Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 06, 2020 | |
Document Information Line Items | ||
Entity Registrant Name | ALLIED ESPORTS ENTERTAINMENT INC. | |
Trading Symbol | AESE | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 35,110,843 | |
Amendment Flag | false | |
Entity Central Index Key | 0001708341 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Document Period End Date | Sep. 30, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Shell Company | false | |
Entity Ex Transition Period | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-38226 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 82-1659427 | |
Entity Address, Address Line One | 17877 Von Karman Avenue, | |
Entity Address, Address Line Two | Suite 300 | |
Entity Address, City or Town | Irvine | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92614 | |
City Area Code | (949) | |
Local Phone Number | 225-2600 | |
Title of 12(b) Security | Common Stock | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | Yes |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Current Assets | ||
Cash | $ 5,772,970 | $ 8,440,573 |
Restricted cash | 5,000,000 | 3,650,000 |
Accounts receivable | 1,342,629 | 2,121,326 |
Prepaid expenses and other current assets | 1,371,539 | 1,367,795 |
Total Current Assets | 13,487,138 | 15,579,694 |
Property and equipment, net | 17,610,568 | 20,554,307 |
Goodwill | 4,083,621 | 4,083,621 |
Intangible assets, net | 12,954,948 | 14,789,876 |
Deposits | 704,500 | 712,463 |
Deferred production costs | 11,446,098 | 10,962,482 |
Other assets | 5,000,000 | 4,638,631 |
Total Assets | 65,286,873 | 71,321,074 |
Current Liabilities | ||
Accounts payable | 985,481 | 956,871 |
Accrued expenses and other current liabilities | 3,960,864 | 3,892,471 |
Accrued interest, current portion | 1,905,899 | 2,088,994 |
Deferred revenue | 3,070,726 | 3,855,459 |
Convertible debt, net of discount, current portion | 2,582,705 | 12,845,501 |
Convertible debt, related party, net of discount, current portion | 988,115 | |
Loans payable, current portion | 928,660 | |
Total Current Liabilities | 13,434,335 | 24,627,411 |
Deferred rent | 3,782,940 | 2,472,837 |
Bridge note payable | 1,421,096 | |
Accrued interest, non-current portion | 17,742 | |
Convertible debt, non-current portion | 1,000,000 | |
Convertible debt, related party, non-current portion | 1,000,000 | |
Loans payable, non-current portion | 663,769 | |
Total Liabilities | 21,319,882 | 27,100,248 |
Commitments and Contingencies | ||
Stockholders’ Equity | ||
Preferred stock, $0.0001 par value, 1,000,000 shares authorized, none issued and outstanding | ||
Common stock, $0.0001 par value; 100,000,000 shares authorized, 31,989,974 and 23,176,146 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively | 3,199 | 2,317 |
Additional paid in capital | 187,206,726 | 161,300,916 |
Accumulated deficit | (143,424,659) | (117,218,584) |
Accumulated other comprehensive income | 181,725 | 136,177 |
Total Stockholders’ Equity | 43,966,991 | 44,220,826 |
Total Liabilities and Stockholders’ Equity | $ 65,286,873 | $ 71,321,074 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, authorized Shares | 1,000,000 | 1,000,000 |
Preferred stock, issued Shares | 0 | 0 |
Preferred stock, outstanding Shares | 0 | 0 |
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, authorized Shares | 100,000,000 | 100,000,000 |
Common stock, issued Shares | 31,989,974 | 23,176,146 |
Common stock, outstanding Shares | 31,989,974 | 23,176,146 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenues: | ||||
In-person | $ 696,890 | $ 2,586,965 | $ 3,701,139 | $ 8,554,030 |
Multiplatform content | 1,264,346 | 1,031,383 | 3,186,494 | 3,873,709 |
Interactive | 3,927,066 | 2,423,193 | 9,628,009 | 7,187,196 |
Total Revenues | 5,888,302 | 6,041,541 | 16,515,642 | 19,614,935 |
Costs and Expenses: | ||||
In-person (exclusive of depreciation and amortization) | 640,409 | 1,196,572 | 2,134,964 | 3,334,803 |
Multiplatform content (exclusive of depreciation and amortization) | 928,354 | 786,706 | 1,953,561 | 2,907,827 |
Interactive (exclusive of depreciation and amortization) | 1,249,799 | 569,478 | 2,982,899 | 1,976,012 |
Online operating expenses | 329,639 | 172,879 | 993,802 | 401,394 |
Selling and marketing expenses | 168,080 | 705,714 | 1,093,295 | 2,392,929 |
General and administrative expenses | 3,578,760 | 4,693,285 | 12,165,463 | 13,265,767 |
Stock-based compensation | 577,167 | 18,407 | 4,912,640 | 18,407 |
Depreciation and amortization | 1,738,020 | 1,716,103 | 5,330,317 | 5,133,947 |
Impairment of investment in ESA | 1,138,631 | 600,000 | ||
Total Costs and Expenses | 9,210,228 | 9,859,144 | 32,705,572 | 30,031,086 |
Loss From Operations | (3,321,926) | (3,817,603) | (16,189,930) | (10,416,151) |
Other (Expense) Income: | ||||
Other income | (2,973) | 15,684 | 1,210 | 15,684 |
Conversion inducement expense | (5,247,531) | |||
Extinguishment loss on acceleration of debt redemption | (1,733,768) | (1,733,768) | ||
Interest expense | (1,490,210) | (451,553) | (3,036,056) | (518,443) |
Total Other Expense | (3,226,951) | (435,869) | (10,016,145) | (502,759) |
Net Loss | (6,548,877) | (4,253,472) | (26,206,075) | (10,918,910) |
Other comprehensive income: | ||||
Foreign currency translation adjustments | 45,358 | (21,083) | 45,548 | (13,366) |
Total Comprehensive Loss | $ (6,503,519) | $ (4,274,555) | $ (26,160,527) | $ (10,932,276) |
Basic and Diluted Net Loss per Common Share (in Dollars per share) | $ (0.22) | $ (0.24) | $ (0.99) | $ (0.79) |
Weighted Average Number of Common Shares Outstanding: | ||||
Basic and Diluted (in Shares) | 29,626,222 | 18,098,797 | 26,508,006 | 13,791,896 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) | Common Stock | Common Stock Subscribed | Additional Paid-in Capital | Subscription Receivable | Accumulated Other Comprehensive Income | Accumulated Deficit | Total |
Balance at Dec. 31, 2018 | $ 1,160 | $ 124,361,130 | $ 138,861 | $ (100,479,855) | $ 24,021,296 | ||
Balance (in Shares) at Dec. 31, 2018 | 11,602,754 | ||||||
Stock-based compensation: | |||||||
Net loss | (3,854,152) | (3,854,152) | |||||
Other comprehensive income (loss) | (3,082) | (3,082) | |||||
Balance at Mar. 31, 2019 | $ 1,160 | 124,361,130 | 135,779 | (104,334,007) | 20,164,062 | ||
Balance (in Shares) at Mar. 31, 2019 | 11,602,754 | ||||||
Stock-based compensation: | |||||||
Net loss | (2,811,286) | (2,811,286) | |||||
Other comprehensive income (loss) | 10,799 | 10,799 | |||||
Balance at Jun. 30, 2019 | $ 1,160 | 124,361,130 | 146,578 | (107,145,293) | 17,363,575 | ||
Balance (in Shares) at Jun. 30, 2019 | 11,602,754 | ||||||
Stock-based compensation: | |||||||
Stock options | 5,940 | 5,940 | |||||
Restricted stock | $ 8 | 12,459 | 12,467 | ||||
Restricted stock (in Shares) | 80,393 | ||||||
Stock-based compensation: | |||||||
Effect of reverse merger | $ 1,149 | 36,395,355 | 36,396,504 | ||||
Effect of reverse merger (in Shares) | 11,492,999 | ||||||
Warrants issued to convertible debt holders | 114,804 | 114,804 | |||||
Contingent consideration for convertible debt holders | 152,590 | 152,590 | |||||
Stock-based compensation: | |||||||
Net loss | (4,253,472) | (4,253,472) | |||||
Other comprehensive income (loss) | (21,083) | (21,083) | |||||
Balance at Sep. 30, 2019 | $ 2,317 | 161,042,278 | 125,495 | (111,398,765) | 49,771,325 | ||
Balance (in Shares) at Sep. 30, 2019 | 23,176,146 | ||||||
Balance at Dec. 31, 2019 | $ 2,317 | 161,300,916 | 136,177 | (117,218,584) | 44,220,826 | ||
Balance (in Shares) at Dec. 31, 2019 | 23,176,146 | ||||||
Common stock issued for cash | $ 76 | 4,999,924 | 5,000,000 | ||||
Common stock issued for cash (in Shares) | 758,725 | ||||||
Stock-based compensation: | |||||||
Stock options | 240,399 | 240,399 | |||||
Restricted stock | 113,436 | 113,436 | |||||
Restricted stock (in Shares) | |||||||
Subscription of common stock in connection with exercise of put option | $ 102 | 1,999,898 | (2,000,000) | ||||
Subscription of common stock in connection with exercise of put option (in Shares) | 1,018,848 | ||||||
Stock-based compensation: | |||||||
Net loss | (8,776,469) | (8,776,469) | |||||
Balance at Mar. 31, 2020 | $ 2,393 | $ 102 | 168,654,573 | (2,000,000) | 136,177 | (125,995,053) | 40,798,192 |
Balance (in Shares) at Mar. 31, 2020 | 23,934,871 | 1,018,848 | |||||
Stock-based compensation: | |||||||
Stock options | 213,763 | 213,763 | |||||
Restricted stock | 117,875 | 117,875 | |||||
Restricted stock (in Shares) | |||||||
Cash received for subscription | $ 102 | $ (102) | 2,000,000 | 2,000,000 | |||
Cash received for subscription (in Shares) | 1,018,848 | (1,018,848) | |||||
Shares issued upon conversion of debt | $ 339 | 9,998,506 | 9,998,845 | ||||
Shares issued upon conversion of debt (in Shares) | 3,392,857 | ||||||
Beneficial conversion feature associated with convertible debt | 523,636 | 523,636 | |||||
Warrants issued with convertible debt | 1,205,959 | 1,205,959 | |||||
Stock-based compensation: | |||||||
Net loss | (10,880,729) | (10,880,729) | |||||
Other comprehensive income (loss) | 190 | 190 | |||||
Balance at Jun. 30, 2020 | $ 2,834 | 180,714,312 | 136,367 | (136,875,782) | 43,977,731 | ||
Balance (in Shares) at Jun. 30, 2020 | 28,346,576 | ||||||
Stock-based compensation: | |||||||
Stock options | 312,117 | 312,117 | |||||
Restricted stock | $ 20 | 136,030 | 136,050 | ||||
Restricted stock (in Shares) | 199,143 | ||||||
Stock-based compensation: | |||||||
Shares issued for redemption of debt and accrued interest | $ 316 | 5,419,421 | 5,419,737 | ||||
Shares issued for redemption of debt and accrued interest (in Shares) | 3,161,970 | ||||||
Shares issued in satisfaction of employee bonus obligations | $ 22 | 473,978 | 474,000 | ||||
Shares issued in satisfaction of employee bonus obligations (in Shares) | 217,999 | ||||||
Disgorgement of short swing profits | 21,875 | 21,875 | |||||
Stock-based compensation: | |||||||
Common Stock | $ 7,000,000 | 128,993,000,000 | 129,000,000,000 | ||||
Common Stock (in Shares) | 64,286,000,000 | ||||||
Stock-based compensation: | |||||||
Net loss | (6,548,877) | (6,548,877) | |||||
Other comprehensive income (loss) | 45,358 | 45,358 | |||||
Balance at Sep. 30, 2020 | $ 3,199 | $ 187,206,726 | $ 181,725 | $ (143,424,659) | $ 43,966,991 | ||
Balance (in Shares) at Sep. 30, 2020 | 31,989,974 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash Flows From Operating Activities | ||
Net loss | $ (26,206,075) | $ (10,918,910) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock-based compensation | 4,912,640 | 18,407 |
Bad debt expense | 115,726 | |
Conversion inducement expense | 5,247,531 | |
Extinguishment loss on acceleration of debt redemption | 1,733,768 | |
Amortization of debt discount | 1,639,150 | 36,414 |
Non-cash interest expense | 183,373 | |
Depreciation and amortization | 5,330,317 | 5,133,947 |
Impairment of investment in ESA | 1,138,631 | 600,000 |
Deferred rent | 220,318 | 175,314 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 780,655 | (1,029,096) |
Deposits | 7,963 | (79,500) |
Deferred production costs | (483,616) | (2,145,999) |
Prepaid expenses and other current assets | 1,803 | (227,324) |
Accounts payable | 24,943 | (642,686) |
Accrued expenses and other current liabilities | 499,972 | 898,157 |
Accrued interest | (768,126) | 469,296 |
Deferred revenue | (787,936) | (154,646) |
Total Adjustments | 19,681,386 | 3,168,010 |
Net Cash Used In Operating Activities | (6,524,689) | (7,750,900) |
Cash Flows From Investing Activities | ||
Net cash acquired in Merger | 14,941,683 | |
Return of Simon Investment | (3,650,000) | |
Investment in TV Azteca | (1,500,000) | (3,500,000) |
Lease incentive reimbursements | 1,021,603 | |
Purchases of property and equipment | (496,019) | (2,173,200) |
Investment in ESA | (1,238,631) | |
Purchases of intangible assets | (41,095) | (99,822) |
Net Cash (Used In) Provided By Investing Activities | (4,665,511) | 7,930,030 |
Cash Flows From Financing Activities | ||
Proceeds from loans payable | 1,592,429 | |
Proceeds from convertible debt, related party | 1,000,000 | |
Proceeds from convertible debt | 9,000,000 | 3,000,000 |
Proceeds from disgorgement of short swing profit | 21,875 | |
Issuance costs paid in connection with convertible debt | (766,961) | |
Repayments of convertible debt | (7,000,000) | |
Repayments to Former Parent | (346,804) | |
Proceeds from sale of common stock | 7,000,000 | |
Net Cash Provided By Financing Activities | 9,847,343 | 3,653,196 |
Effect of Exchange Rate Changes on Cash | 25,254 | 1,874 |
Net (Decrease) Increase In Cash And Restricted Cash | (1,317,603) | 3,834,200 |
Cash and restricted cash - Beginning of period | 12,090,573 | 10,471,296 |
Cash and restricted cash - End of period | 10,772,970 | 14,305,496 |
Cash and restricted cash consisted of the following: | ||
Cash | 5,772,970 | 9,355,496 |
Restricted cash | 5,000,000 | 4,950,000 |
Total | 10,772,970 | 14,305,496 |
Supplemental Disclosures of Cash Flow Information: | ||
Cash paid during the period for interest | 2,095,527 | |
Non-Cash Investing and Financing Activities | ||
Beneficial conversion feature associated with convertible debt | 523,636 | |
Contingent consideration for convertible debt holders in connection with Merger | 152,590 | |
Convertible debt and related interest assumed in Merger | 10,992,877 | |
Due to Former Parent satisfied by issuance of common stock in connection with Merger | 18,179,745 | |
Guaranteed interest on convertible debt recorded as debt discount | 1,536,000 | |
Non-cash interest on convertible debt recorded as debt discount | 1,664,000 | |
Interest payable on Bridge Note converted to principal | 1,421,096 | |
Original issue discount on convertible debt | 600,000 | |
Shares issued upon conversion of Bridge Note | 5,000,000 | |
Shares issued for redemption of debt and accrued interest | 5,236,364 | |
Warrants issued with convertible debt | 1,205,959 | |
Warrants granted to convertible debt holders in connection with Merger | 114,804 | |
Shares issued in satisfaction of employee bonus obligation | $ 474,000 |
Background
Background | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Background | Note 1 – Background Allied Esports Entertainment Inc. (“AESE” and formerly known as Black Ridge Acquisition Corp, or “BRAC”) was incorporated in Delaware on May 9, 2017 as a blank check company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization or other similar business combination with one or more businesses or entities (a “Business Combination”). Allied Esports Media, Inc. (“AEM”), a Delaware corporation, was formed in November 2018 to act as a holding company for Allied Esports International Inc. (“Allied Esports”) and immediately prior to the close of the Merger (see below) to also include Noble Link Global Limited (“Noble Link”). Allied Esports, together with its subsidiaries described below, owns and operates the esports-related businesses of AESE. Noble Link (prior to the AEM Merger) and its wholly owned subsidiaries Peerless Media Limited, Club Services, Inc. and WPT Enterprises, Inc. operate the poker-related business of AESE and are collectively referred to herein as “World Poker Tour” or “WPT”. Prior to the Merger, as described below, Noble Link and Allied Esports were subsidiaries of Ourgame International Holdings Limited (the “Former Parent”). On December 19, 2018, BRAC, Noble Link and AEM executed an Agreement and Plan of Reorganization (as amended from time to time, the “Merger Agreement”). On August 9, 2019 (the “Closing Date”), Noble Link was merged with and into AEM, with AEM being the surviving entity, which was accounted for as a common control merger (the “AEM Merger”). Further, on August 9, 2019, a subsidiary of AESE merged with AEM pursuant to the Merger Agreement with AEM being the surviving entity (the “Merger”). The Merger was accounted for as a reverse recapitalization, and AEM is deemed to be the accounting acquirer. Consequently, the assets and liabilities and the historical operations that are reflected in these condensed consolidated financial statements prior to the Merger are those of Allied Esports and WPT. The preferred stock, common stock, additional paid in capital and earnings per share amounts in these condensed consolidated financial statements for the period prior to the Merger have been restated to reflect the recapitalization in accordance with the shares issued to the Former Parent as a result of the Merger. References herein to the “Company” are to the combination of AEM and WPT during the period prior to the AEM Merger and are to AESE and its subsidiaries after the Merger. Allied Esports operates directly and through its wholly-owned subsidiaries Esports Arena Las Vegas, LLC (“ESALV”) and Allied Esports Gaming GmbH. Allied Esports operates global competitive esports properties designed to connect players and fans via a network of connected arenas. ESALV operates a flagship gaming arena located at the Luxor Hotel in Las Vegas, Nevada. Allied Esports GmbH operates a mobile esports truck that serves as both a battleground and content generation hub and also operates a studio for recording and streaming gaming events. World Poker Tour is an internationally televised gaming and entertainment company with brand presence in land-based tournaments, television, online and mobile applications. WPT has been involved in the sport of poker since 2002 and created a television show based on a series of high-stakes poker tournaments. WPT has broadcasted globally in more than 150 countries and territories and its shows are sponsored by established brands in many areas, including watches, crystal, playing cards and online social poker operators. WPT also operates ClubWPT.com, a subscription-based site that offers its members inside access to the WPT content database, as well as sweepstakes-based poker product that allows members to play for real cash and prizes in 43 states and territories across the United States Australia, Canada, France and the United Kingdom, with no purchase necessary. WPT also participates in strategic brand licensing, partnership, and sponsorship opportunities. |
Going Concern and Management's
