             $ 167,951      
Minimum percentage of trust account required for business combination             80.00%      
Percentage of outstanding voting securities             50.00%      
Pro rata interest earned on funds held in trust account (in Dollars per share)             $ 10.00      
Amount of threshold tangible assets             $ 5,000,001      
Common stock subject to redemption share price held in trust account (in dollars per share)       11.50%     20.00%      
Description of business combination within the combination period             If the Company is unable to complete a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no more than ten business days thereafter, redeem 100% of the outstanding Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned and not previously released to pay franchise and income taxes (less up to $75,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining stockholders and the Company’s board of directors, proceed to commence a voluntary liquidation and thereby a formal dissolution of the Company, subject in each case to its obligations to provide for claims of creditors and the requirements of applicable law.      
Maximum additonal fund for liquidation expenses paid             $ 75,000      
Business combination, description     the Company held a special meeting pursuant to which the Company’s stockholders approved extending the Combination Period from December 5, 2019 to April 5, 2020 (the “Initial Extended Date”). In connection with the approval of the extension, stockholders elected to redeem an aggregate of 1,123,749 shares of the Company’s common stock. As a result, an aggregate of $11,583,473 (or approximately $10.31 per share) was released from the Company’s Trust Account to pay such stockholders The Company agreed to contribute (the “Contribution”) $0.03 for each share of the Company’s common stock that did not redeem in connection with the extension for each monthly period or portion thereof that is needed to complete a Business Combination (commencing on December 6, 2019 and on the 6th day of each subsequent month through the Initial Extended Date). On each of December 5, 2019, January 3, 2020, February 4, 2020 and March 4, 2020, the Company made a Contribution of $0.03 for each of the public shares outstanding, for an aggregate Contribution of $2,265,151, which amounts were deposited into the Trust Account.              
Stockholders elected to redeem aggregate of shares of common stock (in Shares)           16,837,678 1,123,749      
Aggregate of amount released from company's trust account to pay such stockholders           $ 176,283,492 $ 11,583,473      
Aggregate of amount per share released from company's trust account to pay such stockholders (in Dollars per share)           $ 10.47 $ 10.31      
Contribution price per share (in Dollars per share)   $ 0.03       $ 10.00 $ 0.03      
Aggregate contribution amount deposited into trust account   $ 2,265,151                
Shares of common stock issued and outstanding (in Shares)           7,038,573        
Redemption of common stock             $ 136,283,492      
Due to Officers or Stockholders, Current             $ 40,000,000      
Percentage of redemption of company's outstanding public shares             100.00%      
Operating bank accounts           $ 167,951 $ 167,951 $ 1,061,151 $ 1,506,596 $ 1,658,398
Securities held in trust account           61,327,451 61,327,451 195,312,177    
Working capital deficit           $ 3,233,889        
Prepaid income taxes             63,946 $ 138,571    
Franchise and income taxes payable             $ 50,000      
Aggregate amount of unsecured promissory notes to sponsors and HG Vora $ 1,000,000                  
GTWY Expense Advance Agreement [Member]                    
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (Details) [Line Items]                    
Aggregate contribution amount deposited into trust account   $ 566,288                
Subsequent Event [Member]                    
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (Details) [Line Items]                    
Redemption of common stock         $ 40,000,000          
IPO [Member]                    
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (Details) [Line Items]                    
Number of units issued in transaction (in Shares)       20,000,000            
Gross proceeds from issuance offering       $ 200,000,000            
Net proceeds from issuance equity held in trust account       $ 200,000,000            
Unit price (in Dollars per share)       $ 10.00            
IPO [Member] | Warrant [Member] | Sponsors [Member]                    
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (Details) [Line Items]                    
Number of units issued in transaction (in Shares)       6,825,000            
Unit price (in dollars per unit) (in Dollars per share)       $ 1.00            
Proceeds from issuance of warrant private placement       $ 6,825,000            
Private Placement [Member] | Warrant [Member] | Sponsors [Member]                    
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (Details) [Line Items]                    
Proceeds from issuance of warrant private placement       $ 6,825,000            
XML 16 R23.htm IDEA: XBRL DOCUMENT v3.20.1
PRIVATE PLACEMENT (Details) - USD ($)
3 Months Ended
Dec. 05, 2017
Mar. 31, 2020
PRIVATE PLACEMENT (Details) [Line Items]    
Number of units issued in transaction 20,000,000  
Exercise price $ 11.50  
Warrant description   Each Private Placement Warrant entitles the holder to purchase one share of common stock at an exercise price of $11.50.
Common stock subject to redemption share price held in trust account (in dollars per share) 11.50% 20.00%
Warrant [Member]    
PRIVATE PLACEMENT (Details) [Line Items]    
Exercise price   $ 0.01
IPO [Member]    
PRIVATE PLACEMENT (Details) [Line Items]    
Number of units issued in transaction 20,000,000  
IPO [Member] | Warrant [Member] | Sponsors [Member]    
PRIVATE PLACEMENT (Details) [Line Items]    
Number of units issued in transaction 6,825,000  
Exercise price $ 1.00  
Proceeds from issuance of warrant private placement $ 6,825,000  
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FAIR VALUE MEASUREMENTS (Details) - Schedule of Asset Fair Value on Recurring Basic - USD ($)
Mar. 31, 2020
Dec. 31, 2019
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Cash and marketable securities held in Trust Account $ 61,327,451 $ 202,915,739
XML 19 R7.htm IDEA: XBRL DOCUMENT v3.20.1
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
3 Months Ended
Mar. 31, 2020
Accounting Policies [Abstract]  
Business Description and Basis of Presentation [Text Block]

1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS 


Leisure Acquisition Corp. (the “Company”) is a blank check company incorporated in Delaware on September 11, 2017. The Company was formed for the purpose of acquiring, through a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, recapitalization, exchangeable share transaction or other similar business transaction, one or more operating businesses or assets that the Company has not yet identified (a “Business Combination”). 


At March 31, 2020, the Company had not yet commenced operations. All activity through March 31, 2020 relates to the Company’s formation, its initial public offering (“Initial Public Offering”), which is described below, identifying a target company for a Business Combination and activities in connection with the proposed acquisition of GTWY Holdings Limited, a Canadian corporation (“GTWY Holdings”) (see Note 6).


