UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended June 30, 2022

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

For the transition period from ____________ to____________

Commission file number 001-41113

GAMES & ESPORTS EXPERIENCE ACQUISITION CORP.

(Exact Name of Registrant as Specified in Its Charter)


Cayman Islands		98-1592885
State or Other Jurisdiction of Incorporation or Organization		I.R.S. Employer Identification No.

7381 La Tijera Blvd. P.O. Box 452118 Los Angeles, California		90045
Address of Principal Executive Offices		Zip Code

Registrant’s telephone number, including area code: (213) 266-7674

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


Title of each class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Units, each consisting of one Class A Ordinary Share, $0.0001 par value, and one-half of one redeemable warrant	GEEXU	The Nasdaq Global Market
Class A Ordinary Shares	GEEX	The Nasdaq Global Market
Redeemable Warrants, each whole warrant exercisable for one Class A Ordinary Share at an exercise price of $11.50	GEEXW	The Nasdaq Global Market

Securities registered pursuant to Section 12(g) of the Act: None

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, 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 Act). Yes ☒ No☐

As of August 15, 2022, there were 20,000,000 Class A ordinary shares and 5,000,000 Class B ordinary shares of the registrant issued and outstanding.

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TABLE OF CONTENTS


		Page
PART I		2
Item 1.	Financial Statements	2
	Condensed Balance Sheets as of June 30, 2022 (Unaudited) and December 31, 2021	2
	Unaudited Condensed Statements of Operations for each of the Three and Six Month Periods Ended June 30, 2022 and 2021	3
	Unaudited Condensed Statements of Changes of Shareholders’ Deficit and Class A Ordinary Shares Subject to Possible Redemption for each of the Periods ended June 30, 2022 and 2021	4
	Unaudited Condensed Statements of Cash Flows for each of the Periods Ended June 30, 2022 and 2021	5
	Notes to Unaudited Condensed Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	25
Item 4.	Controls and Procedures.	25
PART II		26
Item 1.	Legal Proceedings.	26
Item 1A.	Risk Factors.	26
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	28
Item 3.	Defaults Upon Senior Securities.	28
Item 4.	Mine Safety Disclosures.	28
Item 5.	Other Information.	28
Item 6.	Exhibits.	29

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

GAMES & ESPORTS EXPERIENCE ACQUISITION CORP.

CONDENSED BALANCE SHEETS


	June 30,		December 31,
	2022		2021
	(Unaudited)
Assets
Current Assets:
Cash	$	491,272	$	987,106
Prepaid expenses		556,794		759,210
Cash and Investments held in Trust Account		205,114,799		—
Total Current Assets		206,162,865		1,746,316
Cash and Investments held in Trust Account		—		205,005,299
Total Assets	$	206,162,865	$	206,751,615
Liabilities, Shares Subject to Redemption and Shareholders’ Deficit:
Current Liabilities:
Accounts payable	$	—	$	15,716
Accrued expenses		314,084		511,532
Warrant liability		1,700,000		—
Deferred underwriting commissions		7,000,000		—
Class A ordinary shares subject to possible redemption, 20,000,000 shares at redemption value		205,114,799		—
Total Current Liabilities		214,128,883		527,248
Warrant liability		—		17,600,000
Deferred underwriting commissions		—		7,000,000
Total Liabilities	$	214,128,883	$	25,127,248
Commitments and Contingencies
Class A ordinary shares subject to possible redemption, 20,000,000 shares at redemption value		—		205,005,299
Shareholders’ Deficit:
Class B ordinary shares, $0.0001 par value; 20,000,000 shares authorized; 5,000,000 shares issued and outstanding		500		500
Accumulated deficit		(7,966,518)		(23,381,432)
Total Shareholders’ Deficit		(7,966,018)		(23,380,932)
Total Liabilities, Shares Subject to Redemption and Shareholders’ Deficit	$	206,162,865	$	206,751,615

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GAMES & ESPORTS EXPERIENCE ACQUISITION CORP.

