Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2021 | Aug. 13, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | SUPER LEAGUE GAMING, INC. | |
Entity Central Index Key | 0001621672 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | true | |
Entity Current Reporting Status | Yes | |
Document Period End Date | Jun. 30, 2021 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2021 | |
Entity Ex Transition Period | false | |
Entity Common Stock Shares Outstanding | 35,340,633 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-38819 | |
Entity Incorporation State Country Code | DE | |
Entity Tax Identification Number | 47-1990734 | |
Entity Address Address Line 1 | 2912 Colorado Ave. | |
Entity Address Address Line 2 | Suite #203 | |
Entity Address City Or Town | Santa Monica | |
Entity Address State Or Province | CA | |
Entity Address Postal Zip Code | 90404 | |
City Area Code | 802 | |
Local Phone Number | 294-2754 | |
Entity Interactive Data Current | Yes | |
Security 12b Title | Common Stock | |
Trading Symbol | SLGG | |
Security Exchange Name | NASDAQ |
CONDENSED BALANCE SHEETS
CONDENSED BALANCE SHEETS - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Current Assets | ||
Cash and cash equivalents | $ 31,455,000 | $ 7,942,000 |
Accounts receivable | 1,721,000 | 588,000 |
Prepaid expenses and other current assets | 900,000 | 837,000 |
Total current assets | 34,076,000 | 9,367,000 |
Property and equipment, net | 122,000 | 138,000 |
Intangible and other Assets, net | 21,221,000 | 1,907,000 |
Goodwill | 46,084,000 | 2,565,000 |
Total assets | 101,503,000 | 13,977,000 |
Current Liabilities | ||
Accounts payable and accrued expenses | 2,808,000 | 1,829,000 |
Deferred revenue | 142,000 | 0 |
Total current liabilities | 2,950,000 | 1,829,000 |
Long term note payable | 0 | 1,208,000 |
Total liabilities | 2,950,000 | 3,037,000 |
Commitments and Contingencies | 0 | 0 |
Stockholders' Equity | ||
Preferred stock, par value $0.001 per share; 10,000,000 shares authorized; no shares issued or outstanding | 0 | 0 |
Common stock, par value $0.001 per share; 100,000,000 shares authorized; 35,340,633 and 15,483,010 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively. | 45,000 | 25,000 |
Additional paid-in capital | 209,703,000 | 115,459,000 |
Accumulated deficit | (111,195,000) | (104,544,000) |
Total stockholders' equity | 98,553,000 | 10,940,000 |
Total liabilities and stockholders' equity | $ 101,503,000 | $ 13,977,000 |
CONDENSED BALANCE SHEETS (Paren
CONDENSED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2021 | Dec. 31, 2020 |
CONDENSED BALANCE SHEETS | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 10,000,000 | 10,000,000 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, authorized | 100,000,000 | 100,000,000 |
Common stock, issued | 35,340,633 | 15,483,010 |
Common stock, outstanding | 35,340,633 | 15,483,010 |
CONDENSED STATEMENTS OF OPERATI
CONDENSED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
CONDENSED STATEMENTS OF OPERATIONS (Unaudited) | ||||
REVENUES | $ 1,084,000 | $ 324,000 | $ 1,872,000 | $ 567,000 |
COST OF REVENUES | 533,000 | 116,000 | 875,000 | 233,000 |
GROSS PROFIT | 551,000 | 208,000 | 997,000 | 334,000 |
OPERATING EXPENSES | ||||
Selling, marketing and advertising | 1,934,000 | 1,256,000 | 3,417,000 | 2,529,000 |
Technology platform and infrastructure | 2,497,000 | 1,685,000 | 4,100,000 | 3,590,000 |
General and administrative | 2,433,000 | 1,826,000 | 4,419,000 | 3,922,000 |
Total operating expenses | 6,864,000 | 4,767,000 | 11,936,000 | 10,041,000 |
NET OPERATING LOSS | (6,313,000) | (4,559,000) | (10,939,000) | (9,707,000) |
OTHER INCOME (EXPENSE) | ||||
Accrued interest expense | (2,000) | (2,000) | (5,000) | (2,000) |
Gain on loan forgiveness | 1,213,000 | 0 | 1,213,000 | 0 |
Other | 3,000 | 1,000 | 7,000 | 15,000 |
Total other income (expense) | 1,214,000 | (1,000) | 1,215,000 | 13,000 |
Loss before benefit from income taxes | (5,099,000) | (4,560,000) | (9,724,000) | (9,694,000) |
Benefit from income taxes | 3,073,000 | 0 | 3,073,000 | 0 |
NET LOSS | $ (2,026,000) | $ (4,560,000) | $ (6,651,000) | $ (9,694,000) |
Net loss attributable to common stockholders - basic and diluted | ||||
Basic and diluted loss per common share | $ (0.07) | $ (0.48) | $ (0.28) | $ (1.07) |
Weighted-average number of shares outstanding, basic and diluted | 27,165,755 | 9,547,819 | 23,525,528 | 9,066,386 |
CONSOLIDATED CONDENSED STATEMEN
CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS EQUITY (Unaudited) - USD ($) | Total | Common Stock | Additional Paid-In Capital | Accumulated Deficit |
Balance, shares at Dec. 31, 2019 | 8,573,922 | |||
Balance, amount at Dec. 31, 2019 | $ 18,000 | $ 99,237,000 | $ (85,812,000) | |
Issuance of common stock at $2.60 per share, amount | 0 | 0 | ||
Issuance of common stock at $4.10 per share, amount | $ 0 | 5,951,000 | ||
Issuance of common stock at $9.00 per share, shares | 0 | |||
Issuance of common stock at $9.00 per share, amount | $ 0 | 0 | ||
Issuance of common stock at $3.50 per share, net of issuance costs, shares | 1,825,000 | |||
Issuance of common stock at $3.50 per share, net of issuance costs, amount | $ 2,000 | |||
Common stock issued for Mobcrush Acquisition (Note 4), shares | 0 | |||
Common stock issued for Mobcrush Acquisition (Note 4), amount | $ 0 | |||
Common stock issued for Framerate Acquisition (Note 4), shares | 32,936 | |||
Common stock issued for Framerate Acquisition (Note 4), amount | $ 0 | |||
Stock-based compensation, shares | 28,838 | |||
Stock-based compensation, amount | 1,049,000 | |||
Net Loss | (9,694,000) | |||
Balance, shares at Mar. 31, 2020 | 8,595,742 | |||
Balance, amount at Mar. 31, 2020 | $ 18,000 | 99,914,000 | (90,946,000) | |
Balance, shares at Dec. 31, 2019 | 8,573,922 | |||
Balance, amount at Dec. 31, 2019 | $ 18,000 | 99,237,000 | (85,812,000) | |
Net Loss | $ (9,694,000) | |||
Balance, shares at Jun. 30, 2020 | 10,460,696 | |||
Balance, amount at Jun. 30, 2020 | 10,751,000 | $ 20,000 | 106,237,000 | (95,506,000) |
Balance, shares at Mar. 31, 2020 | 8,595,742 | |||
Balance, amount at Mar. 31, 2020 | $ 18,000 | 99,914,000 | (90,946,000) | |
Issuance of common stock at $2.60 per share, shares | 0 | |||
Issuance of common stock at $2.60 per share, amount | $ 0 | 0 | ||
Issuance of common stock at $4.10 per share, shares | 0 | |||
Issuance of common stock at $4.10 per share, amount | $ 0 | 0 | ||
Issuance of common stock at $9.00 per share, shares | 0 | |||
Issuance of common stock at $9.00 per share, amount | $ 0 | 0 | ||
Issuance of common stock at $3.50 per share, net of issuance costs, shares | 1,825,000 | |||
Issuance of common stock at $3.50 per share, net of issuance costs, amount | $ 2,000 | 5,951,000 | ||
Common stock issued for Mobcrush Acquisition (Note 4), shares | 0 | |||
Common stock issued for Mobcrush Acquisition (Note 4), amount | $ 0 | 0 | ||
Common stock issued for Framerate Acquisition (Note 4), shares | 32,936 | |||
Common stock issued for Framerate Acquisition (Note 4), amount | $ 0 | |||
Stock-based compensation, shares | 7,018 | |||
Stock-based compensation, amount | $ 0 | 372,000 | ||
Net Loss | (4,560,000) | 4,560,000 | ||
Stock option exercises | 0 | |||
Balance, shares at Jun. 30, 2020 | 10,460,696 | |||
Balance, amount at Jun. 30, 2020 | 10,751,000 | $ 20,000 | 106,237,000 | (95,506,000) |
Balance, shares at Dec. 31, 2020 | 15,483,010 | |||
Balance, amount at Dec. 31, 2020 | 10,940,000 | $ 25,000 | 115,459,000 | (104,544,000) |
Issuance of common stock at $2.60 per share, shares | 3,076,924 | |||
Issuance of common stock at $2.60 per share, amount | $ 3,000 | 7,924,000 | ||
Issuance of common stock at $4.10 per share, shares | 2,926,830 | |||
Issuance of common stock at $4.10 per share, amount | $ 3,000 | 11,927,000 | ||
Issuance of common stock at $9.00 per share, shares | 1,512,499 | |||
Issuance of common stock at $9.00 per share, amount | $ 2,000 | 13,540,000 | ||
Issuance of common stock at $3.50 per share, net of issuance costs, shares | 0 | |||
Issuance of common stock at $3.50 per share, net of issuance costs, amount | $ 0 | 0 | ||
Common stock issued for Mobcrush Acquisition (Note 4), shares | 12,067,571 | |||
Common stock issued for Mobcrush Acquisition (Note 4), amount | $ 12,000 | |||
Common stock issued for Framerate Acquisition (Note 4), shares | 0 | |||
Common stock issued for Framerate Acquisition (Note 4), amount | $ 0 | 59,843,000 | ||
Stock-based compensation, shares | 273,799 | |||
Stock-based compensation, amount | $ 0 | 972,000 | ||
Net Loss | (6,651,000) | |||
Stock option exercises | 38,000 | |||
Balance, shares at Mar. 31, 2021 | 23,133,918 | |||
Balance, amount at Mar. 31, 2021 | $ 33,000 | 149,299,000 | (109,169,000) | |
Balance, shares at Dec. 31, 2020 | 15,483,010 | |||
Balance, amount at Dec. 31, 2020 | $ 10,940,000 | $ 25,000 | 115,459,000 | (104,544,000) |
Issuance of common stock at $2.60 per share, shares | 12,582,204 | |||
Net Loss | $ (6,651,000) | |||
Balance, shares at Jun. 30, 2021 | 35,340,633 | |||
Balance, amount at Jun. 30, 2021 | 98,553,000 | $ 45,000 | 209,703,000 | (111,195,000) |
Balance, shares at Mar. 31, 2021 | 23,133,918 | |||
Balance, amount at Mar. 31, 2021 | $ 33,000 | 149,299,000 | (109,169,000) | |
Issuance of common stock at $2.60 per share, shares | 0 | |||
Issuance of common stock at $2.60 per share, amount | $ 0 | 0 | ||
Issuance of common stock at $4.10 per share, amount | $ 0 | 0 | ||
Issuance of common stock at $9.00 per share, amount | 0 | |||
Issuance of common stock at $3.50 per share, net of issuance costs, shares | 0 | |||
Issuance of common stock at $3.50 per share, net of issuance costs, amount | $ 0 | 0 | ||
Common stock issued for Mobcrush Acquisition (Note 4), shares | 12,067,571 | |||
Common stock issued for Mobcrush Acquisition (Note 4), amount | $ 12,000 | 59,843,000 | ||
Common stock issued for Framerate Acquisition (Note 4), shares | 0 | |||
Common stock issued for Framerate Acquisition (Note 4), amount | $ 0 | 0 | ||
Stock-based compensation, shares | 139,144 | |||
Stock-based compensation, amount | $ 0 | |||
Net Loss | (2,026,000) | (2,026,000) | ||
Stock option exercises | $ 0 | |||
Balance, shares at Jun. 30, 2021 | 35,340,633 | |||
Balance, amount at Jun. 30, 2021 | $ 98,553,000 | $ 45,000 | $ 209,703,000 | $ (111,195,000) |
CONDENSED STATEMENTS OF CASH FL
CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (6,651,000) | $ (9,694,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 801,000 | 854,000 |
Stock-based compensation | 972,000 | 1,099,000 |
Gain on loan forgiveness (Note 5) | 1,213,000 | 0 |
Change in valuation allowance (Note 4) | 3,073,000 | 0 |
Changes in assets and liabilities: | ||
Accounts receivable | 134,000 | (204,000) |
Prepaid expenses and other current assets | 79,000 | (484,000) |
Accounts payable and accrued expenses | (991,000) | (5,000) |
Deferred revenue | 12,000 | (151,000) |
Accrued interest on note payable | 5,000 | 0 |
Net cash used in operating activities | (9,925,000) | (8,585,000) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Cash acquired in connection with Mobcrush Acquisition (Note 4) | 586,000 | 0 |