The registration statement for the Company’s Initial Public Offering was declared effective on December 1, 2017. On December 5, 2017, the Company consummated the Initial Public Offering of 20,000,000 units (“Units” and, with respect to the common stock included in the Units, the “Public Shares”), generating gross proceeds of $200,000,000, which is described in Note 3.


Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 6,825,000 warrants (the “Private Placement Warrants”) at a price of $1.00 per warrant in a private placement to Hydra LAC, LLC, an affiliate of Hydra Management, LLC (the “Hydra Sponsor”), MLCP GLL Funding LLC, an affiliate of Matthews Lane Capital Partners, LLC (the “Matthews Lane Sponsor,” and, together with the Hydra Sponsor, the “Sponsors”), HG Vora Special Opportunities Master Fund, Ltd. (“HG Vora”) and certain members of the Company’s management team, generating gross proceeds of $6,825,000, which is described in Note 4.


Following the closing of the Initial Public Offering on December 5, 2017, an amount of $200,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the Private Placement Warrants was placed in a trust account (the “Trust Account”) and invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 180 days or less or in any open-ended investment company that holds itself out as a money market fund selected by the Company meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the consummation of a Business Combination or (ii) the distribution of the Trust Account, as described below.


Transaction costs amounted to $11,548,735, consisting of $4,000,000 of underwriting fees, $7,000,000 of deferred underwriting fees and $548,735 of Initial Public Offering costs. In addition, at March 31, 2020, cash of $167,951 was held outside of the Trust Account and is available for working capital purposes.


The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. The Company’s initial Business Combination must be with one or more target businesses that together have a fair market value equal to at least 80% of the balance in the Trust Account (excluding deferred underwriting commissions and franchise and income taxes payable on the income earned on the Trust Account) at the time of the signing of an agreement to enter into a Business Combination. In addition, the Company’s Business Combination must be approved by HG Vora as a condition to the Contingent Forward Purchase Contract (as described in Note 6). The Company will only complete a Business Combination if the post-Business Combination company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act. There is no assurance that the Company will be able to successfully effect a Business Combination.


The Company will provide its stockholders with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The stockholders will be entitled to redeem their shares for a pro rata portion of the amount then on deposit in the Trust Account ($10.00 per share, plus any deposits made to the Trust Account in connection with extension payments and any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay franchise and income taxes). The per share amount to be distributed to stockholders who redeem their shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriters (see Note 7).


The Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 upon consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the outstanding shares voted are voted in favor of the Business Combination. If a stockholder vote is not required by law and the Company does not decide to hold a stockholder vote for business or other legal reasons, the Company will, pursuant to its Second Amended and Restated Certificate of Incorporation, conduct the redemptions pursuant to the tender offer rules of the Securities and Exchange Commission (“SEC”), and file tender offer documents with the SEC prior to completing a Business Combination. If, however, a stockholder approval of the transaction is required by law, or the Company decides to obtain stockholder approval for business or other legal reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks stockholder approval in connection with a Business Combination, the Sponsors and the Company’s other initial stockholders (collectively, the “Initial Stockholders”) have agreed to vote their Founder Shares (as defined in Note 5) and any Public Shares held by them in favor of approving a Business Combination. Additionally, each public stockholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction.


Notwithstanding the foregoing, the Company’s Second Amended and Restated Certificate of Incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to an aggregate of 20% or more of the common stock sold in the Initial Public Offering.


The Company has until June 30, 2020 to consummate a Business Combination or such later date to the extent its stockholders approve an extension (the “Combination Period”). If the Company is unable to complete a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no more than ten business days thereafter, redeem 100% of the outstanding Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned and not previously released to pay franchise and income taxes (less up to $75,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining stockholders and the Company’s board of directors, proceed to commence a voluntary liquidation and thereby a formal dissolution of the Company, subject in each case to its obligations to provide for claims of creditors and the requirements of applicable law. The underwriters have agreed to waive their rights to the deferred underwriting commission held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period and, in such event, such amounts will be included with the funds held in the Trust Account that will be available to fund the redemption of the Company’s Public Shares. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution (including Trust Account assets) will be less than the $10.00 per Unit in the Initial Public Offering.


On November 26, 2019, the Company held a special meeting pursuant to which the Company’s stockholders approved extending the Combination Period from December 5, 2019 to April 5, 2020 (the “Initial Extended Date”). In connection with the approval of the extension, stockholders elected to redeem an aggregate of 1,123,749 shares of the Company’s common stock. As a result, an aggregate of $11,583,473 (or approximately $10.31 per share) was released from the Company’s Trust Account to pay such stockholders


The Company agreed to contribute (the “Contribution”) $0.03 for each share of the Company’s common stock that did not redeem in connection with the extension for each monthly period or portion thereof that is needed to complete a Business Combination (commencing on December 6, 2019 and on the 6th day of each subsequent month through the Initial Extended Date). On each of December 5, 2019, January 3, 2020, February 4, 2020 and March 4, 2020, the Company made a Contribution of $0.03 for each of the public shares outstanding, for an aggregate Contribution of $2,265,151, which amounts were deposited into the Trust Account.


On December 5, 2019, the Company entered into an expense advancement agreement (the “GTWY Expense Advance Agreement”) with GTWY Holdings (“Potential Target”), pursuant to which the Potential Target committed to provide $566,288 to fund contributions to the Trust Account. The Company drew down the full amount under the GTWY Expense Advance Agreement to fund the required Contribution to the Trust Account for the period December 6, 2019 to January 5, 2020 by issuing an unsecured promissory note to the Potential Target (see Note 5).


On March 26, 2020, the Company held a special meeting pursuant to which the Company’s stockholders approved extending the Combination Period from April 5, 2020 to June 30, 2020 (the “Extended Date”). In connection with the approval of the extension, stockholders elected to redeem an aggregate of 16,837,678 shares of the Company’s common stock. As a result, an aggregate of $176,283,492 (or approximately $10.47 per share) was released from the Company’s Trust Account to pay such stockholders and 7,038,573 shares of common stock are now issued and outstanding. Of the amount paid to redeeming stockholders, $136,283,492 was paid as of March 31, 2020 and the balance of $40,000,000 was paid on April 1, 2020. As such, the amount due to stockholders of $40,000,000 as of March 31, 2020 is reflected as “Due to stockholders” in the accompanying condensed balance sheets.