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)


	For The		For the		For The
	Three-Month		Three-Month		Six-Month		Period from March 22,
	Period Ended		Period Ended		Period Ended		2021 (Inception) -
	June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021
General and administrative expenses	$	266,478	$	36,333	$	657,982	$	36,333
Loss from operations		(266,478)		(36,333)		(657,982)		(36,333)
Other income
Change in fair value of derivative warrant liabilities		2,337,500		—		15,900,000		—
Unrealized gain on investments held in trust account		158,526		—		109,500		—
Total other income		2,496,026		—		16,009,500		—
Net income (loss)	$	2,229,548	$	(36,333)	$	15,351,518	$	(36,333)
Weighted average ordinary shares outstanding, basic and diluted
Class A – Ordinary shares subject to possible redemption		20,000,000		—		20,000,000		—
Class B – Ordinary shares		5,000,000		3,913,194		5,000,000		3,521,875
Basic and diluted net income (loss) per ordinary share
Class A – Ordinary shares subject to possible redemption	$	0.09	$	—	$	0.62	$	—
Class B – Ordinary shares	$	0.08	$	(0.01)	$	0.61	$	(0.01)

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GAMES & ESPORTS EXPERIENCE ACQUISITION CORP.

CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT AND CLASS A ORDINARY SHARES SUBJECT TO POSSIBLE REDEMPTION

(Unaudited)


	FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2022
	Class A Ordinary Shares Subject to			Ordinary Shares						Additional				Total
	Possible Redemption			Class A			Class B			Paid-In		Accumulated		Shareholders’
	Shares	Amount		Shares	Amount		Shares	Amount		Capital		Deficit		Deficit
Balance—January 1, 2022	20,000,000	$	205,005,299	—	$	—	5,000,000	$	500	$	—	$	(23,381,432)	$	(23,380,932)
Adjustment of offering costs on Sale of Public Shares													172,896		172,896
Accretion of Class A ordinary shares subject to possible redemption amount	—		(49,026)	—		—	—		—		—		49,026		49,026
Net income	—		—	—		—	—		—		—		13,121,970		13,121,970
Balance—March 31, 2022	20,000,000	$	204,956,273	—	$	—	5,000,000	$	500	$	—	$	(10,037,540)	$	(10,037,040)
Accretion of Class A ordinary shares subject to possible redemption amount	—		158,526	—		—	—		—		—		(158,526)		(158,526)
Net income	—		—	—		—	—		—		—		2,229,548		2,229,548
Balance—June 30, 2022	20,000,000	$	205,114,799	—	$	—	5,000,000	$	500	$	—	$	(7,966,518)	$	(7,966,018)

	FOR THE PERIOD FROM MARCH 22, 2021 (INCEPTION)-JUNE 30, 2021
	Class A Ordinary Shares Subject to			Ordinary Shares						Additional				Total
	Possible Redemption			Class A			Class B			Paid-In		Accumulated		Shareholders’
	Shares	Amount		Shares	Amount		Shares	Amount		Capital		Deficit		Deficit
Balance-March 22, 2021		$		—	$	—		$	—	$	—	$		$
Net income (loss)	—		—	—		—	—		—		—		—		—
Balance-March 31, 2021		$		—	$	—		$	—	$	—	$	—		—
Issuance of Class B ordinary shares to GEEX Sponsor, LLC							5,031,250		503		24,497				25,000
Net loss	—		—	—		—	—		—		—		(36,333)		(36,333)
Balance-June 30, 2021		$		—	$	—	5,031,250	$	503	$	24,497	$	(36,333)		(11,333)

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GAMES & ESPORTS EXPERIENCE ACQUISITION CORP.

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)


	For the		Period from March 22,
	Six-Month		2021
	Period Ended		(Inception)-
	June 30, 2022		June 30, 2021
Cash Flows used in Operating Activities:
Net income (loss)	$	15,351,518	$	(36,333)
Adjustments to reconcile net income to net cash and cash equivalents used in operating activities:
Unrealized gain on investments held in trust account		(109,500)		—
Change in fair value of derivative warrant liabilities		(15,900,000)		—
Changes in operating assets and liabilities:
Prepaid expenses		202,416		8,165
Accounts payable		(15,716)		—
Accrued expenses		(24,552)		27,480
Net cash used in operating activities		(495,834)		(688)
Cash Flows from Investing Activities:
Redemption of U.S. government treasury obligations		205,103,000		—
Purchase of U.S. government treasury obligations		(205,103,000)		—
Net cash used in investing activities		—		—
Cash Flows from Financing Activities:
Payment of offering costs		—		(62,294)
Proceeds from promissory note – related party		—		74,316
Proceeds from sale of ordinary shares to founder		—		25,000
Net cash from financing activities		—		37,022
Net change in cash		(495,834)		36,334
Cash—beginning of the period		987,106		—
Cash—end of the period	$	491,272	$	36,334
Supplemental Disclosure of Non-cash Investing and Financing Activities:
Accretion of Class A ordinary shares subject to possible redemption	$	109,500
Reduction of offering costs incurred for the IPO	$	172,896		—
Deferred offering costs included in accrued expenses		—	$	376,400
Retainers paid by related parties for deferred offering costs as advances of promissory note		—	$	50,000
Retainers utilized for deferred offering costs		—	$	28,450

