Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 17, 2021 | |
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 | 39,141,907 | |
Amendment Flag | false | |
Entity Central Index Key | 0001708341 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Sep. 30, 2021 | |
Document Fiscal Year Focus | 2021 | |
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 | (714) | |
Local Phone Number | 265-7323 | |
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, 2021 | Dec. 31, 2020 |
Current Assets | ||
Cash | $ 95,221,785 | $ 424,223 |
Restricted cash | 5,000,000 | 5,000,000 |
Accounts receivable | 338,118 | 271,142 |
Prepaid expenses and other current assets | 1,011,430 | 909,766 |
Assets of discontinued operations | 45,363,817 | |
Total Current Assets | 101,571,333 | 51,968,948 |
Property and equipment, net | 6,873,533 | 9,275,729 |
Intangible assets, net | 29,820 | 30,818 |
Deposits | 625,000 | 625,000 |
Total Assets | 109,099,686 | 61,900,495 |
Current Liabilities | ||
Accounts payable | 342,185 | 901,353 |
Accrued expenses and other current liabilities | 2,820,105 | 1,987,017 |
Accrued interest, current portion | 152,899 | |
Due to affiliates | 9,433,975 | |
Deferred revenue | 354,104 | 57,018 |
Bridge note payable | 1,421,096 | |
Convertible debt, net of discount, current portion | 1,000,000 | |
Convertible debt, related party, net of discount, current portion | 1,000,000 | |
Loans payable, current portion | 539,055 | |
Liabilities of discontinued operations | 9,169,247 | |
Total Current Liabilities | 3,516,394 | 25,661,660 |
Deferred rent | 1,961,640 | 1,693,066 |
Accrued interest, non-current portion | 193,939 | |
Convertible debt, net of discount, non-current portion | 578,172 | |
Loans payable, non-current portion | 368,074 | |
Total Liabilities | 5,478,034 | 28,494,911 |
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, 39,141,907 and 38,506,844 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively | 3,915 | 3,851 |
Additional paid in capital | 197,642,458 | 195,488,181 |
Accumulated deficit | (94,251,576) | (162,277,414) |
Accumulated other comprehensive income | 226,855 | 190,966 |
Total Stockholders’ Equity | 103,621,652 | 33,405,584 |
Total Liabilities and Stockholders’ Equity | $ 109,099,686 | $ 61,900,495 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares | Sep. 30, 2021 | Dec. 31, 2020 |
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 | ||
Preferred stock, outstanding shares | ||
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 | 39,141,907 | 38,506,844 |
Common stock, outstanding shares | 39,141,907 | 38,506,844 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenues: | ||||
In-person | $ 1,455,867 | $ 595,932 | $ 2,627,781 | $ 2,274,135 |
Multiplatform content | 229,961 | 951 | 383,684 | 951 |
Total Revenues | 1,685,828 | 596,883 | 3,011,465 | 2,275,086 |
Costs and Expenses: | ||||
In-person (exclusive of depreciation and amortization) | 1,249,640 | 640,409 | 2,442,750 | 2,134,964 |
Multiplatform content (exclusive of depreciation and amortization) | 87,373 | 214,258 | ||
Online operating expenses | 37,462 | 34,577 | 134,009 | 148,977 |
Selling and marketing expenses | 87,755 | 52,788 | 216,428 | 185,004 |
General and administrative expenses | 3,196,736 | 2,270,018 | 8,444,054 | 8,039,358 |
Stock-based compensation | 151,220 | 508,268 | 1,081,362 | 4,729,643 |
Depreciation and amortization | 806,137 | 905,580 | 2,495,939 | 2,715,007 |
Impairment of investment in ESA | 1,138,631 | |||
Total Costs and Expenses | 5,616,323 | 4,411,640 | 15,028,800 | 19,091,584 |
Loss From Operations | (3,930,495) | (3,814,757) | (12,017,335) | (16,816,498) |
Other Income (Expense): | ||||
Gain on forgiveness of PPP loans and interest | 912,475 | 912,475 | ||
Other income (expense), net | 54,434 | (2,973) | 69,413 | (5,432) |
Conversion inducement expense | (5,247,531) | |||
Extinguishment loss on acceleration of debt redemption | (1,733,768) | (1,733,768) | ||
Interest expense | (11,809) | (1,488,517) | (269,411) | (3,033,524) |
Total Other Income (Expense) | 955,100 | (3,225,258) | 712,477 | (10,020,255) |
Loss from continuing operations | (2,975,395) | (7,040,015) | (11,304,858) | (26,836,753) |
(Loss) income from discontinued operations, net of tax provision: | ||||
(Loss) income from discontinued operations before sale of WPT | (3,151,740) | 491,138 | (1,099,033) | 630,678 |
Gain on sale of WPT | 80,429,729 | 80,429,729 | ||
Income from discontinued operations | 77,277,989 | 491,138 | 79,330,696 | 630,678 |
Net income (loss) | $ 74,302,594 | $ (6,548,877) | $ 68,025,838 | $ (26,206,075) |
Basic and Diluted Net (Loss) Income per Common Share | ||||
Continuing operations (in Dollars per share) | $ (0.08) | $ (0.24) | $ (0.29) | $ (1.01) |
Discontinued operations, net of tax (in Dollars per share) | $ 1.98 | $ 0.02 | $ 2.04 | $ 0.02 |
Weighted Average Number of Common Shares Outstanding: | ||||
Basic (in Shares) | 39,043,863 | 29,626,222 | 38,970,267 | 26,508,006 |
Diluted (in Shares) | 39,043,863 | 29,626,222 | 38,970,267 | 26,508,006 |
Comprehensive Loss | ||||
Net Income (Loss) | $ 74,302,594 | $ (6,548,877) | $ 68,025,838 | $ (26,206,075) |
Other comprehensive (loss) income: | ||||
Foreign currency translation adjustments | (22,031) | 45,358 | 35,889 | 45,548 |
Total Comprehensive Income (Loss) | $ 74,280,563 | $ (6,503,519) | $ 68,061,727 | $ (26,160,527) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in 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, 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 | ||||||
Restricted common stock | 113,436 | 113,436 | |||||
Stock options | 240,399 | 240,399 | |||||
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 | ||||||
Net income (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 | |||||
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 options | 213,763 | 213,763 | |||||
Restricted stock | 117,875 | 117,875 | |||||
Net income (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 | ||||||
Common stock | $ 7 | 128,993 | 129,000 | ||||
Common stock (in Shares) | 64,286 | ||||||
Stock options | 312,117 | 312,117 | |||||
Restricted stock | $ 20 | 136,030 | 136,050 | ||||
Restricted stock (in Shares) | 199,143 | ||||||
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 | |||||
Net income (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 | ||||||
Balance at Dec. 31, 2020 | $ 3,851 | 195,488,181 | 190,966 | (162,277,414) | 33,405,584 | ||
Balance (in Shares) at Dec. 31, 2020 | 38,506,844 | ||||||
Common stock | $ 13 | 199,987 | 200,000 | ||||
Common stock (in Shares) | 126,584 | ||||||
Restricted common stock | 80,006 | 80,006 | |||||
Stock options | 282,999 | 282,999 | |||||
Shares issued for redemption of debt and accrued interest | $ 53 | 821,814 | 821,867 | ||||
Shares issued for redemption of debt and accrued interest (in Shares) | 529,383 | ||||||
Net income (loss) | (3,336,676) | (3,336,676) | |||||
Other comprehensive income (Loss) | 25,336 | 25,336 | |||||
Balance at Mar. 31, 2021 | $ 3,917 | 196,872,987 | 216,302 | (165,614,090) | 31,479,116 | ||
Balance (in Shares) at Mar. 31, 2021 | 39,162,811 | ||||||
Balance at Dec. 31, 2020 | $ 3,851 | 195,488,181 | 190,966 | (162,277,414) | $ 33,405,584 | ||
Balance (in Shares) at Dec. 31, 2020 | 38,506,844 | ||||||
Restricted stock (in Shares) | 11,521 | ||||||
Balance at Sep. 30, 2021 | $ 3,915 | 197,642,458 | 226,855 | (94,251,576) | $ 103,621,652 | ||
Balance (in Shares) at Sep. 30, 2021 | 39,141,907 | ||||||
Balance at Mar. 31, 2021 | $ 3,917 | 196,872,987 | 216,302 | (165,614,090) | 31,479,116 | ||
Balance (in Shares) at Mar. 31, 2021 | 39,162,811 | ||||||
Stock options | 226,698 | 226,698 | |||||
Restricted stock | 80,925 | 80,925 | |||||
Net income (loss) | (2,940,080) | (2,940,080) | |||||
Other comprehensive income (Loss) | 32,584 | 32,584 | |||||
Balance at Jun. 30, 2021 | $ 3,917 | 197,180,610 | 248,886 | (168,554,170) | 28,879,243 | ||
Balance (in Shares) at Jun. 30, 2021 | 39,162,811 | ||||||
Stock options | 613,070 | 613,070 | |||||
Restricted stock | $ 8 | 58,915 | 58,923 | ||||
Restricted stock (in Shares) | 80,000 | ||||||
Shares withheld for employee payroll tax | $ (10) | (210,137) | (210,147) | ||||
Shares withheld for employee payroll tax (in Shares) | (100,904) | ||||||
Net income (loss) | 74,302,594 | 74,302,594 | |||||
Other comprehensive income (Loss) | (22,031) | (22,031) | |||||
Balance at Sep. 30, 2021 | $ 3,915 | $ 197,642,458 | $ 226,855 | $ (94,251,576) | $ 103,621,652 | ||
Balance (in Shares) at Sep. 30, 2021 | 39,141,907 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash Flows From Operating Activities | ||
Net income (loss) | $ 68,025,838 | $ (26,206,075) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Income from discontinued operations, net of tax provision | (79,330,696) | (630,678) |
Stock-based compensation | 1,081,362 | 4,729,643 |
Gain on forgiveness of PPP loans and interest | (912,475) | |
Conversion inducement expense | 5,247,531 | |
Extinguishment loss on acceleration of debt redemption | 1,733,768 | |