The Initial Stockholders have agreed to (i) waive their redemption rights with respect to their Founder Shares and Public Shares in connection with the completion of a Business Combination, (ii) to waive their rights to liquidating distributions from the Trust Account with respect to their Founder Shares if the Company fails to complete a Business Combination within the Combination Period and (iii) not to propose an amendment to the Company’s Second Amended and Restated Certificate of Incorporation that would affect the substance or timing of the Company’s obligation to redeem 100% of its Public Shares if the Company does not complete a Business Combination, unless the Company provides the public stockholders with the opportunity to redeem their shares in conjunction with any such amendment. However, the Initial Stockholders will be entitled to liquidating distributions with respect to any Public Shares acquired if the Company fails to consummate a Business Combination or liquidates within the Combination Period.


In order to protect the amounts held in the Trust Account, the Sponsors have agreed to be liable to the Company if and to the extent any claims by a vendor for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00 per Public Share or (ii) such lesser amount per share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets. This liability will not apply with respect to any claims by a third party who executed a waiver of any right, title, interest or claim of any kind in or to any monies held in the Trust Account or to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsors will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsors will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers, prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.


Liquidity and Going Concern


As of March 31, 2020, the Company had $167,951 in its operating bank accounts, $61,327,451 in securities held in the Trust Account to be used for a Business Combination or to repurchase or redeem its common stock in connection therewith and working capital deficit of $3,233,889, which excludes $63,946 of prepaid income taxes and $50,000 of franchise taxes payable that will be paid from interest earned on the Trust Account.


On January 15, 2020, the Company issued unsecured promissory notes (the “Promissory Notes”) for an aggregate amount of $1,000,000 to its Sponsors and HG Vora. The Company used the funds received to fund its working capital requirements and to fund required Contributions to its Trust Account in connection with the extension of the date by which the Company must complete its Business Combination.


The Company will need to raise additional capital through loans or additional investments from its Sponsors, HG Vora, stockholders, officers, directors, or third parties. The Company’s Sponsors and HG Vora may, but are not obligated to, loan the Company funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion, to meet the Company’s working capital needs. Accordingly, the Company may not be able to obtain additional financing. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction, and reducing overhead expenses. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all. These conditions raise substantial doubt about the Company’s ability to continue as a going concern through June 30, 2020, the date that the Company will be required to cease all operations, except for the purpose of winding up, if a Business Combination is not consummated. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.


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CONDENSED BALANCE SHEETS (Parentheticals) - $ / shares
Mar. 31, 2020
Dec. 31, 2019
Preferred stock par value (in Dollars per share) $ 0.0001 $ 0.0001
Preferred stock, shares authorized 1,000,000 1,000,000
Preferred stock, shares issued 0 0
Preferred stock, shares outstanding 0 0
Common stock, par value (in Dollars per share) $ 0.0001 $ 0.0001
Common stock, shares authorized 100,000,000 100,000,000
Common stock, shares issued 6,604,785 6,375,178
Common stock, shares outstanding 6,604,785 6,375,178
Common stock subject to possible redemption, shares 433,788 17,501,073
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INITIAL PUBLIC OFFERING (Details)
Dec. 05, 2017
$ / shares
shares
INITIAL PUBLIC OFFERING [Abstract]  
Number of shares issued (in Shares) | shares 20,000,000
Unit price $ 10.00
Public warrant description Each Unit consists of one share of common stock, and one-half of one warrant (“Public Warrant”). Each whole Public Warrant entitles the holder to purchase one share of common stock at an exercise price of $11.50
Warrant exercise price $ 11.50
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STOCKHOLDERS' EQUITY (Details) - $ / shares
3 Months Ended
Jan. 15, 2018
Dec. 05, 2017
Mar. 31, 2020
Dec. 31, 2019
STOCKHOLDERS' EQUITY (Details) [Line Items]        
Preferred stock, authorized     1,000,000 1,000,000
Preferred stock, par value (in Dollars per share)     $ 0.0001 $ 0.0001
Preferred stock, issued     0 0
Preferred stock, outstanding     0 0
Common stock, authorized     100,000,000 100,000,000
Common stock, par value (in Dollars per share)     $ 0.0001 $ 0.0001
Common stock, rights     Holders of the Company’s common stock are entitled to one vote for each share.  
Common stock, issued     6,604,785 6,375,178
Common stock, outstanding     6,604,785 6,375,178
Common stock subject to possible redemption,at redemption value     433,788 17,501,073
Exercise price of warrants (in Dollars per share)   $ 11.50    
Warrant [Member]        
STOCKHOLDERS' EQUITY (Details) [Line Items]        
Warrant term     five years  
Exercise price of warrants (in Dollars per share)     $ 0.01  
Description of sale price of common stock     Company’s common stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending on the third business day prior to the date on which the Company sends the notice of redemption to the warrant holders  
Over-Allotment Option [Member] | Founder Shares [Member] | Underwriters [Member]        
STOCKHOLDERS' EQUITY (Details) [Line Items]        
Number of shares subject to forfeiter 750,000 750,000    
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CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)
3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Cash Flows from Operating Activities:    
Net (loss) income $ (349,854) $ 775,913
Adjustments to reconcile net (loss) income to net cash used in operating activities:    
Interest earned on marketable securities held in Trust Account (639,954) (1,179,970)
Unrealized loss on marketable securities held in Trust Account   527
Deferred tax (benefit) provision   (1,874)
Changes in operating assets and liabilities:    
Prepaid expenses (42,375) (17,500)
Prepaid income taxes 74,625 170,535
Accounts payable and accrued expenses 723,170 (87,692)
Income taxes payable   45,695
Net cash used in operating activities (234,388) (294,366)
Cash Flows from Investing Activities:    
Investment of cash in Trust Account (1,698,862)  
Cash withdrawn from Trust Account for redemption of common stock 136,283,492  
Cash withdrawn from Trust Account for franchise taxes 40,050 151,204
Net cash provided by investing activities 134,624,680 151,204
Cash Flows from Financing Activities:    
Proceeds from convertible promissory notes – related parties 1,000,000  
Redemption of common stock (136,283,492)  
Payment of offering costs   (8,640)
Net cash used in financing activities (135,283,492) (8,640)
Net Change in Cash (893,200) (151,802)
Cash – Beginning 1,061,151 1,658,398
Cash – Ending 167,951 1,506,596
Non-Cash investing and financing activities:    
Change in value of common stock subject to possible redemption (349,857) $ 775,913
Due to stockholders for redemption of common stock $ 40,000,000  
XML 25 R2.htm IDEA: XBRL DOCUMENT v3.20.1
CONDENSED BALANCE SHEETS - USD ($)
Mar. 31, 2020
Dec. 31, 2019
Current Assets    
Cash $ 167,951 $ 1,061,151
Prepaid expenses 42,375  
Prepaid income taxes 63,946 138,571
Total Current Assets 274,272 1,199,722
Cash and marketable securities held in Trust Account 61,327,451 195,312,177
TOTAL ASSETS 61,601,723 196,511,899
LIABILITIES AND STOCKHOLDERS’ EQUITY    
Current Liabilities – Accounts payable and accrued expenses 3,494,215 2,771,045
Total Current Liabilities 3,494,215 2,771,045
Promissory note 566,268 566,268
Convertible promissory notes – related parties 1,000,000  
Due to stockholders 40,000,000  
Deferred underwriting fee payable 7,000,000 7,000,000
Total Liabilities 52,060,483 10,337,313
Commitments    
Common stock subject to possible redemption, 433,788 and 17,501,073 shares at redemption value at March 31, 2020 and December 31, 2019, respectively 4,541,236 181,174,585
Stockholders’ Equity    
Common stock, $0.0001 par value; 100,000,000 shares authorized; 6,604,785 and 6,375,178 shares issued and outstanding (excluding 433,788 and 17,501,073 shares subject to possible redemption) at March 31, 2020 and December 31, 2019, respectively 660 638
Additional paid-in capital 2,892,404 2,542,569
Retained earnings 2,106,940 2,456,794
Total Stockholders’ Equity 5,000,004 5,000,001
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 61,601,723 $ 196,511,899
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A0# M% @ QH"G4%#BK_&T" (U( !4 ( !4G4 &QA8W$M M,C R,# S,S%?8V%L+GAM;%!+ 0(4 Q0 ( ,: IU#/>&)Z32< )5S @ 5 M " 3E^ !L86-Q+3(P,C P,S,Q7V1E9BYX;6Q02P$"% ,4 M " #&@*=0>"I\!A!3 J_P, %0 @ &YI0 ;&%C<2TR M,#(P,#,S,5]L86(N>&UL4$L! A0#% @ QH"G4.U]L;?O)@ 3VT" !4 M ( !_/@ &QA8W$M,C R,# S,S%?<')E+GAM;%!+!08 ..!@ & (H! >( $ ! end XML 28 R18.htm IDEA: XBRL DOCUMENT v3.20.1
FAIR VALUE MEASUREMENTS (Tables)
3 Months Ended
Mar. 31, 2020
Fair Value Disclosures [Abstract]  
Fair Value, by Balance Sheet Grouping [Table Text Block]
Description  Level  March 31,
2020
   December 31,
2019
 