Purchase of property and equipment | (11,000) | (6,000) |
Capitalization of software development costs | (437,000) | (691,000) |
Acquisition of other intangible assets | (137,000) | (72,000) |
Net cash used in investing activities | 1,000 | (769,000) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from issuance of common stock, net of issuance costs (Note 6) | 33,399,000 | 5,953,000 |
Proceeds from note payable (Note 5) | 0 | 1,200,000 |
Proceeds from common stock option exercises | 38,000 | 0 |
Net cash provided by financing activities | 33,437,000 | 7,153,000 |
INCREASE (DECREASE) IN CASH | 23,513,000 | (2,201,000) |
Cash - beginning of period | 7,942,000 | 8,442,000 |
Cash - end of period | 31,455,000 | 6,241,000 |
SUPPLEMENTAL NONCASH INVESTING AND FINANCING ACTIVITIES | ||
Issuance of common stock in connection with Mobcrush Acquisition | 59,855,000 | 0 |
Issuance of common stock in connection with Framerate Acquisition | 245,000 | |
Gain on loan forgiveness (Note 5) | $ 1,213,000 | $ 0 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 6 Months Ended |
Jun. 30, 2021 | |
DESCRIPTION OF BUSINESS | |
Note 1. DESCRIPTION OF BUSINESS | 1. DESCRIPTION OF BUSINESS Super League Gaming, Inc. (“Super League,” the “Company,” “we” or “our”) is a leading video game entertainment and experiences company that gives tens of millions of players multiple ways to create, connect, compete, and enjoy the video games they love. Fueled by proprietary and patented technology systems, the company’s offerings include gameplay properties in which young gamers form vibrant in-game communities, content creation platforms that power live broadcasts and on-demand video series that generate billions of views annually across the world’s biggest distribution channels, and competitive gaming tournaments featuring many of the most popular global titles. Through partnerships with top consumer brands, in-game player and brand monetization, and a fully virtual cloud-based video production studio, Super League is building a broadly inclusive business at the intersection of content creation, creator monetization, and both casual and competitive gameplay. Super League was incorporated on October 1, 2014 as Nth Games, Inc. under the laws of the State of Delaware and changed its name to Super League Gaming, Inc. on June 15, 2015. We are an “emerging growth company” as defined by the Jumpstart Our Business Startups Act of 2012, as amended. Acquisition of Mobcrush Streaming, Inc. On June 1, 2021 (the “Closing Date”), the Company completed the acquisition of Mobcrush Streaming, Inc. (“Mobcrush”) pursuant to which the Company acquired all of the issued and outstanding shares of Mobcrush (the "Merger"). At closing, the Company issued to the former stockholders of Mobcrush an aggregate total of 12,067,571 shares of the Company’s common stock and reserved an aggregate total of 514,633 shares of common stock for future stock option grants, under the Super League 2014 Stock Option and Incentive Plan, to the former Mobcrush employees retained by the Company in connection with the Merger, resulting in a total of 12,582,204 shares of the Company’s common stock issued and reserved as consideration for the Merger (the "Merger Consideration"). Upon completion of the Merger, Mobcrush became a wholly-owned subsidiary of the Company. Mobcrush is a live streaming technology platform used by gaming influencers who generate and distribute original content to fans and subscribers across the most popular live streaming and social media platforms, including Twitch, YouTube, Facebook, Instagram, Twitter, and more. Mobcrush also operates Mineville, one of six official Minecraft servers in partnership with Microsoft. In accordance with the acquisition method of accounting, the financial results of Super League presented herein include the financial results of Mobcrush as of the Closing Date, including the results of operations from the closing date to the end of the current period presented herein. Refer to Note 4 for additional information. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, certain information and footnotes required by U.S. GAAP in annual financial statements have been omitted or condensed in accordance with quarterly reporting requirements of the Securities and Exchange Commission (“SEC”). These interim consolidated condensed financial statements should be read in conjunction with our audited financial statements for the year ended December 31, 2020 included in our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on March 19, 2021. The year-end consolidated condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. The consolidated condensed interim financial statements of Super League include all adjustments of a normal recurring nature which, in the opinion of management, are necessary for a fair statement of Super League’s financial position as of June 30, 2021, and results of its operations and its cash flows for the interim periods presented. The results of operations for the three and six months ended June 30, 2021 are not necessarily indicative of the results to be expected for the entire fiscal year. Reclassifications Certain reclassifications to operating expense line items have been made to prior year amounts for consistency and comparability with the current year’s consolidated condensed financial statements presentation. These reclassifications had no effect on the reported total operating expenses for the periods presented. Use of Estimates The preparation of financial statements in conformity with U.S. 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. Actual results could differ from these estimates. The Company believes that, of the significant accounting policies described herein, the accounting policies associated with revenue recognition, impairment of goodwill and intangibles, stock-based compensation expense, capitalized internal-use-software costs, accounting for business combinations, and accounting for income taxes and valuation allowances against net deferred tax assets, require its most difficult, subjective or complex judgments. Revenue Recognition Revenue is recognized when the Company transfers promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods and services. In this regard, revenue is recognized when: (i) the parties to the contract have approved the contract (in writing, orally, or in accordance with other customary business practices) and are committed to perform their respective obligations; (ii) the entity can identify each party’s rights regarding the goods or services to be transferred; (iii) the entity can identify the payment terms for the goods or services to be transferred; (iv) the contract has commercial substance (that is, the risk, timing, or amount of the entity’s future cash flows is expected to change as a result of the contract); and (v) it is probable that the entity will collect substantially all of the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer. Transaction prices are based on the amount of consideration to which we expect to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties, if any. We consider the explicit terms of the revenue contract, which are typically written and executed by the parties, our customary business practices, the nature, timing, and the amount of consideration promised by a customer in connection with determining the transaction price for our revenue arrangements. Refunds and sales returns historically have not been material. Super League generates revenues from (i) advertising, serving as a marketing channel for brands and advertisers to reach their target audiences of gamers across our network, (ii) content, curating and distributing esports and entertainment content for our own network of digital channels and media and entertainment partner channels and (iii) direct to consumer offers including digital subscriptions, digital goods, gameplay access fees and merchandise sales. Revenue billed or collected in advance is recorded as deferred revenue until the event occurs or until applicable performance obligations are satisfied. Advertising and Sponsorships Advertising revenue primarily consists of direct sales activity along with sales of programmatic display and video advertising units to third-party advertisers and exchanges. Advertising arrangements typically include contract terms for time periods ranging from several days to several weeks in length. For advertising arrangements that include performance obligations satisfied over time, customers typically simultaneously receive and consume the benefits under the arrangement as we satisfy our performance obligations, over the applicable contract term. As such, revenue is recognized over the contract term based upon estimates of progress toward complete satisfaction of the contract performance obligations (typically utilizing a time, effort or delivery-based method of estimation). Revenue from shorter term advertising arrangements that provide for a contractual delivery or performance date is recognized when performance is substantially complete and or delivery occurs. Payments are typically due from customers during the term of the arrangement for longer-term campaigns, and once delivery is complete for shorter-term campaigns. Sponsorship revenue arrangements may include: exclusive or non-exclusive title sponsorships, marketing benefits, official product status exclusivity, product visibly and additional infrastructure placement, social media rights, rights to on-screen activations and promotions, display material rights, media rights, hospitality and tickets and merchandising rights. Sponsorship revenues also include revenues pursuant to arrangements with brand and media partners, retail venues, game publishers and broadcasters that allow our partners to run amateur esports experiences, and or capture specifically curated gameplay content that is customized for our partners’ distribution channels. Sponsorship arrangements typically include contract terms for time periods ranging from several weeks or months to terms of twelve months in length. For sponsorship arrangements that include performance obligations satisfied over time, customers typically simultaneously receive and consume the benefits under the agreement as we satisfy our performance obligations, over the applicable contract term. As such, revenue is recognized over the contract term based upon estimates of progress toward complete satisfaction of the contract performance obligations (typically utilizing a time, effort or delivery-based method of estimation). Payments are typically due from customers during the term of the arrangement. Revenue from sponsorship arrangements for one-off branded experiences and/or the development of content tailored specifically for our partners’ distribution channels that provide for a contractual delivery or performance date, is recognized at a point in time, when performance is substantially complete and or delivery occurs. Content Content sales revenue is generated in