Change in fair value of warrant liabilities | 1,100 | |
Amortization of debt discount | 3,646 | 1,639,150 |
Non-cash interest expense | 46,110 | 183,373 |
Expenses paid on behalf of WPT | (305,845) | |
Depreciation and amortization | 2,495,939 | 2,715,007 |
Impairment of investment in ESA | 1,138,631 | |
Deferred rent | 268,574 | (49,347) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (36,021) | 526,405 |
Prepaid expenses and other current assets | (108,257) | (50,148) |
Deposits | 7,963 | |
Accounts payable | (556,041) | 264,945 |
Accrued expenses and other current liabilities | 326,862 | 738,404 |
Accrued interest | (146,894) | (770,658) |
Due to affiliates | 697,551 | 4,229,090 |
Deferred revenue | 297,086 | 219,263 |
Total Adjustments | (75,872,154) | 21,566,497 |
Net Cash Used In Operating Activities | (7,846,316) | (4,639,578) |
Cash Flows From Investing Activities | ||
Cash consideration for sale of WPT | 106,155,004 | |
Return of Simon investment | (3,650,000) | |
Investment in TV Azteca | (1,500,000) | |
Purchases of property and equipment | (141,923) | (390,459) |
Purchases of intangible assets | (750) | |
Net Cash Provided By (Used in) Investing Activities | 106,013,081 | (5,541,209) |
Cash Flows From Financing Activities | ||
Proceeds from PPP loans payable | 907,129 | |
Proceeds from convertible debt | 9,000,000 | |
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 of bridge loans | (3,421,096) | |
Proceeds from sale of common stock | 7,000,000 | |
Net Cash (Used In) Provided By Financing Activities | (3,421,096) | 9,162,043 |
Cash Flows From Discontinued Operations | ||
Operating activities | 63,956 | (1,885,111) |
Investing activities | (17,259) | 875,698 |
Financing activities | 685,300 | |
Change in cash balance of discontinued operations | 3,633,292 | 324,113 |
Cash sold in connection with sale of WPT | (3,679,989) | |
Net Cash Provided By Discontinued Operations | ||
Effect of Exchange Rate Changes on Cash | 51,893 | 25,254 |
Net Increase (Decrease) In Cash And Restricted Cash | 94,797,562 | (993,490) |
Cash and restricted cash - Beginning of period | 5,424,223 | 6,927,417 |
Cash and restricted cash - End of period | 100,221,785 | 5,933,927 |
Cash and restricted cash consisted of the following: | ||
Cash | 95,221,785 | 933,927 |
Restricted cash | 5,000,000 | 5,000,000 |
Total | 100,221,785 | 5,933,927 |
Supplemental Disclosures of Cash Flow Information: | ||
Cash paid during the period for interest | 350,471 | 2,095,527 |
Non-Cash Investing and Financing Activities: | ||
Original issue discount on convertible debt | 600,000 | |
Beneficial conversion feature associated with convertible debt | 523,636 | |
Warrants issued with convertible debt | 1,205,959 | |
Guaranteed interest on convertible debt recorded as debt discount | 1,536,000 | |
Shares issued upon conversion of Bridge Note | 5,000,000 | |
Interest payable on Bridge Note converted to principal | 1,421,096 | |
Non-cash interest on convertible debt recorded as debt discount | 1,664,000 | |
Shares issued for redemption of debt and accrued interest | 821,867 | 5,236,364 |
Forgiveness of amounts due to affiliate | 9,370,261 | |
Shares issued in satisfaction of employee bonus obligations | $ 474,000 |
Business Organization and Natur
Business Organization and Nature of Operations | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Business Organization and Nature of Operations | Note 1 – Business Organization and Nature of Operations Allied Esports Entertainment Inc., (“AESE” and together with its subsidiaries “the Company”), operates a public esports and entertainment company, consisting of the Allied Esports business and through the sale of WPT on July 12, 2021 (See Note 3 – Sale of WPT), the World Poker Tour business. Allied Esports operates through its wholly owned subsidiaries Allied Esports International, Inc., (“AEII”), Esports Arena Las Vegas, LLC (“ESALV”) and ELC Gaming GMBH (“ELC Gaming”). AEII 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. ELC Gaming 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. AESE’s wholly owned subsidiaries, Peerless Media Limited, Club Services, Inc. (“CSI”) and WPT Enterprises, Inc., operated the poker-related business of AESE and are collectively referred to herein as “World Poker Tour” or “WPT”. The World Poker Tour is an internationally televised gaming and entertainment company that has been involved in the sport of poker since 2002 and created a television show based on a series of high-stakes poker tournaments. On January 19, 2021, the Company entered into a stock purchase agreement (as amended and restated, the “SPA”) for the sale of 100% of the capital stock of its wholly owned subsidiary, CSI. CSI owns 100% of each of the legal entities which comprise the World Poker Tour. On July 12, 2021, the Company consummated the sale of the World Poker Tour business (see Note 3 – Sale of WPT for additional information). As the result of the Company’s sale of WPT, the Consolidated Balance Sheet as of December 31, 2020, the Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2021 and 2020, and the Consolidated Statements of Cash Flows for the nine months ended September 30, 2021 and 2020, present the results and accounts of World Poker Tour as discontinued operations and the related assets and liabilities are presented as assets and liabilities of discontinued operations. See Note 3 – Sale of WPT. COVID-19 Pandemic. |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Note 2 – Significant Accounting Policies There have been no material changes to the Company’s significant accounting policies as set forth in the Company’s audited consolidated financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2020, except as disclosed in this note. 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 Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on April 13, 2021. 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, 2021, and for the three and nine months ended September 30, 2021 and 2020. The results of operations for the nine months ended September 30, 2021 are not necessarily indicative of the operating results for the full year ending December 31, 2021 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 consolidated financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2020, filed with the Securities and Exchange Commission (“SEC”) on April 13, 2021. Net Income (Loss) per Common Share Basic loss per common share is computed by dividing net loss attributable to the Company 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. There were no dilutive securities outstanding during the three and nine months ended September 30, 2021 or the three and nine months ended September 30, 2020 (computed using the treasury stock or if-converted method). The following securities are excluded from the calculation of weighted average dilutive common shares because their inclusion would have been anti-dilutive: As of September 30, 2021 2020 Restricted common shares 80,000 199,143 Options 2,565,000 2,430,000 Warrants 20,091,549 20,091,549 Convertible debt - 3,609,839 Equity purchase options 600,000 600,000 Contingent consideration shares 192,308 269,231 23,528,857 27,199,762 Warrant Liabilities Entities must consider whether to classify contracts that may be settled in its own stock, such as warrants, as equity of the entity or as an asset or liability. If an event that is not within the entity’s control could require net cash settlement, then the contract should be classified as an asset or a liability rather than as equity. ● Management has determined that its publicly-traded warrants (the “public warrants”) are of a form that qualify for equity classification. ● Management has determined that the common stock purchase warrants issued by the Company on June 8, 2020 in connection with the issuance of convertible notes (the “convertible note warrants”) are of a form that qualify for equity classification. ● Management has determined that the warrants previously issued to the Company’s sponsor (the “sponsor warrants”) contain provisions that change depending on who holds the sponsor warrant. If the sponsor warrants are held by someone other than the initial purchasers or their permitted transferees, the sponsor warrants will be redeemable by the Company and exercisable by such holders on the same basis as the public warrants. This feature precludes the sponsor warrants from being indexed to the Company’s common stock, and thus the sponsor warrants are classified as a liability measured at fair value, with changes in fair value each period reported in earnings. As of September 30, 2021 and December 31, 2020, the fair value of our warrant liabilities totaled $4,100 and $3,000, respectively, which are included in accrued expenses and other current liabilities in the accompanying condensed consolidated balance sheet. See Note 4 – Accrued Expenses and Other Current Liabilities. Financial Instruments and Fair Value Fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, there