Going Concern and Management's Plans | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern and Management's Plans | Note 2 – Going Concern and Management’s Plans As of September 30, 2020, the Company had cash of approximately $5.8 million (excluding approximately $5.0 million of restricted cash) and working capital of approximately $53 thousand. For the nine months ended September 30, 2020 and 2019, the Company incurred net losses of approximately $26.2 million and $10.9 million, respectively, and used cash in operations of approximately $6.5 million and $7.8 million, respectively. As of September 30, 2020, the Company had convertible debt in the gross principal amount of $2.0 million which matures on February 23, 2022, and convertible debt in the gross principal amount of $5.7 million which is payable in 12 monthly installments through September 1, 2021, and for which certain payments can be accelerated at the option of the lender (see Note 7 – Convertible Debt and Convertible Debt, Related Party). As of September 30, 2020, the Company also has a Bridge Note outstanding in the amount of approximately $1.4 million which matures on February 23, 2022 (see Note 8 – Bridge Note Payable) and loans payable in the aggregate amount of $1.6 million, which are due in monthly installments beginning November 2020 through April 2022 (see Note 9 – Loans Payable). During the period from October 1, 2020 through November 2, 2020, the Company issued an aggregate 3,120,869 shares of its common stock in satisfaction of $2.6 million and $0.4 million of principal and interest, respectively, owed on the convertible debt. In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (“COVID-19”) as a pandemic which continues to spread throughout the United States. As a global entertainment company that hosts numerous live events with spectators and participants in destination cities, the outbreak has caused people to avoid traveling to and attending these events. Allied Esports’ and WPT’s businesses have cancelled or postponed live events, and before the reopening of Allied Esports’ flagship gaming arena located at the Luxor Hotel in Las Vegas, Nevada on June 25, 2020 these businesses were operating online only. The arena is currently running under a modified schedule and limited capacity (up to 65% capacity depending on the event) for daily play and weekly tournaments, and the WPT business continues to operate online only, other than a recent live event in Tokyo, Japan. The Company is continuing to monitor the outbreak of COVID-19 and the related business and travel restrictions, and changes to behavior intended to reduce its spread, and the related impact on the Company’s operations, financial position and cash flows, as well as the impact on its employees. Due to the rapid development and fluidity of this situation, the magnitude and duration of the pandemic, and its impact on the Company’s future operations and liquidity is uncertain as of the date of this report. While there could ultimately be a material impact on operations and liquidity of the Company, at the time of issuance, the extent of the impact cannot be determined. The aforementioned factors raise substantial doubt about the Company’s ability to continue as a going concern within one year after the issuance date of these condensed consolidated financial statements. The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which contemplate continuation of the Company as a going concern and the realization of assets and the satisfaction of liabilities in the normal course of business. The condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset amounts or the classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company’s continuation is dependent upon attaining and maintaining profitable operations and, until that time, raising additional capital as needed, but there can be no assurance that it will be able to close on sufficient financing. The Company’s ability to generate positive cash flow from operations is dependent upon generating sufficient revenues. To date, the Company’s operations have been funded by the Former Parent, as well as through the issuance of convertible debt, and with cash acquired in the Merger. The Company cannot provide any assurances that it will be able to secure additional funding, either from equity offerings or debt financings, on terms acceptable to the Company, if at all. If the Company is unable to obtain the requisite amount of financing needed to fund its planned operations, including the repayment of convertible debt, it would have a material adverse effect on its business and ability to continue as a going concern, and it may have to explore the sale of, or curtail or even cease, certain operations. |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Note 3 – Significant Accounting Policies There are no material changes from the significant accounting policies set forth in Note 3 – Significant Accounting Policies of the Company’s accompanying notes to the audited consolidated financial statements for the year ended December 31, 2019, except for the following accounting policies and required disclosures. Basis of Presentation and Principles of Consolidation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information. Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for annual consolidated financial statements. For additional information, these condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements of and notes thereto included in the Company’s amended annual report on Form 10-K/A filed with the Securities and Exchange Commission (“SEC”) on March 17, 2020. In the opinion of management, the accompanying condensed consolidated financial statements include all adjustments which are considered necessary for a fair presentation of the unaudited condensed consolidated financial statements of the Company as of September 30, 2020 and for the three and nine months ended September 30, 2020 and 2019. The results of operations for the three and nine months ended September 30, 2020 are not necessarily indicative of the operating results for the full year ending December 31, 2020 or any other period. These unaudited condensed consolidated financial statements have been derived from the accounting records of AESE, WPT and Allied Esports and should be read in conjunction with the accompanying notes thereto. Net Loss per Common Share Basic loss per common share is computed by dividing net loss attributable to AESE common stockholders by the weighted average number of common shares outstanding during the period. Diluted loss per common share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding, plus the impact of common shares, if dilutive, resulting from the exercise of outstanding stock options and warrants and the conversion of convertible instruments. The following securities are excluded from the calculation of weighted average dilutive common shares because their inclusion would have been anti-dilutive: September 30, 2020 2019 Restricted common shares 199,143 80,393 Options 2,430,000 400,000 Warrants 20,091,549 18,637,003 Convertible debt 3,609,839 (1) 1,647,058 Unit purchase options 600,000 600,000 Contingent consideration shares 269,231 - 27,199,762 21,364,454 (1) Common stock equivalents associated with convertible debt were calculated based on the fixed conversion price in effect for voluntary holder conversions; however for certain convertible notes there is a variable conversion price in effect under certain scenarios that is equal to 87% of lowest daily volume weighted average price over the prior ten days, subject to a $0.734 floor price. If the applicable convertible note principal and guaranteed interest were all converted at the floor price, the potentially dilutive shares related to convertible debt would be 15,406,956 shares. Revenue Recognition The Company recognizes revenue primarily from the following sources: In-person revenue The Company’s in-person revenue is comprised of event revenue, sponsorship revenue, merchandising revenue, and other revenue. Event revenue is generated through World Poker Tour events – TV, non-TV, and DeepStacks Entertainment, LLC and DeepStacks Poker Tour, LLC (collectively “DeepStacks”) events – held at the Company’s partner casinos as well as Allied Esports events held at the Company’s esports properties. Event revenues recognized from the rental of the Allied Esports arena and gaming trucks are recognized at a point in time when the event occurs. In-person revenue also includes revenue from ticket sales, admission fees and food and beverage sales for events held at the Company’s esports properties. Ticket revenue is recognized at the completion of the applicable event. Point of sale revenues, such as food and beverage, gaming, and merchandising revenues, are recognized when control of the related goods are transferred to the customer. The Company also generates sponsorship revenues for naming rights for, and rental of, the Company’s arena and gaming trucks. Sponsorship revenues from naming rights of the Company’s esports arena and from sponsorship arrangements are recognized on a straight-line basis over the contractual term of the agreement. The Company records deferred revenue to the extent that payment has been received for services that have yet to be performed. In-person revenue was comprised of the following for the three and nine months ended September 30, 2020 and 2019: For the Three Months Ended For the Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Event revenue $ 227,247 $ 1,582,749 $ 1,839,365 $ 5,752,880 Sponsorship revenue 314,924 411,903 1,305,014 1,091,718 Food and beverage revenue 34,427 290,408 266,726 976,313 Ticket and gaming revenue 118,996 250,955 270,247 587,727 Merchandising revenue 678 50,950 19,065 145,273 Other revenue 618 - 722 119 Total in-person revenue $ 696,890 $ 2,586,965 $ 3,701,139 $ 8,554,030 Multiplatform content revenue The Company’s multiplatform content revenue is comprised of distribution revenue, sponsorship revenue, music royalty revenue, online advertising revenue and content revenue. Distribution revenue is generated primarily through the distribution of content from World Poker Tour’s library. World Poker Tour provides video content to global television networks, who then have the right to air the content and place advertisements on the content during the related license period. Revenue from the distribution of video content to television networks is received pursuant to the contract payment terms and is recognized at the point in time that advertisements are aired on the WPT content. Occasionally, WPT will bundle third-party content with its own content in a distribution arrangement and will share the revenue with the third party; however, the revenues related to third party content are de minimis. The Company recognizes distribution revenue pursuant to the terms of each individual contract with the customer and records deferred revenue to the extent the Company has received a payment for services that have yet to be performed or products that have yet to be delivered. The Company also distributes video content to online channels. Both the global television networks and the online channels place ads within the WPT content and any advertising revenue earned by the global TV network or online channel is shared with WPT. The Company recognizes online advertising revenue at the point in time when the advertisements are placed in the video content. Sponsorship revenue is generated through the sponsorship of the Company’s TV content, live and online events and online streams. Online advertising revenue is generated from third-party advertisements placed on the Company’s website. Music royalty revenue is generated when the Company’s music is played in the Company’s TV series, both on TV networks and online. The Company recognizes sponsorship revenue pursuant to the terms of each individual contract when the Company satisfies the respective performance obligations, which could be recognized at a point in time or over the term of the contract. The Company records deferred revenue to the extent the Company has received a payment for services that have yet to be performed or products that have yet to be delivered. Music royalty revenue is recognized at the point in time when the music is played. Multiplatform content revenue was comprised of the following for the three and nine months ended September 30, 2020 and 2019: For the Three Months Ended For the Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Distribution revenue $ 611,370 $ 282,508 $ 1,471,263 $ 1,069,328 Sponsorship revenue 370,597 544,541 1,154,267 1,585,467 Music royalty revenue 278,610 200,787 553,198 1,214,286 Online advertising revenue 3,769 3,547 7,766 4,628 Total multiplatform revenue $ 1,264,346 $ 1,031,383 $ 3,186,494 $ 3,873,709 Interactive revenue The Company’s interactive revenue is primarily comprised of subscription revenue, licensing, social gaming, and virtual product revenue. Subscription revenue is generated through fixed rate (monthly, quarterly, and annual) subscriptions which offer the opportunity for subscribers to play unlimited poker and access benefits not available to non-subscribers. The Company recognizes subscription revenue on a straight-line basis and records deferred revenue to the extent the Company receives payments for services that have yet to be provided. Social gaming revenue arises from the sale of online tokens and other online purchases on the Company’s social gaming website and is recognized at the point the product is delivered. Virtual product revenue is generated from the licensing of the Company’s various brands to be used on the customers’ virtual product and social gaming platforms and is recognized over the term of the contractual agreement. The Company generates licensing revenue by licensing the right to use the Company’s brands on products to third parties. Licensing revenue is recognized pursuant to the terms of each individual contract with the customer and is recognized over the term of the contractual agreement. Deferred revenue is recorded to the extent the Company has received a payment for products that have yet to be delivered. Interactive revenue was comprised of the following for the three and nine months ended September 30, 2020 and 2019: For the Three Months Ended For the Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Subscription revenue $ 2,511,958 $ 1,313,218 $ 5,599,687 $ 3,745,623 Virtual product revenue 975,411 925,411 2,880,478 2,773,769 Social gaming revenue 411,297 152,317 1,043,268 397,065 Licensing revenue 11,188 16,872 68,461 198,481 Other revenue 17,212 15,376 36,115 72,259 Total interactive revenue $ 3,927,066 $ 2,423,193 $ 9,628,009 $ 7,187,196 The following table summarizes our revenue recognized under ASC 606 in our condensed consolidated statements of operations and comprehensive loss: For the Three Months Ended For the Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Revenues Recognized at a Point in Time: Event revenue $ 227,247 $ 1,582,749 $ 1,839,365 $ 5,752,880 Distribution revenue 611,370 282,508 1,471,263 1,069,328 Social gaming revenue 411,297 152,317 1,043,268 397,065 Food and beverage revenue 34,427 290,408 266,726 976,313 Sponsorship revenue 23,890 123,407 69,350 408,873 Ticket and gaming revenue 118,996 250,955 270,247 587,727 Merchandising revenue 678 50,950 19,065 145,273 Music royalty revenue 278,610 200,787 553,198 1,214,286 Online advertising revenue 3,769 3,547 7,766 4,628 Other revenue 17,830 15,376 36,837 72,378 Total Revenues Recognized at a Point in Time 1,728,114 2,953,004 5,577,085 10,628,751 Revenues Recognized Over a Period of Time: Subscription revenue 2,511,958 1,313,218 5,599,687 3,745,623 Virtual product revenue 975,411 925,411 2,880,478 2,773,769 Sponsorship revenue 661,631 833,037 2,389,931 2,268,312 Licensing revenue 11,188 16,872 68,461 198,481 Total Revenues Recognized Over a Period of Time 4,160,188 3,088,537 10,938,557 8,986,184 Total Revenues $ 5,888,302 $ 6,041,541 $ 16,515,642 $ 19,614,935 The timing of the Company’s revenue recognition may differ from the timing of payment by its customers. A receivable is recorded when revenue is recognized prior to payment and the Company has an unconditional right to payment. Alternatively, when payment precedes the provision of the related services, the Company records deferred revenue until the performance obligations are satisfied. As of September 30, 2020, there remained approximately $622,000 of contract liabilities which were included within deferred revenue on the consolidated balance sheet as of December 31, 2019, and for which performance obligations had not yet been satisfied as of September 30, 2020. The Company expects to satisfy its remaining performance obligations within the next twelve months. Advertising Costs The Company expenses advertising and marketing costs as they are incurred. Marketing and advertising expense was $17,343 and $133,103 during the three and nine months ended September 30, 2020 and $59,698 and $245,259 during the three and nine months ended September 30, 2019, respectively. Foreign Currency Translation The Company’s reporting currency is the United States Dollar. The functional currencies of the Company’s operating subsidiaries are their local currencies (United States Dollar and Euro). Euro-denominated assets and liabilities are translated into the United States Dollar using the exchange rate at the balance sheet date and revenue and expense accounts are translated using the weighted average exchange rate in effect for the period. Resulting translation adjustments are made directly to accumulated other comprehensive (loss) income. Gains (losses) arising from exchange rate fluctuations on transactions denominated in a currency other than the reporting currency were $5,124 and $3,868 during the three and nine months ended September 30, 2020, respectively, and $(3,651) and $(3,563) during the three and nine months ended September 30, 2019, respectively, and are recognized in operating results in the condensed consolidated statements of operations. The Euro to United States Dollar exchange rate was $1.1724 and $1.1215 at September 30, 2020 and December 31, 2019, respectively. The Company engages in foreign currency denominated transactions with customers and suppliers, as well as between subsidiaries with different functional currencies. Reclassifications Certain prior period balances have been reclassified in order to conform to the current year presentation. These reclassifications have no effect on previously reported results of operations or loss per share. CARES Act On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”). The CARES Act, amongst other things, includes provisions relating to refundable payroll tax credits, deferment of employer social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property. Pursuant to Accounting Standards Codification Topic (“ASC 740”), the Company recognizes the tax effects of new tax legislation upon enactment. Accordingly, the CARES Act is effective beginning in the quarter ended March 31, 2020. The Company does not believe that the new tax provisions outlined in the CARES Act will have a material impact on the Company’s consolidated financial statements. Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, “Leases (Topic 842)” (“ASU 2016-02”). ASU 2016-02 requires that a lessee recognize the assets and liabilities that arise from operating leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. This amendment will be effective for private companies and emerging growth companies for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. The FASB issued ASU No. 2018-10 “Codification Improvements to Topic 842, Leases” and ASU No. 2018-11 “Leases (Topic 842) Targeted Improvements” in July 2018 (“ASU 2018-10” and “ASU 2018-11”), and ASU No. 2018-20 “Leases (Topic 842) - Narrow Scope Improvements for Lessors” in December 2018 (“ASU 2018-20”). ASU 2018-10 and ASU 2018-20 provide certain amendments that affect narrow aspects of the guidance issued in ASU 2016-02. ASU 2018-11 allows all entities adopting ASU 2016-02 to choose an additional (and optional) transition method of adoption, under which an entity initially applies the new leases standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company is currently evaluating the impact that this guidance will have on its consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The new guidance simplifies the accounting for goodwill impairment by eliminating Step 2 of the goodwill impairment test. Under current guidance, Step 2 of the goodwill impairment test requires entities to calculate the implied fair value of goodwill in the same manner as the amount of goodwill recognized in a business combination by assigning the fair value of a reporting unit to all of the assets and liabilities of the reporting unit. The carrying value in excess of the implied fair value is recognized as goodwill impairment. Under the new standard, goodwill impairment is recognized based on Step 1 of the current guidance, which calculates the carrying value in excess of the reporting unit’s fair value. This standard was adopted on January 1, 2020 and did not have a material impact on the Company’s consolidated financial statements or disclosures. In July 2018, the FASB issued ASU No. 2018-09, “Codification Improvements” (“ASU 2018-09”). These amendments provide clarifications and corrections to certain ASC subtopics including the following: Income Statement - Reporting Comprehensive Income – Overall (Topic 220-10), Debt - Modifications and Extinguishments (Topic 470-50), Distinguishing Liabilities from Equity – Overall (Topic 480-10), Compensation - Stock Compensation - Income Taxes (Topic 718-740), Business Combinations – Income Taxes (Topic 805-740), Derivatives and Hedging – Overall (Topic 815-10), and Fair Value Measurement – Overall (Topic 820-10). The majority of the amendments in ASU 2018-09 will be effective in annual periods beginning after December 15, 2019. This standard was adopted on January 1, 2020 and did not have a material impact on the Company’s consolidated financial statements or disclosures. In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”). The amendments in ASU 2018-13 modify the disclosure requirements associated with fair value measurements based on the concepts in the Concepts Statement, including the consideration of costs and benefits. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. The amendments are effective for all entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. This standard was adopted on January 1, 2020 and did not have a material impact on the Company’s consolidated financial statements or disclosures. In February 2020, the FASB issued ASU No. 2020-02, Financial Instruments - Credit Losses (Topic 326) and Leases (Topic 842) – Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date (“ASU 2020-02”) which provides clarifying guidance and minor updates to ASU No. 2016-13 – Financial Instruments – Credit Loss (Topic 326) (“ASU 2016-13”) and related to ASU No. 2016-02 - Leases (Topic 842). ASU 2020-02 amends the effective date of ASU 2016-13, such that ASU 2016-13 and its amendments will be effective for the Company for interim and annual periods in fiscal years beginning after December 15, 2022. The adoption of ASU 2016-13 is not expected to have a material impact on the Company’s consolidated financial statements or disclosures. In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, to clarify the accounting for certain financial instruments with characteristics of liabilities and equity. The amendments in this update reduce the number of accounting models for convertible debt instruments and convertible preferred stock by removing the cash conversion model and the beneficial conversion feature model. Limiting the accounting models will result in fewer embedded conversion features being separately recognized from the host contract. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting and (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in-capital. In addition, this ASU improves disclosure requirements for convertible instruments and earnings-per-share guidance. The ASU also revises the derivative scope exception guidance to reduce form-over-substance-based accounting conclusions driven by remote contingent events. The amendments in this update are effective for the Company in fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption will be permitted, but no earlier than for fiscal years beginning after December 15, 2020. The Company is currently evaluating the impact that this guidance will have on its consolidated financial statements. |