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GAMES & ESPORTS EXPERIENCE ACQUISITION CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

JUNE 30, 2022

(Unaudited)

Note 1 - Description of Organization, Business Operations and Basis of Presentation

Games & Esports Experience Acquisition Corp (the “Company”) is a blank check company incorporated in the Cayman Islands as an exempted company on March 22, 2021. The Company was formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities (any such business combination involving the Company, a “Business Combination”). The Company may pursue an acquisition opportunity in any industry or geographic region.

The Company has selected December 31 as its fiscal year-end.

As of June 30, 2022 the Company had not commenced operations. All activity for the period ended June 30, 2022 relates to the Company’s formation and initial public offering (the “IPO”). The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income on cash from the proceeds derived from the IPO. The Company did not have any significant activity for the period from March 22, 2021 (inception) through March 31, 2021.

Sponsor and IPO Financing

The Company’s sponsor is GEEX Sponsor, LLC (the “Sponsor”). The registration statement for the IPO was declared effective on December 1, 2021. On December 7, 2021 the Company consummated its IPO of 20,000,000 units at $10.00 per unit (the “Units”), which is discussed in Note 3, and the private sale of 11,250,000 warrants (“Private Placement Warrants”) to the Sponsor at a price of $1.00 per warrant in a private placement that closed simultaneously with the IPO (the “Private Placement”). Each Unit consists of one Class A ordinary share, par value $0.0001 per share, of the Company (the “Class A ordinary shares”) and one-half of one redeemable warrant of the Company (the “Public Warrants”), with each whole Public Warrant exercisable to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment. The Company’s management has broad discretion with respect to the specific application of the net proceeds of the IPO and the Private Placement Warrants, although substantially all of the net proceeds are intended to be generally applied toward consummating an initial Business Combination. The underwriters were provided a 45-day option from the date of IPO to purchase up to an additional 2,625,000 Units to cover over-allotments, if any. On December 7, 2021 the underwriters partially exercised their over-allotment option by purchasing 2,500,000 Units.

Transaction costs related to the IPO amounted to $11,724,947 consisting of $3,750,000 of underwriting commissions (net of $250,000 in underwriter expense reimbursement to the Company), $7,000,000 of deferred underwriting commissions, and $974,947 of other offering costs. Of the total offering costs from the IPO, $419,250 was expensed and $11,305,697 was charged to shareholders’ equity.

Trust Account

Upon the closing of the IPO and the Private Placement, $205,000,000 has been placed in a trust account (the “Trust Account”).

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Following the closing of the IPO on December 7, 2021, an amount of $205,000,000 from the net proceeds of the sale of the Units in the IPO and the sale of the Private Placement Warrants were placed in the Trust Account and may be invested only in U.S. government securities with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. The Trust Account is intended as a holding place for funds pending the earliest to occur of: (i) the completion of the initial Business Combination; (ii) the redemption of any Class A ordinary shares included in the Units sold in the IPO (the “public shares”) properly submitted in connection with a shareholder vote to amend the Company’s amended and restated memorandum and articles of association (A) to modify the substance or timing of the Company’s obligation to redeem 100% of the public shares if the Company does not complete the initial Business Combination within 15 months from the closing of the IPO (or up to 24 months if the period of time to consummate an initial Business Combination is extended pursuant to the terms of the Company’s amended and restated memorandum and articles of association) (such period, the “completion window”) or (B) with respect to any other provision relating to stockholders’ rights or pre-initial Business Combination activity; and (iii) the redemption of the public shares if the Company is unable to complete its initial Business Combination within the completion window, subject to applicable law.

Business Combination

The Company’s management has broad discretion with respect to the specific application of the net proceeds of the IPO, although substantially all the net proceeds are intended to be applied toward consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully. The Company must complete its initial Business Combination with one or more target businesses that together have an aggregate fair market value of at least 80% of the value of the Trust Account (excluding any deferred underwriter’s fees and taxes payable on the income earned on the Trust Account) at the time of the agreement to enter into the initial Business Combination. The Company anticipates structuring the initial Business Combination so that the post-Business Combination company in which public Shareholders own shares will own or acquire 100% of the equity interests or assets of the target business or businesses. The Company may, however, structure the initial Business Combination such that the post-Business Combination company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team or Shareholders or for other reasons, but the Company will only complete such 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 of 1940, as amended.