exists a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1 - Unadjusted quoted market prices for identical assets or liabilities; Level 2 - Quoted market prices for identical assets or liabilities in an active market that have been adjusted for items such as effects of restrictions for transferability and those that are not quoted but are observable through corroboration with observable market data, including quoted market prices for similar assets or liabilities; and Level 3 - Unobservable inputs for the asset or liability only used when there is little, if any, market activity for the asset or liability at the measurement date. This hierarchy requires management to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. The carrying amounts of the Company’s financial instruments, such as accounts receivable, accounts payable and accrued liabilities approximate fair value due to the short-term nature of these instruments. The Company’s convertible debt, bridge notes and loans payable approximate fair value due to their short-term nature and market rate of interest. The sponsor warrants are carried at fair value as of September 30, 2021 and December 31, 2020. The sponsor warrants are valued using level 3 inputs. The fair value of the sponsor warrants is estimated using the Black-Scholes option pricing method. Significant level 3 inputs used to calculate the fair value of the sponsor warrants include the share price on the valuation date, expected volatility, expected term and the risk-free interest rate. The following is a roll forward of the Company’s Level 3 instruments: Balance, December 31, 2020 $ 3,000 Change in fair value of sponsor warrants 36,300 Balance, March 31, 2021 39,300 Change in fair value of sponsor warrants (25,300 ) Balance, June 30, 2021 14,000 Change in fair value of sponsor warrants (9,900 ) Balance, September 30, 2021 $ 4,100 The key inputs into the Black-Scholes model at the relevant measurement dates were as follows: September 30, December 31, Input 2021 2020 Risk-free rate 0.53 % 0.27 % Remaining term in years 2.86 3.61 Expected volatility 46.0 % 42.0 % Exercise price $ 11.50 $ 11.50 Fair value of common stock $ 1.77 $ 1.58 Revenue Recognition To determine the proper revenue recognition method, the Company evaluates each of its contractual arrangements to identify its performance obligations. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. The majority of the Company’s contracts have a single performance obligation because the promise to transfer the individual good or service is not separately identifiable from other promises within the contract and is therefore not distinct. Some of the Company’s contracts have multiple performance obligations, primarily related to the provision of multiple goods or services. For contracts with more than one performance obligation, the Company allocates the total transaction price in an amount based on the estimated relative standalone selling prices underlying each performance obligation. Revenue recognized from continuing operations during the three and nine months ended September 30, 2021 and 2020 was 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 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 the 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 Las Vegas 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, 2021 and 2020: For the Three Months Ended For the Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Event revenue $ 1,002,452 $ 126,289 $ 1,420,364 $ 412,361 Sponsorship revenue 161,825 314,924 535,355 1,305,014 Food and beverage revenue 129,549 34,427 300,357 266,726 Ticket and gaming revenue 159,533 118,996 357,488 270,247 Merchandising revenue 2,508 678 14,117 19,065 Other revenue - 618 100 722 Total in-person revenue $ 1,455,867 $ 595,932 $ 2,627,781 $ 2,274,135 Multiplatform content revenue The Company’s multiplatform content revenue is comprised of distribution revenue. Distribution revenue is generated primarily through the development, promotion, and execution of Esports Tournaments covering multiple, Company-approved game titles. 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 received a payment for services that have yet to be performed or products that have yet to be delivered. The Company recorded multiplatform content revenue of $229,961 and $383,684, respectively, for the three and nine months ended September 30, 2021, and $951 for the three and nine months ended September 30, 2020. The following table summarizes our revenue recognized in our condensed consolidated statements of operations: For the Three Months Ended For the Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Revenues Recognized at a Point in Time: Event revenue $ 1,002,452 $ 126,289 $ 1,420,364 $ 412,361 Distribution revenue 229,961 951 383,684 951 Food and beverage revenue 129,549 34,427 300,357 266,726 Ticket and gaming revenue 159,533 118,996 357,488 270,247 Sponsorship revenue - 2,502 - 2,502 Merchandising revenue 2,508 678 14,117 19,065 Other revenue - 618 100 722 Total Revenues Recognized at a Point in Time 1,524,003 284,461 2,476,110 972,574 Revenues Recognized Over a Period of Time: Sponsorship revenue 161,825 312,422 535,355 1,302,512 Total Revenues Recognized Over a Period of Time 161,825 312,422 535,355 1,302,512 Total Revenues $ 1,685,828 $ 596,883 $ 3,011,465 $ 2,275,086 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. Concentration Risks Financial instruments that potentially subject the Company to concentration of credit risk consist of cash accounts in a financial institution which, at times, may exceed Federal Deposit Insurance Corporation insured limits. The Company has not experienced any losses in such accounts, periodically evaluates the creditworthiness of the financial institutions and has determined the credit exposure to be negligible. During the three months ended September 30, 2021 and 2020, 1% and 18%, respectively, of the Company’s revenues from continuing operations were from customers in foreign countries. During the nine months ended September 30, 2021 and 2020, 3% and 14%, respectively, of the Company’s revenues from continuing operations were from customers in foreign countries. During the three months ended September 30, 2021, the Company’s two largest customers accounted for 32% and 14% of the Company’s consolidated revenues from continuing operations. During the nine months ended September 30, 2021, the Company’s four largest customers accounted for 22%, 15%, 13% and 11% of the Company’s consolidated revenues from continuing operations. During the three months ended September 30, 2020, the Company’s three largest customers accounted for 46%, 15%, and 11% of the Company’s consolidated revenues from continuing operations. During the nine months ended September 30, 2020, the Company’s two largest customers accounted for 53% and 18% of the Company’s consolidated revenues from continuing operations. 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 (1.1589 and 1.2264, at September 30, 2021 and December 31, 2020, respectively), and revenue and expense accounts are translated using the weighted average exchange rate in effect for the period (1.1790 and 1.1243 for the nine months ended September 30, 2021 and 2020, respectively). Resulting translation adjustments are made directly to accumulated other comprehensive (loss) income. Subsequent Events The Company evaluates events that have occurred after the balance sheet date but before the financial statements are issued. Based upon the evaluation, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the condensed consolidated financial statements, except as disclosed. Discontinued Operations The assets and liabilities of WPT are classified as “discontinued operations” as of December 31, 2020 and are reflected in the accompanying condensed consolidated balance sheets as “Assets of discontinued operations” and “Liabilities of discontinued operations,” respectively. The results of operations of WPT are included in “Income (loss) from discontinued operations, net of tax provision” in the accompanying condensed consolidated statements of operations and comprehensive loss. For comparative purposes, all prior periods presented have been reclassified to reflect the classifications on a consistent basis. Reclassifications Certain prior year balances have been reclassified in order to conform to current year presentation. These reclassifications have no effect on previously reported results of operations or loss per share. Recently Issued Accounting Pronouncements On May 3, 2021, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. This new standard provides clarification and reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (such as warrants) that remain equity classified after modification or exchange. This standard is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Issuers should apply the new standard prospectively to modifications or exchanges occurring after the effective date of the new standard. Early adoption is