connection with our curation and distribution of esports and entertainment content for our own network of digital channels and media and entertainment partner channels. We distribute three primary types of content for syndication and licensing, including: (1) our own original programming content, (2) user generated content (“UGC”), including online gameplay and gameplay highlights, and (3) the creation of content for third parties utilizing our remote production and broadcast technology. For content arrangements that include performance obligations satisfied over time, customers typically simultaneously receive and consume the benefits under the arrangement as we satisfy our performance obligations, over the applicable contract term. As such, revenue is recognized over the contract term based upon estimates of progress toward complete satisfaction of the contract performance obligations (typically utilizing a time, effort or delivery-based method of estimation). Revenue from shorter term content sales arrangements that provide for a contractual delivery or performance date is recognized when performance is substantially complete and or delivery occurs. Payments are typically due from customers during the term of the arrangement for longer-term campaigns, and once delivery is complete for shorter-term campaigns. Payments are typically due from customers during the term of the arrangement for longer-term campaigns, and once delivery is complete for shorter-term campaigns. Direct to Consumer Direct to consumer revenues primarily consist of primarily monthly digital subscription fees, and sales of digital goods and merchandise. Subscription revenue is recognized in the period the services are rendered. Payments are typically due from customers at the point of sale. Platform Generated Sales Transactions Revenue for digital goods sold on the platform is recognized when Microsoft (our partner) collects the revenue and facilitates the transaction on the platform. Revenue for such arrangements includes all revenue generated, bad debt, make goods, and refunds of all transactions managed via the platform by Microsoft. The revenue is recognized on a monthly basis. Payments are made to the Company monthly based on the reconciled sales revenue generated. Revenue was comprised of the following for the periods presented: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Advertising and sponsorships $ 485,000 $ 49,000 $ 928,000 $ 56,000 Content sales 365,000 236,000 646,000 457,000 Direct to consumer 234,000 39,000 298,000 54,000 $ 1,084,000 $ 324,000 $ 1,872,000 $ 567,000 For the three and six months ended June 30, 2021, 42% and 39% of revenues were recognized at a single point in time, and 58% and 61% of revenues were recognized over time, respectively. For the three and six months ended June 30, 2020, 46% and 35% of revenues were recognized at a single point in time, and 54% and 65% of revenues were recognized over time, respectively. Cost of Revenues Cost of revenues includes direct costs incurred in connection with the satisfaction of performance obligations under our revenue arrangements including direct labor, creative and broadcast related contract services, talent and influencers, content capture and production services, direct marketing, prizing, platform costs and revenue sharing fees. Advertising Gaming experience and Super League brand related advertising costs include the cost of ad production, social media, print media, marketing, promotions, and merchandising. The Company expenses advertising costs as incurred. Advertising costs are included in selling, marketing and advertising expenses in the accompanying statements of operations. Advertising expenses for the three and six months ended June 30, 2021 were $117,000 and $251,000, respectively. Advertising expenses for the three and six months ended June 30, 2020 were $20,000 and $87,000, respectively. Technology Platform and Infrastructure Costs Technology platform and infrastructure costs include (i) allocated personnel costs, including salaries, noncash stock compensation, taxes and benefits related to our internal software developers and engineers, employed by Super League, engaged in the operation, maintenance, management, administration, testing and enhancement of our proprietary gaming and content technology platform, (ii) third-party contract software development and engineering resources engaged in developing and enhancing our proprietary gaming and content technology platform (iii) the amortization of capitalized internal use software costs, and (iv) technology platform related cloud services, broadband and other technology platform costs. Acquisitions For acquisitions that meet the definition of a business under ASC 805, the Company records the acquisition using the acquisition method of accounting. All of the assets acquired, liabilities assumed, contractual contingencies, and contingent consideration, when applicable, are recorded at fair value at the acquisition date. Any excess of the purchase price over the fair value of the net assets acquired is recorded as goodwill. The application of the acquisition method of accounting requires management to make significant estimates and assumptions in the determination of the fair value of assets acquired and liabilities assumed in order to properly allocate purchase price consideration. For acquisitions that do not meet the definition of a business under ASC 805, the Company accounts for the transaction as an asset acquisition. Transaction costs associated with business combinations are expensed as incurred and are included in general and administrative expenses in the consolidated statements of operations. Intangible Assets Intangible assets primarily consist of (i) internal-use software development costs, (ii) domain name, copyright and patent registration costs, (iii) commercial licenses and branding rights and (iv) other intangible assets, which are recorded at cost and amortized using the straight-line method over the estimated useful lives of the assets, ranging from three to 10 years. Software development costs incurred to develop internal-use software during the application development stage are capitalized and amortized on a straight-line basis over the software’s estimated useful life, which is generally three years. Software development costs incurred during the preliminary stages of development are charged to expense as incurred. Maintenance and training costs are charged to expense as incurred. Upgrades or enhancements to existing internal-use software that result in additional functionality are capitalized and amortized on a straight-line basis over the applicable estimated useful life. Impairment of Long-Lived Assets The Company assesses the recoverability of long-lived assets whenever events or changes in circumstances indicate that their carrying value may not be recoverable. If the cost basis of a long-lived asset is greater than the projected future undiscounted net cash flows from such asset, an impairment loss is recognized. Impairment losses are calculated as the difference between the cost basis of an asset and its estimated fair value. Management believes that there was no impairment of long-lived assets for the periods presented herein. There can be no assurance, however, that market conditions or demand for the Company’s products or services will not change, which could result in long-lived asset impairment charges in the future. Stock-Based Compensation Compensation expense for stock-based awards is measured at the grant date, based on the estimated fair value of the award, and is recognized as an expense, typically on a straight-line basis over the employee’s requisite service period (generally the vesting period of the equity award) which is generally two to four years. Compensation expense for awards with performance conditions that affect vesting is recorded only for those awards expected to vest or when the performance criteria are met. The fair value of restricted stock and restricted stock unit awards is determined by the product of the number of shares or units granted and the grant date market price of the underlying common stock. The fair value of stock option and common stock purchase warrant awards is estimated on the date of grant utilizing the Black-Scholes-Merton option pricing model. The Company utilizes the simplified method for estimating the expected term for options granted to employees due to the lack of available or sufficient historical exercise data for the Company for the applicable options terms. The Company accounts for forfeitures of awards as they occur. Grants of equity-based awards (including warrants) to non-employees in exchange for consulting or other services are accounted for using the grant date fair value of the equity instruments issued. Noncash stock-based compensation expense for the periods presented was included in the following financial statement line items: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Sales, marketing and advertising $ 237,000 $ 197,000 $ 420,000 $ 395,000 Technology platform and infrastructure 24,000 59,000 57,000 148,000 General and administrative 300,000 141,000 495,000 556,000 Total noncash stock compensation expense $ 561,000 $ 397,000 $ 972,000 $ 1,099,000 Equity Financing Costs Specific incremental costs directly attributable to a proposed or actual offering of securities or debt are deferred and charged against the gross proceeds of the financing. In the event that the proposed or actual financing is not completed, or is deemed not likely to be completed, such costs are expensed in the period that such determination is made. Deferred financing costs, if any, are included in other current assets in the accompanying balance sheet. For each of the three and six months ended June 30, 2021, financing costs charged against gross proceeds in connection with equity financings totaled $215,000. For each of the three and six months ended June 30, 2020, financing costs charged against gross proceeds in connection with equity financings totaled $434,000. Risks and Uncertainties Concentrations Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Number of customers > 10% of revenues / percent of revenues One / 15% Six / 84% - Four / 61 % June 30, 2021 December 31, 2020 Number of customers > 10% of accounts receivable / percent of accounts receivable One / 13% Four / 61% Number of vendors > 10% of accounts payable / percent of accounts payable One / 11% One / 55% Earnings (Loss) Per Share Basic earnings (loss) per share is computed by dividing the income or loss by the weighted-average number of outstanding shares of common stock for the applicable period. Diluted earnings per share is computed by dividing the income or loss by the weighted-average number of outstanding shares of common stock for the applicable period, including the dilutive effect of common stock equivalents. Potentially dilutive common stock equivalents primarily consist of employee stock options, warrants issued to employees and non-employees in exchange for services and warrants issued in connection with financings. All outstanding stock options, restricted stock units and warrants, totaling 5,064,000 and 4,470,000 at June 30, 2021 and December 31, 2020, respectively, have been excluded from the computation of diluted loss per share because the effect of inclusion would have been anti-dilutive. Recent Accounting Guidance Recent Accounting Pronouncements - Not Yet Adopted. Recent Accounting Pronouncements - Adopted. |