Other Assets
Other Assets | 9 Months Ended |
Sep. 30, 2020 | |
Other Assets [Abstract] | |
Other Assets | Note 4 – Other Assets The Company’s other assets consist of the following: September 30, December 31, 2020 2019 Investment in ESA $ - $ 1,138,631 Investment in TV Azteca 5,000,000 3,500,000 $ 5,000,000 $ 4,638,631 As of September 30, 2020, the Company owns a 25% non-voting membership interest in Esports Arena, LLC (“ESA”) and ESA’s wholly owned subsidiary. The investment is accounted for as a cost method investment since the Company does not have the ability to exercise significant influence over the operating and financial policies of ESA. During January 2019, the Company contributed $1,238,631 to ESA, in order to fulfill the remainder of its funding commitment to ESA. The Company recognized an immediate impairment of $600,000 related to this funding. During June 2020, the Company recorded an additional impairment charge in the amount of $1,138,631, related to its investment in ESA. The Company paid $3,500,000 to TV Azteca, S.A.B. DE C.V., a Grupo Salinas company (“TV Azteca”) in August 2019, and on March 4, 2020 the Company paid an additional $1,500,000 to TV Azteca in connection with a Strategic Investment Agreement with TV Azteca in order to expand the Allied Esports brand into Mexico. See Note 11 – Commitments and Contingencies, Investment Agreements for additional details. |
Deferred Production Costs
Deferred Production Costs | 9 Months Ended |
Sep. 30, 2020 | |
Deferred Production Costs Disclosure [Abstract] | |
Deferred Production Costs | Note 5 – Deferred Production Costs Deferred production costs consist of the following: September 30, December 31, 2020 2019 Deferred production costs $ 30,231,418 28,290,200 Less: accumulated amortization (18,785,320 ) (17,327,718 ) Deferred production costs, net $ 11,446,098 $ 10,962,482 Weighted average remaining amortization period at September 30, 2020 (in years) 3.43 Production costs of $724,762 and $1,457,602 for the three and nine months ended September 30, 2020 and $605,077 and $2,225,442 for the three and nine months ended September 30, 2019, respectively, were expensed and are reflected in multiplatform content costs in the condensed consolidated statements of operations and comprehensive loss. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 9 Months Ended |
Sep. 30, 2020 | |
Disclosure Text Block Supplement [Abstract] | |
Accrued Expenses and Other Current Liabilities | Note 6 – Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consist of the following: September 30, December 31, 2020 2019 Compensation expense $ 617,471 $ 1,348,066 Payroll tax obligations 118,379 - Rent 987,572 124,969 Interactive costs 465,813 319,833 Event costs 138,915 186,173 Legal and professional fees 459,591 154,799 Production costs 131,158 55,679 Unclaimed player prizes 471,101 342,535 Other accrued expenses 458,398 721,693 Other current liabilities 112,466 369,614 Accrued leasehold improvements - 269,110 $ 3,960,864 $ 3,892,471 |
Convertible Debt and Convertibl
Convertible Debt and Convertible Debt, Related Party | 9 Months Ended |
Sep. 30, 2020 | |
Convertible Debt And Convertible Debt Related Party [Abstract] | |
Convertible Debt and Convertible Debt, Related Party | Note 7 – Convertible Debt and Convertible Debt, Related Party As of September 30, 2020 and December 31, 2019, the Company’s convertible debt consisted of the following: September 30, 2020 December 31, 2019 Gross Debt Convertible Gross Debt Convertible Convertible bridge notes $ 1,000,000 $ - $ 1,000,000 $ 13,000,000 $ (154,499 ) $ 12,845,501 Convertible bridge notes, related party 1,000,000 - 1,000,000 1,000,000 (11,885 ) 988,115 Senior secured convertible notes 5,672,727 (3,090,022 ) 2,582,705 - - - Total $ 7,672,727 $ (3,090,022 ) $ 4,582,705 $ 14,000,000 $ (166,384 ) $ 13,833,616 Convertible Bridge Notes and Convertible Bridge Notes, Related Party Pursuant to an Amendment and Acknowledgement Agreement dated August 5, 2019, the convertible bridge notes (the “Bridge Notes”) are secured by the assets of the Company and originally matured on August 23, 2020 (the “Maturity Date”). The Bridge Notes are convertible into shares of AESE common stock at any time at a conversion price of $8.50 per share. Further, the minimum interest to be paid under each Bridge Note shall be the greater of (a) 18 months of accrued interest at 12% per annum; or (b) the sum of the actual interest accrued plus 6 months of additional interest at 12% per annum. In the event of default, the Bridge Notes shall become immediately due and payable upon the written notice of the holder. If any holder elects to convert their Bridge Note into common stock, they would be entitled to receive additional shares of common stock (“Contingent Consideration Shares”) equal to the product of (i) 3,846,153 shares, multiplied by (ii) that holder’s investment amount, divided by (iii) $100,000,000, if at any time within five years after the August 9, 2019 closing date, the last exchange-reported sale price of common stock trades at or above $13.00 for thirty (30) consecutive calendar days. On April 29, 2020, the Company and a holder of a $5,000,000 Bridge Note (the “Noteholder”), entered into a Secured Convertible Note Modification and Conversion Agreement (the “Amendment 1”), pursuant to which the Noteholder converted $2,000,000 of the principal amount of its $5,000,000 Bridge Note into 1,250,000 shares of the Company’s common stock at a reduced conversion price of $1.60 per share. On May 22, 2020, the Company and the Noteholder entered into a Secured Convertible Note Modification and Conversion Agreement No. 2 (“Amendment 2”), pursuant to which the remaining principal amount of the $5,000,000 Bridge Note ($3,000,000) was converted into 2,142,857 shares of the Company’s common stock at a reduced conversion price of $1.40 per share. Further, pursuant to Amendment 1 and Amendment 2, interest on the $5,000,000 principal owed to the Noteholder prior to conversion will continue to accrue through the maturity date as if the principal amount had not been converted. Minimum accrued interest payable pursuant to Amendment 2 in the amount of $1,421,096 (the “Accrued Interest”) is payable on or before the maturity date. No Contingent Consideration Shares were issued in connection with the conversion since the requirements for issuance were not met. On June 8, 2020, the Company and the Noteholder entered into Secured Convertible Note Modification Agreement No. 3 (“Amendment 3” and together with Amendment 1 and Amendment 2, the “Amendments”). Pursuant to Amendment 3, the Accrued Interest is converted into principal under the Noteholder’s Bridge Note (the “Amended Bridge Note”). See Note 8 - Bridge Note Payable for additional details. The Company recorded a conversion inducement charge of $5,247,531 as a result of the Amendments, consisting of $4,998,845 representing the value of common stock issued upon conversion in excess of the common stock issuable under the original terms of the $5,000,000 Bridge Note, and $248,686, representing the excess of minimum interest payable pursuant to Amendment 3 over the interest payable pursuant to the original terms of the $5,000,000 Bridge Note. On June 8, 2020, the Company paid $8,670,431 in satisfaction of principal in the amount of $7,000,000 and interest in the amount of $1,670,431 owed in connection with other Bridge Notes. Further, on June 8, 2020, the Company and the holders (the “Extending Bridge Noteholders”) of the two remaining Bridge Notes outstanding in the aggregate principal amount of $2,000,000 (together, the “Extended Bridge Notes”), of which principal in the amount of $1,000,000 is owed to the spouse of the Company’s Chief Executive Officer and Director, entered into a Secured Convertible Note Modification (Extension) Agreement with the Company (together, the “Bridge Note Extensions”) pursuant to which, among other things, the Extending Bridge Noteholders agreed to extend the maturity date of their respective Extended Bridge Note until February 23, 2022. Interest on the Extended Bridge Notes will continue to accrue at 12.0% per year and may be prepaid without penalty. The remaining provisions of the Extended Bridge Notes remain unchanged and in effect. On August 13, 2020 the Company paid in cash an aggregate of $425,096 related to interest payable on the Extended Bridge Notes, such that the balance of principal and interest outstanding under the Extended Bridge Notes as of September 30, 2020 is $2,000,000 and $24,760, respectively. The Company recorded interest expense of $65,836 and $1,355,549 (including amortization of debt discount of $5,386 and $166,385), respectively, related to the Bridge Notes and the Extended Bridge Notes during the three and nine months ended September 30, 2020, and recorded interest expense of $447,847, and $505,710 (including amortization of debt discount of $36,414 and $36,414), respectively, during the three and nine months ended September 30, 2019. As of September 30, 2020, all debt discount on the Convertible Bridge Notes and Extended Bridge Notes has been fully amortized. Senior Secured Convertible Notes On June 8, 2020, pursuant to a securities purchase agreement (the “Purchase Agreement”) between the Company and certain accredited investors (the “Investors”), the Company issued two senior secured convertible notes (the “Senior Notes”) with an aggregate principal balance of $9,600,000 and immediately vested five-year warrants to purchase an aggregate 1,454,546 shares of common stock at an exercise price of $4.125 per share for net cash proceeds of $9,000,000. The Senior Notes are secured by the assets of the Company, bear interest at 8% per annum and mature on June 8, 2022, with an aggregate of $1,536,000 of interest guaranteed to be paid to the Investors. The Purchase Agreement contains customary representations and warranties, and the Company agreed it would not take on additional debt from third parties without the Investors’ written approval, subject to certain exceptions for ordinary course trade debt. The Company also agreed to use 35% of the proceeds from future financings in excess of $3 million (or $5 million if approved by the Investors) to pay down the outstanding balance on the Loan. The Company reserves its rights under the Purchase Agreement to consummate, subject to certain exceptions, a debtor or equity offering of up to $5 million in the future. The Senior Notes and two years of interest are payable in equal monthly installments (the “Monthly Redemption Payment”), commencing on August 7, 2020. Each Monthly Redemption Payment may be paid at the Company’s option in cash, or in shares of common stock (the “Stock Settlement Option”) at a price equal to 87% of the lowest daily volume weighted average price in the 10 days prior to the scheduled payment date (the “Stock Settlement Price”), provided that (i) the Company gives thirty days written irrevocable notice prior to the Monthly Redemption Payment (the “Monthly Redemption Notice”), (ii) all amounts due have been paid timely, (iii) there are sufficient number of authorized shares available to be issued, (iv) the Investors do not possess any material non-public information at the time the Company issues the common stock, and (v) the Company’s shares have met certain minimum volume and closing price thresholds. The Stock Settlement Price cannot be lower than $0.734 per share. Monthly Redemption Payments paid in cash require the payment of a 10% premium in addition to the monthly installment. Each Investor may accelerate up to four Monthly Redemption Payments in any calendar month and may elect to have such accelerated Monthly Redemption Payments paid in shares of the Company’s common stock at the Stock Settlement Price of the contemporaneous or immediately prior Monthly Redemption Payment, instead of in cash. The Senior Notes are convertible at each Investor’s option, in whole or in part, and from time to time, into shares of the Company’s common stock (the “Holder Conversion Option” and together, with the Stock Settlement Option, the “ECOs”) at $3.30 per share (subject to adjustment to convert at the same price as any subsequent issuances of Company common stock at a lower issuance price, subject to certain exceptions) (the “Holder Conversion Price”); provided, however, that the parties may not affect any such conversion that would result in an Investor (together with its affiliates) owning in excess of 4.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to the conversion (the “Beneficial Ownership Limitation”). Each Investor, upon notice to the Company, may elect to increase or decrease its Beneficial Ownership Limitation, provided that the Beneficial Ownership Limitation may not exceed 9.99%. The Company determined that the ECOs contained a beneficial conversion feature (“BCF”) in the amount of $523,636, which was credited to additional paid in capital. Upon the issuance of the Senior Notes, the Company recorded a debt discount at issuance in the aggregate amount $6,296,555, consisting of (i) the $600,000 difference between the aggregate principal amount of the Senior Notes and the cash proceeds received, (ii) the relative fair value of the warrants of $1,205,959 (which were credited to additional paid in capital), (iii) two years’ guaranteed interest of $1,536,000 (credited to interest payable), (iv) the BCF of $523,636 (credited to additional paid in capital), (v) non-cash interest in the amount of $1,664,000, representing the difference between the anticipated issuance date fair value of common stock issued and the Stock Settlement Price, for Monthly Redemption Payments (credited to interest payable), and (vi) financing costs of $766,961. The debt discount is being amortized using the effective interest method over the term of the Senior Notes. During the three and nine months ended September 30, 2020, the Company recorded amortization of debt discount of $1,219,323 and $1,472,766, respectively, related to the Senior Notes, and recorded an extinguishment loss of $1,733,768 and $1,733,768, respectively, in connection with the extinguishment of Senior Notes resulting from accelerated Monthly Redemption Payments. Debt discount in the amount of $3,090,021 remains to be amortized as of September 30, 2020. During the three and nine months ended September 30, 2020, the Company issued 3,161,970 shares of its common stock, as Monthly Redemption Payments in satisfaction of aggregate amount of $3,927,273 of principal and $628,364 interest payable owed on the Senior Notes, of which 2,472,302 shares were issued in connection with accelerated Monthly Redemption Payments in the aggregate amount of $3,543,273 (representing $3,054,546 and $488,727 of principal and interest, respectively). The Company recorded additional non-cash interest expense in the amount of $183,373 in connection with Monthly Redemption Payments during the three and nine months ended September 30, 2020, respectively. As of September 30, 2020, gross principal and guaranteed interest of $5,672,727 and $907,636, respectively, remains outstanding on the Senior Notes and is payable in 12 monthly installments through September 1, 2021. |
Bridge Note Payable
Bridge Note Payable | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Bridge Note Payable | Note 8 – Bridge Note Payable The Bridge Note Payable consists of the Amended Bridge Note (see Note 7 – Convertible Debt and Convertible Debt, Related Party, Convertible Bridge Notes and Convertible Bridge Notes, Related Party). The Amended Bridge Note matures on February 23, 2022. Interest on the Amended Bridge Note began to accrue on August 23, 2020 at 12% per annum (increasing to 15% per annum upon an event of default as defined in the Amended Bridge Note). Principal and interest owed under the Amended Bridge Note is not convertible into shares of the Company’s common stock. During the three and nine months ended September 30, 2020, the Company recorded interest expense of $17,742 and $17,742, respectively, in connection with the Amended Bridge Note. |
Loans Payable
Loans Payable | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Loans Payable | Note 9 – Loans Payable During May 2020, the Company’s subsidiaries received aggregate cash proceeds of $1,592,429 pursuant to three loans (the “PPP Loans”) provided in connection with the Paycheck Protection Program (“PPP”) under the CARES Act. The PPP Loans mature two years from their dates of issuance. Of the total principal owed under the PPP Loans, $907,129 bears interest at 0.98% per annum and $685,300 bears interest at 1.00% per annum, respectively. Monthly amortized principal and interest payments are deferred for six months after the date of disbursement. While the PPP Loans currently have two-year maturities, the amended law permits the borrower to request five-year maturities from its lenders. Under the terms of the CARES Act, as amended by the Paycheck Protection Program Flexibility Act of 2020, the Company’s subsidiaries are eligible to apply for and receive forgiveness for all or a portion of PPP Loans. Such forgiveness will be determined, subject to limitations, based on the use of PPP loan proceeds for certain permissible purposes as set forth in the PPP, including, but not limited to, payroll costs (as defined under the PPP) and mortgage interest, rent or utility costs (collectively, “Qualifying Expenses”), and on the maintenance of employee and compensation levels during the twenty-four week period following the funding of the PPP Loan. The Company intends to use the proceeds of the PPP Loans solely for Qualifying Expenses. However, no assurance is provided that the Company will be able to obtain forgiveness of the PPP Loans, in whole or in part. The Company recorded interest expense of $3,936 and $6,626, respectively, related to the PPP Loans during the three and nine months ended September 30, 2020. |
Segment Data