permitted, including adoption in an interim period. If an issuer elects to early adopt the new standard in an interim period, the guidance should be applied as of the beginning of the fiscal year that includes that interim period. The Company is evaluating this new standard. Recently Adopted Accounting Pronouncements In March 2019, the FASB issued ASU 2019-02, which aligns the accounting for production costs of episodic television series with the accounting for production costs of films. In addition, ASU 2019-02 modifies certain aspects of the capitalization, impairment, presentation and disclosure requirements in Accounting Standards Codification (“ASC”) 926-20 and the impairment, presentation and disclosure requirements in ASC 920-350. This ASU must be adopted on a prospective basis and is effective for annual periods beginning after December 15, 2020, including interim periods within those years, with early adoption permitted. This standard was adopted on January 1, 2021 and did not have a material impact on the Company’s condensed consolidated financial statements or disclosures. In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes,” which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. The Company adopted ASU 2019-12 effective for January 1, 2021 and its adoption did not have a material impact on the Company’s condensed consolidated financial statements and related disclosures. |
Sale of WPT
Sale of WPT | 9 Months Ended |
Sep. 30, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Sale of WPT | Note 3 – Sale of WPT Transaction During the first quarter of 2021, AESE entered into the SPA to sell the equity interests of its subsidiaries that own and operate its WPT business (the “Sale Transaction”), subject to shareholder and regulatory approvals, for a total base purchase price of $105 million. This base purchase price was adjusted to reflect the amount of CSI’s cash (less cash required to satisfy employee payment obligations), indebtedness and accrued and unpaid transaction expenses as of the closing of the Sale Transaction. The WPT business has been recast as discontinued operations, and the assets and liabilities of WPT are classified as assets and liabilities of discontinued operations. See Note 1 – Business Organization and Nature of Operations. In reaching its decision to enter into the SPA, the Company’s Board of Directors, in consultation with management as well as its financial and legal advisors, considered a number of factors, including the risks and challenges facing the WPT business in the future as compared to the opportunities available to the WPT business in the future, and the availability of strategic alternatives. After careful consideration, the Board of Directors unanimously approved the SPA. On July 12, 2021, the Company consummated the sale of the WPT business. Immediately prior to the Sale Transaction, WPT forgave $9,370,261 of amounts due from affiliates, which was recorded as an equity transaction on the stand-alone books of WPT and its affiliates and did not have an effect on the consolidated financial statements. The Company recorded a gain on the sale of the WPT business in the amount of $80,429,729, as follows: Cash consideration for sale of WPT (1) $ 106,155,004 Less: book value of assets sold: Cash 3,579,988 Accounts receivable 2,999,352 Restricted cash 100,000 Prepaid expenses and other assets 264,385 Property and equipment, net 1,429,706 Goodwill 4,083,621 Intangible assets, net 10,986,463 Deposits 79,500 Deferred production costs 12,684,054 Net book value of assets sold 36,207,069 Add: Liabilities assumed by buyer Accounts payable 487,579 Accrued expenses and other liabilities 5,567,072 Deferred revenue 1,807,176 Deferred rent 2,619,967 Total liabilities assumed 10,481,794 Gain on Sale of WPT $ 80,429,729 (1) Subject to post-closing adjustments. Management has determined that there are no current federal or state income taxes payable in connection with the sale of WPT, after considering the Company’s tax basis in the stock of WPT, as well as the Company’s projected tax losses for the 2021 tax year. Further, if needed, the Company has net operating loss carryforwards that are available to offset any tax liability. About WPT WPT 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 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. WPT also participates in strategic brand licensing, partnership, and sponsorship opportunities. Results of Discontinued Operations Net income from discontinued operations details are as follows: For the Three Months Ended For the Nine Months Ended September 30, September 30, 2021 (1) 2020 2021 (1) 2020 Revenues $ 839,005 $ 5,291,419 $ 13,017,362 $ 14,240,556 Operating costs and expenses 3,990,745 4,798,588 14,805,920 13,613,988 (Loss) income from operations (3,151,740 ) 492,831 (1,788,558 ) 626,568 Gain on sale of WPT 80,429,729 - 80,429,729 - Other (expense) income, net - (1,693 ) 689,525 4,110 Net income from discontinued operations, before tax 77,277,989 491,138 79,330,696 630,678 Income tax - - - - Income from discontinued operations, net of tax provision $ 77,277,989 $ 491,138 $ 79,330,696 $ 630,678 (1) Through the date of the Sale Transaction on July 12, 2021. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 9 Months Ended |
Sep. 30, 2021 | |
Accrued Expenses and Other Current Liabilities [Abstract] | |
Accrued Expenses and Other Current Liabilities | Note 4 – Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consist of the following: September 30, December 31, 2021 2020 Compensation expense $ 1,608,732 $ 1,010,734 (1) Current portion of deferred rent 190,719 148,919 Event costs 1,668 26,926 Legal and professional fees 701,546 307,135 Warrant liabilities 4,100 3,000 Unclaimed player prizes 12,272 45,171 Other accrued expenses 288,341 445,132 Other current liabilities 12,727 - $ 2,820,105 $ 1,987,017 (1) Accrued compensation expense as of December 31, 2020 includes approximately $571,000 payable to the employees of the Company’s continuing operations for their 2020 services. The Company paid such compensation from the proceeds of the Sale Transaction. |
Convertible Debt and Convertibl
Convertible Debt and Convertible Debt, Related Party | 9 Months Ended |
Sep. 30, 2021 | |
Convertible Debt And Convertible Debt Related Party [Abstract] | |
Convertible Debt and Convertible Debt, Related Party | Note 5 – Convertible Debt and Convertible Debt, Related Party As of December 31, 2020, the Company’s convertible debt consisted of the following: December 31, 2020 Gross Debt Convertible Convertible debt $ 1,000,000 $ - $ 1,000,000 Convertible debt, related party 1,000,000 - 1,000,000 Senior secured convertible notes 581,818 (3,646 ) 578,172 Total 2,581,818 (3,646 ) 2,578,172 Less: current portion (2,000,000 ) - (2,000,000 ) Convertible debt, non-current $ 581,818 $ (3,646 ) $ 578,172 As of September 30, 2021, the Company repaid all convertible debt. See below for details. Convertible Debt and Convertible Debt, Related Party The Company recorded interest expense of $2,959 and $62,424 related to the Convertible Bridge Notes during the three and nine months ended September 30, 2021, respectively, and recorded interest expense of $32,919 and $1,255,497 (including amortization of debt discount of $2,693 and $154,500, respectively) during the three and nine months ended September 30, 2020. The Company repaid in full the Convertible Bridge Notes from the proceeds of the Sale Transaction (see Note 3 – Sale of WPT). There was no balance outstanding on the convertible debt and all related debt discount has been fully amortized as of September 30, 2021. The Company recorded interest expense of $2,958 and $62,425 related to a Convertible Bridge Note owed to a related party (the “Related Party Convertible Debt”) during the three and nine months ended September 30, 2021, respectively, and recorded interest expense of $32,919 and $130,052 (including amortization of debt discount of $2,693 and $11,885, respectively) during the three and nine months ended September 30, 2020. The Company repaid the Related Party Convertible Debt in full the from the proceeds of the Sale Transaction (see Note 3 – Sale of WPT). There was no balance outstanding on the Related Party Convertible Debt and all related debt discount has been fully amortized as of September 30, 2021. Senior Secured Convertible Notes During January 2021, the Company issued 529,383 shares of its common stock, as Monthly Redemption Payments in satisfaction of an aggregate amount of $581,818 of principal and $93,091 of interest payable owed on the Senior Notes as well as $146,958 of non-cash interest accrued on the Senior Notes. Of the 529,383 shares issued, 132,346 shares were issued in connection with accelerated Monthly Redemption Payments in the aggregate amount of $168,727 (representing $145,454 and $23,273 of principal and interest, respectively). The Company recorded additional non-cash interest expense in the amount of $0 and $46,110 in connection with Monthly Redemption Payments during the three and nine months ended September 30, 2021, respectively. As of September 30, 2021, all principal and interest owed in connection with the Senior Notes has been repaid in full. |