INTANGIBLE AND OTHER ASSETS
INTANGIBLE AND OTHER ASSETS | 6 Months Ended |
Jun. 30, 2021 | |
INTANGIBLE AND OTHER ASSETS | |
Note 3. INTANGIBLE AND OTHER ASSETS | 3. INTANGIBLE AND OTHER ASSETS Intangible and other assets consisted of the following for the periods presented: June 30, 2021 December 31, 2020 (Unaudited) Capitalized software development costs $ 3,712,000 $ 3,291,000 Trade name 189,000 189,000 Domain 68,000 68,000 Copyrights and other 572,000 435,000 Intangible assets acquired in connection with Mobcrush Acquisition (Note 4) 19,500,000 - 24,041,000 3,983,000 Less: accumulated amortization (2,820,000 ) (2,076,000 ) Intangible and other assets, net $ 21,221,000 $ 1,907,000 Amortization expense, excluding the impact of the Merger, for the three and six months ended June 30, 2021 totaled $284,000 and $550,000, respectively. Amortization expense included in cost of revenues for the three and six months ended June 30, 2021 totaled $13,000 and $16,000, respectively. Amortization expense for the three and six months ended June 30, 2020 totaled $302,000 and $795,000, respectively. |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 6 Months Ended |
Jun. 30, 2021 | |
BUSINESS COMBINATIONS | |
Note 4. BUSINESS COMBINATIONS | 4. Business Combinations Acquisition of Mobcrush On March 9, 2021, we entered into an Agreement and Plan of Merger, as amended on April 20, 2021, (the “Mobcrush Merger Agreement”) by and among Mobcrush, the Company, and SLG Merger Sub II, Inc., a wholly-owned subsidiary of the Company (“Merger Co”), which provided for the acquisition of Mobcrush by Super League pursuant to the merger of Merger Co with and into Mobcrush, with Mobcrush as the surviving corporation (the “Merger”). On June 1, 2021 the “Closing Date”), the Company completed the Merger pursuant to which the Company acquired all of the issued and outstanding shares of Mobcrush. In accordance with the terms and subject to the conditions of the Mobcrush Merger Agreement: (A) each outstanding share of Mobcrush common stock, par value $0.001 per share ("Mobcrush Common Stock"), and Mobcrush preferred stock, par value $0.001, (other than dissenting shares) was canceled and converted into the right to receive (i) 0.528 shares of the Company's common stock, as determined in the Mobcrush Merger Agreement, and (ii) any cash in lieu of fractional shares of common stock otherwise issuable under the Mobcrush Merger Agreement (the "Merger Consideration"). At closing, the Company issued to the former stockholders of Mobcrush an aggregate total of 12,067,571 shares of the Company’s common stock and reserved an aggregate total of 514,633 shares of common stock for future stock option grants, under the Super League 2014 Stock Option and Incentive Plan, to the former Mobcrush employees retained by the Company in connection with the Merger, resulting in a total of 12,582,204 shares of common stock issued and reserved as consideration for the Merger. Upon completion of the Merger, Mobcrush became a wholly-owned subsidiary of the Company. The Merger was approved by the board of directors of each of the Company and Mobcrush, and was approved by the stockholders of Mobcrush. For purposes of complying with Nasdaq Listing Rule 5635, Super League’s stockholders approved the issuance of an aggregate of 12,582,204 shares of Common Stock to be issued in connection with the Merger. Transaction costs incurred by the Company relating to the Merger totaled $636,000 and were expensed as incurred in accordance with the acquisition method of accounting. In accordance with the acquisition method of accounting, the financial results of Super League presented herein include the financial results of Mobcrush from the closing date to the end of the current period presented herein (the "Stub Period"). Total revenues and net loss for Mobcrush operations, for the Stub Period, included in the consolidated statements of operations for each of the three and six months ended June 30, 2021 were $275,000 and $135,000, respectively. The Company determined that the Mobcrush Merger constitutes a business acquisition as defined by Accounting Standards Codification (“ASC”) 805, Business Combinations Fair Value Measurements and Disclosures The following table summarizes the determination of the fair value of the purchase price consideration paid in connection with the Merger: Equity Consideration at closing 12,067,571 Super League closing stock price per share on the Closing Date $ 4.96 Fair value of common stock issued $ 59,855,000 The fair value of the Company Common Stock used in determining the estimated fair value of the Merger Consideration was $4.96 per share based on the closing price of Company Common Stock on June 1, 2021, as quoted on the Nasdaq Capital Market. The purchase price allocation was based upon a preliminary estimate of the fair value of the assets acquired and the liabilities assumed by the Company in connection with the Merger, as follows: Amount Assets Acquired and Liabilities Assumed: Cash $ 586,000 Accounts receivable 1,266,000 Prepaids 141,000 Property and equipment 13,000 Identifiable intangible assets 19,500,000 Accounts payable and accrued expenses (1,966,000 ) Deferred revenue (130,000 ) Net deferred income tax liability (3,073,000 ) Identifiable net assets acquired 16,337,000 Goodwill 43,518,000 Total purchase price $ 59,855,000 The following table presents details of the fair values of the acquired intangible assets of Mobcrush: Estimated Useful Life (in years) Amount Preferred partner relationship 7 10,700,000 Developed technology 5 3,900,000 Influencers/content creators 5 2,000,000 Advertiser and agency relationships 5 1,900,000 Trademarks 7 500,000 Customer relationships 5 500,000 Total intangible assets acquired $ 19,500,000 Aggregated amortization expense for each of the three and six months ended June 30, 2021, related to intangible assets acquired in connection with the Merger, totaled $251,000, respectively. Goodwill represents the excess of the purchase price of the acquired business over the acquisition date fair value of the net assets acquired. Goodwill recorded in connection with the Merger is primarily attributable to expected synergies from combining the operations of Super League and Mobcrush, and also includes residual value attributable to the assembled and trained workforce acquired in the Merger. Pursuant to the terms of the Merger Agreement, immediately prior to the effective time of the Merger, each vested option to acquire shares of Mobcrush common stock held by former Mobcrush employees was exercised so that, at the effective time of the Merger, shares of Mobcrush Common Stock issued upon exercise of these vested options received shares of Company Common Stock issuable as Merger Consideration. Unvested options to acquire shares of Mobcrush common stock that were outstanding immediately prior to the Closing Date were canceled, and a number of options to purchase shares of Company Common Stock were issued to replace the cancelled unvested Mobcrush options in a manner consistent with options historically granted by Super League under the Super League 2014 Stock Option and Incentive Plan (the “Replacement Options”). Pursuant to the terms of the Mobcrush Merger Agreement, 514,633 shares of the Company's common stock were reserved for Replacement Option grants to the former Mobcrush employees retained by the Company in connection with the Merger. As of June 30, 2021, 415,000 Replacement Options have been granted to former Mobcrush employees retained by the Company, with continued employment required to vest and retain the Replacement Options granted. Under ASC 805, consideration arrangements in which the payments are automatically forfeited if employment terminates is considered to be compensation for post-combination services, and not acquisition consideration. As such, the 514,633 shares of the Company's common stock reserved at closing for future stock option grants to former Mobcrush employees retained by the Company are not included as a component of the consideration paid in connection with the Merger, and will be accounted for pursuant to ASC 718, “Stock based Compensation,” Management is primarily responsible for determining the fair value of the tangible and identifiable intangible assets acquired and liabilities assumed as of the Closing Date. Management considered a number of factors, including reference to a preliminary independent analysis of estimated fair values solely for the purpose of allocating the purchase price to the assets acquired and liabilities assumed. The analysis included a preliminary discounted cash flow analysis which estimated the future net cash flows expected to result from the respective assets acquired as of the Closing Date. A discount rate consistent with the risks associated with achieving the estimated net cash flows was used to estimate the present value of future estimated net cash flows. The Company is in the process of finalizing the estimates and assumptions developed in connection with the independent analysis of estimated fair values of intangible assets acquired solely for the purpose of allocating the purchase price to the assets acquired and liabilities assumed. Any adjustments to the fair values of intangibles assets acquired, or estimates of economic useful lives of the intangible assets acquired, could impact the carrying value of those assets and related goodwill, as well as the estimates of periodic amortization of intangible assets acquired to be reflected in the statement of operations. In addition, the Company is in the process of finalizing its estimate and analysis of the fair values of certain tax attributes acquired. Any adjustments to the preliminary estimates of tax attributes acquired will increase or decrease the estimated net deferred tax liability recorded in connection with the acquisition method of accounting, with an offsetting adjustment to goodwill. The Merger was treated for tax purposes as a nontaxable transaction and, as such, the historical tax bases of the acquired assets and assumed liabilities, net operating losses, and other tax attributes of Mobcrush will carryover. As a result, no new tax goodwill was created in connection with the Merger as there is no step-up to fair value of the underlying tax bases of the acquired net assets. The acquisition method of accounting includes the establishment of a net deferred tax asset or liability resulting from book tax basis differences related to assets acquired and liabilities assumed on the date of acquisition. Acquisition date deferred tax assets primarily relate to certain net operating