Segment Data | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Segment Data | Note 10 – Segment Data Each of the Company’s business segments offer different, but synergistic products and services, and are managed separately, by different chief operating decision makers. The Company’s business consists of three reportable segments: Poker, gaming, and entertainment, provided through WPT, including televised gaming and entertainment, land-based poker tournaments, online and mobile poker applications. E-sports, provided through Allied Esports, including multiplayer video game competitions. Corporate. The following tables present segment information for the three and nine months ended September 30, 2020 and 2019 and as of September 30, 2020 and December 31, 2019: For the Three Months Ended For the Three Months Ended Gaming & E-sports Corporate (1) TOTAL Gaming & E-sports Corporate (1) TOTAL Revenues $ 5,291,419 $ 596,883 $ - $ 5,888,302 $ 4,137,091 $ 1,904,450 $ - $ 6,041,541 Income (Loss) from Operations $ 663,919 $ (1,945,413 ) $ (2,040,432 ) $ (3,321,926 ) $ (172,502 ) $ (2,984,047 ) $ (661,054 ) $ (3,817,603 ) For the Nine Months Ended For the Nine Months Ended Gaming & E-sports Corporate (1) TOTAL Gaming & E-sports Corporate (1) TOTAL Revenues $ 14,240,556 $ 2,275,086 $ - $ 16,515,642 $ 14,022,841 $ 5,592,094 $ - $ 19,614,935 Income (Loss) from Operations $ 1,115,410 $ (11,639,966 ) $ (5,665,374 ) $ (16,189,930 ) $ (1,069,712 ) $ (8,685,385 ) $ (661,054 ) $ (10,416,151 ) As of September 30, 2020 As of December 31, 2019 Gaming & E-sports Corporate (2) TOTAL Gaming & E-sports Corporate (2) TOTAL Total Assets $ 36,673,898 $ 27,470,708 $ 1,142,267 $ 65,286,873 $ 39,290,001 $ 28,852,158 $ 3,178,915 $ 71,321,074 (1) Unallocated corporate operating losses result from general corporate overhead expenses not directly attributable to any one of the business segments. These expenses are reported separate from the Company’s identified segments and are included are included in total operating costs and expenses on the accompanying condensed consolidated statements of operations and comprehensive loss. (2) Unallocated corporate assets not directly attributable to any one of the business segments. One customer of the Gaming and Entertainment segment accounted for 14% and 16%, respectively, of that segment’s revenues and during the three and nine months ended September 30, 2020, respectively, and accounted for 13% and 14% of total Company revenues during the three and nine months ended September 30, 2020, respectively. There were no customer concentrations greater than 10% for the Gaming and Entertainment segment for the three and nine months ended September 30, 2019. One customer of the Esports segment account for 18% and 14% of that segments revenues during the three and nine months ended September 30, 2020. There were no customer concentrations for the E-Sports segment during the three and nine months ended September 30, 2019. During the nine months ended September 30, 2020, 10% of the Gaming and Entertainment revenues were from foreign sources. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 11 – Commitments and Contingencies Litigations, Claims, and Assessments The Company is involved in various disputes, claims, liens, and litigation matters arising out of the normal course of business. While the outcome of these disputes, claims, liens and litigation matters cannot be predicted with certainty, after consulting with legal counsel, management does not believe that the outcome of these matters will have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. On March 23, 2020, an employee of Allied Esports filed a claim in Los Angeles Superior Court alleging various employment misconduct against Allied Esports, the Company and an officer of the Company in connection with a competition hosted by Allied Esports. The claim alleged damages in excess of $3.1 million. The parties agreed to a mediation and all claims asserted against the Company by the employee for were settled on September 10, 2020 for an amount significantly less than the original claim. The matter is now closed. Operating Leases The Company’s aggregate rent expense incurred was $650,438 and $711,302 during the three months ended September 30, 2020 and 2019, respectively, and was $2,113,909 and $2,079,801 during the nine months ended September 30, 2020 and 2019, respectively. Of the aggregate rent incurred during the three months ended September 30, 2020 and 2019, $96,278 and $96,278, respectively, was capitalized into deferred production costs, $353,887 and $448,861, respectively, was included within in-person cost of revenues, and $200,273 and $166,163, respectively, was included within general administrative expenses on the condensed consolidated statements of operations. During the nine months ended September 30, 2020, the Company received a rent abatement in the amount of $91,667 and rent deferrals totaling $250,000 due to the impact of the COVID-19 pandemic. Of the aggregate rent incurred during the nine months ended September 30, 2020 and 2019, $288,835 and $288,835, respectively, was capitalized into deferred production costs, $1,068,440 and $1,073,864, respectively, was included within in-person cost of revenues, and $756,634 and $717,102, respectively, was included within general administrative expenses on the condensed consolidated statements of operations. Investment Agreements TV Azteca Agreement In June 2019, the Company entered into an exclusive ten-year strategic investment and revenue sharing agreement (the “TV Azteca Agreement”) with TV Azteca, in order to expand the Allied Esports brand into Mexico. Pursuant to the terms of the TV Azteca Agreement, as amended, TV Azteca purchased 742,692 shares of AESE common stock for $5,000,000 (the “Purchased Shares”). In connection with the TV Azteca Agreement, AESE will provide $7,000,000 to be used for various strategic initiatives including digital channel development, facility and flagship construction in Mexico, co-production of Spanish language content, platform localization, and marketing initiatives. The Company will be entitled to various revenues generated from the investment. As of September 30, 2020, the Company has paid $5,000,000. On July 20, 2020, the Company entered into an Amendment to TV Azteca Agreement (the “Azteca Amendment). The Azteca Amendment provides that, subject to the approval of the terms of the Azteca Amendment by the Company’s Board of Directors: (i) TV Azteca waives the Company’s obligations under the Term Sheet to pay TV Azteca $1,000,000 on each of March 1, 2021 and March 1, 2022 for various strategic initiatives, and to further invest in and develop an esports platform for the Mexican market; (ii) the Company waives the 24-month lock-up that prohibits TV Azteca from selling or transferring the 763,904 shares of Company common stock TV Azteca purchased pursuant to the Share Purchase Agreement (the “Purchased Shares”); (iii) TV Azteca may sell the Purchased Shares in compliance with applicable securities laws, subject to selling at a reasonable market price and subject to a daily volume cap not to exceed 25% of the Company’s total daily Nasdaq trading volume; and (iv) if TV Azteca sells all of the Purchased Shares within a three-month period following the Company’s Board of Directors approval of the Azteca Amendment, for gross proceeds of less than $1,600,000, then on March 1, 2021, the Company shall contribute additional capital to the parties’ strategic alliance pursuant to the Term Sheet in an amount equal to such shortage. Simon Agreement In June 2019, the Company entered into an agreement (the “Simon Agreement”) with Simon Equity Development, LLC (“Simon”), a shareholder of the Company, pursuant to which Allied Esports would conduct a series of mobile esports gaming tournaments and events at selected Simon shopping malls and online called the Simon Cup, in each of 2019, 2020 and 2021, and would also develop esports and gaming venues at certain Simon shopping malls in the U.S. In connection with the Simon Agreement, AESE placed $4,950,000 of cash into an escrow account to be utilized for various strategic initiatives including the build-out of branded esports facilities at Simon malls, and esports event programs. On October 22, 2019, $1,300,000 was released from escrow in order to fund expenses incurred in connection with the 2019 Simon Cup. As of December 31, 2019, the balance in the escrow account was $3,650,000, which is shown as restricted cash on the accompanying condensed consolidated balance sheet. The Simon Agreement and the related Escrow Agreement, as amended, permitted Simon to request the return of any funds remaining in escrow if the parties did not agree on the 2020 spending plan by March 8, 2020. On March 18, 2020, as the COVID-19 pandemic accelerated in the United States, Simon notified the escrow agent that the parties had not agreed on a 2020 spending plan and requested the return of the remaining funds in the escrow account. The escrow agent returned the remaining $3,650,000 to Simon on March 26, 2020. During the three months and nine months ended September 30, 2020, the Company recorded $0 and $3,650,000, respectively, of stock-based compensation related to the return of cash held in escrow, which is reflected in stock-based compensation expense on the accompanying condensed consolidated statements of operations and comprehensive loss. The COVID-19 pandemic has delayed indefinitely the parties’ ability to plan and budget for the 2020 and 2021 esports programming and esports venues. The parties have agreed to extend the due date under the applicable agreements from March 8, 2020 to January 31, 2021, in order to continue to develop and budget for the annual esports program and esports venues in future years once the COVID-19 pandemic has ended. Brookfield Partnership On January 14, 2020, the Company issued 758,725 shares of its common stock to BPR Cumulus LLC, an affiliate of Brookfield Property Partners (“Brookfield”) in exchange for $5,000,000 (the “Purchase Price”) pursuant to a Share Purchase Agreement (the “Brookfield Agreement”). The Purchase Price was placed into escrow and is to be used by the Company or its subsidiaries to develop integrated esports experience venues at mutually agreed upon shopping malls owned and/or operated by Brookfield or any of its affiliates (each, an “Investor Mall”), that will include a dedicated gaming space and production capabilities to attract and to activate esports and other emerging live events (each, an “Esports Venue”). To that end, half of the Purchase Price will be released from escrow to the Company upon the execution of a written lease agreement between Brookfield and the Company for the first Esports Venue, and the other half will be released to the Company upon the execution of a written lease agreement between Brookfield and the Company for the second Esports Venue. Further, pursuant to the Brookfield Agreement, the Company must create, produce, and execute three (3) esports events during each calendar year 2020, 2021 and 2022 that will include the Company’s esports truck at one or more Investor Malls at mutually agreed times. The balance held in escrow as of September 30, 2020 is $5,000,000 and is reflected in restricted cash on the accompanying condensed consolidated balance sheet. Amendments to Employment Agreements On April 24, 2020, the employment agreement between the Company and the Chief Executive Officer of WPT (the “WPT CEO”) was amended such that effective as of May 1, 2020, the WPT CEO annual salary will be reduced by 10% to approximately $377,000 for a six-month period, and thereafter his full annual salary will be restored. On April 24, 2020, the employment agreement (the “CEO Agreement”) between the Company and its Chief Executive Officer (the “CEO”), was amended such that effective May 1, 2020, the CEO’s annual salary will be reduced by 80% to $60,000 for a six-month period. On September 30, 2020, the CEO Agreement was further amended such that effective November 1, 2020, the CEO’s annual salary will be $210,000 for a six month period, and thereafter the initial annual base salary of $300,000 set forth in the CEO Agreement will be restored. |
Stockholders_ Equity
Stockholders’ Equity | 9 Months Ended |
Sep. 30, 2020 | |
Stockholders' Equity Note [Abstract] | |
Stockholders’ Equity | Note 12 – Stockholders’ Equity Amendment to Company Charter On July 27, 2020, the Company filed an Amendment to its Second Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to increase the number of shares of common stock currently authorized by the Certificate by 10,000,000 shares, from 65,000,000 shares to 75,000,000 shares. Put Option Agreement and Exercise On February 25, 2020 (the “Effective Date”), the Company entered into a Put Option Agreement (the “Agreement”) with the Chairman of the Company’s Board of Director (the “Chairman”), pursuant to which the Company has an option in its discretion, to sell shares of its common stock (the “Option Shares”) to the Chairman for aggregate gross proceeds of up to $2.0 million, at a purchase price of $1.963 per Option Share, subject to the following limitations: a) The total number of shares that may be issued under the Agreement will be limited to 19.99% of the Company’s outstanding shares on the date the Agreement is signed (the “Exchange Cap”), unless stockholder approval is obtained to issue shares in excess of the Exchange Cap; b) The Company may not issue and the Chairman may not purchase Option Shares to the extent that such issuance would result in the Chairman and his affiliates beneficially owning more than 19.99% of the then issued and outstanding shares of the Company’s common stock unless (i) such ownership would not be the largest ownership position in the Company, or (ii) stockholder approval is obtained for ownership in excess of 19.99%; c) The Company may not issue, and the Chairman may not purchase any Option Shares if such issuance and purchase would be considered equity compensation under the rules of The Nasdaq Stock Market unless stockholder approval is obtained for such issuance; and d) Option Shares are subject to a six-month lock-up period whereby they cannot be sold or transferred. On March 9, 2020, the Company provided notice to the Chairman that it had elected to exercise the Put Option to sell 1,018,848 Option Shares at a purchase price of $1.963 per share for total proceeds of $2,000,000, which was recorded as subscription receivable and common stock subscribed on the accompanying condensed consolidated balance sheet. The Option Shares were not deemed to be issued until the closing of the sale of the Option Shares on May 15, 2020. On September 29, 2020, the Company received proceeds of $21,875 from the Chairman, representing the disgorgement of short swing profits realized from the sale of shares. Stock Options A summary of the option activity during the nine months ended September 30, 2020 is presented below: Weighted Weighted Average Average Number of Exercise Remaining Intrinsic Options Price Term (Yrs) Value Outstanding, January 1, 2020 2,480,000 $ 4.34 9.86 $ - Granted 200,000 2.15 Exercised - - Expired - - Forfeited (250,000 ) 4.47 Outstanding, September 30, 2020 2,430,000 $ 4.15 9.15 $ - Exercisable, September 30, 2020 100,000 $ 5.66 2.38 $ - Options outstanding and exercisable as of September 30, 2020 are as follows: Options Outstanding Options Exercisable Weighted Outstanding Average Exercisable Exercise Number of Remaining Life Number of Price Options In Years Options $ 2.11 80,000 - - $ 2.17 120,000 - - $ 4.09 1,890,000 - - $ 5.66 340,000 2.38 100,000 2,430,000 100,000 Effective June 30, 2020 two of the Company’s directors (the “Resigning Members”) resigned from their positions as members of the Company’s Board of Directors. Options for the purchase of an aggregate of 20,000 shares of common stock, with a grant date value of $43,356, held by the Resigning Directors were modified such that the options will be fully vested on September 20, 2020 and will be exercisable through September 20, 2029. The Company recorded $8,386 of incremental stock-based compensation expense as a result of the option modification during the three and nine months ended September 30, 2020. On August 7, 2020, the Company’s Board approved, in connection with its general counsel’s transition to a part-time employee, the Company’s waiver of any forfeiture of non-vested options in connection with such transition and termination of employment scheduled for February 2021, such that the options for the purchase of 170,000 shares of common stock (grant date value of $266,733) held by the Company’s general counsel will continue to vest according to their original vesting schedules and will expire ninety days after November 21, 2023. The incremental value of the modified option award of $64,093, along with the unamortized portion of the original award, will be amortized through the termination date in February 2021. The option grants described below were issued from the Company’s 2019 Stock Incentive Plan (“Incentive Plan”). On July 1, 2020, the Company issued ten-year options for the purchase of 80,000 shares of common stock, with a grant date value of $61,186, to two directors of the Company. The options are exercisable at $2.11 per share and have a 4-year vesting term, with 25% vesting on each anniversary of the date of grant. On August 6, 2020, the Company issued ten-year options for the purchase of 120,000 shares of common stock, with an aggregate grant date value of $97,947 to WPT’s general counsel. The options are exercisable at $2.17 per share and have a 4-year vesting term with 25% vesting on each anniversary of the date of grant. The grant date value of options granted during the three and nine months ended September 30, 2020 were calculated using the Black-Scholes option pricing model, with the following assumptions used: Risk free interest rate 0.55% – 0.69 % Expected term (years) 6.25 Expected volatility 38 % Expected dividends 0.00 % The expected term used for options is the estimated period of time that options granted are expected to be outstanding. The Company utilizes the “simplified” method to develop an estimate of the expected term of “plain vanilla” option grants. The Company is utilizing an expected volatility figure based on a review of the historical volatilities, over a period of time, equivalent to the expected life of the instrument being valued, of similarly positioned public companies within its industry. The risk-free interest rate was determined from the implied yields from U.S. Treasury zero-coupon bonds with a remaining term consistent with the expected term of the instrument being valued. During the three and nine months ended September 30, 2020, the Company recorded stock-based compensation expense related to stock options issued as compensation of $312,117 and $766,279 respectively, and during the three and nine months ended September 30, 2019, the Company recorded $5,940 and $5,940, respectively. As of September 30, 2020, there was $2,789,317 of unrecognized stock-based compensation expense related to the stock options that will be recognized over the weighted average remaining vesting period of 3.2 years. Common Stock and Restricted Common Stock A summary of the non-vested restricted common stock activity during the nine months ended September 30, 2020 is presented below: Number of Weighted Non-vested balance, January 1, 2020 80,393 $ 5.66 Granted 199,143 2.02 Vested (80,393 ) 5.66 Forfeited - - Non-vested balance, September 30, 2020 199,143 $ 2.02 The stock grants described below were issued from the Company’s Incentive Plan. On July 1, 2020, the Company issued 18,958 shares of restricted common stock with a grant date value $40,000 to two directors of the Company. The restricted common stock remains subject to transfer and forfeiture restrictions until the shares vest on the one-year anniversary of the date of grant. On August 7, 2020, the Company issued 50,000 shares of its common stock and 50,000 shares of restricted common stock, with an aggregate grant date value of $218,000 to its Chief Financial Officer (“CFO”). The 50,000 shares of restricted common stock have transfer and forfeiture restrictions until the shares vest in two equal installments on August 18, 2021 and August 18, 2022. On August 7, 2020, the Company issued 217,999 shares of common stock with a grant date value of $474,000 to certain officers and employees of the Company, in satisfaction of bonus obligations incurred in previous years, which were included in accrued expenses as of December 31, 2019. On August 7, 2020, the Company issued 94,471 shares of restricted common stock with a grant date value $205,000 to certain officers and directors. The restricted common stock remains subject to transfer and forfeiture restrictions until the shares vest on the one-year anniversary of the date of grant. On September 24, 2020, the Company issued 35,714 shares of restricted common stock with a grant date value of $50,000 to its CFO. The restricted common stock remains subject to transfer and forfeiture restrictions until the shares vest in two equal installments on August 18, 2021 and August 18, 2022. On September 24, 2020, the Company issued 14,286 shares of common stock to the Chairman of the Board of Directors. The common stock was immediately vested with no restrictions and had grant date value of $20,000. The Company recorded stock-based compensation expense of $265,050 and $496,334, during the three and nine months ended September 30, 2020 respectively, and recorded stock-based compensation of $12,467, during the three and nine months ended September 30, 2019, respectively, related to restricted stock issued as compensation. As of September 30, 2020, there was $364,487 of unrecognized stock-based compensation expense related to restricted stock that will be recognized over the weighted average remaining vesting period of 1.2 years. Warrants A summary of warrant activity during the nine months ended September 30, 2020 is presented below: Number of Weighted Weighted Intrinsic Outstanding, January 1, 2020 18,637,003 $ 11.50 4.6 $ - Issued 1,454,546 4.13 Exercised - - Cancelled - - Outstanding, September 30, 2020 20,091,549 $ 10.97 3.9 $ - Exercisable, September 30, 2020 20,091,549 $ 10.97 3.9 $ - Warrants outstanding and exercisable as of September 30, 2020 are as follows: Warrants Outstanding Warrants Exercisable Exercise Price Exercisable Into Outstanding Weighted Exercisable $ 11.50 Common Stock 18,637,003 3.9 18,637,003 $ 4.13 Common Stock 1,454,546 4.7 1,454,546 20,091,549 20,091,549 On June 8, 2020, the Company issued five-year warrants to purchase 1,454,546 shares of common stock (the “Warrant Shares”) at an exercise price of $4.125 per share, in connection with the issuance of Senior Notes (see Note 7 – Convertible Debt and Convertible Debt, Related Party). The warrants could be exercised on a cashless basis if there was no effective registration statement registering the Warrant Shares at the time of exercise. The registration of the Warrant Shares became effective on July 31, 2020. The Company computed the fair value of the warrants using a Black-Scholes option pricing model using the following assumptions: expected volatility of 45%, risk-free rate of 0.45%, expected term of 5 years, and expected dividends of 0.00%. