References in this report (the "Quarterly Report") to "we," "us" or the
"Company" refer to Gaming & Hospitality Acquisition Corp. References to our
"management" or our "management team" refer to our officers and directors, and
references to the "Sponsor" refer to Affinity Gaming Holdings, L.L.C. 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 final prospectus for its Initial Public
Offering 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 formed under the laws of the State of Delaware on
March 4, 2020 ("Inception") for the purpose of effecting a merger, capital stock
exchange, asset acquisition, stock purchase, reorganization or other similar
business combination with one or more businesses (the "Business Combination").
We intend to effectuate our Business Combination using cash from the proceeds of
the Initial Public Offering and the sale of the Private Units, our capital
stock, debt or a combination of cash, stock and debt.
We expect to continue to incur significant costs in the pursuit of our
acquisition plans. We cannot assure you that our plans to complete our initial
Business Combination will be successful.
Results of Operations
We have neither engaged in any operations nor generated any revenues to date.
Our only activities from Inception through June 30, 2021 were organizational
activities, those necessary to prepare for the Initial Public Offering,
described below, and, subsequent to the Initial Public Offering, identifying a
target company for a Business Combination. We do not expect to generate any
operating revenues until after the completion of our Business Combination, at
the earliest. We expect to generate
non-operating
income in the form of interest income on marketable securities held after the
Initial Public Offering in the Trust Account. We incur expenses as a result of
being a public company (for legal, financial reporting, accounting and auditing
compliance), as well as for due diligence expenses.
For the three months ended June 30, 2021, we had a net loss of $1,385,296, which
consisted of operating costs of $350,391, interest income on marketable
securities held in our Trust Account of $6,561, and a loss in fair value of
warrant liabilities of 1,041,466.
For the six months ended June 30, 2021, we had a net loss of $2,490,169, which
consisted of operating costs of $1,319,407, interest income on marketable
securities held in our Trust Account of $9,221, and a loss in fair value of
warrant liabilities of 1,179,983.

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Liquidity and Capital Resources
On February 5, 2021, we consummated the Initial Public Offering of 20,000,000
Units at a price of $10.00 per Unit, including 2,500,000 Units sold pursuant to
the full exercise of the underwriter's over-allotment option, generating gross
proceeds of $200,000,000. Simultaneously with the closing of the Initial Public
Offering, we consummated the sale of 777,500 Private Units to the Sponsor at a
price of $10.00 per Private Unit, generating gross proceeds of $7,775,000.
Following the Initial Public Offering, the exercise of the over-allotment option
and the sale of the Private Units, a total of $200,000,000 was placed in the
Trust Account. We incurred $11,755,731 in transaction costs, including
$4,000,000 of underwriting fees, $7,000,000 of deferred underwriting fees and
$755,731 of other costs. Of these transaction costs, $344,981 were determined to
be allocable to the warrant liabilities and were expensed in formation costs and
other operating expenses within the condensed statement of operations.
As of June 30, 2021, we had marketable securities held in the Trust Account of
$200,009,221 (including $9,221 of interest income) consisting of U.S. Treasury
Bills with a maturity of 185 days or less.
For the six months ended June 30, 2021, cash used in operating activities was
$1,866,641. Net loss of $2,490,169 was affected by interest income on marketable
securities held in our Trust Account of $9,221, transaction costs allocable to
warrant liabilities of $344,981, change in fair value of warrant liabilities of
$1,179,983, and changes in operating assets and liabilities, which used $892,215
of cash.
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 income taxes payable), 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 June 30, 2021, we had cash of $1,177,628 held outside the Trust Account.
We intend to use the funds held outside the Trust Account primarily for working
capital purposes and to identify and evaluate target businesses, perform
business due diligence on prospective target businesses, review corporate
documents and material agreements of prospective target businesses, and
structure, negotiate and complete a Business Combination.
In order to fund working capital deficiencies or finance transaction costs in
connection with a 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. If we complete a Business Combination, we
would repay such loaned amounts. In the event that a Business Combination does
not close, we may use a portion of the working capital held outside the Trust
Account to repay such loaned amounts but no proceeds from our Trust Account
would be used for such repayment. Up to $1,500,000 of such loans may be
convertible into units identical to the Private Units, at a price of $10.00 per
warrant at the option of the lender.
We do not believe we will need to raise additional funds in order to meet the
expenditures required for operating our business. However, if our estimate of
the costs of identifying a target business, undertaking
in-depth
due diligence and negotiating a Business Combination are less than the actual
amount necessary to do so, we may have insufficient funds available to operate
our business prior to our Business Combination. Moreover, we may need to obtain
additional financing either to complete our Business Combination or because we
become obligated to redeem a significant number of our public shares upon
consummation of our Business Combination, in which case we may issue additional
securities or incur debt in connection with such Business Combination. If we are
unable to complete our Business Combination within the time period set forth in
our amended and restated certificate of incorporation because we do not have
sufficient funds available to us, we will be forced to cease operations and
liquidate the Trust Account. In addition, following our Business Combination, if
cash on hand is insufficient, we may need to obtain additional financing in
order to meet our obligations.
Off-Balance
Sheet Arrangements
We did not have any
off-balance
sheet arrangements as of June 30, 2021.

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Contractual Obligations
We do not have any long-term debt, capital lease obligations, operating lease
obligations or long-term liabilities, other than an agreement to pay Affinity
Gaming, an affiliate of the Sponsor, a monthly fee of $33,333 for office space,
utilities, secretarial and administrative support services, reimbursement of a
portion of the compensation paid by Affinity Gaming, an affiliate of our
Sponsor, to our officers in consideration of the time dedicated to us by each of
Ms. Higgins, our Chief Executive Officer, Mr. Fiocco, our Chief Operating
Officer and Secretary, and Mr. Scrivens, our Chief Financial Officer, and
reimbursement of expenses. We began incurring these fees on February 3, 2021 and
will continue to incur these fees monthly until the earlier of the completion of
the Business Combination and the Company's liquidation in accordance with its
amended and restated certificate of incorporation.
The underwriters are entitled to a deferred fee of $0.35 per unit, or $7,000,000
in the aggregate. The deferred fee 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.
Critical Accounting Policies
The preparation of condensed 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 common stock subject to possible redemption in accordance with
the guidance in ASC 480. 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 the
Company's 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 stockholders' equity section of our condensed balance sheets.
Net Loss Per Share of Common Stock
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 Standards
Management does not believe that any recently issued, but not yet effective,
accounting standards, if currently adopted, would have a material effect on our
condensed financial statements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are a smaller reporting company as defined by Rule
12b-2
of the Exchange Act and are not required to provide the information otherwise
required under this item.

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