Bridge Note Payable
Bridge Note Payable | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Bridge Note Payable | Note 6 – Bridge Note Payable The Company recorded interest expense of $5,136 and $89,643, respectively, during the three and nine months ended September 30, 2021, and recorded interest expense of $17,742 and $17,742, respectively, during the three and nine months ended September 30, 2020, in connection with the Bridge Note. The Company repaid the Bridge Note in full from the proceeds of the Sale Transaction. See Note 3 - Sale of WPT. |
Loans Payable
Loans Payable | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Loans Payable | Note 7 – Loans Payable During May 2020, the Company’s continuing operations received aggregate cash proceeds of $907,129 pursuant to two loans (the “PPP Loans”) provided in connection with the Paycheck Protection Program (“PPP”) under the CARES Act. The PPP Loans bore interest at 0.98% per annum. Monthly amortized principal and interest payments were scheduled to begin in July 2021 and the notes were scheduled to mature in April 2022. While the PPP Loans currently have two-year maturities, the amended law permits the borrower to request five-year maturities from its lenders. The Company received full forgiveness of the PPP Loans in August 2021. The Company recorded interest expense of $756 and $5,163 related to the PPP Loans for the three and nine months ended September 30, 2021 and $3,936 and $6,626, respectively, for the three and nine months ended September 30, 2020, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 8 – 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 ultimate outcome of these matters will have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. Principal Shareholder Matter During August 2021, the Company received a $2.3 million expense reimbursement request from a principal shareholder. The principal shareholder alleges that former officers of the Company verbally agreed to reimburse certain costs of the principal shareholder that were incurred in connection with specified Company transactions. The Company is evaluating the approval, authorization, nature and reasonableness of the costs related to this matter and is in discussions with the principal shareholder. The Company has not recorded an accrual as of September 30, 2021. Operating Leases 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) $299,250 of deferred minimum monthly rent and additional rent due under the lease for the period from April 1, 2020 through June 3, 2020 must be paid in its entirety by December 31, 2021; (ii) the monthly rent to be paid for the period from June 25, 2020 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”), (iii) the initial term of the lease was extended for two additional months until May 31, 2023, and (iv) 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. The Company met the minimum aggregate Percentage Rent each month during the Rent Relief Period. The Company and the landlord of the event space agreed to extend the Rent Relief Period through the second quarter of 2021. The Company’s aggregate incurred rent expense in the amount of $364,085 and $449,191 during the three months ended September 30, 2021 and 2020, respectively, and $1,111,138 and $1,381,817 during the nine months ended September 30, 2021 and 2020, respectively. Of the aggregate rent incurred during the three months ended September 30, 2021 and 2020, $317,550 and $353,887, respectively, was included within in-person costs and $46,535 and $95,304, respectively, was included in general and administrative expenses on the condensed consolidated statements of operations. Of the aggregate rent incurred during the nine months ended September 30, 2021 and 2020, $891,977 and $1,068,440, respectively, was included within in-person costs and $219,161 and $313,377, respectively, was included in general and administrative expenses on the condensed consolidated statements of operations. AESE is currently the guarantor of WPT’s lease of Irvine, California office space (the “Irvine Lease”). The lease expires on October 1, 2033. Current base rent pursuant to the Irvine Lease is $41,027 per month, increasing to $58,495 per month over the term of the lease. AESE is currently the guarantor of WPT’s lease of Los Angeles, California office space (the “LA Lease”). The lease expires on November 30, 2031. Current base rent pursuant to the LA Lease is $38,533.50 per month, increasing to $51,785.80 per month over the term on the lease. The Company and the purchaser of WPT are working toward releasing the Company as a guarantor on the Irvine and LA leases as part of the Sale Transaction. See Note 3 – Sale of WPT. Resignation of Chief Executive Officer On July 13, 2021, Frank Ng resigned as Chief Executive Officer of the Company, effective immediately. In connection with his resignation, the Company entered into a Release and Separation Agreement with Mr. Ng (the “Separation Agreement”) pursuant to which, among other things, Mr. Ng has agreed to provide reasonable assistance to the Company (when, as and if requested) in connection with the Company’s Esports division, Mr. Ng released any and all claims he may have against the Company and its subsidiaries (subject to certain exclusions), and the Company agreed to provide Mr. Ng with certain separation benefits, including $400,000 (gross) in severance pay payable over a twelve-month period, accelerated vesting of 225,000 unvested stock options previously granted to Mr. Ng pursuant to an Option Agreement dated effective November 21, 2019, and accelerated vesting of all unvested shares of restricted stock previously granted to Mr. Ng pursuant to an Executive Restricted Stock Agreement dated August 7, 2020. In addition, the Separation Agreement provides for an amendment to the terms of the restricted stock units previously granted to Mr. Ng. See Note 9 – Stockholders’ Equity, Restricted Stock Units. Appointment of Chief Executive Officer, President and General Counsel On July 13, 2021, the Company appointed Libing (Claire) Wu as its Chief Executive Officer, President and General Counsel. The Company entered into an employment agreement (the “CEO Agreement”) with Ms. Wu that provides for, among other things, payment to Ms. Wu of an annual base salary equal to $500,000, subject to certain cost-of-living adjustments. Ms. Wu is also eligible to receive an annual incentive bonus of up to 60% of her annual salary, determined at the discretion of the Board of Directors and subject to the attainment of certain Board objectives. In addition, Ms. Wu received a $200,000 bonus payable upon the commencement of her employment. Also, upon commencement of her employment, Ms. Wu was granted 80,000 shares of restricted common stock, subject to transfer and forfeiture restrictions until the shares vest on August 16, 2022, and ten-year stock options to purchase up to 200,000 shares of the Company’s common stock at an exercise price of $2.21 per share that are scheduled to vest in four equal annual installments commencing on the one-year anniversary of the grant date. The CEO Agreement expires automatically on the five-year anniversary of the effective date. However, the CEO Agreement may be extended for additional periods of up to one year by the parties’ mutual written agreement at least thirty days prior to expiration of the current term. The CEO Agreement can be terminated by the Company or by Ms. Wu prior to expiration. In the event the CEO Agreement is terminated without cause (as described in the CEO Agreement) by the Company, or by Ms. Wu for good reason (as described in the CEO Agreement), Ms. Wu is entitled to receive severance from the Company equal to eighteen months of base salary, then in effect at the time of termination, payable over an eighteen-month period in equal installments on the Company’s regular pay dates, less applicable taxes and withholdings. Ms. Wu shall also receive any accrued, but unused vacation pay. Board of Directors On March 29, 2021, the Company’s Board of Directors (“Board”) increased the size of its Board from 10 directors to 11 directors. Yangyang Li was appointed as a Class A Director to fill the vacancy created by the Board’s increase in the size of the Board. Ho Min Kim and Maya Rogers resigned from the Company’s Board of Directors (“Board”) on May 5, 2021. In connection with Ms. Rogers’ and Mr. Kim’s resignations, the Board permitted the accelerated vesting of 10,000 outstanding options previously issued to each person for their director services scheduled to vest on September 19, 2021 and extended the exercise period to exercise 20,000 vested outstanding options issued to each person to September 19, 2029. Given the foregoing resignations, the Board elected Libing (Claire) Wu as a Class C Director, and Jingsheng Lu as a Class B