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 13 – Subsequent Events From October 1, 2020 through November 2, 2020, the Company issued 1,070,091 shares of its common stock, as Monthly Redemption Payments in the aggregate amount of $1,020,364 on the Senior Notes, and 2,050,778 shares of its common stock, as accelerated Monthly Redemption Payments in the aggregate amount of $2,024,727. On October 30, 2020, ESALV entered into an Assent Agreement to Labor Agreement (the “Assent Agreement”) with the International Alliance of Theatrical Stage Employees, Moving Pictures Technicians, Artists and Allied Crafts of the United States, its Territories and Canada, and Local 720, Las Vegas, Nevada (together, the “Union”), pursuant to which ESALV agreed that the Union would be the exclusive bargaining representative for all stagehand employees, audio visual technicians, wardrobe technicians, wardrobe dressers, and working lead persons employed by ESALV and working at Allied Esports’ flagship arena at the Luxor Hotel and Casino in Las Vegas, Nevada. The Assent Agreement provides for carveouts from the agreement in connection with third party customers or clients (including the World Poker Tour) producing events at the arena, and in connection with certain ESALV-produced events at the arena utilizing up to a maximum of six (6) regular employees of the Allied Esports group. On November 4, 2020, the Company filed with the Delaware Secretary of State an amendment (the “Amendment”) to its Second Amended and Restated Certificate of Incorporation to increase the total number of authorized shares of its common stock from 75,000,000 shares to 100,000,000 shares. On November 5, 2020, Allied Esports entered into an amendment of its lease of event space in Las Vegas Nevada (the “Amended Las Vegas Lease”), pursuant to which (i) the monthly rent to be paid for the period from June 25 through December 31, 2020 (the “Rent Relief Period) was reduced to an amount equal to 20% of gross sales (excluding food sales) at the event space (the “Percentage Rent”), (ii) the initial term of the lease was extended for two additional months until May 31, 2023, and (iii) the option period to extend the lease was extended to between April 1, 2022 and September 30, 2022. Pursuant to the Amended Las Vegas Lease, if the aggregate Percentage Rent during the Rent Relief Period is less than $194,000, Allied Esports must pay the shortfall no later than December 31, 2021. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information. Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for annual consolidated financial statements. For additional information, these condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements of and notes thereto included in the Company’s amended annual report on Form 10-K/A filed with the Securities and Exchange Commission (“SEC”) on March 17, 2020. In the opinion of management, the accompanying condensed consolidated financial statements include all adjustments which are considered necessary for a fair presentation of the unaudited condensed consolidated financial statements of the Company as of September 30, 2020 and for the three and nine months ended September 30, 2020 and 2019. The results of operations for the three and nine months ended September 30, 2020 are not necessarily indicative of the operating results for the full year ending December 31, 2020 or any other period. These unaudited condensed consolidated financial statements have been derived from the accounting records of AESE, WPT and Allied Esports and should be read in conjunction with the accompanying notes thereto. |
Net Loss per Common Share | Net Loss per Common Share Basic loss per common share is computed by dividing net loss attributable to AESE common stockholders by the weighted average number of common shares outstanding during the period. Diluted loss per common share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding, plus the impact of common shares, if dilutive, resulting from the exercise of outstanding stock options and warrants and the conversion of convertible instruments. The following securities are excluded from the calculation of weighted average dilutive common shares because their inclusion would have been anti-dilutive: September 30, 2020 2019 Restricted common shares 199,143 80,393 Options 2,430,000 400,000 Warrants 20,091,549 18,637,003 Convertible debt 3,609,839 (1) 1,647,058 Unit purchase options 600,000 600,000 Contingent consideration shares 269,231 - 27,199,762 21,364,454 (1) Common stock equivalents associated with convertible debt were calculated based on the fixed conversion price in effect for voluntary holder conversions; however for certain convertible notes there is a variable conversion price in effect under certain scenarios that is equal to 87% of lowest daily volume weighted average price over the prior ten days, subject to a $0.734 floor price. If the applicable convertible note principal and guaranteed interest were all converted at the floor price, the potentially dilutive shares related to convertible debt would be 15,406,956 shares. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue primarily from the following sources: In-person revenue The Company’s in-person revenue is comprised of event revenue, sponsorship revenue, merchandising revenue, and other revenue. Event revenue is generated through World Poker Tour events – TV, non-TV, and DeepStacks Entertainment, LLC and DeepStacks Poker Tour, LLC (collectively “DeepStacks”) events – held at the Company’s partner casinos as well as Allied Esports events held at the Company’s esports properties. Event revenues recognized from the rental of the Allied Esports arena and gaming trucks are recognized at a point in time when the event occurs. In-person revenue also includes revenue from ticket sales, admission fees and food and beverage sales for events held at the Company’s esports properties. Ticket revenue is recognized at the completion of the applicable event. Point of sale revenues, such as food and beverage, gaming, and merchandising revenues, are recognized when control of the related goods are transferred to the customer. The Company also generates sponsorship revenues for naming rights for, and rental of, the Company’s arena and gaming trucks. Sponsorship revenues from naming rights of the Company’s esports arena and from sponsorship arrangements are recognized on a straight-line basis over the contractual term of the agreement. The Company records deferred revenue to the extent that payment has been received for services that have yet to be performed. In-person revenue was comprised of the following for the three and nine months ended September 30, 2020 and 2019: For the Three Months Ended For the Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Event revenue $ 227,247 $ 1,582,749 $ 1,839,365 $ 5,752,880 Sponsorship revenue 314,924 411,903 1,305,014 1,091,718 Food and beverage revenue 34,427 290,408 266,726 976,313 Ticket and gaming revenue 118,996 250,955 270,247 587,727 Merchandising revenue 678 50,950 19,065 145,273 Other revenue 618 - 722 119 Total in-person revenue $ 696,890 $ 2,586,965 $ 3,701,139 $ 8,554,030 Multiplatform content revenue The Company’s multiplatform content revenue is comprised of distribution revenue, sponsorship revenue, music royalty revenue, online advertising revenue and content revenue. Distribution revenue is generated primarily through the distribution of content from World Poker Tour’s library. World Poker Tour provides video content to global television networks, who then have the right to air the content and place advertisements on the content during the related license period. Revenue from the distribution of video content to television networks is received pursuant to the contract payment terms and is recognized at the point in time that advertisements are aired on the WPT content. Occasionally, WPT will bundle third-party content with its own content in a distribution arrangement and will share the revenue with the third party; however, the revenues related to third party content are de minimis. The Company recognizes distribution revenue pursuant to the terms of each individual contract with the customer and records deferred revenue to the extent the Company has received a payment for services that have yet to be performed or products that have yet to be delivered. The Company also distributes video content to online channels. Both the global television networks and the online channels place ads within the WPT content and any advertising revenue earned by the global TV network or online channel is shared with WPT. The Company recognizes online advertising revenue at the point in time when the advertisements are placed in the video content. Sponsorship revenue is generated through the sponsorship of the Company’s TV content, live and online events and online streams. Online advertising revenue is generated from third-party advertisements placed on the Company’s website. Music royalty revenue is generated when the Company’s music is played in the Company’s TV series, both on TV networks and online. The Company recognizes sponsorship revenue pursuant to the terms of each individual contract when the Company satisfies the respective performance obligations, which could be recognized at a point in time or over the term of the contract. The Company records deferred revenue to the extent the Company has received a payment for services that have yet to be performed or products that have yet to be delivered. Music royalty revenue is recognized at the point in time when the music is played. Multiplatform content revenue was comprised of the following for the three and nine months ended September 30, 2020 and 2019: For the Three Months Ended For the Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Distribution revenue $ 611,370 $ 282,508 $ 1,471,263 $ 1,069,328 Sponsorship revenue 370,597 544,541 1,154,267 1,585,467 Music royalty revenue 278,610 200,787 553,198 1,214,286 Online advertising revenue 3,769 3,547 7,766 4,628 Total multiplatform revenue $ 1,264,346 $ 1,031,383 $ 3,186,494 $ 3,873,709 Interactive revenue The Company’s interactive revenue is primarily comprised of subscription revenue, licensing, social gaming, and virtual product revenue. Subscription revenue is generated through fixed rate (monthly, quarterly, and annual) subscriptions which offer the opportunity for subscribers to play unlimited poker and access benefits not available to non-subscribers. The Company recognizes subscription revenue on a straight-line basis and records deferred revenue to the extent the Company receives payments for services that have yet to be provided. Social gaming revenue arises from the sale of online tokens and other online purchases on the Company’s social gaming website and is recognized at the point the product is delivered. Virtual product revenue is generated from the licensing of the Company’s various brands to be used on the customers’ virtual product and social gaming platforms and is recognized over the term of the contractual agreement. The Company generates licensing revenue by licensing the right to use the Company’s brands on products to third parties. Licensing revenue is recognized pursuant to the terms of each individual contract with the customer and is recognized over the term of the contractual agreement. Deferred revenue is recorded to the extent the Company has received a payment for products that have yet to be delivered. Interactive revenue was comprised of the following for the three and nine months ended September 30, 2020 and 2019: For the Three Months Ended For the Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Subscription revenue $ 2,511,958 $ 1,313,218 $ 5,599,687 $ 3,745,623 Virtual product revenue 975,411 925,411 2,880,478 2,773,769 Social gaming revenue 411,297 152,317 1,043,268 397,065 Licensing revenue 11,188 16,872 68,461 198,481 Other revenue 17,212 15,376 36,115 72,259 Total interactive revenue $ 3,927,066 $ 2,423,193 $ 9,628,009 $ 7,187,196 The following table summarizes our revenue recognized under ASC 606 in our condensed consolidated statements of operations and comprehensive loss: For the Three Months Ended For the Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Revenues Recognized at a Point in Time: Event revenue $ 227,247 $ 1,582,749 $ 1,839,365 $ 5,752,880 Distribution revenue 611,370 282,508 1,471,263 1,069,328 Social gaming revenue 411,297 152,317 1,043,268 397,065 Food and beverage revenue 34,427 290,408 266,726 976,313 Sponsorship revenue 23,890 123,407 69,350 408,873 Ticket and gaming revenue 118,996 250,955 270,247 587,727 Merchandising revenue 678 50,950 19,065 145,273 Music royalty revenue 278,610 200,787 553,198 1,214,286 Online advertising revenue 3,769 3,547 7,766 4,628 Other revenue 17,830 15,376 36,837 72,378 Total Revenues Recognized at a Point in Time 1,728,114 2,953,004 5,577,085 10,628,751 Revenues Recognized Over a Period of Time: Subscription revenue 2,511,958 1,313,218 5,599,687 3,745,623 Virtual product revenue 975,411 925,411 2,880,478 2,773,769 Sponsorship revenue 661,631 833,037 2,389,931 2,268,312 Licensing revenue 11,188 16,872 68,461 198,481 Total Revenues Recognized Over a Period of Time 4,160,188 3,088,537 10,938,557 8,986,184 Total Revenues $ 5,888,302 $ 6,041,541 $ 16,515,642 $ 19,614,935 The timing of the Company’s revenue recognition may differ from the timing of payment by its customers. A receivable is recorded when revenue is recognized prior to payment and the Company has an unconditional right to payment. Alternatively, when payment precedes the provision of the related services, the Company records deferred revenue until the performance obligations are satisfied. As of September 30, 2020, there remained approximately $622,000 of contract liabilities which were included within deferred revenue on the consolidated balance sheet as of December 31, 2019, and for which performance obligations had not yet been satisfied as of September 30, 2020. The Company expects to satisfy its remaining performance obligations within the next twelve months. |
Advertising Costs | Advertising Costs The Company expenses advertising and marketing costs as they are incurred. Marketing and advertising expense was $17,343 and $133,103 during the three and nine months ended September 30, 2020 and $59,698 and $245,259 during the three and nine months ended September 30, 2019, respectively. |
Foreign Currency Translation | Foreign Currency Translation The Company’s reporting currency is the United States Dollar. The functional currencies of the Company’s operating subsidiaries are their local currencies (United States Dollar and Euro). Euro-denominated assets and liabilities are translated into the United States Dollar using the exchange rate at the balance sheet date and revenue and expense accounts are translated using the weighted average exchange rate in effect for the period. Resulting translation adjustments are made directly to accumulated other comprehensive (loss) income. Gains (losses) arising from exchange rate fluctuations on transactions denominated in a currency other than the reporting currency were $5,124 and $3,868 during the three and nine months ended September 30, 2020, respectively, and $(3,651) and $(3,563) during the three and nine months ended September 30, 2019, respectively, and are recognized in operating results in the condensed consolidated statements of operations. The Euro to United States Dollar exchange rate was $1.1724 and $1.1215 at September 30, 2020 and December 31, 2019, respectively. The Company engages in foreign currency denominated transactions with customers and suppliers, as well as between subsidiaries with different functional currencies. |
Reclassification | Reclassifications Certain prior period balances have been reclassified in order to conform to the current year presentation. These reclassifications have no effect on previously reported results of operations or loss per share. |