Assets:           
Cash and marketable securities held in Trust Account  1  $61,327,451   $202,915,739 
XML 29 R10.htm IDEA: XBRL DOCUMENT v3.20.1
PRIVATE PLACEMENT
3 Months Ended
Mar. 31, 2020
PRIVATE PLACEMENT [Abstract]  
PRIVATE PLACEMENT [Text Block]

4. PRIVATE PLACEMENT


Simultaneously with the closing of the Initial Public Offering, affiliates of the Hydra Sponsor and Matthews Lane Sponsor, HG Vora and certain members of management purchased an aggregate of 6,825,000 Private Placement Warrants at $1.00 per Private Placement Warrant, for an aggregate purchase price of $6,825,000. Each Private Placement Warrant entitles the holder to purchase one share of common stock at an exercise price of $11.50. The proceeds from the Private Placement Warrants were added to the proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds of the sale of the Private Placement Warrants will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and the Private Placement Warrants will expire worthless. There will be no redemption rights or liquidating distributions from the Trust Account with respect to the Private Placement Warrants.


The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the common stock issuable upon the exercise of the Private Placement Warrants are not transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants are exercisable on a cashless basis and are non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.


XML 30 R14.htm IDEA: XBRL DOCUMENT v3.20.1
FAIR VALUE MEASUREMENTS
3 Months Ended
Mar. 31, 2020
Fair Value Disclosures [Abstract]  
Fair Value Disclosures [Text Block]

8. FAIR VALUE MEASUREMENTS


The Company follows the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.


The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:


  Level 1:  Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

  Level 2:  Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.
     
  Level 3: Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.

The following table presents information about the Company’s assets that are measured at fair value on a recurring basis at March 31, 2020 and December 31, 2019, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:


Description  Level  March 31,
2020
   December 31,
2019
 
Assets:           
Cash and marketable securities held in Trust Account  1  $61,327,451   $202,915,739 