loss carryforwards of Mobcrush. Acquisition date deferred tax liabilities relate to specifically identified non-goodwill intangibles acquired. The estimated net deferred tax liability was determined as follows: Book Basis Tax Basis Difference Intangible assets acquired 19,500,000 2,635,000 $ (16,865,000 ) Tangible assets acquired 13,000 (13,000 ) Estimated net operating loss carryforwards - Mobcrush - 5,895,000 5,895,000 Net deferred tax liability - pretax (10,983,000 ) Estimated tax rate 27.98 % Estimated net deferred tax liability $ (3,073,000 ) Release of Valuation Allowance The following unaudited pro forma combined results of operations for the periods presented are provided for illustrative purposes only. The unaudited pro forma combined statements of operations for the three and six months ended June 30, 2021 and 2020, assume the acquisition occurred as of January 1, 2020. The unaudited pro forma combined financial results do not purport to be indicative of the results of operations for future periods or the results that actually would have been realized had the entities been a single entity during these periods. Three Months Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020 Revenue $ 2,011,000 $ 1,725,000 $ 5,176,000 $ 3,627,000 Net Loss (3,203,000 ) (7,469,000 ) (9,155,000 ) (15,295,000 ) Pro forma adjustments primarily relate to the amortization of identifiable intangible assets acquired over the estimated economic useful life as described above, the expensing of stock options issued to former Mobcrush employees acquired in connection with the Merger, the exclusion of interest expense related to convertible debt of Mobcrush not assumed by Super League in connection with the Merger, the exclusion of nonrecurring transaction costs, and the exclusion of amortization and depreciation related to tangible and intangible assets of Mobcrush existing immediately prior to the Merger. The unaudited pro forma combined statements of operations for the periods presented herein have been adjusted to give effect to pro forma events that are expected to have a continuing impact on the combined results. As such, the income tax benefit related to the release of valuation allowance reflected in the statement of income for the three months ended June 30, 2021, as described above, totaling $3,073,000, is not reflected in the accompanying unaudited pro forma combined statements of income for the periods presented. Acquisition of Framerate, Inc. On June 3, 2019, Super League and SLG Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of the Company (“Merger Sub”), entered into an agreement and plan of merger (the “Merger Agreement”) with Framerate, Inc., a Delaware corporation (“Framerate”), pursuant to which Framerate merged with and into Merger Sub, with Merger Sub continuing as the surviving corporation (the “Framerate Acquisition”). The Framerate Acquisition was consummated on June 6, 2019 when the certificate of merger of Merger Sub and Framerate was filed with the Secretary of State of the State of Delaware (the “Effective Date”). As consideration for the Framerate Acquisition, the Company ratably paid and/or issued to the former shareholders of Framerate an aggregate of i) $1.5 million paid in cash and ii) $1.0 million paid by the issuance of a total of 134,422 shares of the Company’s common stock, at a price per share of $7.4395 (the “Closing Shares”). In addition to the issuance of the Closing Shares, the Merger Agreement provides for the issuance of up to an additional $980,000 worth of shares of the Company’s common stock at the same price per share as the Closing Shares (the “Earn-Out Shares”) in the event Framerate achieves certain performance-based milestones during the two-year period following the closing of the Acquisition, or June 6, 2021 (the “Earn-Out”). One-half of the Earn-Out Shares will be issuable on the one-year anniversary of the Effective Date, and the remaining one-half will be issuable on the second anniversary of the Effective Date. The fair value of the Earn-Out on the Effective Date was estimated to be $454,000. In June 2020, we issued an additional 32,936 shares of our common stock to the former shareholders of Framerate in connection with the achievement of certain components of the year-one earn-out related performance milestones. The Company hired the former Chief Executive of Framerate (“Framerate Executive”), who was also a selling shareholder of Framerate. Pursuant to the provisions of the Earn-Out included in the Merger Agreement, in the event that the Framerate Executive is terminated for cause or resigns from his employment with the Company at any time on or before the second anniversary of the Effective Date, and any such resignation is without “Good Reason” as such term is defined in his employment agreement, then the maximum amount of any portion of the Earn-Out that has not yet been earned as of the date of resignation shall be reduced by 44.0164%. Under ASC 805, a contingent consideration arrangement in which the payments are automatically forfeited if employment terminates is considered to be compensation for post-combination services, and not acquisition consideration. As such approximately 44% of the estimated fair value of the Earn-Out, or $200,000 was accounted for as deferred compensation expense and being amortized in the statement of operations over the two-year period ending on the second anniversary of the Effective date. Noncash stock compensation expense related to the compensation component of the contingent consideration was $25,000 and $50,000, for the three and six months ended June 30, 2021. The remaining deferred compensation balance as of July 1, 2020 was expensed in July 2020 due to the cessation of services. |
NOTES PAYABLE
NOTES PAYABLE | 6 Months Ended |
Jun. 30, 2021 | |
NOTES PAYABLE | |
Note 5. NOTES PAYABLE | 5. NOTE PAYABLE Long-Term Note Payable On May 4, 2020, the Company entered into a forgivable loan from the U.S. Small Business Administration (“SBA”) resulting in net proceeds of $1,200,047 pursuant to the Paycheck Protection Program (“PPP”) enacted by Congress under the CARES Act administered by the SBA (the “PPP Loan”). To facilitate the PPP Loan, the Company entered into a Note Payable Agreement with a bank (the “Lender”) (the “PPP Loan Agreement”). The PPP Loan had an original maturity date of May 4, 2022, and accrued interest at a rate of 1.00% per annum, with interest accruing throughout the period the PPP Loan was outstanding, or until forgiven. The PPP Loan was accounted for as a financial liability in accordance with FASB ASC 470, “ Debt. In May 2021, the PPP loan was forgiven pursuant to the terms and conditions of the PPP Loan Agreement and the provision of the Cares Act. Upon forgiveness, and legal release, the Company reduced the liability by the amount forgiven, totaling $1,213,000 and recorded a gain on extinguishment in the accompanying statement of operations. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 6 Months Ended |
Jun. 30, 2021 | |
Stockholders' Equity | |
Note 6. STOCKHOLDERS' EQUITY | 6. STOCKHOLDERS’ EQUITY Financing Activities In January 2021, the Company issued 3,076,924 shares of common stock at a price of $2.60 per share, raising aggregate net proceeds of approximately $8.0 million, after deducting offering expenses totaling $73,000. In February 2021, the Company issued 2,926,830 shares of common stock at a price of $4.10 per share, raising aggregate net proceeds of approximately $12.0 million, after deducting offering expenses totaling $70,000. In March 2021, the Company issued 1,512,499 shares of common stock at a price of $9.00 per share, raising aggregate net proceeds of approximately $13.6 million, after deducting offering expenses totaling $72,000. The offerings described above were made pursuant to an effective shelf registration statement on Form S-3, which was originally filed with the Securities and Exchange Commission on April 10, 2020 (File No. 333-237626). The net proceeds from these offerings are intended to be used for working capital and other general corporate purposes, including sales and marketing activities, product development and capital expenditures. The Company may also use a portion of the net proceeds for the acquisition of, or investment in, technologies, solutions or businesses. In May 2020, the Company issued 1,825,000 shares of common stock at a price of $3.50 per share, raising aggregate net proceeds of approximately $6.0 million, after deducting placement agent fees of $319,000 and other offering expenses totaling $116,000. The offering was made pursuant to an effective shelf registration statement on Form S-3 previously filed with the U.S. Securities and Exchange Commission. We intend to use the net proceeds from this offering for working capital and other general corporate purposes, including sales and marketing activities, product development and capital expenditures. We may also use a portion of the net proceeds for the acquisition of, or investment in, technologies, solutions or businesses. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2021 | |
SUBSEQUENT EVENTS | |
Note 7. SUBSEQUENT EVENTS | 7. SUBSEQUENT EVENTS The Company evaluated subsequent events for their potential impact on the consolidated condensed financial statements and disclosures through the date the consolidated condensed financial statements were available to be issued and determined that, except as set forth below, no subsequent events occurred that were reasonably expected to impact the consolidated condensed financial statements presented herein. Bannerfy Acquisition On August 11, 2021, the Company entered into a Share Purchase Agreement (the "Purchase Agreement") with William Roberts, Colin Gillespie, and Robert Pierre (collectively, "Sellers"), pursuant to which the Company agreed to purchase, and Sellers agreed to sell, all of the issued and outstanding common shares of Bannerfy, Ltd., a company organized under the laws of England and Wales ("Bannerfy") for a total purchase price of $7.0 million (the "Purchase Price") (the "Bannerfy Acquisition"). Pursuant to the Purchase Agreement, upon the consummation of the Bannerfy Acquisition (the "Closing"), the Company will pay to Sellers an initial payment of $2.45 million (the "Closing Consideration"), payable as follows (i) approximately $0.52 million in the form of a cash payment, and (ii) approximately $1.92 million in the form of shares of the Company's common stock at a price per share of $4.10, the closing price of the Company’s common stock on the date of the Purchase Agreement, as reported on the Nasdaq Capital Market. In accordance with the Purchase Agreement, all remaining portions of the Purchase Price after the payment of the Closing Consideration, up to approximately $4.55 million (the "Contingent Consideration"), will be payable upon the achievement of certain revenue and gross profit thresholds for the remainder of the 2021 fiscal year, and each of the fiscal years ending December 31, 2022, and December 31, 2023. The Contingent Consideration is payable in the form of both cash and shares of common stock, as more specifically set forth in the Purchase Agreement. The foregoing description of the Purchase Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the Purchase Agreement, a copy of which is filed as an exhibit to this Report. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation | The accompanying consolidated condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, certain information and footnotes required by U.S. GAAP in annual financial statements have been omitted or condensed in accordance with quarterly reporting requirements of the Securities and Exchange Commission (“SEC”). These interim consolidated condensed financial statements should be read in conjunction with our audited financial statements for the year ended December 31, 2020 included in our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on March 19, 2021. The year-end consolidated condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. The consolidated condensed interim financial statements of Super League include all adjustments of a normal recurring nature which, in the opinion of management, are necessary for a fair statement of Super League’s financial position as of June 30, 2021, and results of its operations and its cash flows for the interim periods presented. The results of operations for the three and six months ended June 30, 2021 are not necessarily indicative of the results to be expected for the entire fiscal year. |