CARES Act | CARES Act On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”). The CARES Act, amongst other things, includes provisions relating to refundable payroll tax credits, deferment of employer social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property. Pursuant to Accounting Standards Codification Topic (“ASC 740”), the Company recognizes the tax effects of new tax legislation upon enactment. Accordingly, the CARES Act is effective beginning in the quarter ended March 31, 2020. The Company does not believe that the new tax provisions outlined in the CARES Act will have a material impact on the Company’s consolidated financial statements. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, “Leases (Topic 842)” (“ASU 2016-02”). ASU 2016-02 requires that a lessee recognize the assets and liabilities that arise from operating leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. This amendment will be effective for private companies and emerging growth companies for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. The FASB issued ASU No. 2018-10 “Codification Improvements to Topic 842, Leases” and ASU No. 2018-11 “Leases (Topic 842) Targeted Improvements” in July 2018 (“ASU 2018-10” and “ASU 2018-11”), and ASU No. 2018-20 “Leases (Topic 842) - Narrow Scope Improvements for Lessors” in December 2018 (“ASU 2018-20”). ASU 2018-10 and ASU 2018-20 provide certain amendments that affect narrow aspects of the guidance issued in ASU 2016-02. ASU 2018-11 allows all entities adopting ASU 2016-02 to choose an additional (and optional) transition method of adoption, under which an entity initially applies the new leases standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company is currently evaluating the impact that this guidance will have on its consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The new guidance simplifies the accounting for goodwill impairment by eliminating Step 2 of the goodwill impairment test. Under current guidance, Step 2 of the goodwill impairment test requires entities to calculate the implied fair value of goodwill in the same manner as the amount of goodwill recognized in a business combination by assigning the fair value of a reporting unit to all of the assets and liabilities of the reporting unit. The carrying value in excess of the implied fair value is recognized as goodwill impairment. Under the new standard, goodwill impairment is recognized based on Step 1 of the current guidance, which calculates the carrying value in excess of the reporting unit’s fair value. This standard was adopted on January 1, 2020 and did not have a material impact on the Company’s consolidated financial statements or disclosures. In July 2018, the FASB issued ASU No. 2018-09, “Codification Improvements” (“ASU 2018-09”). These amendments provide clarifications and corrections to certain ASC subtopics including the following: Income Statement - Reporting Comprehensive Income – Overall (Topic 220-10), Debt - Modifications and Extinguishments (Topic 470-50), Distinguishing Liabilities from Equity – Overall (Topic 480-10), Compensation - Stock Compensation - Income Taxes (Topic 718-740), Business Combinations – Income Taxes (Topic 805-740), Derivatives and Hedging – Overall (Topic 815-10), and Fair Value Measurement – Overall (Topic 820-10). The majority of the amendments in ASU 2018-09 will be effective in annual periods beginning after December 15, 2019. This standard was adopted on January 1, 2020 and did not have a material impact on the Company’s consolidated financial statements or disclosures. In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”). The amendments in ASU 2018-13 modify the disclosure requirements associated with fair value measurements based on the concepts in the Concepts Statement, including the consideration of costs and benefits. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. The amendments are effective for all entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. This standard was adopted on January 1, 2020 and did not have a material impact on the Company’s consolidated financial statements or disclosures. In February 2020, the FASB issued ASU No. 2020-02, Financial Instruments - Credit Losses (Topic 326) and Leases (Topic 842) – Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date (“ASU 2020-02”) which provides clarifying guidance and minor updates to ASU No. 2016-13 – Financial Instruments – Credit Loss (Topic 326) (“ASU 2016-13”) and related to ASU No. 2016-02 - Leases (Topic 842). ASU 2020-02 amends the effective date of ASU 2016-13, such that ASU 2016-13 and its amendments will be effective for the Company for interim and annual periods in fiscal years beginning after December 15, 2022. The adoption of ASU 2016-13 is not expected to have a material impact on the Company’s consolidated financial statements or disclosures. In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, to clarify the accounting for certain financial instruments with characteristics of liabilities and equity. The amendments in this update reduce the number of accounting models for convertible debt instruments and convertible preferred stock by removing the cash conversion model and the beneficial conversion feature model. Limiting the accounting models will result in fewer embedded conversion features being separately recognized from the host contract. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting and (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in-capital. In addition, this ASU improves disclosure requirements for convertible instruments and earnings-per-share guidance. The ASU also revises the derivative scope exception guidance to reduce form-over-substance-based accounting conclusions driven by remote contingent events. The amendments in this update are effective for the Company in fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption will be permitted, but no earlier than for fiscal years beginning after December 15, 2020. The Company is currently evaluating the impact that this guidance will have on its consolidated financial statements. |
Significant Accounting Polici_2
Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Significant Accounting Policies (Tables) [Line Items] | |
Schedule of antidiluted shares | September 30, 2020 2019 Restricted common shares 199,143 80,393 Options 2,430,000 400,000 Warrants 20,091,549 18,637,003 Convertible debt 3,609,839 (1) 1,647,058 Unit purchase options 600,000 600,000 Contingent consideration shares 269,231 - 27,199,762 21,364,454 (1) Common stock equivalents associated with convertible debt were calculated based on the fixed conversion price in effect for voluntary holder conversions; however for certain convertible notes there is a variable conversion price in effect under certain scenarios that is equal to 87% of lowest daily volume weighted average price over the prior ten days, subject to a $0.734 floor price. If the applicable convertible note principal and guaranteed interest were all converted at the floor price, the potentially dilutive shares related to convertible debt would be 15,406,956 shares. |
In-person [Member] | |
Significant Accounting Policies (Tables) [Line Items] | |
Schedule of revenue recognition | For the Three Months Ended For the Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Event revenue $ 227,247 $ 1,582,749 $ 1,839,365 $ 5,752,880 Sponsorship revenue 314,924 411,903 1,305,014 1,091,718 Food and beverage revenue 34,427 290,408 266,726 976,313 Ticket and gaming revenue 118,996 250,955 270,247 587,727 Merchandising revenue 678 50,950 19,065 145,273 Other revenue 618 - 722 119 Total in-person revenue $ 696,890 $ 2,586,965 $ 3,701,139 $ 8,554,030 |
Multiplatform Content [Member] | |
Significant Accounting Policies (Tables) [Line Items] | |
Schedule of revenue recognition | For the Three Months Ended For the Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Distribution revenue $ 611,370 $ 282,508 $ 1,471,263 $ 1,069,328 Sponsorship revenue 370,597 544,541 1,154,267 1,585,467 Music royalty revenue 278,610 200,787 553,198 1,214,286 Online advertising revenue 3,769 3,547 7,766 4,628 Total multiplatform revenue $ 1,264,346 $ 1,031,383 $ 3,186,494 $ 3,873,709 |
Interactive Product [Member] | |
Significant Accounting Policies (Tables) [Line Items] | |
Schedule of revenue recognition | For the Three Months Ended For the Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Subscription revenue $ 2,511,958 $ 1,313,218 $ 5,599,687 $ 3,745,623 Virtual product revenue 975,411 925,411 2,880,478 2,773,769 Social gaming revenue 411,297 152,317 1,043,268 397,065 Licensing revenue 11,188 16,872 68,461 198,481 Other revenue 17,212 15,376 36,115 72,259 Total interactive revenue $ 3,927,066 $ 2,423,193 $ 9,628,009 $ 7,187,196 |
Adjustment under 606 [Member] | |
Significant Accounting Policies (Tables) [Line Items] | |
Schedule of revenue recognition | For the Three Months Ended For the Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Revenues Recognized at a Point in Time: Event revenue $ 227,247 $ 1,582,749 $ 1,839,365 $ 5,752,880 Distribution revenue 611,370 282,508 1,471,263 1,069,328 Social gaming revenue 411,297 152,317 1,043,268 397,065 Food and beverage revenue 34,427 290,408 266,726 976,313 Sponsorship revenue 23,890 123,407 69,350 408,873 Ticket and gaming revenue 118,996 250,955 270,247 587,727 Merchandising revenue 678 50,950 19,065 145,273 Music royalty revenue 278,610 200,787 553,198 1,214,286 Online advertising revenue 3,769 3,547 7,766 4,628 Other revenue 17,830 15,376 36,837 72,378 Total Revenues Recognized at a Point in Time 1,728,114 2,953,004 5,577,085 10,628,751 Revenues Recognized Over a Period of Time: Subscription revenue 2,511,958 1,313,218 5,599,687 3,745,623 Virtual product revenue 975,411 925,411 2,880,478 2,773,769 Sponsorship revenue 661,631 833,037 2,389,931 2,268,312 Licensing revenue 11,188 16,872 68,461 198,481 Total Revenues Recognized Over a Period of Time 4,160,188 3,088,537 10,938,557 8,986,184 Total Revenues $ 5,888,302 $ 6,041,541 $ 16,515,642 $ 19,614,935 |
Other Assets (Tables)
Other Assets (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Other Assets [Abstract] | |
Schedule of Other Assets | September 30, December 31, 2020 2019 Investment in ESA $ - $ 1,138,631 Investment in TV Azteca 5,000,000 3,500,000 $ 5,000,000 $ 4,638,631 |
Deferred Production Costs (Tabl
Deferred Production Costs (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Deferred Production Costs Disclosure [Abstract] | |
Schedule of Deferred Production Costs | September 30, December 31, 2020 2019 Deferred production costs $ 30,231,418 28,290,200 Less: accumulated amortization (18,785,320 ) (17,327,718 ) Deferred production costs, net $ 11,446,098 $ 10,962,482 Weighted average remaining amortization period at September 30, 2020 (in years) 3.43 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Disclosure Text Block Supplement [Abstract] | |
Schedule of Accrued expenses and other current liabilities | September 30, December 31, 2020 2019 Compensation expense $ 617,471 $ 1,348,066 Payroll tax obligations 118,379 - Rent 987,572 124,969 Interactive costs 465,813 319,833 Event costs 138,915 186,173 Legal and professional fees 459,591 154,799 Production costs 131,158 55,679 Unclaimed player prizes 471,101 342,535 Other accrued expenses 458,398 721,693 Other current liabilities 112,466 369,614 Accrued leasehold improvements - 269,110 $ 3,960,864 $ 3,892,471 |
Convertible Debt and Converti_2
Convertible Debt and Convertible Debt, Related Party (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Convertible Debt And Convertible Debt Related Party [Abstract] | |
Schedule of convertible debt | September 30, 2020 December 31, 2019 Gross Debt Convertible Gross Debt Convertible Convertible bridge notes $ 1,000,000 $ - $ 1,000,000 $ 13,000,000 $ (154,499 ) $ 12,845,501 Convertible bridge notes, related party 1,000,000 - 1,000,000 1,000,000 (11,885 ) 988,115 Senior secured convertible notes 5,672,727 (3,090,022 ) 2,582,705 - - - Total $ 7,672,727 $ (3,090,022 ) $ 4,582,705 $ 14,000,000 $ (166,384 ) $ 13,833,616 |
Segment Data (Tables)
Segment Data (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of segment information | For the Three Months Ended For the Three Months Ended Gaming & E-sports Corporate (1) TOTAL Gaming & E-sports Corporate (1) TOTAL Revenues $ 5,291,419 $ 596,883 $ - $ 5,888,302 $ 4,137,091 $ 1,904,450 $ - $ 6,041,541 Income (Loss) from Operations $ 663,919 $ (1,945,413 ) $ (2,040,432 ) $ (3,321,926 ) $ (172,502 ) $ (2,984,047 ) $ (661,054 ) $ (3,817,603 ) For the Nine Months Ended For the Nine Months Ended Gaming & E-sports Corporate (1) TOTAL Gaming & E-sports Corporate (1) TOTAL Revenues $ 14,240,556 $ 2,275,086 $ - $ 16,515,642 $ 14,022,841 $ 5,592,094 $ - $ 19,614,935 Income (Loss) from Operations $ 1,115,410 $ (11,639,966 ) $ (5,665,374 ) $ (16,189,930 ) $ (1,069,712 ) $ (8,685,385 ) $ (661,054 ) $ (10,416,151 ) |
Schedule of total assets | As of September 30, 2020 As of December 31, 2019 Gaming & E-sports Corporate (2) TOTAL Gaming & E-sports Corporate (2) TOTAL Total Assets $ 36,673,898 $ 27,470,708 $ 1,142,267 $ 65,286,873 $ 39,290,001 $ 28,852,158 $ 3,178,915 $ 71,321,074 (1) Unallocated corporate operating losses result from general corporate overhead expenses not directly attributable to any one of the business segments. These expenses are reported separate from the Company’s identified segments and are included are included in total operating costs and expenses on the accompanying condensed consolidated statements of operations and comprehensive loss. (2) Unallocated corporate assets not directly attributable to any one of the business segments. |
Stockholders_ Equity (Tables)
Stockholders’ Equity (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Stockholders' Equity Note [Abstract] | |
Schedule of fair value of options granted | Weighted Weighted Average Average Number of Exercise Remaining Intrinsic Options Price Term (Yrs) Value Outstanding, January 1, 2020 2,480,000 $ 4.34 9.86 $ - Granted 200,000 2.15 Exercised - - Expired - - Forfeited (250,000 ) 4.47 Outstanding, September 30, 2020 2,430,000 $ 4.15 9.15 $ - Exercisable, September 30, 2020 100,000 $ 5.66 2.38 $ - |
Schedule of options outstanding and exercisable | Options Outstanding Options Exercisable Weighted Outstanding Average Exercisable Exercise Number of Remaining Life Number of Price Options In Years Options $ 2.11 80,000 - - $ 2.17 120,000 - - $ 4.09 1,890,000 - - $ 5.66 340,000 2.38 100,000 2,430,000 100,000 |
Schedule of fair value of options granted | Risk free interest rate 0.55% – 0.69 % Expected term (years) 6.25 Expected volatility 38 % Expected dividends 0.00 % |
Schedule of non-vested restricted stock activity | Number of Weighted Non-vested balance, January 1, 2020 80,393 $ 5.66 Granted 199,143 2.02 Vested (80,393 ) 5.66 Forfeited - - Non-vested balance, September 30, 2020 199,143 $ 2.02 |
Schedule of warrant activity | Number of Weighted Weighted Intrinsic Outstanding, January 1, 2020 18,637,003 $ 11.50 4.6 $ - Issued 1,454,546 4.13 Exercised - - Cancelled - - Outstanding, September 30, 2020 20,091,549 $ 10.97 3.9 $ - Exercisable, September 30, 2020 20,091,549 $ 10.97 3.9 $ - |
Schedule of warrants outstanding and exercisable | Warrants Outstanding Warrants Exercisable Exercise Price Exercisable Into Outstanding Weighted Exercisable $ 11.50 Common Stock 18,637,003 3.9 18,637,003 $ 4.13 Common Stock 1,454,546 4.7 1,454,546 20,091,549 20,091,549 |
Going Concern and Management'_2
Going Concern and Management's Plans (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Going Concern and Management's Plans (Textual) | ||||
Cash | $ 5,772,970 | $ 9,355,496 | $ 5,772,970 | $ 9,355,496 |
Restricted cash | 5,000,000 | 5,000,000 | ||
Working capital deficit | 53,000 | 53,000 | ||
Net loss | $ (6,548,877) | $ (4,253,472) | (26,206,075) | (10,918,910) |
Cash used in operations | $ (6,524,689) | $ (7,750,900) | ||
Percentage of capacity | 65.00% | |||
Bridge Note Payable [Member] | ||||
Going Concern and Management's Plans (Textual) | ||||
Description of convertible debt | As of September 30, 2020, the Company had convertible debt in the gross principal amount of $2.0 million which matures on February 23, 2022, and convertible debt in the gross principal amount of $5.7 million which is payable in 12 monthly installments through September 1, 2021, and for which certain payments can be accelerated at the option of the lender (see Note 7 – Convertible Debt and Convertible Debt, Related Party). As of September 30, 2020, the Company also has a Bridge Note outstanding in the amount of approximately $1.4 million which matures on February 23, 2022 (see Note 8 – Bridge Note Payable) and loans payable in the aggregate amount of $1.6 million, which are due in monthly installments beginning November 2020 through April 2022 (see Note 9 – Loans Payable). During the period from October 1, 2020 through November 2, 2020, the Company issued an aggregate 3,120,869 shares of its common stock in satisfaction of $2.6 million and $0.4 million of principal and interest, respectively, owed on the convertible debt. |
Significant Accounting Polici_3
Significant Accounting Policies (Details) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)$ / sharesshares | Sep. 30, 2019USD ($) | Dec. 31, 2019 | |
Significant Accounting Policies (Textual) | |||||
Percentage of variable conversion | 87.00% | ||||
Floor price (in Dollars per share) | $ / shares | $ 0.734 | ||||
Anti-dilutive shares related to convertible debt (in Shares) | shares | 15,406,956 | ||||
Deferred revenue | $ 622,000 | $ 622,000 | |||
Advertising costs | 17,343 | $ 59,698 | 133,103 | $ 245,259 | |
Gains (loss) from foreign exchange rate fluctuations | $ 5,124 | $ (3,651) | $ 3,868 | $ (3,563) | |
Functional currencies translation | 1.1724 | 1.1724 | 1.1215 |
Significant Accounting Polici_4
Significant Accounting Policies (Details) - Schedule of antidiluted shares - shares | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Securities excluded from calculation of weighted average dilutive common shares | 27,199,762 | 21,364,454 | |
Restricted common shares [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Securities excluded from calculation of weighted average dilutive common shares | 199,143 | 80,393 | |
Options [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Securities excluded from calculation of weighted average dilutive common shares | 2,430,000 | 400,000 | |
Warrants [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Securities excluded from calculation of weighted average dilutive common shares | 20,091,549 | 18,637,003 | |
Convertible debt [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Securities excluded from calculation of weighted average dilutive common shares | 3,609,839 | [1] | 1,647,058 |
Unit purchase options [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Securities excluded from calculation of weighted average dilutive common shares | 600,000 | 600,000 | |
Contingent Consideration Shares [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Securities excluded from calculation of weighted average dilutive common shares | 269,231 | ||
[1] | Common stock equivalents associated with convertible debt were calculated based on the fixed conversion price in effect for voluntary holder conversions; however for certain convertible notes there is a variable conversion price in effect under certain scenarios that is equal to 87% of lowest daily volume weighted average price over the prior ten days, subject to a $0.734 floor price. If the applicable convertible note principal and guaranteed interest were all converted at the floor price, the potentially dilutive shares related to convertible debt would be 15,406,956 shares. |
Significant Accounting Polici_5
Significant Accounting Policies (Details) - Schedule of revenue recognition - In-person [Member] - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 696,890 | $ 2,586,965 | $ 3,701,139 | $ 8,554,030 |
Event revenue [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 227,247 | 1,582,749 | 1,839,365 | 5,752,880 |
Sponsorship revenue [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 314,924 | 411,903 | 1,305,014 | 1,091,718 |
Food and beverage revenue [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 34,427 | 290,408 | 266,726 | 976,313 |
Ticket and gaming revenue [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 118,996 | 250,955 | 270,247 | 587,727 |
Merchandising revenue [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 678 | $ 50,950 | 19,065 | 145,273 |
Other revenue [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 618 | $ 722 | $ 119 |
Significant Accounting Polici_6
Significant Accounting Policies (Details) - Schedule of revenue recognition - Multiplatform Content [Member] - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 1,264,346 | $ 1,031,383 | $ 3,186,494 | $ 3,873,709 |
Distribution revenue [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 611,370 | 282,508 | 1,471,263 | 1,069,328 |
Sponsorship revenue [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 370,597 | 544,541 | 1,154,267 | 1,585,467 |
Music royalty revenue [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 278,610 | 200,787 | 553,198 | 1,214,286 |
Online advertising revenue [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 3,769 | $ 3,547 | $ 7,766 | $ 4,628 |
Significant Accounting Polici_7
Significant Accounting Policies (Details) - Schedule of revenue recognition - Interactive Product [Member] - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 3,927,066 | $ 2,423,193 | $ 9,628,009 | $ 7,187,196 |
Subscription revenue [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 2,511,958 | 1,313,218 | 5,599,687 | 3,745,623 |
Virtual product revenue [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 975,411 | 925,411 | 2,880,478 | 2,773,769 |
Social gaming revenue [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 411,297 | 152,317 | 1,043,268 | 397,065 |
Licensing revenue [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 11,188 | 16,872 | 68,461 | 198,481 |
Other revenue [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 17,212 | $ 15,376 | $ 36,115 | $ 72,259 |
Significant Accounting Polici_8
Significant Accounting Policies (Details) - Schedule of revenue recognition - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 5,888,302 | $ 6,041,541 | $ 16,515,642 | $ 19,614,935 |
Point in Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 1,728,114 | 2,953,004 | 5,577,085 | 10,628,751 |
Over a Period of Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 4,160,188 | 3,088,537 | 10,938,557 | 8,986,184 |
Event revenue [Member] | Point in Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 227,247 | 1,582,749 | 1,839,365 | 5,752,880 |