XML 31 R20.htm IDEA: XBRL DOCUMENT v3.20.1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($)
3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Accounting Policies [Abstract]    
Interest income from trust account (in Dollars) $ 1,714,842  
Cash withdrawn from Trust Account (in Dollars) $ 40,050 $ 151,204
Effective Income Tax Rate Reconciliation, Percent (27.00%) 22.00%
Statutory tax rate, Percentage 21.00% 21.00%
Effect of warrants sold in initial public offering and private placement to purchase shares of common stock (in Shares) 16,825,000  
Federal depository insurance coverage (in Dollars) $ 250,000  
XML 32 R24.htm IDEA: XBRL DOCUMENT v3.20.1
RELATED PARTY TRANSACTIONS (Details) - USD ($)
3 Months Ended 12 Months Ended
Dec. 05, 2019
Jan. 15, 2018
Dec. 05, 2017
Dec. 05, 2017
Sep. 11, 2017
Mar. 31, 2020
Dec. 31, 2019
Jan. 15, 2020
RELATED PARTY TRANSACTIONS (Details) [Line Items]                
Number of common stock issued (in Shares)       20,000,000        
Percentage of issued and outstanding shares       11.50%   20.00%    
Accounts payable and accrued expenses           $ 3,494,215 $ 2,771,045  
Fund contributions to trust account $ 566,288              
Promissory note           566,268    
Purchase shares of common stock price per warrant (in Dollars per share)               $ 1.00
Promissory Notes [Member]                
RELATED PARTY TRANSACTIONS (Details) [Line Items]                
Warrants outstanding           1,000,000    
Sponsors [Member] | Unsecured Promissory Notes [Member]                
RELATED PARTY TRANSACTIONS (Details) [Line Items]                
Amount of debt converted           1,000,000    
Sponsors [Member] | Founder Shares [Member]                
RELATED PARTY TRANSACTIONS (Details) [Line Items]                
Number of common stock issued (in Shares)         7,187,500      
Purchase price of shares issued         $ 25,000      
Maximum shares subject to forfeited (in Shares)     1,437,500          
Number of shares outstanding (in Shares)     5,750,000          
Percentage of issued and outstanding shares     20.00%          
Description of initial stockholders     (i) one year after the date of the completion of a Business Combination, or (ii) the date on which the last sales price of the Company’s common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations) for any 20 trading days within any 30-trading day period commencing 150 days after a Business Combination, or earlier, in each case, if subsequent to a Business Combination, the Company completes a subsequent liquidation, merger, stock exchange, or other similar transaction which results in all of the Company’s stockholders having the right to exchange their common stock for cash, securities or other property.          
Sponsors [Member] | Warrant [Member] | Unsecured Promissory Notes [Member]                
RELATED PARTY TRANSACTIONS (Details) [Line Items]                
Amount of debt converted           $ 1,000,000    
Conversion price (in dollars per share) (in Dollars per share)           $ 1.00    
Administrative Services Agreement [Member] | Sponsors [Member]                
RELATED PARTY TRANSACTIONS (Details) [Line Items]                
Administrative fees           $ 10,000    
Payment for administrative fees           30,000 30,000  
Accounts payable and accrued expenses           $ 41,000 $ 17,000  
Over-Allotment Option [Member] | Sponsors [Member] | Founder Shares [Member]                
RELATED PARTY TRANSACTIONS (Details) [Line Items]                
Number of shares outstanding (in Shares)   5,000,000            
Number of shares subject to forfeited (in Shares)   750,000            
Over-Allotment Option [Member] | Underwriters [Member] | Founder Shares [Member]                
RELATED PARTY TRANSACTIONS (Details) [Line Items]                
Number of shares subject to forfeited (in Shares)   750,000 750,000          
XML 33 R4.htm IDEA: XBRL DOCUMENT v3.20.1
CONDENSED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)
3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Operating costs $ 915,183 $ 189,174
Loss from operations (915,183) (189,174)
Other income:    
Interest income 639,954 1,179,970
Unrealized loss on marketable securities held in Trust Account   (527)
Other income, net 639,954 1,179,443
(Loss) income before provision for income taxes (275,229) 990,269
Provision for income taxes (74,625) (214,356)
Net (loss) income $ (349,854) $ 775,913
Weighted average shares outstanding, basic and diluted (in Shares) [1] 6,375,178 6,039,072
Basic and diluted net loss per common share (in Dollars per share) [2] $ (0.07) $ (0.04)
[1] Excludes an aggregate of 433,788 and 18,952,136 shares subject to possible redemption at March 31, 2020 and 2019, respectively.
[2] Net loss per common share - basic and diluted excludes income attributable to common stock subject to possible redemption of $109,662 and $1,026,960 for the three months ended March 31, 2020 and 2019, respectively (see Note 2).
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
3 Months Ended
Mar. 31, 2020
Accounting Policies [Abstract]  
Significant Accounting Policies [Text Block]

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 


Basis of presentation 


The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission (the “SEC”). Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. 


The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 as filed with the SEC on March 10, 2020, which contains the audited financial statements and notes thereto. The financial information as of December 31, 2019 is derived from the audited financial statements presented in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. The interim results for the three months ended March 31, 2020 are not necessarily indicative of the results to be expected for the year ending December 31, 2020 or for any future interim periods.


Use of estimates 


The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. 


Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future events. Accordingly, the actual results could differ significantly from the Company’s estimates. 


Cash and cash equivalents


The Company considers all short-term investments with an original maturity of three months or less, when purchased, to be cash equivalents. The Company did not have any cash equivalents as of March 31, 2020 and December 31, 2019.


Marketable securities held in Trust Account


At March 31, 2020 and December 31, 2019, the assets held in the Trust Account were substantially held in a money market fund that invests primarily in U.S. Treasury Bills. Through March 31, 2020, the Company withdrew $1,714,842 of interest income from the Trust Account, of which $40,050 was withdrawn during the three months ended March 31, 2020, to pay franchise taxes.


Common stock subject to possible redemption


The Company accounts for its common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption 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 features certain redemption rights that are considered to be outside of the Company’s control and subject to 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 condensed balance sheets. 


Income taxes


The Company complies with the accounting and reporting requirements of Accounting Standards Codification (“ASC”) Topic 740 “Income Taxes,” which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.


ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of March 31, 2020 and December 31, 2019. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The effective tax rate of (27)% differs from the statutory tax rate of 21% for the three months ended March 31, 2020 primarily due to the non-deductibility of transactional expenses incurred in connection with the search for potential targets for a Business Combination. The effective tax rate of 22% differs from the statutory tax rate of 21% for the three months ended March 31, 2019 due to true-up adjustments from the prior year tax returns.


The Company may be subject to potential examination by federal, state and city taxing authorities in the areas of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal, state and city tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.


Net loss per common share


Net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding for the period. The Company applies the two-class method in calculating earnings per share. Shares of common stock subject to possible redemption at March 31, 2020 and 2019, which are not currently redeemable and are not redeemable at fair value, have been excluded from the calculation of basic loss per share since such shares, if redeemed, only participate in their pro rata share of the Trust Account earnings. The Company has not considered the effect of warrants sold in the Initial Public Offering and private placement to purchase 16,825,000 shares of common stock in the calculation of diluted loss per share, since the exercise of the warrants is contingent upon the occurrence of future events. As a result, diluted loss per common share is the same as basic loss per common share for the periods.