Director, to serve in the vacancies created by the resignations of Mr. Kim and Ms. Rogers, effective May 6, 2021. On May 3, 2021, Frank Ng resigned from the Board of Directors (the “Board”). In connection with Mr Ng’s resignation, the Board permitted the accelerated vesting of 10,000 outstanding options previously issued to Mr. Ng for his director services scheduled to vest on September 19, 2021 and extended the exercise period to exercise 20,000 vested outstanding options issued to Mr. Ng to September 19, 2029. The Company appointed Jerry Lewin to serve as a Class C director on the Board and fill the vacancy on the Board created as a result of Mr. Ng’s resignation. On August 12, 2021, Tae Hyung Steve Kim resigned from the Board. On August 13, 2021, the Company appointed Alexander Misch to serve as a Class B Director on the Board and fill the vacancy on the Board created as a result of Mr. Kim’s resignation. On November 5, 2021, Mr. Misch resigned from the Board. On November 11, 2021, the Company appointed Guanzhou (Jerry) Qin to serve as a Class B Director on the Board and fill the vacancy on the Board created as a result of Mr. Misch’s resignation. On July 6, 2021, the Board approved the following compensation for non-executive directors: (i) annual $30,000 fee for director services; (ii) annual $10,000 fee for non-chair committee services (capped at $10,000 per director); and (iii) annual $15,000 fee for committee chairs (capped at $15,000 per director). The Company has the option to pay such amounts in cash or stock from the Company’s incentive plan (valued at the closing price of AESE common stock on the trading day immediately prior to issuance), with the current fees payable in cash. The fees are payable monthly by the Company. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2021 | |
Stockholders' Equity Note [Abstract] | |
Stockholders’ Equity | Note 9 – Stockholders’ Equity 2019 Equity Incentive Plan On August 13, 2021, the Board approved an amendment to the 2019 Equity Incentive Plan (the “Plan”) to increase the number of shares of common stock authorized under the Plan from 3,463,305 shares to 7,800,000 shares, subject to the approval of the Company’s stockholders. On November 11, 2021, the Board approved revising the number of shares of common stock authorized under the Plan to be 3,763,305 shares, subject to the approval of the Company’s stockholders. As of September 30, 2021 there were 233,444 shares available under the plan. Common Stock On January 4, 2021, the Company issued to its non-executive directors an aggregate of 126,584 shares of common stock from its 2019 Equity Incentive Plan for their director services to the Company. The Company recognized stock-based compensation of $200,000 in connection with the issuance of these shares. Stock Options On May 6, 2021, the Company granted ten-year stock options to purchase an aggregate of 160,000 shares of common stock to its directors. The shares vest in equal annual installments over four years and have an exercise price of $2.48 per share, which represents the Company’s closing stock price on the day prior to the date of grant. The options had an aggregate grant date fair value of $145,777 and are being amortized into expense over the vesting period. On July 13, 2021, the Company granted ten-year stock options to purchase an aggregate of 200,000 shares of common stock to Ms. Wu. The shares vest in equal annual installments over four years and have an exercise price of $2.21 per share, which represents the Company’s closing stock price on the day prior to the date of grant. The options had an aggregate grant date fair value of $202,910 and are amortized over the vesting period. The grant date value of the options granted were calculated using the Black-Scholes option pricing model, with the following assumptions used: For the Three Months Ended For the Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Risk free interest rate 1.01 % 0.55% - 0.69 % 1.01% - 1.58 % 0.55% - 0.69 % Expected term (years) 6.25 6.25 6.25 6.25 Expected volatility 46 % 38 % 40% - 46 % 38 % Expected dividends 0.00 % 0.00 % 0.00 % 0.00 % A summary of the option activity during the nine months ended September 30, 2021 is presented below: Weighted Weighted Average Average Number of Exercise Remaining Intrinsic Options Price Term (Yrs) Value Outstanding, January 1, 2021 2,430,000 $ 4.15 Granted 360,000 2.33 Exercised - - Expired - - Forfeited (225,000 ) 4.51 Outstanding, September 30, 2021 2,565,000 $ 3.88 6.76 $ - Exercisable, September 30, 2021 1,360,000 $ 4.09 4.79 $ - Options outstanding and exercisable as of September 30, 2021 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 8.75 20,000 $ 2.17 120,000 8.85 120,000 $ 2.21 200,000 - - $ 2.48 160,000 - - $ 4.09 1,725,000 3.74 1,050,000 $ 5.66 280,000 7.97 170,000 2,565,000 4.79 1,360,000 In connection with the Sale Transaction, options for the purchase of an aggregate 340,000 common shares held by two officers of WPT became fully vested upon the consummation of the sale of WPT, pursuant to the original terms of the options agreements, and they were modified to permit exercise of the options for the remainder of the current option term. Further, options for the purchase of 187,500 common shares became vested upon the consummation of the sale of WPT and they were modified to permit exercise for a one-year period following the closing of the Sale Transaction. The Company recognized stock-based compensation expense included in discontinued operations, of approximately $156,000 related to the modification of these awards. For the three months ended September 30, 2021 and 2020, the Company recorded $613,070 and $312,117, respectively, of stock-based compensation expense related to stock options issued as compensation, of which $633,197 and $55,063, respectively, was included in net income of discontinued operations on the accompanying condensed consolidated statements of operations. During the nine months ended September 30, 2021 and 2020, the Company recorded $1,122,767 and $766,279, respectively, of stock-based compensation expense related to stock options issued as compensation, of which $746,410 and $156,695, respectively, was included in net income of discontinued operations on the accompanying condensed consolidated statement of operations. As of September 30, 2021, there was $1,191,826 of unrecognized stock-based compensation expense related to the stock options that will be recognized over the weighted average remaining vesting period of 2.56 years. Restricted Common Stock A summary of the non-vested restricted common stock activity during the nine months ended September 30, 2021 is presented below: Weighted Number of Average Restricted Grant Date Stock Fair Value Non-vested balance, January 1, 2021 199,143 $ 2.03 Granted 80,000 2.00 Vested (174,143 ) 1.69 Forfeited (25,000 ) 2.17 Non-vested balance, September 30, 2021 80,000 $ 2.00 In connection with the Sale Transaction, 11,521 restricted shares of common stock held by an officer of WPT became fully vested upon the upon the consummation of the sale of WPT. The Company recorded a credit to stock-based compensation expense included in discontinued operations, of $15,466 related to the modification of these awards. For the three months ended September 30, 2021 and 2020, the Company recorded $58,923 and $265,050, respectively, of stock-based compensation expense related to restricted stock issued as compensation of which $(12,425) and $13,836, respectively, was included in net income of discontinued operations on the accompanying condensed consolidated statements of operations. During the nine months ended September 30, 2021 and 2020, the Company recorded $219,853 and $496,361, respectively, of stock-based compensation expense related to restricted stock issued as compensation of which $14,848 and $26,302, respectively, was included in net income of discontinued operations on the accompanying condensed consolidated statements of operations. As of September 30, 2021, there was $140,274 of unrecognized stock-based compensation expense related to restricted stock that will be recognized over the weighted average remaining vesting period of 0.9 years. Restricted Stock Units On January 19, 2021, the Company entered into a Restricted Stock Unit Agreement with its then Chief Executive Officer (“CEO”), pursuant to which the CEO received restricted stock units having a stated value equal to $1,000,000. The restricted stock units represent the right to receive $1,000,000, contingent upon the closing of the Sale Transaction, which is payable upon the earlier of the two-year anniversary of the closing date of the Sale Transaction (provided that the CEO remains continuously employed by the Company through such date), or the termination of the CEO’s employment without cause after the closing of the Sale Transaction (as defined in his employment agreement) (as applicable, the “Vesting Date”). At the time of payment, the Company may elect to pay the $1,000,000 award in cash