Distribution revenue [Member] | Point in Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 611,370 | 282,508 | 1,471,263 | 1,069,328 |
Social gaming revenue [Member] | Point in Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 411,297 | 152,317 | 1,043,268 | 397,065 |
Food and beverage revenue [Member] | Point in Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 34,427 | 290,408 | 266,726 | 976,313 |
Sponsorship Revenue [Member] | Point in Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 23,890 | 123,407 | 69,350 | 408,873 |
Sponsorship Revenue [Member] | Over a Period of Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 661,631 | 833,037 | 2,389,931 | 2,268,312 |
Ticket and gaming revenue [Member] | Point in Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 118,996 | 250,955 | 270,247 | 587,727 |
Merchandising revenue [Member] | Point in Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 678 | 50,950 | 19,065 | 145,273 |
Music royalty revenue [Member] | Point in Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 278,610 | 200,787 | 553,198 | 1,214,286 |
Online advertising revenue [Member] | Point in Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 3,769 | 3,547 | 7,766 | 4,628 |
Other revenue [Member] | Point in Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 17,830 | 15,376 | 36,837 | 72,378 |
Subscription Revenue [Member] | Over a Period of Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 2,511,958 | 1,313,218 | 5,599,687 | 3,745,623 |
Virtual Product Revenue [Member] | Over a Period of Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 975,411 | 925,411 | 2,880,478 | 2,773,769 |
Licensing revenue [Member] | Over a Period of Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 11,188 | $ 16,872 | $ 68,461 | $ 198,481 |
Other Assets (Details)
Other Assets (Details) - USD ($) | 1 Months Ended | 9 Months Ended | |||
Jun. 29, 2020 | Mar. 04, 2020 | Aug. 31, 2019 | Jan. 31, 2019 | Sep. 30, 2020 | |
ESA [Member] | |||||
Other Assets (Textual) | |||||
Investment percentage owned | 25.00% | ||||
Payment of investment | $ 1,238,631 | ||||
Impairment of investment | $ 600,000 | ||||
Additional impairment charge | $ 1,138,631 | ||||
TV Azteca [Member] | |||||
Other Assets (Textual) | |||||
Payment of investment | $ 1,500,000 | $ 3,500,000 |
Other Assets (Details) - Schedu
Other Assets (Details) - Schedule of Other Assets - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Other Assets (Details) - Schedule of Other Assets [Line Items] | ||
Other assets | $ 5,000,000 | $ 4,638,631 |
Investment in ESA [Member] | ||
Other Assets (Details) - Schedule of Other Assets [Line Items] | ||
Other assets | 1,138,631 | |
Investment in TV Azteca [Member] | ||
Other Assets (Details) - Schedule of Other Assets [Line Items] | ||
Other assets | $ 5,000,000 | $ 3,500,000 |
Deferred Production Costs (Deta
Deferred Production Costs (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Multiplatform Content [Member] | ||||
Deferred Production Costs (Textual) | ||||
Production costs | $ 724,762 | $ 605,077 | $ 1,457,602 | $ 2,225,442 |
Deferred Production Costs (De_2
Deferred Production Costs (Details) - Schedule of Deferred Production Costs - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Schedule of Deferred Production Costs [Abstract] | ||
Deferred production costs | $ 30,231,418 | $ 28,290,200 |
Less: accumulated amortization | (18,785,320) | (17,327,718) |
Deferred production costs, net | $ 11,446,098 | $ 10,962,482 |
Weighted average remaining amortization period at September 30, 2020 (in years) | 3 years 5 months 4 days |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Details) - Schedule of Accrued expenses and other current liabilities - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Schedule of Accrued expenses and other current liabilities [Abstract] | ||
Compensation expense | $ 617,471 | $ 1,348,066 |
Payroll tax obligations | 118,379 | |
Rent | 987,572 | 124,969 |
Interactive costs | 465,813 | 319,833 |
Event costs | 138,915 | 186,173 |
Legal and professional fees | 459,591 | 154,799 |
Production costs | 131,158 | 55,679 |
Unclaimed player prizes | 471,101 | 342,535 |
Other accrued expenses | 458,398 | 721,693 |
Other current liabilities | 112,466 | 369,614 |
Accrued leasehold improvements | 269,110 | |
Total | $ 3,960,864 | $ 3,892,471 |
Convertible Debt and Converti_3
Convertible Debt and Convertible Debt, Related Party (Details) - USD ($) | Aug. 13, 2020 | Jun. 08, 2020 | Apr. 29, 2020 | Aug. 05, 2019 | Sep. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Convertible Debt and Convertible Debt, Related Party (Textual) | |||||||||
Amendment and acknowledgement agreement, description | the convertible bridge notes (the “Bridge Notes”) are secured by the assets of the Company and originally matured on August 23, 2020 (the “Maturity Date”). The Bridge Notes are convertible into shares of AESE common stock at any time at a conversion price of $8.50 per share. Further, the minimum interest to be paid under each Bridge Note shall be the greater of (a) 18 months of accrued interest at 12% per annum; or (b) the sum of the actual interest accrued plus 6 months of additional interest at 12% per annum. In the event of default, the Bridge Notes shall become immediately due and payable upon the written notice of the holder. | ||||||||
Agreement, description | The Simon Agreement and the related Escrow Agreement, as amended, permitted Simon to request the return of any funds remaining in escrow if the parties did not agree on the 2020 spending plan by March 8, 2020. On March 18, 2020, as the COVID-19 pandemic accelerated in the United States, Simon notified the escrow agent that the parties had not agreed on a 2020 spending plan and requested the return of the remaining funds in the escrow account. The escrow agent returned the remaining $3,650,000 to Simon on March 26, 2020. | ||||||||
Debt instrument, descripion | the Company recorded a debt discount at issuance in the aggregate amount $6,296,555, consisting of (i) the $600,000 difference between the aggregate principal amount of the Senior Notes and the cash proceeds received, (ii) the relative fair value of the warrants of $1,205,959 (which were credited to additional paid in capital), (iii) two years’ guaranteed interest of $1,536,000 (credited to interest payable), (iv) the BCF of $523,636 (credited to additional paid in capital), (v) non-cash interest in the amount of $1,664,000, representing the difference between the anticipated issuance date fair value of common stock issued and the Stock Settlement Price, for Monthly Redemption Payments (credited to interest payable), and (vi) financing costs of $766,961. The debt discount is being amortized using the effective interest method over the term of the Senior Notes. During the three and nine months ended September 30, 2020, the Company recorded amortization of debt discount of $1,219,323 and $1,472,766, respectively, related to the Senior Notes, and recorded an extinguishment loss of $1,733,768 and $1,733,768, respectively, in connection with the extinguishment of Senior Notes resulting from accelerated Monthly Redemption Payments. | ||||||||
Interest payable, description | On August 13, 2020 the Company paid in cash an aggregate of $425,096 related to interest payable on the Extended Bridge Notes, such that the balance of principal and interest outstanding under the Extended Bridge Notes as of September 30, 2020 is $2,000,000 and $24,760, respectively. | ||||||||
Interest expense | $ 3,936 | $ 6,626 | |||||||
Amortization of debt discount | $ 1,639,150 | $ 36,414 | |||||||
Monthly redemption payment, description | Each Monthly Redemption Payment may be paid at the Company’s option in cash, or in shares of common stock (the “Stock Settlement Option”) at a price equal to 87% of the lowest daily volume weighted average price in the 10 days prior to the scheduled payment date (the “Stock Settlement Price”), provided that (i) the Company gives thirty days written irrevocable notice prior to the Monthly Redemption Payment (the “Monthly Redemption Notice”), (ii) all amounts due have been paid timely, (iii) there are sufficient number of authorized shares available to be issued, (iv) the Investors do not possess any material non-public information at the time the Company issues the common stock, and (v) the Company’s shares have met certain minimum volume and closing price thresholds. The Stock Settlement Price cannot be lower than $0.734 per share. Monthly Redemption Payments paid in cash require the payment of a 10% premium in addition to the monthly installment. | ||||||||
Sale of stock, description | The Senior Notes are convertible at each Investor’s option, in whole or in part, and from time to time, into shares of the Company’s common stock (the “Holder Conversion Option” and together, with the Stock Settlement Option, the “ECOs”) at $3.30 per share (subject to adjustment to convert at the same price as any subsequent issuances of Company common stock at a lower issuance price, subject to certain exceptions) (the “Holder Conversion Price”); provided, however, that the parties may not affect any such conversion that would result in an Investor (together with its affiliates) owning in excess of 4.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to the conversion (the “Beneficial Ownership Limitation”). Each Investor, upon notice to the Company, may elect to increase or decrease its Beneficial Ownership Limitation, provided that the Beneficial Ownership Limitation may not exceed 9.99%. The Company determined that the ECOs contained a beneficial conversion feature (“BCF”) in the amount of $523,636, which was credited to additional paid in capital. | ||||||||
Option per share | $ 3.30 | ||||||||
Common stock, redemption payments, description | the Company issued 3,161,970 shares of its common stock, as Monthly Redemption Payments in satisfaction of aggregate amount of $3,927,273 of principal and $628,364 interest payable owed on the Senior Notes, of which 2,472,302 shares were issued in connection with accelerated Monthly Redemption Payments in the aggregate amount of $3,543,273 (representing $3,054,546 and $488,727 of principal and interest, respectively). The Company recorded additional non-cash interest expense in the amount of $183,373 in connection with Monthly Redemption Payments during the three and nine months ended September 30, 2020, respectively. As of September 30, 2020, gross principal and guaranteed interest of $5,672,727 and $907,636, respectively, remains outstanding on the Senior Notes and is payable in 12 monthly installments through September 1, 2021. | ||||||||
Amended Bridge Note [Member] | |||||||||
Convertible Debt and Convertible Debt, Related Party (Textual) | |||||||||
Debt instrument, descripion | The Company recorded a conversion inducement charge of $5,247,531 as a result of the Amendments, consisting of $4,998,845 representing the value of common stock issued upon conversion in excess of the common stock issuable under the original terms of the $5,000,000 Bridge Note, and $248,686, representing the excess of minimum interest payable pursuant to Amendment 3 over the interest payable pursuant to the original terms of the $5,000,000 Bridge Note. | ||||||||
Conversion inducement charge | $ 5,247,531 | ||||||||
Common stock issued upon conversion | $ 4,998,845 | ||||||||
common stock issued in excess | 5,000,000 | ||||||||
Convertible Debt [Member] | |||||||||
Convertible Debt and Convertible Debt, Related Party (Textual) | |||||||||
Shares of common stock, description | If any holder elects to convert their Bridge Note into common stock, they would be entitled to receive additional shares of common stock (“Contingent Consideration Shares”) equal to the product of (i) 3,846,153 shares, multiplied by (ii) that holder’s investment amount, divided by (iii) $100,000,000, if at any time within five years after the August 9, 2019 closing date, the last exchange-reported sale price of common stock trades at or above $13.00 for thirty (30) consecutive calendar days. | ||||||||
Bridge Notes [Member] | |||||||||
Convertible Debt and Convertible Debt, Related Party (Textual) | |||||||||
Bridge notes, description | the Company paid $8,670,431 in satisfaction of principal in the amount of $7,000,000 and interest in the amount of $1,670,431 owed in connection with other Bridge Notes. Further, on June 8, 2020, the Company and the holders (the “Extending Bridge Noteholders”) of the two remaining Bridge Notes outstanding in the aggregate principal amount of $2,000,000 (together, the “Extended Bridge Notes”), of which principal in the amount of $1,000,000 is owed to the spouse of the Company’s Chief Executive Officer and Director, entered into a Secured Convertible Note Modification (Extension) Agreement with the Company (together, the “Bridge Note Extensions”) pursuant to which, among other things, the Extending Bridge Noteholders agreed to extend the maturity date of their respective Extended Bridge Note until February 23, 2022. Interest on the Extended Bridge Notes will continue to accrue at 12.0% per year and may be prepaid without penalty. The remaining provisions of the Extended Bridge Notes remain unchanged and in effect. | ||||||||
Interest expense | 65,836 | $ 447,847 | $ 1,355,549 | 505,710 | |||||
Amortization of debt discount | $ 5,386 | $ 36,414 | $ 166,385 | $ 36,414 | |||||
Secured Convertible Note Modification and Conversion Agreement [Member] | |||||||||
Convertible Debt and Convertible Debt, Related Party (Textual) | |||||||||
Agreement, description | the Company and a holder of a $5,000,000 Bridge Note (the “Noteholder”), entered into a Secured Convertible Note Modification and Conversion Agreement (the “Amendment 1”), pursuant to which the Noteholder converted $2,000,000 of the principal amount of its $5,000,000 Bridge Note into 1,250,000 shares of the Company’s common stock at a reduced conversion price of $1.60 per share. On May 22, 2020, the Company and the Noteholder entered into a Secured Convertible Note Modification and Conversion Agreement No. 2 (“Amendment 2”), pursuant to which the remaining principal amount of the $5,000,000 Bridge Note ($3,000,000) was converted into 2,142,857 shares of the Company’s common stock at a reduced conversion price of $1.40 per share. Further, pursuant to Amendment 1 and Amendment 2, interest on the $5,000,000 principal owed to the Noteholder prior to conversion will continue to accrue through the maturity date as if the principal amount had not been converted. Minimum accrued interest payable pursuant to Amendment 2 in the amount of $1,421,096 (the “Accrued Interest”) is payable on or before the maturity date. | ||||||||
Purchase Agreement [Member] | |||||||||
Convertible Debt and Convertible Debt, Related Party (Textual) | |||||||||
Agreement, description | pursuant to a securities purchase agreement (the “Purchase Agreement”) between the Company and certain accredited investors (the “Investors”), the Company issued two senior secured convertible notes (the “Senior Notes”) with an aggregate principal balance of $9,600,000 and immediately vested five-year warrants to purchase an aggregate 1,454,546 shares of common stock at an exercise price of $4.125 per share for net cash proceeds of $9,000,000. The Senior Notes are secured by the assets of the Company, bear interest at 8% per annum and mature on June 8, 2022, with an aggregate of $1,536,000 of interest guaranteed to be paid to the Investors. The Purchase Agreement contains customary representations and warranties, and the Company agreed it would not take on additional debt from third parties without the Investors’ written approval, subject to certain exceptions for ordinary course trade debt. The Company also agreed to use 35% of the proceeds from future financings in excess of $3 million (or $5 million if approved by the Investors) to pay down the outstanding balance on the Loan. The Company reserves its rights under the Purchase Agreement to consummate, subject to certain exceptions, a debtor or equity offering of up to $5 million in the future. |
Convertible Debt and Converti_4
Convertible Debt and Convertible Debt, Related Party (Details) - Schedule of convertible debt - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Convertible debt [Member] | ||
Convertible Debt and Convertible Debt, Related Party (Details) - Schedule of convertible debt [Line Items] | ||
Gross Principal Amount | $ 1,000,000 | $ 13,000,000 |
Debt Discount | (154,499) | |
Convertible Debt, Net of Debt Discount | 1,000,000 | 12,845,501 |
Convertible debt, related party [Member] | ||
Convertible Debt and Convertible Debt, Related Party (Details) - Schedule of convertible debt [Line Items] | ||
Gross Principal Amount | 1,000,000 | 1,000,000 |
Debt Discount | (11,885) | |
Convertible Debt, Net of Debt Discount | 1,000,000 | 988,115 |
Senior secured convertible notes [Member] | ||
Convertible Debt and Convertible Debt, Related Party (Details) - Schedule of convertible debt [Line Items] | ||
Gross Principal Amount | 5,672,727 | |
Debt Discount | (3,090,022) | |
Convertible Debt, Net of Debt Discount | 2,582,705 | |
Total [Member] | ||
Convertible Debt and Convertible Debt, Related Party (Details) - Schedule of convertible debt [Line Items] | ||
Gross Principal Amount | 7,672,727 | 14,000,000 |
Debt Discount | (3,090,022) | (166,384) |
Convertible Debt, Net of Debt Discount | $ 4,582,705 | $ 13,833,616 |
Bridge Note Payable (Details)
Bridge Note Payable (Details) - USD ($) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2020 | Sep. 30, 2020 | |
Amended Bridge Note [Member] | ||
Bridge Note Payable (Textual) | ||
Maturity date | Feb. 23, 2022 | |
Interest rate, description | Interest on the Amended Bridge Note began to accrue on August 23, 2020 at 12% per annum (increasing to 15% per annum upon an event of default as defined in the Amended Bridge Note). | |
Bridge Note Payable [Member] | ||
Bridge Note Payable (Textual) | ||
Interest expense | $ 17,742 | $ 17,742 |
Loans Payable (Details)
Loans Payable (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |
May 31, 2020 | Sep. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | |
Loans Payable (Textual) | ||||
Received loan proceeds | $ 1,592,429 | $ 1,592,429 | ||
Loan maturity date | 2 years | |||
Interest rate, description | the total principal owed under the PPP Loans, $907,129 bears interest at 0.98% per annum and $685,300 bears interest at 1.00% per annum, respectively. Monthly amortized principal and interest payments are deferred for six months after the date of disbursement. While the PPP Loans currently have two-year maturities, the amended law permits the borrower to request five-year maturities from its lenders. | |||
Interest expenses | $ 3,936 | $ 6,626 |
Segment Data (Details)
Segment Data (Details) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2020 | Sep. 30, 2020 | |
Segment Data (Textual) | ||
Gaming & Entertainment revenues, percentage | 10.00% | |
Customer One [Member] | ||
Segment Data (Textual) | ||
Gaming and Entertainment segment total revenues, Percentage | 14.00% | 16.00% |
Esports segment total revenues, Percentage | 18.00% | 14.00% |
Customer [Member] | ||
Segment Data (Textual) | ||
Gaming and Entertainment segment total revenues, Percentage | 13.00% | 14.00% |
Segment Data (Details) - Schedu
Segment Data (Details) - Schedule of segment information - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | ||
Segment Reporting Information [Line Items] | |||||
Revenues | $ 5,888,302 | $ 6,041,541 | $ 16,515,642 | $ 19,614,935 | |
Income (Loss) from Operations | (3,321,926) | (3,817,603) | (16,189,930) | (10,416,151) | |
Gaming and Entertainment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 5,291,419 | 4,137,091 | 14,240,556 | 14,022,841 | |
Income (Loss) from Operations | 663,919 | (172,502) | 1,115,410 | (1,069,712) | |
E-Sports [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 596,883 | 1,904,450 | 2,275,086 | 5,592,094 | |
Income (Loss) from Operations | (1,945,413) | (2,984,047) | (11,639,966) | (8,685,385) | |
Corporate Segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | [1] | ||||
Income (Loss) from Operations | [1] | $ (2,040,432) | $ (661,054) | $ (5,665,374) | $ (661,054) |
[1] | Unallocated corporate operating losses result from general corporate overhead expenses not directly attributable to any one of the business segments. These expenses are reported separate from the Company’s identified segments and are included are included in total operating costs and expenses on the accompanying condensed consolidated statements of operations and comprehensive loss. |