Reclassifications | Certain reclassifications to operating expense line items have been made to prior year amounts for consistency and comparability with the current year’s consolidated condensed financial statements presentation. These reclassifications had no effect on the reported total operating expenses for the periods presented. |
Use of Estimates | The preparation of financial statements in conformity with U.S. 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. Actual results could differ from these estimates. The Company believes that, of the significant accounting policies described herein, the accounting policies associated with revenue recognition, impairment of goodwill and intangibles, stock-based compensation expense, capitalized internal-use-software costs, accounting for business combinations, and accounting for income taxes and valuation allowances against net deferred tax assets, require its most difficult, subjective or complex judgments. |
Revenue Recognition | Revenue is recognized when the Company transfers promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods and services. In this regard, revenue is recognized when: (i) the parties to the contract have approved the contract (in writing, orally, or in accordance with other customary business practices) and are committed to perform their respective obligations; (ii) the entity can identify each party’s rights regarding the goods or services to be transferred; (iii) the entity can identify the payment terms for the goods or services to be transferred; (iv) the contract has commercial substance (that is, the risk, timing, or amount of the entity’s future cash flows is expected to change as a result of the contract); and (v) it is probable that the entity will collect substantially all of the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer. Transaction prices are based on the amount of consideration to which we expect to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties, if any. We consider the explicit terms of the revenue contract, which are typically written and executed by the parties, our customary business practices, the nature, timing, and the amount of consideration promised by a customer in connection with determining the transaction price for our revenue arrangements. Refunds and sales returns historically have not been material. Super League generates revenues from (i) advertising, serving as a marketing channel for brands and advertisers to reach their target audiences of gamers across our network, (ii) content, curating and distributing esports and entertainment content for our own network of digital channels and media and entertainment partner channels and (iii) direct to consumer offers including digital subscriptions, digital goods, gameplay access fees and merchandise sales. Revenue billed or collected in advance is recorded as deferred revenue until the event occurs or until applicable performance obligations are satisfied. Advertising and Sponsorships Advertising revenue primarily consists of direct sales activity along with sales of programmatic display and video advertising units to third-party advertisers and exchanges. Advertising arrangements typically include contract terms for time periods ranging from several days to several weeks in length. For advertising arrangements that include performance obligations satisfied over time, customers typically simultaneously receive and consume the benefits under the arrangement as we satisfy our performance obligations, over the applicable contract term. As such, revenue is recognized over the contract term based upon estimates of progress toward complete satisfaction of the contract performance obligations (typically utilizing a time, effort or delivery-based method of estimation). Revenue from shorter term advertising arrangements that provide for a contractual delivery or performance date is recognized when performance is substantially complete and or delivery occurs. Payments are typically due from customers during the term of the arrangement for longer-term campaigns, and once delivery is complete for shorter-term campaigns. Sponsorship revenue arrangements may include: exclusive or non-exclusive title sponsorships, marketing benefits, official product status exclusivity, product visibly and additional infrastructure placement, social media rights, rights to on-screen activations and promotions, display material rights, media rights, hospitality and tickets and merchandising rights. Sponsorship revenues also include revenues pursuant to arrangements with brand and media partners, retail venues, game publishers and broadcasters that allow our partners to run amateur esports experiences, and or capture specifically curated gameplay content that is customized for our partners’ distribution channels. Sponsorship arrangements typically include contract terms for time periods ranging from several weeks or months to terms of twelve months in length. For sponsorship arrangements that include performance obligations satisfied over time, customers typically simultaneously receive and consume the benefits under the agreement as we satisfy our performance obligations, over the applicable contract term. As such, revenue is recognized over the contract term based upon estimates of progress toward complete satisfaction of the contract performance obligations (typically utilizing a time, effort or delivery-based method of estimation). Payments are typically due from customers during the term of the arrangement. Revenue from sponsorship arrangements for one-off branded experiences and/or the development of content tailored specifically for our partners’ distribution channels that provide for a contractual delivery or performance date, is recognized at a point in time, when performance is substantially complete and or delivery occurs. Content Content sales revenue is generated in connection with our curation and distribution of esports and entertainment content for our own network of digital channels and media and entertainment partner channels. We distribute three primary types of content for syndication and licensing, including: (1) our own original programming content, (2) user generated content (“UGC”), including online gameplay and gameplay highlights, and (3) the creation of content for third parties utilizing our remote production and broadcast technology. For content arrangements that include performance obligations satisfied over time, customers typically simultaneously receive and consume the benefits under the arrangement as we satisfy our performance obligations, over the applicable contract term. As such, revenue is recognized over the contract term based upon estimates of progress toward complete satisfaction of the contract performance obligations (typically utilizing a time, effort or delivery-based method of estimation). Revenue from shorter term content sales arrangements that provide for a contractual delivery or performance date is recognized when performance is substantially complete and or delivery occurs. Payments are typically due from customers during the term of the arrangement for longer-term campaigns, and once delivery is complete for shorter-term campaigns. Payments are typically due from customers during the term of the arrangement for longer-term campaigns, and once delivery is complete for shorter-term campaigns. Direct to Consumer Direct to consumer revenues primarily consist of primarily monthly digital subscription fees, and sales of digital goods and merchandise. Subscription revenue is recognized in the period the services are rendered. Payments are typically due from customers at the point of sale. Platform Generated Sales Transactions Revenue for digital goods sold on the platform is recognized when Microsoft (our partner) collects the revenue and facilitates the transaction on the platform. Revenue for such arrangements includes all revenue generated, bad debt, make goods, and refunds of all transactions managed via the platform by Microsoft. The revenue is recognized on a monthly basis. Payments are made to the Company monthly based on the reconciled sales revenue generated. Revenue was comprised of the following for the periods presented: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Advertising and sponsorships $ 485,000 $ 49,000 $ 928,000 $ 56,000 Content sales 365,000 236,000 646,000 457,000 Direct to consumer 234,000 39,000 298,000 54,000 $ 1,084,000 $ 324,000 $ 1,872,000 $ 567,000 For the three and six months ended June 30, 2021, 42% and 39% of revenues were recognized at a single point in time, and 58% and 61% of revenues were recognized over time, respectively. For the three and six months ended June 30, 2020, 46% and 35% of revenues were recognized at a single point in time, and 54% and 65% of revenues were recognized over time, respectively. |
Cost of Revenues | Cost of revenues includes direct costs incurred in connection with the satisfaction of performance obligations under our revenue arrangements including direct labor, creative and broadcast related contract services, talent and influencers, content capture and production services, direct marketing, prizing, platform costs and revenue sharing fees. |
Advertising | Gaming experience and Super League brand related advertising costs include the cost of ad production, social media, print media, marketing, promotions, and merchandising. The Company expenses advertising costs as incurred. Advertising costs are included in selling, marketing and advertising expenses in the accompanying statements of operations. Advertising expenses for the three and six months ended June 30, 2021 were $117,000 and $251,000, respectively. Advertising expenses for the three and six months ended June 30, 2020 were $20,000 and $87,000, respectively. |