or in shares of common stock valued at the fair market value of our common stock on the Vesting Date, or any combination thereof. All issuances of common stock will be issued from the 2019 Equity Incentive Plan. If payments or benefits provided or to be provided by the Company or its affiliates to the CEO pursuant to the agreement or otherwise (“Covered Payments”) constitute “parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986 (the “Code”) that would be subject to the excise tax imposed under Section 4999 of the Code (collectively, the “Excise Tax”), payments to be made under the agreement will be reduced to the minimum extent necessary to ensure that no portion of the Covered Payments is subject to the Excise Tax. Pursuant to the Separation Agreement, the Vesting Date was amended to be the earlier of (i) the sale of substantially all of the assets or equity interests comprising the Company’s esports business, or (ii) the two-year anniversary of the sale of CSI (provided that the CEO provides consulting services (when, as and if requested) to the Company through such date). The Company recorded a charge to stock-based compensation and a corresponding credit to accrued compensation expense in the amount of $100,000 and $300,000 for the three and nine months ended September 30, 2021, respectively, representing the amortization of this award. See Note 8 – Commitments and Contingencies – Resignation of Chief Executive Officer. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 10 – Subsequent Events On November 11, 2021, the Board approved the grant of ten-year stock options for the purchase of 150,000 shares of common stock to certain directors of the Company. The shares vest in equal annual installments over four years, subject to an earlier vesting upon the closing of an acquisition of another company; however, the options may not be exercised in full or in part until the Company’s shareholders have approved an increase in the number of shares authorized under the Company’s 2019 Stock Incentive Plan sufficient to permit the issuance of the shares underlying such options. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
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 Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on April 13, 2021. 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, 2021, and for the three and nine months ended September 30, 2021 and 2020. The results of operations for the nine months ended September 30, 2021 are not necessarily indicative of the operating results for the full year ending December 31, 2021 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 consolidated financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2020, filed with the Securities and Exchange Commission (“SEC”) on April 13, 2021. |
Net Income (Loss) per Common Share | Net Income (Loss) per Common Share Basic loss per common share is computed by dividing net loss attributable to the Company 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. There were no dilutive securities outstanding during the three and nine months ended September 30, 2021 or the three and nine months ended September 30, 2020 (computed using the treasury stock or if-converted method). The following securities are excluded from the calculation of weighted average dilutive common shares because their inclusion would have been anti-dilutive: As of September 30, 2021 2020 Restricted common shares 80,000 199,143 Options 2,565,000 2,430,000 Warrants 20,091,549 20,091,549 Convertible debt - 3,609,839 Equity purchase options 600,000 600,000 Contingent consideration shares 192,308 269,231 23,528,857 27,199,762 |
Warrant Liabilities | Warrant Liabilities Entities must consider whether to classify contracts that may be settled in its own stock, such as warrants, as equity of the entity or as an asset or liability. If an event that is not within the entity’s control could require net cash settlement, then the contract should be classified as an asset or a liability rather than as equity. ● Management has determined that its publicly-traded warrants (the “public warrants”) are of a form that qualify for equity classification. ● Management has determined that the common stock purchase warrants issued by the Company on June 8, 2020 in connection with the issuance of convertible notes (the “convertible note warrants”) are of a form that qualify for equity classification. ● Management has determined that the warrants previously issued to the Company’s sponsor (the “sponsor warrants”) contain provisions that change depending on who holds the sponsor warrant. If the sponsor warrants are held by someone other than the initial purchasers or their permitted transferees, the sponsor warrants will be redeemable by the Company and exercisable by such holders on the same basis as the public warrants. This feature precludes the sponsor warrants from being indexed to the Company’s common stock, and thus the sponsor warrants are classified as a liability measured at fair value, with changes in fair value each period reported in earnings. As of September 30, 2021 and December 31, 2020, the fair value of our warrant liabilities totaled $4,100 and $3,000, respectively, which are included in accrued expenses and other current liabilities in the accompanying condensed consolidated balance sheet. See Note 4 – Accrued Expenses and Other Current Liabilities. |
Financial Instruments and Fair Value | Financial Instruments and Fair Value Fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, there exists a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1 - Unadjusted quoted market prices for identical assets or liabilities; Level 2 - Quoted market prices for identical assets or liabilities in an active market that have been adjusted for items such as effects of restrictions for transferability and those that are not quoted but are observable through corroboration with observable market data, including quoted market prices for similar assets or liabilities; and Level 3 - Unobservable inputs for the asset or liability only used when there is little, if any, market activity for the asset or liability at the measurement date. This hierarchy requires management to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. The carrying amounts of the Company’s financial instruments, such as accounts receivable, accounts payable and accrued liabilities approximate fair value due to the short-term nature of these instruments. The Company’s convertible debt, bridge notes and loans payable approximate fair value due to their short-term nature and market rate of interest. The sponsor warrants are carried at fair value as of September 30, 2021 and December 31, 2020. The sponsor warrants are valued using level 3 inputs. The fair value of the sponsor warrants is estimated using the Black-Scholes option pricing method. Significant level 3 inputs used to calculate the fair value of the sponsor warrants include the share price on the valuation date, expected volatility, expected term and the risk-free interest rate. The following is a roll forward of the Company’s Level 3 instruments: Balance, December 31, 2020 $ 3,000 Change in fair value of sponsor warrants 36,300 Balance, March 31, 2021 39,300 Change in fair value of sponsor warrants (25,300 ) Balance, June 30, 2021 14,000 Change in fair value of sponsor warrants (9,900 ) Balance, September 30, 2021 $ 4,100 The key inputs into the Black-Scholes model at the relevant measurement dates were as follows: September 30, December 31, Input 2021 2020 Risk-free rate 0.53 % 0.27 % Remaining term in years 2.86 3.61 Expected volatility 46.0 % 42.0 % Exercise price $ 11.50 $ 11.50 Fair value of common stock $ 1.77 $ 1.58 |