Reconciliation of net loss per common share


The Company’s net (loss) income is adjusted for the portion of income that is attributable to common stock subject to redemption, as these shares only participate in the earnings of the Trust Account and not the income or losses of the Company. Accordingly, basic and diluted loss per common share is calculated as follows:


   Three Months Ended
March 31,
 
   2020   2019 
Net (loss) income  $(349,854)  $775,913 
Less: Income attributable to common stock subject to possible redemption   (109,662)   (1,026,960)
Adjusted net loss   (459,516)   (251,047)
           
Weighted average common shares outstanding, basic and diluted   6,375,178    6,039,072 
           
Basic and diluted net loss per common share  $(0.07)  $(0.04)

Concentration of credit risk


Financial instruments that potentially subject the Company to concentration of credit risk consist of a cash account in a financial institution, which, at times may exceed the federal depository insurance coverage of $250,000. The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account.


Fair value of financial instruments


The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement” (“ASC 820”), approximates the carrying amounts represented in the accompanying condensed balance sheets, primarily due to their short-term nature.


Recent accounting pronouncements


Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s condensed financial statements.


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COMMITMENTS
3 Months Ended
Mar. 31, 2020
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Disclosure [Text Block]

6. COMMITMENTS


Registration Rights


Pursuant to a registration rights agreement entered into on December 1, 2017, the holders of the Founder Shares, Private Placement Warrants (and their underlying securities), Private Placement Units (and their underlying securities) (as defined below) and any warrants that may be issued upon conversion of the Working Capital Loans (and their underlying securities) are entitled to registration rights. The holders of these securities are entitled to make up to two demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that the Company will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lock-up period. The Company will bear the expenses incurred in connection with the filing of any such registration statements.


Underwriters Agreement


The underwriters of the Initial Public Offering are entitled to a deferred fee of three and one-half percent (3.5%) of the gross proceeds of the Initial Public Offering, or $7,000,000. Up to $0.05 per Unit (or up to $1,000,000) of the deferred fee may be paid to third parties (who are members of FINRA) that assist the Company in consummating its initial Business Combination. The election to make such payments to third parties will be solely at the discretion of the Company’s management team, and such third parties will be selected by the management team in their sole and absolute discretion. The deferred fee will be paid in cash upon the closing of a Business Combination from the amounts held in the Trust Account, subject to the terms of the underwriting agreement.


Contingent Forward Purchase Contract


On December 1, 2017, the strategic investor entered into a contingent forward purchase contract (the “Contingent Forward Purchase Contract”) with the Company to purchase, in a private placement for gross proceeds of $62,500,000 to occur concurrently with the consummation of the Business Combination, 6,250,000 Units on substantially the same terms as the sale of Units in the Initial Public Offering at $10.00 per Unit. On December 27, 2019, the Contingent Forward Purchase Contract was amended to provide that the Contingent Forward Purchase Contract will terminate effective upon the closing in connection with the proposed business combination with GTWY Holdings. As part of the Transaction (as defined below), on December 27, 2019, the strategic investor entered into the Strategic Investor Subscription Agreement, in similar form to and to replace the Contingent Forward Purchase Contract, with GTWY Holdings pursuant to which, among other things the strategic investor agreed to purchase 3,000,000 units of GTWY Holdings’ equity securities (with each unit consisting of one GTWY Holdings Share and one-half of one GTWY Holdings Warrant) for a purchase price of $10.00 per unit.


Service Provider Agreement


From time to time the Company has entered into and may enter into agreements with various services providers and advisors, including investment banks, to help us identify targets, negotiate terms of potential Business Combinations, consummate a Business Combination and/or provide other services. In connection with these agreements, the Company may be required to pay such service providers and advisors fees in connection with their services to the extent that certain conditions, including the closing of a potential Business Combination, are met. If a Business Combination does not occur, the Company would not expect to be required to pay these contingent fees. There can be no assurance that the Company will complete a Business Combination.


Merger Agreement


On December 27, 2019, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”), with GTWY Holdings and GTWY Merger Sub Corp., a Delaware corporation and wholly owned subsidiary of GTWY Holdings (“Merger Sub”), relating to a proposed business combination transaction. Pursuant to the Merger Agreement, Merger Sub will merge with and into the Company, with the Company surviving such merger as a wholly owned subsidiary of GTWY Holdings and the stockholders of the Company becoming stockholders of the GTWY Holdings (the “Merger”).


GTWY Holdings’ stockholders as of immediately prior to the Arrangement Effective Time (as defined in the Merger Agreement) will be entitled to receive a cash distribution in an aggregate amount equal to GTWY Pre-Closing Distribution Amount (as defined in the Merger Agreement). In addition, GTWY Holdings’ issued and outstanding share capital as of immediately prior to the Arrangement Effective Time, which is expected to have an aggregate value of $222,917,162 (subject to certain adjustments for transaction expenses and deduction of GTWY Pre-Closing Distribution Amount, as further described in the Merger Agreement), will, at the closing of the transactions contemplated by the Merger Agreement (collectively, the “Transactions”), be converted into a number of common shares of GTWY Holdings calculated based on a reference price of $10.00 per share, and retained by GTWY’s existing stockholders.


The Transaction will be consummated subject to the deliverables and provisions as further described in the Merger Agreement.


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Accounting Policies, by Policy (Policies)
3 Months Ended
Mar. 31, 2020
Accounting Policies [Abstract]  
Basis of presentation

Basis of presentation 


The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission (the “SEC”). Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. 


The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 as filed with the SEC on March 10, 2020, which contains the audited financial statements and notes thereto. The financial information as of December 31, 2019 is derived from the audited financial statements presented in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. The interim results for the three months ended March 31, 2020 are not necessarily indicative of the results to be expected for the year ending December 31, 2020 or for any future interim periods.

Use of estimates

Use of estimates 


The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. 


Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future events. Accordingly, the actual results could differ significantly from the Company’s estimates.

Cash and cash equivalents

Cash and cash equivalents


The Company considers all short-term investments with an original maturity of three months or less, when purchased, to be cash equivalents. The Company did not have any cash equivalents as of March 31, 2020 and December 31, 2019

Marketable securities held in Trust Account

Marketable securities held in Trust Account


At March 31, 2020 and December 31, 2019, the assets held in the Trust Account were substantially held in a money market fund that invests primarily in U.S. Treasury Bills. Through March 31, 2020, the Company withdrew $1,714,842 of interest income from the Trust Account, of which $40,050 was withdrawn during the three months ended March 31, 2020, to pay franchise taxes.

