VCV Digital Technology entered into a letter of intent to acquire Fortune Rise Acquisition Corporation (NasdaqGM:FRLA) from Fortune Rise Sponsor LLC, EF Hutton Partners, LLC, US Tiger Securities, Inc. and others in a reverse merger transaction on November 30, 2021. VCV Digital Technology entered into a definitive merger agreement to acquire Fortune Rise Acquisition Corporation (NasdaqGM:FRLA) from Fortune Rise Sponsor LLC, EF Hutton Partners, LLC, US Tiger Securities, Inc. and others for approximately $340 million in a reverse merger transaction on April 26, 2022. At closing, approximately 24.5 million shares of Fortune Rise common stock representing the initial merger consideration and 9.8 million shares of Fortune Rise common stock representing the earnout consideration will be issued to the Sigma and Gamma stockholders at the redemption price of Fortune Rise public shares in connection with the Business Combination. The earnout shares will be issued at the closing to pre-closing stockholders of Gamma and deposited into an escrow account either to be released to these stockholders if certain milestones are reached or to be forfeited if such milestones have not been reached by April 30, 2023. One fourth of the earnout shares (with an implied value of $25 million) will be released to pre-closing stockholders of Gamma if an aggregate of 4,500 miners are deployed. An additional one fourth of the earnout shares (with an implied value of $25 million) will be released for each additional tranche of 2,000 miners deployed through April 30, 2023, up to a total of an additional 6,000 miners, for total earnout consideration of $100 million implied value. The combined company is expected to have a combined implied initial pro forma equity value of approximately $381.4 million, translating into an enterprise value of approximately $294.1 million. As part of the transaction, all Sigma and Gamma shares owned by their existing equity holders will be converted into common stock of Fortune Rise. Pre-closing stockholders of Sigma and Gamma will roll 100% of their equity into the combined company and, including the earnout shares, will own approximately 72.7% of the combined company's outstanding shares of common stock, and pre-closing stockholders of Fortune Rise will own approximately 27.3% of the combined company's outstanding shares of common stock on a pro forma basis (assuming no redemptions) immediately after the closing. Pre-closing stockholders of Sigma and Gamma will own approximately 65.5%, and pre-closing stockholders of Fortune Rise will own approximately 34.5%, of the combined company if all earnout shares are forfeited following April 30, 2023. Upon completion of the Business Combination, the combined company is expected to operate under the name “VCV Digital Technology, Inc.” and remain listed on the Nasdaq stock market under the new ticker symbol “XVC” with respect to its common stock. If the Merger Agreement is terminated by VCV Digital, VCV Digital will pay to FRLA a termination fee of $500,000.

The transaction is subject to regulatory and stockholder approvals, the applicable waiting periods, if any, under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 having expired or terminated, the registration statement in connection with the Mergers having been declared effective by the Securities and Exchange Commission, the combined company having at least $5,000,001 of net tangible assets remaining after the closing of the transactions contemplated by the Merger Agreement including proceeds from any PIPE Investment, the nominees specified in the Merger Agreement having been elected or appoint to the Board, effective as of the closing, Lock-up Agreements, Escrow Agreement, stockholders approval of each company, Nasdaq Approval and the satisfaction or waiver of other customary closing conditions. The proposed transaction has been unanimously approved by the board of directors of each of the Companies and FRLA. The proposed business combination is expected to be completed in the third quarter of 2022.

Maxim Group LLC acted as financial advisor and Scott W. Goodman and Richard D. Harris of Day Pitney LLP acted as legal advisors to VCV Digital Technology. US Tiger Securities, Inc. acted as the financial advisor and Arila Zhou of Robinson & Cole LLP acted as legal counsel to Fortune Rise.

VCV Digital Technology, Inc. cancelled the acquisition of Fortune Rise Acquisition Corporation (NasdaqGM:FRLA) from Fortune Rise Sponsor LLC, EF Hutton Partners, LLC, US Tiger Securities, Inc. and others on July 19, 2022.