Technology Platform and Infrastructure Costs | Technology platform and infrastructure costs include (i) allocated personnel costs, including salaries, noncash stock compensation, taxes and benefits related to our internal software developers and engineers, employed by Super League, engaged in the operation, maintenance, management, administration, testing and enhancement of our proprietary gaming and content technology platform, (ii) third-party contract software development and engineering resources engaged in developing and enhancing our proprietary gaming and content technology platform (iii) the amortization of capitalized internal use software costs, and (iv) technology platform related cloud services, broadband and other technology platform costs. |
Acquisitions | For acquisitions that meet the definition of a business under ASC 805, the Company records the acquisition using the acquisition method of accounting. All of the assets acquired, liabilities assumed, contractual contingencies, and contingent consideration, when applicable, are recorded at fair value at the acquisition date. Any excess of the purchase price over the fair value of the net assets acquired is recorded as goodwill. The application of the acquisition method of accounting requires management to make significant estimates and assumptions in the determination of the fair value of assets acquired and liabilities assumed in order to properly allocate purchase price consideration. For acquisitions that do not meet the definition of a business under ASC 805, the Company accounts for the transaction as an asset acquisition. Transaction costs associated with business combinations are expensed as incurred and are included in general and administrative expenses in the consolidated statements of operations. |
Intangible Assets | Intangible assets primarily consist of (i) internal-use software development costs, (ii) domain name, copyright and patent registration costs, (iii) commercial licenses and branding rights and (iv) other intangible assets, which are recorded at cost and amortized using the straight-line method over the estimated useful lives of the assets, ranging from three to 10 years. Software development costs incurred to develop internal-use software during the application development stage are capitalized and amortized on a straight-line basis over the software’s estimated useful life, which is generally three years. Software development costs incurred during the preliminary stages of development are charged to expense as incurred. Maintenance and training costs are charged to expense as incurred. Upgrades or enhancements to existing internal-use software that result in additional functionality are capitalized and amortized on a straight-line basis over the applicable estimated useful life. |
Impairment of Long-Lived Assets | The Company assesses the recoverability of long-lived assets whenever events or changes in circumstances indicate that their carrying value may not be recoverable. If the cost basis of a long-lived asset is greater than the projected future undiscounted net cash flows from such asset, an impairment loss is recognized. Impairment losses are calculated as the difference between the cost basis of an asset and its estimated fair value. Management believes that there was no impairment of long-lived assets for the periods presented herein. There can be no assurance, however, that market conditions or demand for the Company’s products or services will not change, which could result in long-lived asset impairment charges in the future. |
Stock-Based Compensation | Compensation expense for stock-based awards is measured at the grant date, based on the estimated fair value of the award, and is recognized as an expense, typically on a straight-line basis over the employee’s requisite service period (generally the vesting period of the equity award) which is generally two to four years. Compensation expense for awards with performance conditions that affect vesting is recorded only for those awards expected to vest or when the performance criteria are met. The fair value of restricted stock and restricted stock unit awards is determined by the product of the number of shares or units granted and the grant date market price of the underlying common stock. The fair value of stock option and common stock purchase warrant awards is estimated on the date of grant utilizing the Black-Scholes-Merton option pricing model. The Company utilizes the simplified method for estimating the expected term for options granted to employees due to the lack of available or sufficient historical exercise data for the Company for the applicable options terms. The Company accounts for forfeitures of awards as they occur. Grants of equity-based awards (including warrants) to non-employees in exchange for consulting or other services are accounted for using the grant date fair value of the equity instruments issued. Noncash stock-based compensation expense for the periods presented was included in the following financial statement line items: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Sales, marketing and advertising $ 237,000 $ 197,000 $ 420,000 $ 395,000 Technology platform and infrastructure 24,000 59,000 57,000 148,000 General and administrative 300,000 141,000 495,000 556,000 Total noncash stock compensation expense $ 561,000 $ 397,000 $ 972,000 $ 1,099,000 |
Equity Financing Costs | Specific incremental costs directly attributable to a proposed or actual offering of securities or debt are deferred and charged against the gross proceeds of the financing. In the event that the proposed or actual financing is not completed, or is deemed not likely to be completed, such costs are expensed in the period that such determination is made. Deferred financing costs, if any, are included in other current assets in the accompanying balance sheet. For each of the three and six months ended June 30, 2021, financing costs charged against gross proceeds in connection with equity financings totaled $215,000. For each of the three and six months ended June 30, 2020, financing costs charged against gross proceeds in connection with equity financings totaled $434,000. |
Risks and Uncertainties | Concentrations Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Number of customers > 10% of revenues / percent of revenues One / 15% Six / 84% - Four / 61 % June 30, 2021 December 31, 2020 Number of customers > 10% of accounts receivable / percent of accounts receivable One / 13% Four / 61% Number of vendors > 10% of accounts payable / percent of accounts payable One / 11% One / 55% |
Earnings (Loss) Per Share | Basic earnings (loss) per share is computed by dividing the income or loss by the weighted-average number of outstanding shares of common stock for the applicable period. Diluted earnings per share is computed by dividing the income or loss by the weighted-average number of outstanding shares of common stock for the applicable period, including the dilutive effect of common stock equivalents. Potentially dilutive common stock equivalents primarily consist of employee stock options, warrants issued to employees and non-employees in exchange for services and warrants issued in connection with financings. All outstanding stock options, restricted stock units and warrants, totaling 5,064,000 and 4,470,000 at June 30, 2021 and December 31, 2020, respectively, have been excluded from the computation of diluted loss per share because the effect of inclusion would have been anti-dilutive. |
Recent Accounting Guidance | Recent Accounting Pronouncements - Not Yet Adopted. Recent Accounting Pronouncements - Adopted. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Disaggregation of revenue | Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Advertising and sponsorships $ 485,000 $ 49,000 $ 928,000 $ 56,000 Content sales 365,000 236,000 646,000 457,000 Direct to consumer 234,000 39,000 298,000 54,000 $ 1,084,000 $ 324,000 $ 1,872,000 $ 567,000 |
Noncash stock-based compensation expense | Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Sales, marketing and advertising $ 237,000 $ 197,000 $ 420,000 $ 395,000 Technology platform and infrastructure 24,000 59,000 57,000 148,000 General and administrative 300,000 141,000 495,000 556,000 Total noncash stock compensation expense $ 561,000 $ 397,000 $ 972,000 $ 1,099,000 |
Schedule of account payable | Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Number of customers > 10% of revenues / percent of revenues One / 15% Six / 84% - Four / 61 % June 30, 2021 December 31, 2020 Number of customers > 10% of accounts receivable / percent of accounts receivable One / 13% Four / 61% Number of vendors > 10% of accounts payable / percent of accounts payable One / 11% One / 55% |
INTANGIBLE AND OTHER ASSETS (Ta
INTANGIBLE AND OTHER ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
INTANGIBLE AND OTHER ASSETS | |
Intangible and other assets | June 30, 2021 December 31, 2020 (Unaudited) Capitalized software development costs $ 3,712,000 $ 3,291,000 Trade name 189,000 189,000 Domain 68,000 68,000 Copyrights and other 572,000 435,000 Intangible assets acquired in connection with Mobcrush Acquisition (Note 4) 19,500,000 - 24,041,000 3,983,000 Less: accumulated amortization (2,820,000 ) (2,076,000 ) Intangible and other assets, net $ 21,221,000 $ 1,907,000 |
BUSINESS COMBINATIONS (Tables)
BUSINESS COMBINATIONS (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
BUSINESS COMBINATIONS | |
Schedule of Purchase price consideration | Equity Consideration at closing 12,067,571 Super League closing stock price per share on the Closing Date $ 4.96 Fair value of common stock issued $ 59,855,000 |
Schedule of Assets acquired | Amount Assets Acquired and Liabilities Assumed: Cash $ 586,000 Accounts receivable 1,266,000 Prepaids 141,000 Property and equipment 13,000 Identifiable intangible assets 19,500,000 Accounts payable and accrued expenses (1,966,000 ) Deferred revenue (130,000 ) Net deferred income tax liability (3,073,000 ) Identifiable net assets acquired 16,337,000 Goodwill 43,518,000 Total purchase price $ 59,855,000 |
Schedule of acquired intangible assets | Estimated Useful Life (in years) Amount Preferred partner relationship 7 10,700,000 Developed technology 5 3,900,000 Influencers/content creators 5 2,000,000 Advertiser and agency relationships 5 1,900,000 Trademarks 7 500,000 Customer relationships 5 500,000 Total intangible assets acquired $ 19,500,000 |
Schedule of non-goodwill intangibles acquired | Book Basis Tax Basis Difference Intangible assets acquired 19,500,000 2,635,000 $ (16,865,000 ) Tangible assets acquired 13,000 (13,000 ) Estimated net operating loss carryforwards - Mobcrush - 5,895,000 5,895,000 Net deferred tax liability - pretax (10,983,000 ) Estimated tax rate 27.98 % Estimated net deferred tax liability $ (3,073,000 ) |