Common stock subject to possible redemption

Common stock subject to possible redemption


The Company accounts for its common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption 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 features certain redemption rights that are considered to be outside of the Company’s control and subject to 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 condensed balance sheets.

Income taxes

Income taxes


The Company complies with the accounting and reporting requirements of Accounting Standards Codification (“ASC”) Topic 740 “Income Taxes,” which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.


ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of March 31, 2020 and December 31, 2019. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The effective tax rate of (27)% differs from the statutory tax rate of 21% for the three months ended March 31, 2020 primarily due to the non-deductibility of transactional expenses incurred in connection with the search for potential targets for a Business Combination. The effective tax rate of 22% differs from the statutory tax rate of 21% for the three months ended March 31, 2019 due to true-up adjustments from the prior year tax returns.


The Company may be subject to potential examination by federal, state and city taxing authorities in the areas of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal, state and city tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.

Net loss per common share

Net loss per common share


Net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding for the period. The Company applies the two-class method in calculating earnings per share. Shares of common stock subject to possible redemption at March 31, 2020 and 2019, which are not currently redeemable and are not redeemable at fair value, have been excluded from the calculation of basic loss per share since such shares, if redeemed, only participate in their pro rata share of the Trust Account earnings. The Company has not considered the effect of warrants sold in the Initial Public Offering and private placement to purchase 16,825,000 shares of common stock in the calculation of diluted loss per share, since the exercise of the warrants is contingent upon the occurrence of future events. As a result, diluted loss per common share is the same as basic loss per common share for the periods.

Reconciliation of net loss per common share

Reconciliation of net loss per common share


The Company’s net (loss) income is adjusted for the portion of income that is attributable to common stock subject to redemption, as these shares only participate in the earnings of the Trust Account and not the income or losses of the Company. Accordingly, basic and diluted loss per common share is calculated as follows:


   Three Months Ended
March 31,
 
   2020   2019 
Net (loss) income  $(349,854)  $775,913 
Less: Income attributable to common stock subject to possible redemption   (109,662)   (1,026,960)
Adjusted net loss   (459,516)   (251,047)
           
Weighted average common shares outstanding, basic and diluted   6,375,178    6,039,072 
           
Basic and diluted net loss per common share  $(0.07)  $(0.04)
Concentration of credit risk

Concentration of credit risk


Financial instruments that potentially subject the Company to concentration of credit risk consist of a cash account in a financial institution, which, at times may exceed the federal depository insurance coverage of $250,000. The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account.

Fair value of financial instruments

Fair value of financial instruments


The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement” (“ASC 820”), approximates the carrying amounts represented in the accompanying condensed balance sheets, primarily due to their short-term nature.

Recently issued accounting standards

Recent accounting pronouncements


Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s condensed financial statements.

XML 38 R13.htm IDEA: XBRL DOCUMENT v3.20.1
STOCKHOLDERS' EQUITY
3 Months Ended
Mar. 31, 2020
Stockholders' Equity Note [Abstract]  
Stockholders' Equity Note Disclosure [Text Block]

7. STOCKHOLDERS’ EQUITY


Preferred Stock — The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per share with such designation, rights and preferences as may be determined from time to time by the Company’s Board of Directors. As of March 31, 2020 and December 31, 2019, there were no shares of preferred stock issued or outstanding.


Common Stock — The Company is authorized to issue 100,000,000 shares of common stock with a par value of $0.0001 per share. Holders of the Company’s common stock are entitled to one vote for each share. The underwriters’ election to exercise their over-allotment option expired unexercised on January 15, 2018 and, as a result, 750,000 Founder Shares were forfeited. At March 31, 2020 and December 31, 2019, there were 6,604,785 and 6,375,178 shares of common stock issued and outstanding, respectively, excluding 433,788 and 17,501,073 shares of common stock subject to possible redemption, respectively.


Warrants — Public Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants. The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination and (b) 12 months from the closing of the Initial Public Offering; provided in each case that the Company has an effective registration statement under the Securities Act covering the shares of common stock issuable upon exercise of the Public Warrants and a current prospectus relating to them is available. The Company has agreed that as soon as practicable, but in no event later than 15 business days after the closing of a Business Combination, the Company will use its best efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the shares of common stock issuable upon exercise of the Public Warrants. The Company will use its best efforts to cause the same to become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the Public Warrants in accordance with the provisions of the warrant agreement. If any such registration statement has not been declared effective by the 60th business day following the closing of the Business Combination, holders of the Public Warrants shall have the right, during the period beginning on the 61st business day after the closing of the Business Combination and ending upon such registration statement being declared effective by the SEC, and during any other period when the Company shall fail to have maintained an effective registration statement covering the shares of common stock issuable upon exercise of the Public Warrants, to exercise such Public Warrants on a “cashless basis.” Notwithstanding the above, if the Company’s common stock is at the time of any exercise of a Public Warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, the Company will not be required to file or maintain in effect a registration statement, but will be required to use its best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. The Public Warrants will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation.


The Company may redeem the Public Warrants:


  in whole and not in part;
  at a price of $0.01 per warrant;
  at any time during the exercise period;
  upon a minimum of 30 days’ prior written notice of redemption;
  if, and only if, the last sale price of the Company’s common stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending on the third business day prior to the date on which the Company sends the notice of redemption to the warrant holders; and
  if, and only if, there is a current registration statement in effect with respect to the shares of common stock underlying such warrants.

If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement.


The exercise price and number of shares of common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuance of common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless.