Concurrently with an initial Business Combination the Company currently intends to combine with Gamers Club Holdings, LLC (“Gamers Club”), an affiliate of the Sponsor. Gamers Club is a gaming technology subscription platform and community hub based in Brazil with a substantial presence in Latin America that offers a range of competitive gaming-related functionality, including matchmaking, tournament and league play, editorial and news content, and other services. The Company has not entered into any letter of intent or definitive agreement with Gamers Club, nor agreed to valuation or other key terms and conditions with respect to such a possible combination transaction.

Liquidation

The Company will have 15 months from the closing of the IPO to consummate an initial Business Combination. If the Company anticipates that it may not be able to consummate an initial Business Combination within 15 months from the consummation of this offering, the Company may, but is not obligated to, by resolution of its board of directors if requested by the Sponsor, extend the period of time to consummate an initial Business Combination up to two times by an additional three months each time for a total of up to 21 months (the “Paid Extension Period”). In addition, the Company will be entitled to an automatic three-month extension (the “Automatic Extension Period”) if the Company has filed a preliminary proxy statement, registration statement or similar filing for an initial Business Combination during the 15-month period or Paid Extension Period, to complete an initial Business Combination. In the case of the Paid Extension Period or Automatic Extension Period, public shareholders will not be offered the opportunity to vote on or redeem their shares if the Company chooses to make any such paid extension or in connection with an automatic extension. If the Company is unable to consummate an initial Business Combination within the 15-month period (or up to 24 months if the period of time to consummate an initial Business Combination is extended pursuant to the terms of the Company’s amended and restated memorandum and articles of association), the Company will redeem 100% of the 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 on the funds held in the Trust Account (less taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of then issued and outstanding public shares.

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Going Concern and Liquidity

At June 30, 2022, the Company had $491,272 of cash, and $205,114,799 in cash held in the Trust Account to be used for an initial Business Combination or to repurchase its public shares in connection therewith and a working capital surplus of $733,982.

Over the next 12 months (or up to 21 months if the period of time to consummate an initial Business Combination is extended pursuant to the terms of the Company’s amended and restated memorandum and articles of association), the Company will be using these funds for paying existing accounts payable, paying the legal, accounting and regulatory costs and expenses of being a public company, identifying and evaluating prospective initial Business Combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the initial Business Combination. In order to fund working capital deficiencies or finance transaction costs in connection with an intended initial Business Combination, our Sponsor or an affiliate of our Sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required (see Note 5).

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, suspending the pursuit of an initial Business Combination. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all.

As a result of the above, in connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standard Board’s Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that the liquidity condition and date for mandatory liquidation and dissolution raise substantial doubt about the Company’s ability to continue as a going concern through approximately one year from the date the financial statements were issued. The 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.

Prior to the consummation of the IPO, the Company’s liquidity needs have been satisfied through receipt of a $25,000 capital contribution from the Sponsor in exchange for the issuance of the Founder Shares (Note 5) to the Sponsor, and a $300,000 note payable to the Sponsor.

Risk and Uncertainties

Management is currently evaluating the impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations, close of the IPO, and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. These financial statements do not include any adjustments that might result from the outcome of this uncertainty.

The credit and financial markets have experienced extreme volatility and disruptions due to the current conflict between Ukraine and Russia. The conflict is expected to have further global economic consequences, including but not limited to the possibility of severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in inflation rates and uncertainty about economic and political stability. In addition, the United States and other countries have imposed sanctions on Russia which increases the risk that Russia, as a retaliatory action, may launch cyberattacks against the United States, its government, infrastructure and businesses. Any of the foregoing consequences, including those we cannot yet predict, may cause our business, financial condition, results of operations and the price of our ordinary shares to be adversely affected.

Note 2 - Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed financial statements are presented in U.S. dollars and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC. Certain information or footnote disclosures normally included in the unaudited condensed financial statements prepared in accordance with U.S. 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 complete presentation of financial position, results of operations, or cash flows. In the opinion

SEC Form 10-Q filed by Games & Esports Experience Acquisition Corp.