Schedule of single entity | Three Months Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020 Revenue $ 2,011,000 $ 1,725,000 $ 5,176,000 $ 3,627,000 Net Loss (3,203,000 ) (7,469,000 ) (9,155,000 ) (15,295,000 ) |
DESCRIPTION OF BUSINESS (Detail
DESCRIPTION OF BUSINESS (Details Narrative) - $ / shares | 6 Months Ended | |
Jun. 30, 2021 | Dec. 31, 2020 | |
Aggregat common stock shares issued | 12,582,204 | |
Common stock, par value | $ 0.001 | $ 0.001 |
June 1, 2021 [Member] | ||
Aggregat common stock shares issued | 12,067,571 | |
Common stock, par value | $ 0.001 | |
Reserved shares | 12,582,204 | |
Stock options to be granted | 514,633 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Revenues | $ 1,084,000 | $ 324,000 | $ 1,872,000 | $ 567,000 |
Advertising and Sponsorships [Member] | ||||
Revenues | 485,000 | 49,000 | 928,000 | 56,000 |
Direct to Consumer [Member] | ||||
Revenues | 234,000 | 39,000 | 298,000 | 54,000 |
Content Sales [Member] | ||||
Revenues | $ 365,000 | $ 236,000 | $ 646,000 | $ 457,000 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Total noncash stock compensation expense | $ 561,000 | $ 397,000 | $ 972,000 | $ 1,099,000 |
Sales, Marketing and Advertising [Member] | ||||
Total noncash stock compensation expense | 237,000 | 197,000 | 420,000 | 395,000 |
Technology Platform and Infrastructure [Member] | April 2020 [Member] | ||||
Total noncash stock compensation expense | 24,000 | 59,000 | 57,000 | 148,000 |
General and Administrative [Member] | ||||
Total noncash stock compensation expense | $ 300,000 | $ 1,410,000 | $ 495,000 | $ 556,000 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2020 | |
Revenue [Member] | Four Customers [Member] | |||
Concentration Risk prcentage | 61.00% | ||
Revenues [Member] | Six Customers [Member] | |||
Concentration Risk prcentage | 84.00% | ||
Revenues [Member] | One Customers [Member] | |||
Concentration Risk prcentage | 15.00% |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 3) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Three Vendors [Member] | Accounts Payables [Member] | ||
Concentration Risk prcentage | 11.00% | |
One Vendors [Member] | Accounts Payables [Member] | ||
Concentration Risk prcentage | 55.00% | |
One Customers [Member] | Accounts Receivables [Member] | ||
Concentration Risk prcentage | 13.00% | |
Four Customers [Member] | Accounts Receivables [Member] | ||
Concentration Risk prcentage | 61.00% |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Advertising expense | $ 117,000 | $ 20,000 | $ 251,000 | $ 87,000 | |
Equity financing costs | $ 215,000 | $ 434,000 | $ 215,000 | $ 434,000 | |
Estimated useful lives of the assets | 10 years | ||||
Anti-dilutive securities | 5,064,000 | 4,470,000 | |||
Revenue [Member] | Single Point in Time [Member] | |||||
Concentration risk | 42.00% | 46.00% | 39.00% | 35.00% | |
Revenue [Member] | Over Time [Member] | |||||
Concentration risk | 58.00% | 54.00% | 61.00% | 65.00% |
INTANGIBLE AND OTHER ASSETS (De
INTANGIBLE AND OTHER ASSETS (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Intangible assets, gross | $ 24,041,000 | $ 3,983,000 |
Less: accumulated amortization | (2,820,000) | (2,076,000) |
Intangible assets, net | 21,221,000 | 1,907,000 |
Capitalized Software Development Costs [Member] | ||
Intangible assets, gross | 3,712,000 | 3,291,000 |
Domain | ||
Intangible assets, gross | 68,000 | 68,000 |
Copyrights and Other | ||
Intangible assets, gross | 572,000 | 435,000 |
Trade Name | ||
Intangible assets, gross | 189,000 | 189,000 |
Intangible Assets Acquired In Connection With Mobcrush Acquisition [Member] | ||
Intangible assets, gross | $ 19,500,000 | $ 0 |
INTANGIBLE AND OTHER ASSETS (_2
INTANGIBLE AND OTHER ASSETS (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Amortization expense | $ 284,000 | $ 302,000 | $ 550,000 | $ 795,000 |
Cost of revenues | 533,000 | $ 116,000 | 875,000 | $ 233,000 |
Technology Platform and Infrastructure [Member] | April 2020 [Member] | ||||
Cost of revenues | $ 13,000 | $ 16,000 |
BUSINESS COMBINATIONS (Details)
BUSINESS COMBINATIONS (Details) - USD ($) | Jun. 06, 2021 | Jun. 30, 2021 |
BUSINESS COMBINATIONS | ||
Equity consideration at closing | $ 12,067,571 | |
Super League closing stock price per share on the Closing Date | $ 4.96 | |
Fair value of common stock issued and reserved | $ 454,000 | $ 59,855,000 |
BUSINESS COMBINATIONS (Details
BUSINESS COMBINATIONS (Details 1) - USD ($) | 6 Months Ended | |||
Jun. 30, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | |
Cash | $ 31,455,000 | $ 7,942,000 | $ 6,241,000 | $ 8,442,000 |
Identifiable Intangible assets | 19,500,000 | |||
Identifiable net assets acquired | 251,000 | |||
Goodwill | 46,084,000 | $ 2,565,000 | ||
Assets Acquired and Liabilities Assumed [Member] | ||||
Cash | 586,000 | |||
Accounts receivable | 1,266,000 | |||
Prepaids | 141,000 | |||
Property and equipment | 13,000 | |||
Identifiable Intangible assets | 19,500,000 | |||
Accounts payable and accrued expenses | (1,966,000) | |||
Deferred revenue | (130,000) | |||
Net deferred income tax liability | (3,073,000) | |||
Identifiable net assets acquired | 16,337,000 | |||
Goodwill | 43,518,000 | |||
Total | $ 59,855,000 |
BUSINESS COMBINATIONS (Detail_2
BUSINESS COMBINATIONS (Details 2) | 6 Months Ended |
Jun. 30, 2021USD ($) | |
Identifiable Intangible assets | $ 19,500,000 |
Estimated useful lives of assets | 10 years |
Developed Technology [Member] | |
Identifiable Intangible assets | $ 3,900,000 |
Estimated useful lives of assets | 5 years |
Influencers/Content Creators [Member] | |
Identifiable Intangible assets | $ 2,000,000 |
Estimated useful lives of assets | 5 years |
Advertiser and Agency Relationships [Member] | |
Identifiable Intangible assets | $ 1,900,000 |
Estimated useful lives of assets | 5 years |
Trademark [Member] | |
Identifiable Intangible assets | $ 500,000 |
Estimated useful lives of assets | 7 years |
Customer Relationships [Member] | |
Identifiable Intangible assets | $ 500,000 |
Estimated useful lives of assets | 5 years |
Preferred Partner Relationship [Member] | |
Identifiable Intangible assets | $ 10,700,000 |
Estimated useful lives of assets | 7 years |
BUSINESS COMBINATIONS (Detail_3
BUSINESS COMBINATIONS (Details 3) | 6 Months Ended |
Jun. 30, 2021USD ($) | |
Estimated tax rate | 27.98% |
Intangible Assets Acquired [Member] | |
Book Basis | $ 19,500,000 |
Tax Basis | 2,635,000 |
Difference | (16,865,000) |
Tangible Assets Acquired [Member] | |
Book Basis | 13,000 |
Tax Basis | 0 |
Difference | (13,000) |
Estimated Net Operating Loss Carryforwards - Mobcrush [Member] | |
Book Basis | 0 |
Tax Basis | 5,895,000 |
Difference | 5,895,000 |
Net Deferred Tax Liability - Pretax [Member] | |
Book Basis | 0 |
Tax Basis | 0 |
Difference | 10,983,000 |
Estimated Net Deferred TaxLiability [Member] | |
Difference | $ (3,073,000) |
BUSINESS COMBINATIONS (Detail_4
BUSINESS COMBINATIONS (Details 4) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Revenue | $ 1,084,000 | $ 324,000 | $ 1,872,000 | $ 567,000 |
Net loss | (2,026,000) | (4,560,000) | (6,651,000) | (9,694,000) |
Single Entity [Member] | ||||
Revenue | 2,011,000 | 5,176,000 | 1,725,000 | 3,627,000 |
Net loss | $ (3,203,000) | $ (9,155,000) | $ (7,469,000) | $ (15,295,000) |
BUSINESS COMBINATIONS (Detail_5
BUSINESS COMBINATIONS (Details Narrative) - USD ($) | Jun. 06, 2021 | Jun. 03, 2019 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 |
Contingent consideration | $ 25,000 | $ 50,000 | |||||
Deferred compensation expense | $ 200,000 | ||||||
Earn out percentage | 44.00% | ||||||
Identifiable Intangible assets acquired | 251,000 | $ 251,000 | |||||
Common stock shares issued | 12,582,204 | ||||||
Fair value earn-out | $ 454,000 | $ 59,855,000 | |||||
Additional issuance of shares | 32,936 | ||||||
Super League closing stock price per share on the Closing Date | $ 4.96 | ||||||
Net loss | (2,026,000) | $ (4,560,000) | $ (6,651,000) | $ (9,694,000) | |||
Revenue | 1,084,000 | 324,000 | $ 1,872,000 | 567,000 | |||
June 1, 2021 [Member] | |||||||
Common stock shares issued | 12,067,571 | ||||||
Stock options to be granted | 514,633 | ||||||
Super League closing stock price per share on the Closing Date | $ 4.96 | ||||||
Net loss | 275,000 | $ 275,000 | |||||
Revenue | 135,000 | $ 135,000 | |||||
Reserved shares | 12,582,204 | ||||||
Totale expenses | $ 636,000 | ||||||
Merger Agreement [Member] | |||||||
Contingent consideration | $ 1,500,000 | ||||||
Additional issuance of shares | 980,000 | ||||||
Stock options to be granted | 415,000 | ||||||
Common stock reserved for future | 514,633 | ||||||
Expenses, related to stock options | 40,000 | $ 40,000 | |||||
Deferred tax assets | $ 3,073,000 | $ 0 | 2,793,000 | $ 0 | |||
Net deferred tax liabilities, reduced by net deferred tax | 23,073,000 | ||||||
Pro forma combined statements of income for the periods | $ 23,073,000 | ||||||
Consideration of acquisition issuance by shares | 134,422 | ||||||
Acquisition Payable amount | $ 1,000,000 | ||||||
Price per share | $ 7.4395 |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) - USD ($) | May 04, 2020 | May 31, 2021 | Jun. 30, 2021 | Jun. 30, 2020 |
Gain on extinguishment | $ 1,213,000 | $ 1,213,000 | $ 0 | |
Small Business Administration [Member] | ||||
Interest rate | 1.00% | |||
Net proceeds of loan | $ 1,200,047 | |||
Maturity date | May 4, 2022 |
STOCKHOLDERS EQUITY (Details Na
STOCKHOLDERS EQUITY (Details Narrative) - USD ($) | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Net proceeds from sale of stock | $ 33,399,000 | $ 5,953,000 |
May 2020 Offering [Member] | ||
Sale of stock, price per share | $ 3.50 | |
Offering expenses | $ 116,000 | |
Agent fees | $ 319,000 | |
Sale of stock, shares | 1,825,000 | |
Net proceeds from sale of stock | $ 6,000,000 | |
January 2021 Offering [Member] | ||
Sale of stock, price per share | $ 2.60 | |
Offering expenses | $ 73,000 | |
Sale of stock, shares | 3,076,924 | |
Net proceeds from sale of stock | $ 8,000,000 | |
February 2021 Offering [Member] | ||
Sale of stock, price per share | $ 4.10 | |
Offering expenses | $ 70,000 | |
Sale of stock, shares | 2,926,830 | |
Net proceeds from sale of stock | $ 12,000,000 | |
March 2021 Offering [Member] | ||
Sale of stock, price per share | $ 9 | |
Offering expenses | $ 72,000 | |
Sale of stock, shares | 1,512,499 | |
Net proceeds from sale of stock | $ 13,600,000 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - Share Purchase Agreemen [Member] - Subsequent Event [Member] $ in Thousands | Aug. 11, 2021USD ($) |
Initial closing consideration, description | the "Closing Consideration"), payable as follows (i) approximately $0.52 million in the form of a cash payment, and (ii) approximately $1.92 million in the form of shares of the Company's common stock at a price per share of $4.10, the closing price of the Company’s common stock on the date of the Purchase Agreement, as reported on the Nasdaq Capital Market. |
Initial payment for closing consideration | $ 2,450 |
Full payment for closing consideration | 4,550 |
Total Purchase price | $ 7,000 |