XML 39 R17.htm IDEA: XBRL DOCUMENT v3.20.1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)
3 Months Ended
Mar. 31, 2020
Accounting Policies [Abstract]  
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]
   Three Months Ended
March 31,
 
   2020   2019 
Net (loss) income  $(349,854)  $775,913 
Less: Income attributable to common stock subject to possible redemption   (109,662)   (1,026,960)
Adjusted net loss   (459,516)   (251,047)
           
Weighted average common shares outstanding, basic and diluted   6,375,178    6,039,072 
           
Basic and diluted net loss per common share  $(0.07)  $(0.04)
XML 40 R21.htm IDEA: XBRL DOCUMENT v3.20.1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Schedule of basic and diluted loss per common share - USD ($)
3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Schedule of basic and diluted loss per common share [Abstract]    
Net (loss) income $ (349,854) $ 775,913
Less: Income attributable to common stock subject to possible redemption (109,662) (1,026,960)
Adjusted net loss $ (459,516) $ (251,047)
Weighted average common shares outstanding, basic and diluted (in Shares) [1] 6,375,178 6,039,072
Basic and diluted net loss per common share (in Dollars per share) [2] $ (0.07) $ (0.04)
[1] Excludes an aggregate of 433,788 and 18,952,136 shares subject to possible redemption at March 31, 2020 and 2019, respectively.
[2] Net loss per common share - basic and diluted excludes income attributable to common stock subject to possible redemption of $109,662 and $1,026,960 for the three months ended March 31, 2020 and 2019, respectively (see Note 2).
XML 41 R25.htm IDEA: XBRL DOCUMENT v3.20.1
COMMITMENTS (Details) - USD ($)
3 Months Ended
Dec. 27, 2019
Dec. 05, 2017
Dec. 01, 2017
Mar. 31, 2020
COMMITMENTS (Details) [Line Items]        
Number of units issued   20,000,000    
Unit price   $ 10.00    
Strategic investor subscription agreement, description the strategic investor entered into the Strategic Investor Subscription Agreement, in similar form to and to replace the Contingent Forward Purchase Contract, with GTWY Holdings pursuant to which, among other things the strategic investor agreed to purchase 3,000,000 units of GTWY Holdings’ equity securities (with each unit consisting of one GTWY Holdings Share and one-half of one GTWY Holdings Warrant) for a purchase price of $10.00 per unit.      
Merger agreement, description In addition, GTWY Holdings’ issued and outstanding share capital as of immediately prior to the Arrangement Effective Time, which is expected to have an aggregate value of $222,917,162 (subject to certain adjustments for transaction expenses and deduction of GTWY Pre-Closing Distribution Amount, as further described in the Merger Agreement), will, at the closing of the transactions contemplated by the Merger Agreement (collectively, the “Transactions”), be converted into a number of common shares of GTWY Holdings calculated based on a reference price of $10.00 per share, and retained by GTWY’s existing stockholders.      
Over-Allotment Option [Member] | Underwriters Agreement [Member]        
COMMITMENTS (Details) [Line Items]        
Description of underwriting discount       The underwriters of the Initial Public Offering are entitled to a deferred fee of three and one-half percent (3.5%) of the gross proceeds of the Initial Public Offering, or $7,000,000. Up to $0.05 per Unit (or up to $1,000,000) of the deferred fee may be paid to third parties (who are members of FINRA) that assist the Company in consummating its initial Business Combination.
Over-Allotment Option [Member] | Underwriters Agreement [Member] | Underwriters [Member]        
COMMITMENTS (Details) [Line Items]        
Percentage of deferred fees       3.50%
Proceeds from underwriter option       $ 7,000,000
Private Placement [Member] | HG Vora [Member] | Contingent Forward Purchase Contract [Member]        
COMMITMENTS (Details) [Line Items]        
Proceeds from sale of Private Placement Warrants     $ 62,500,000  
Number of units issued     6,250,000  
Unit price     $ 10.00  
XML 42 R9.htm IDEA: XBRL DOCUMENT v3.20.1
INITIAL PUBLIC OFFERING
3 Months Ended
Mar. 31, 2020
INITIAL PUBLIC OFFERING [Abstract]  
INITIAL PUBLIC OFFERING [Text Block]

3. INITIAL PUBLIC OFFERING


Pursuant to the Initial Public Offering, the Company sold 20,000,000 Units at a purchase price of $10.00 per Unit. Each Unit consists of one share of common stock, and one-half of one warrant (“Public Warrant”). Each whole Public Warrant entitles the holder to purchase one share of common stock at an exercise price of $11.50 (see Note 7).


XML 43 R5.htm IDEA: XBRL DOCUMENT v3.20.1
CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY - USD ($)
Common Stock [Member]
Additional Paid-in Capital [Member]
Retained Earnings [Member]
Total
Beginning Balance at Dec. 31, 2018 $ 604 $ 2,908,557 $ 2,090,840 $ 5,000,001
Beginning Balance (in Shares) at Dec. 31, 2018 6,039,072      
Change in value of common stock subject to possible redemption $ 1 (775,914)   (775,913)
Change in value of common stock subject to possible redemption (in Shares) 8,792      
Net     775,913 775,913
Ending Balance at Mar. 31, 2019 $ 605 2,132,643 2,866,753 5,000,001
Ending Balance (in Shares) at Mar. 31, 2019 6,047,864      
Beginning Balance at Dec. 31, 2019 $ 638 2,542,569 2,456,794 5,000,001
Beginning Balance (in Shares) at Dec. 31, 2019 6,375,178      
Change in value of common stock subject to possible redemption $ 22 349,835   349,857
Change in value of common stock subject to possible redemption (in Shares) 229,607      
Net     (349,854) (349,854)
Ending Balance at Mar. 31, 2020 $ 660 $ 2,892,404 $ 2,106,940 $ 5,000,004
Ending Balance (in Shares) at Mar. 31, 2020 6,604,785      
XML 44 R1.htm IDEA: XBRL DOCUMENT v3.20.1
Document And Entity Information - shares
3 Months Ended
Mar. 31, 2020
May 07, 2020
Document Information Line Items    
Entity Registrant Name Leisure Acquisition Corp.  
Document Type 10-Q  
Current Fiscal Year End Date --12-31  
Entity Common Stock, Shares Outstanding   7,038,573
Amendment Flag false  
Entity Central Index Key 0001716947  
Entity Current Reporting Status Yes  
Entity Filer Category Accelerated Filer  
Document Period End Date Mar. 31, 2020  
Document Fiscal Year Focus 2020  
Document Fiscal Period Focus Q1  
Entity Small Business true  
Entity Emerging Growth Company true  
Entity Shell Company true  
Entity Ex Transition Period false  
Entity File Number 001-38306  
Entity Incorporation, State or Country Code DE  
Entity Interactive Data Current Yes