Segment Data (Details) - Sche_2
Segment Data (Details) - Schedule of total assets - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 | |
Segment Data (Details) - Schedule of total assets [Line Items] | |||
Total Assets | $ 65,286,873 | $ 71,321,074 | |
Gaming and Entertainment [Member] | |||
Segment Data (Details) - Schedule of total assets [Line Items] | |||
Total Assets | 36,673,898 | 39,290,001 | |
E-Sports [Member] | |||
Segment Data (Details) - Schedule of total assets [Line Items] | |||
Total Assets | 27,470,708 | 28,852,158 | |
Corporate Segment [Member] | |||
Segment Data (Details) - Schedule of total assets [Line Items] | |||
Total Assets | [1] | $ 1,142,267 | $ 3,178,915 |
[1] | Unallocated corporate assets not directly attributable to any one of the business segments. |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | Jan. 14, 2020 | Jul. 20, 2020 | Apr. 24, 2020 | Oct. 22, 2019 | Jun. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Mar. 23, 2020 | Dec. 31, 2019 |
Commitments and Contingencies (Textual) | |||||||||||
Rent expenses | $ 650,438 | $ 711,302 | $ 2,113,909 | $ 2,079,801 | |||||||
Rent abatement | 91,667 | ||||||||||
Rent deferrals | 250,000 | $ 250,000 | |||||||||
Agreement, description | The Simon Agreement and the related Escrow Agreement, as amended, permitted Simon to request the return of any funds remaining in escrow if the parties did not agree on the 2020 spending plan by March 8, 2020. On March 18, 2020, as the COVID-19 pandemic accelerated in the United States, Simon notified the escrow agent that the parties had not agreed on a 2020 spending plan and requested the return of the remaining funds in the escrow account. The escrow agent returned the remaining $3,650,000 to Simon on March 26, 2020. | ||||||||||
Balance in escrow account | 5,000,000 | $ 5,000,000 | |||||||||
Return of cash held in escrow | 0 | 3,650,000 | |||||||||
Simon Agreement [Member] | |||||||||||
Commitments and Contingencies (Textual) | |||||||||||
Balance in escrow account | 4,950,000 | 4,950,000 | $ 3,650,000 | ||||||||
Investment agreements cash | $ 1,300,000 | ||||||||||
Deferred Production Costs [Member] | |||||||||||
Commitments and Contingencies (Textual) | |||||||||||
Operating lease expense | 96,278 | 96,278 | 288,835 | 288,835 | |||||||
Cost of Revenues [Member] | In-person [Member] | |||||||||||
Commitments and Contingencies (Textual) | |||||||||||
Operating lease expense | 353,887 | 448,861 | 1,068,440 | 1,073,864 | |||||||
General and Administrative Expense [Member] | |||||||||||
Commitments and Contingencies (Textual) | |||||||||||
Operating lease expense | $ 200,273 | $ 166,163 | 756,634 | $ 717,102 | |||||||
Share Purchase Agreement [Member] | |||||||||||
Commitments and Contingencies (Textual) | |||||||||||
Alleged damages claim | $ 3,100,000 | ||||||||||
Agreement, description | the Company issued 758,725 shares of its common stock to BPR Cumulus LLC, an affiliate of Brookfield Property Partners (“Brookfield”) in exchange for $5,000,000 (the “Purchase Price”) pursuant to a Share Purchase Agreement (the “Brookfield Agreement”). The Purchase Price was placed into escrow and is to be used by the Company or its subsidiaries to develop integrated esports experience venues at mutually agreed upon shopping malls owned and/or operated by Brookfield or any of its affiliates (each, an “Investor Mall”), that will include a dedicated gaming space and production capabilities to attract and to activate esports and other emerging live events (each, an “Esports Venue”). To that end, half of the Purchase Price will be released from escrow to the Company upon the execution of a written lease agreement between Brookfield and the Company for the first Esports Venue, and the other half will be released to the Company upon the execution of a written lease agreement between Brookfield and the Company for the second Esports Venue. Further, pursuant to the Brookfield Agreement, the Company must create, produce, and execute three (3) esports events during each calendar year 2020, 2021 and 2022 that will include the Company’s esports truck at one or more Investor Malls at mutually agreed times. The balance held in escrow as of September 30, 2020 is $5,000,000 and is reflected in restricted cash on the accompanying condensed consolidated balance sheet. | ||||||||||
WPT CEO [Member] | |||||||||||
Commitments and Contingencies (Textual) | |||||||||||
Percentage of annual salary | 10.00% | ||||||||||
Annual salary | $ 377,000 | ||||||||||
CEO [Member] | |||||||||||
Commitments and Contingencies (Textual) | |||||||||||
Percentage of annual salary | 80.00% | ||||||||||
Annual salary | $ 60,000 | 210,000 | |||||||||
initial annual base salary | $ 300,000 | ||||||||||
TV Azteca [Member] | |||||||||||
Commitments and Contingencies (Textual) | |||||||||||
Investment agreements purchased shares (in Shares) | 742,692 | ||||||||||
Investment agreements common stock value | $ 5,000,000 | ||||||||||
Strategic initiatives | $ 7,000,000 | ||||||||||
Agreement, description | The Azteca Amendment provides that, subject to the approval of the terms of the Azteca Amendment by the Company’s Board of Directors: (i) TV Azteca waives the Company’s obligations under the Term Sheet to pay TV Azteca $1,000,000 on each of March 1, 2021 and March 1, 2022 for various strategic initiatives, and to further invest in and develop an esports platform for the Mexican market; (ii) the Company waives the 24-month lock-up that prohibits TV Azteca from selling or transferring the 763,904 shares of Company common stock TV Azteca purchased pursuant to the Share Purchase Agreement (the “Purchased Shares”); (iii) TV Azteca may sell the Purchased Shares in compliance with applicable securities laws, subject to selling at a reasonable market price and subject to a daily volume cap not to exceed 25% of the Company’s total daily Nasdaq trading volume; and (iv) if TV Azteca sells all of the Purchased Shares within a three-month period following the Company’s Board of Directors approval of the Azteca Amendment, for gross proceeds of less than $1,600,000, then on March 1, 2021, the Company shall contribute additional capital to the parties’ strategic alliance pursuant to the Term Sheet in an amount equal to such shortage. |
Stockholders_ Equity (Details)
Stockholders’ Equity (Details) - USD ($) | Aug. 07, 2020 | Aug. 06, 2020 | Jul. 31, 2020 | Jul. 02, 2020 | Jun. 08, 2020 | Mar. 09, 2020 | Sep. 24, 2020 | Jul. 27, 2020 | Jun. 30, 2020 | Feb. 25, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 29, 2020 |
Stockholders' Equity (Textual) | |||||||||||||||
Stock issued during period increase decrease common stock (in Shares) | 10,000,000 | ||||||||||||||
Aggregate of common stock, value | $ 43,356 | ||||||||||||||
Option to purchase of common shares (in Shares) | 120,000 | ||||||||||||||
Grant date value | $ 97,947 | ||||||||||||||
Option exercisable per share (in Dollars per share) | $ 2.17 | ||||||||||||||
Option term | 4 years | ||||||||||||||
Percentage of option vesting date | 25.00% | ||||||||||||||
Stock based compensation | $ 577,167 | $ 18,407 | $ 4,912,640 | $ 18,407 | |||||||||||
Restriction of common stock, description | the Company issued 94,471 shares of restricted common stock with a grant date value $205,000 to certain officers and directors. The restricted common stock remains subject to transfer and forfeiture restrictions until the shares vest on the one-year anniversary of the date of grant. | ||||||||||||||
Warrants to purchase common stock (in Shares) | 1,454,546 | ||||||||||||||
Price per warrant (in Dollars per share) | $ 4.125 | ||||||||||||||
Description of warrants | The Company computed the fair value of the warrants using a Black-Scholes option pricing model using the following assumptions: expected volatility of 45%, risk-free rate of 0.45%, expected term of 5 years, and expected dividends of 0.00%. | ||||||||||||||
Stock Options [Member] | |||||||||||||||
Stockholders' Equity (Textual) | |||||||||||||||
Stock based compensation | $ 64,093 | ||||||||||||||
Purchase of common stock, shares | $ 170,000 | ||||||||||||||
Purchase of common stock, value (in Shares) | 266,733 | ||||||||||||||
Minimum [Member] | |||||||||||||||
Stockholders' Equity (Textual) | |||||||||||||||
Stock issued during period increase decrease common stock (in Shares) | 65,000,000 | ||||||||||||||
Maximum [Member] | |||||||||||||||
Stockholders' Equity (Textual) | |||||||||||||||
Stock issued during period increase decrease common stock (in Shares) | 75,000,000 | ||||||||||||||
Put Option Agreement [Member] | |||||||||||||||
Stockholders' Equity (Textual) | |||||||||||||||
Put option agreement, description | a)The total number of shares that may be issued under the Agreement will be limited to 19.99% of the Company’s outstanding shares on the date the Agreement is signed (the “Exchange Cap”), unless stockholder approval is obtained to issue shares in excess of the Exchange Cap; b)The Company may not issue and the Chairman may not purchase Option Shares to the extent that such issuance would result in the Chairman and his affiliates beneficially owning more than 19.99% of the then issued and outstanding shares of the Company’s common stock unless (i) such ownership would not be the largest ownership position in the Company, or (ii) stockholder approval is obtained for ownership in excess of 19.99%; c)The Company may not issue, and the Chairman may not purchase any Option Shares if such issuance and purchase would be considered equity compensation under the rules of The Nasdaq Stock Market unless stockholder approval is obtained for such issuance | ||||||||||||||
Incentive Plan [Member] | |||||||||||||||
Stockholders' Equity (Textual) | |||||||||||||||
Option to purchase of common shares (in Shares) | 80,000 | ||||||||||||||
Grant date value | $ 61,186 | ||||||||||||||
Option exercisable per share (in Dollars per share) | $ 2.11 | ||||||||||||||
Option term | 4 years | ||||||||||||||
Percentage of option vesting date | 25.00% | ||||||||||||||
Stock Options [Member] | |||||||||||||||
Stockholders' Equity (Textual) | |||||||||||||||
Stock based compensation | $ 5,940 | 5,940 | |||||||||||||
Option exercisable per share (in Dollars per share) | $ 5.66 | $ 5.66 | |||||||||||||
Stock based compensation | $ 312,117 | $ 766,279 | |||||||||||||
Unrecognized compensation expense | 2,789,317 | $ 2,789,317 | |||||||||||||
Vesting period | 3 years 2 months 12 days | ||||||||||||||
Restricted Stock [Member] | |||||||||||||||
Stockholders' Equity (Textual) | |||||||||||||||
Stock based compensation | 265,050 | $ 12,467 | $ 496,334 | ||||||||||||
Unrecognized compensation expense | 364,487 | $ 364,487 | |||||||||||||
Vesting period | 1 year 2 months 12 days | ||||||||||||||
Restricted stock issued, shares (in Shares) | 217,999 | 18,958 | 35,714 | ||||||||||||
Fair value at date of grant | $ 474,000 | $ 40,000 | $ 50,000 | ||||||||||||
Chief Financial Officer [Member] | |||||||||||||||
Stockholders' Equity (Textual) | |||||||||||||||
Option to purchase of common shares (in Shares) | 50,000 | ||||||||||||||
Restricted stock issued, shares (in Shares) | 50,000 | ||||||||||||||
Fair value at date of grant | $ 218,000 | ||||||||||||||
Forfeiture restrictions, shares (in Shares) | 50,000 | ||||||||||||||
Put Option Agreement [Member] | |||||||||||||||
Stockholders' Equity (Textual) | |||||||||||||||
Aggregate gross proceeds | $ 2,000,000 | ||||||||||||||
Purchase price of per option share (in Dollars per share) | $ 1.963 | ||||||||||||||
Put option expires period (in Shares) | 1,018,848 | ||||||||||||||
Put option purchase price of per share (in Dollars per share) | $ 1.963 | ||||||||||||||
Total proceeds of option shares (in Shares) | 2,000,000 | ||||||||||||||
Gross proceeds | $ 21,875 | ||||||||||||||
Board of Directors [Member] | |||||||||||||||
Stockholders' Equity (Textual) | |||||||||||||||
Aggregate of common stock, shares (in Shares) | 20,000 | ||||||||||||||
Stock based compensation | $ 8,386 | $ 8,386 | |||||||||||||
Fair value at date of grant | $ 20,000 | ||||||||||||||
Common stock, shares issued (in Shares) | 14,286 |
Stockholders_ Equity (Details)
Stockholders’ Equity (Details) - Schedule of option activity - Options [Member] | 9 Months Ended |
Sep. 30, 2020USD ($)$ / sharesshares | |
Stockholders’ Equity (Details) - Schedule of option activity [Line Items] | |
Number of shares, balance at beginning | shares | 2,480,000 |
Weighted Average Exercise Price, balance at beginning | $ / shares | $ 4.34 |
Weighted Average Remaining Term (Yrs), balance at beginning | 9 years 10 months 9 days |
Intrinsic Value, balance at beginning | $ | |
Number of shares, granted | shares | 200,000 |
Weighted Average Exercise Price, granted | $ / shares | $ 2.15 |
Number of shares, exercised | shares | |
Weighted Average Exercise Price, exercised | $ / shares | |
Number of shares, expired | shares | |
Weighted Average Exercise Price, expired | $ / shares | |
Number of shares, forfeited | shares | (250,000) |
Weighted Average Exercise Price, forfeited | $ / shares | $ 4.47 |
Number of shares, balance at end | shares | 2,430,000 |
Weighted Average Exercise Price, balance at end | $ / shares | $ 4.15 |
Weighted Average Remaining Term (Yrs), balance at end | 9 years 1 month 24 days |
Intrinsic Value, balance at end | $ | |
Number of shares, exercisable | shares | 100,000 |
Weighted Average Exercise Price, exercisable | $ / shares | $ 5.66 |
Weighted Average Remaining Term (Yrs), exercisable | 2 years 4 months 17 days |
Intrinsic Value, exercisable | $ |
Stockholders_ Equity (Details_2
Stockholders’ Equity (Details) - Schedule of options outstanding and exercisable | 9 Months Ended |
Sep. 30, 2020$ / sharesshares | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Outstanding Number of Options | 2,430,000 |
Exercisable Number of Options | 100,000 |
2.11 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise Price (in Dollars per share) | $ / shares | $ 2.11 |
Outstanding Number of Options | 80,000 |
Weighted Average Remaining Life In Years | |
Exercisable Number of Options | |
2.17 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise Price (in Dollars per share) | $ / shares | $ 2.17 |
Outstanding Number of Options | 120,000 |
Weighted Average Remaining Life In Years | |
Exercisable Number of Options | |
4.09 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise Price (in Dollars per share) | $ / shares | $ 4.09 |
Outstanding Number of Options | 1,890,000 |
Weighted Average Remaining Life In Years | |
Exercisable Number of Options | |
5.66 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise Price (in Dollars per share) | $ / shares | $ 5.66 |
Outstanding Number of Options | 340,000 |
Weighted Average Remaining Life In Years | 2 years 4 months 17 days |
Exercisable Number of Options | 100,000 |
Stockholders_ Equity (Details_3
Stockholders’ Equity (Details) - Schedule of fair value of options granted | 9 Months Ended |
Sep. 30, 2020 | |
Stockholders’ Equity (Details) - Schedule of fair value of options granted [Line Items] | |
Expected term (years) | 6 years 3 months |
Expected volatility | 38.00% |
Expected dividends | 0.00% |
Minimum [Member] | |
Stockholders’ Equity (Details) - Schedule of fair value of options granted [Line Items] | |
Risk free interest rate | 0.55% |
Maximum [Member] | |
Stockholders’ Equity (Details) - Schedule of fair value of options granted [Line Items] | |
Risk free interest rate | 0.69% |
Stockholders_ Equity (Details_4
Stockholders’ Equity (Details) - Schedule of non-vested restricted stock activity | 9 Months Ended |
Sep. 30, 2020$ / sharesshares | |
Schedule of non-vested restricted stock activity [Abstract] | |
Number of Restricted Stock, balance at begining | shares | 80,393 |
Weighted Average Grant Date Fair Value, balance at begining | $ / shares | $ 5.66 |
Number of Restricted Stock, balance at end | shares | 199,143 |
Weighted Average Grant Date Fair Value, balance at end | $ / shares | $ 2.02 |
Number of Restricted Stock, Granted | shares | 199,143 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | $ 2.02 |
Number of Restricted Stock, Vested | shares | (80,393) |
Weighted Average Grant Date Fair Value, Vested | $ / shares | $ 5.66 |
Number of Restricted Stock, Forfeited | shares | |
Weighted Average Grant Date Fair Value, Forfeited | $ / shares |
Stockholders_ Equity (Details_5
Stockholders’ Equity (Details) - Schedule of warrant activity - Warrant [Member] | 9 Months Ended |
Sep. 30, 2020USD ($)$ / sharesshares | |
Class of Warrant or Right [Line Items] | |
Number of Warrants, Outstanding, balance at beginning | shares | 18,637,003 |
Weighted Average Exercise Price, balance at beginning | $ / shares | $ 11.50 |
Weighted Average Remaining Life in Years, balance at beginning | 4 years 7 months 6 days |
Intrinsic Value, balance at beginning | $ | |
Number of Warrants, Issued | shares | 1,454,546 |
Weighted Average Exercise Price, Issued | $ / shares | $ 4.13 |
Number of Warrants, Exercised | shares | |
Weighted Average Exercise Price, Exercised | $ / shares | |
Number of Warrants, Cancelled | shares | |
Weighted Average Exercise Price, Cancelled | $ / shares | |
Number of Warrants, balance at end | shares | 20,091,549 |
Weighted Average Exercise Price, balance at end | $ / shares | $ 10.97 |
Weighted Average Remaining Life in Years, balance at end | 3 years 10 months 24 days |
Intrinsic Value, balance at end | $ | |
Number of Warrants, exercisable | shares | 20,091,549 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 10.97 |
Weighted Average Remaining Life in Years, Exercisable | 3 years 10 months 24 days |
Intrinsic Value, Exercisable | $ |
Stockholders_ Equity (Details_6
Stockholders’ Equity (Details) - Schedule of warrants outstanding and exercisable - Warrants [Member] | 9 Months Ended |
Sep. 30, 2020$ / sharesshares | |
Stockholders’ Equity (Details) - Schedule of warrants outstanding and exercisable [Line Items] | |
Warrants Outstanding, Outstanding Number of Warrants | 20,091,549 |
Warrants Exercisable, Exercisable Number of Warrants | 20,091,549 |
11.500 [Member] | |
Stockholders’ Equity (Details) - Schedule of warrants outstanding and exercisable [Line Items] | |
Warrants Outstanding, Exercise Price (in Dollars per share) | $ / shares | $ 11.50 |
Warrants Outstanding, Exercisable Into | Common Stock |
Warrants Outstanding, Outstanding Number of Warrants | 18,637,003 |
Warrants Exercisable, Weighted Average Remaining Life in Years | 3 years 10 months 24 days |
Warrants Exercisable, Exercisable Number of Warrants | 18,637,003 |
4.125 [Member] | |
Stockholders’ Equity (Details) - Schedule of warrants outstanding and exercisable [Line Items] | |
Warrants Outstanding, Exercise Price (in Dollars per share) | $ / shares | $ 4.13 |
Warrants Outstanding, Exercisable Into | Common Stock |
Warrants Outstanding, Outstanding Number of Warrants | 1,454,546 |
Warrants Exercisable, Weighted Average Remaining Life in Years | 4 years 8 months 12 days |
Warrants Exercisable, Exercisable Number of Warrants | 1,454,546 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] - USD ($) | Nov. 05, 2020 | Nov. 04, 2020 | Nov. 03, 2020 |
Subsequent Events (Details) [Line Items] | |||
Amount of monthly redemption payment (in Dollars) | $ 2,024,727 | ||
Original total number of authorized common shares issuable | 75,000,000 | ||
Increase (decrease) of the total number of authorized common shares during the period | 100,000,000 | ||
Description of subsequent events | (i) the monthly rent to be paid for the period from June 25 through December 31, 2020 (the “Rent Relief Period) was reduced to an amount equal to 20% of gross sales (excluding food sales) at the event space (the “Percentage Rent”), (ii) the initial term of the lease was extended for two additional months until May 31, 2023, and (iii) the option period to extend the lease was extended to between April 1, 2022 and September 30, 2022. Pursuant to the Amended Las Vegas Lease, if the aggregate Percentage Rent during the Rent Relief Period is less than $194,000, Allied Esports must pay the shortfall no later than December 31, 2021. | ||
Senior Notes [Member] | |||
Subsequent Events (Details) [Line Items] | |||
Amount of monthly redemption payment (in Dollars) | $ 1,020,364 | ||
Common Stock [Member] | |||
Subsequent Events (Details) [Line Items] | |||
Number of shares issued | 1,070,091 | ||
Number of shares paid for monthly redemption | 2,050,778 |