Revenue Recognition | Revenue Recognition To determine the proper revenue recognition method, the Company evaluates each of its contractual arrangements to identify its performance obligations. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. The majority of the Company’s contracts have a single performance obligation because the promise to transfer the individual good or service is not separately identifiable from other promises within the contract and is therefore not distinct. Some of the Company’s contracts have multiple performance obligations, primarily related to the provision of multiple goods or services. For contracts with more than one performance obligation, the Company allocates the total transaction price in an amount based on the estimated relative standalone selling prices underlying each performance obligation. Revenue recognized from continuing operations during the three and nine months ended September 30, 2021 and 2020 was 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 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 the 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 Las Vegas 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, 2021 and 2020: For the Three Months Ended For the Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Event revenue $ 1,002,452 $ 126,289 $ 1,420,364 $ 412,361 Sponsorship revenue 161,825 314,924 535,355 1,305,014 Food and beverage revenue 129,549 34,427 300,357 266,726 Ticket and gaming revenue 159,533 118,996 357,488 270,247 Merchandising revenue 2,508 678 14,117 19,065 Other revenue - 618 100 722 Total in-person revenue $ 1,455,867 $ 595,932 $ 2,627,781 $ 2,274,135 Multiplatform content revenue The Company’s multiplatform content revenue is comprised of distribution revenue. Distribution revenue is generated primarily through the development, promotion, and execution of Esports Tournaments covering multiple, Company-approved game titles. 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 received a payment for services that have yet to be performed or products that have yet to be delivered. The Company recorded multiplatform content revenue of $229,961 and $383,684, respectively, for the three and nine months ended September 30, 2021, and $951 for the three and nine months ended September 30, 2020. The following table summarizes our revenue recognized in our condensed consolidated statements of operations: For the Three Months Ended For the Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Revenues Recognized at a Point in Time: Event revenue $ 1,002,452 $ 126,289 $ 1,420,364 $ 412,361 Distribution revenue 229,961 951 383,684 951 Food and beverage revenue 129,549 34,427 300,357 266,726 Ticket and gaming revenue 159,533 118,996 357,488 270,247 Sponsorship revenue - 2,502 - 2,502 Merchandising revenue 2,508 678 14,117 19,065 Other revenue - 618 100 722 Total Revenues Recognized at a Point in Time 1,524,003 284,461 2,476,110 972,574 Revenues Recognized Over a Period of Time: Sponsorship revenue 161,825 312,422 535,355 1,302,512 Total Revenues Recognized Over a Period of Time 161,825 312,422 535,355 1,302,512 Total Revenues $ 1,685,828 $ 596,883 $ 3,011,465 $ 2,275,086 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. |
Concentration Risks | Concentration Risks Financial instruments that potentially subject the Company to concentration of credit risk consist of cash accounts in a financial institution which, at times, may exceed Federal Deposit Insurance Corporation insured limits. The Company has not experienced any losses in such accounts, periodically evaluates the creditworthiness of the financial institutions and has determined the credit exposure to be negligible. During the three months ended September 30, 2021 and 2020, 1% and 18%, respectively, of the Company’s revenues from continuing operations were from customers in foreign countries. During the nine months ended September 30, 2021 and 2020, 3% and 14%, respectively, of the Company’s revenues from continuing operations were from customers in foreign countries. During the three months ended September 30, 2021, the Company’s two largest customers accounted for 32% and 14% of the Company’s consolidated revenues from continuing operations. During the nine months ended September 30, 2021, the Company’s four largest customers accounted for 22%, 15%, 13% and 11% of the Company’s consolidated revenues from continuing operations. During the three months ended September 30, 2020, the Company’s three largest customers accounted for 46%, 15%, and 11% of the Company’s consolidated revenues from continuing operations. During the nine months ended September 30, 2020, the Company’s two largest customers accounted for 53% and 18% of the Company’s consolidated revenues from continuing operations. |
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 (1.1589 and 1.2264, at September 30, 2021 and December 31, 2020, respectively), and revenue and expense accounts are translated using the weighted average exchange rate in effect for the period (1.1790 and 1.1243 for the nine months ended September 30, 2021 and 2020, respectively). Resulting translation adjustments are made directly to accumulated other comprehensive (loss) income. |
Subsequent Events | Subsequent Events The Company evaluates events that have occurred after the balance sheet date but before the financial statements are issued. Based upon the evaluation, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the condensed consolidated financial statements, except as disclosed. |
Discontinued Operations | Discontinued Operations The assets and liabilities of WPT are classified as “discontinued operations” as of December 31, 2020 and are reflected in the accompanying condensed consolidated balance sheets as “Assets of discontinued operations” and “Liabilities of discontinued operations,” respectively. The results of operations of WPT are included in “Income (loss) from discontinued operations, net of tax provision” in the accompanying condensed consolidated statements of operations and comprehensive loss. For comparative purposes, all prior periods presented have been reclassified to reflect the classifications on a consistent basis. |
Reclassifications | Reclassifications Certain prior year balances have been reclassified in order to conform to current year presentation. These reclassifications have no effect on previously reported results of operations or loss per share. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements On May 3, 2021, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. This new standard provides clarification and reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (such as warrants) that remain equity classified after modification or exchange. This standard is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Issuers should apply the new standard prospectively to modifications or exchanges occurring after the effective date of the new standard. Early adoption is permitted, including adoption in an interim period. If an issuer elects to early adopt the new standard in an interim period, the guidance should be applied as of the beginning of the fiscal year that includes that interim period. The Company is evaluating this new standard. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In March 2019, the FASB issued ASU 2019-02, which aligns the accounting for production costs of episodic television series with the accounting for production costs of films. In addition, ASU 2019-02 modifies certain aspects of the capitalization, impairment, presentation and disclosure requirements in Accounting Standards Codification (“ASC”) 926-20 and the impairment, presentation and disclosure requirements in ASC 920-350. This ASU must be adopted on a prospective basis and is effective for annual periods beginning after December 15, 2020, including interim periods within those years, with early adoption permitted. This standard was adopted on January 1, 2021 and did not have a material impact on the Company’s condensed consolidated financial statements or disclosures. In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes,” which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. The Company adopted ASU 2019-12 effective for January 1, 2021 and its adoption did not have a material impact on the Company’s condensed consolidated financial statements and related disclosures. |
Significant Accounting Polici_2
Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Schedule of weighted average dilutive common shares | As of September 30, 2021 2020 Restricted common shares 80,000 199,143 Options 2,565,000 2,430,000 Warrants 20,091,549 20,091,549 Convertible debt - 3,609,839 Equity purchase options 600,000 600,000 Contingent consideration shares 192,308 269,231 23,528,857 27,199,762 |
Schedule of roll forward of the company’s level 3 instruments | Balance, December 31, 2020 $ 3,000 Change in fair value of sponsor warrants 36,300 Balance, March 31, 2021 39,300 Change in fair value of sponsor warrants (25,300 ) Balance, June 30, 2021 14,000 Change in fair value of sponsor warrants (9,900 ) Balance, September 30, 2021 $ 4,100 |
Schedule of key inputs into the black-scholes model at the relevant measurement dates | September 30, December 31, Input 2021 2020 Risk-free rate 0.53 % 0.27 % Remaining term in years 2.86 3.61 Expected volatility 46.0 % 42.0 % Exercise price $ 11.50 $ 11.50 Fair value of common stock $ 1.77 $ 1.58 |
Schedule of deferred revenue | For the Three Months Ended For the Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Event revenue $ 1,002,452 $ 126,289 $ 1,420,364 $ 412,361 Sponsorship revenue 161,825 314,924 535,355 1,305,014 Food and beverage revenue 129,549 34,427 300,357 266,726 Ticket and gaming revenue 159,533 118,996 357,488 270,247 Merchandising revenue 2,508 678 14,117 19,065 Other revenue - 618 100 722 Total in-person revenue $ 1,455,867 $ 595,932 $ 2,627,781 $ 2,274,135 For the Three Months Ended For the Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Revenues Recognized at a Point in Time: Event revenue $ 1,002,452 $ 126,289 $ 1,420,364 $ 412,361 Distribution revenue 229,961 951 383,684 951 Food and beverage revenue 129,549 34,427 300,357 266,726 Ticket and gaming revenue 159,533 118,996 357,488 270,247 Sponsorship revenue - 2,502 - 2,502 Merchandising revenue 2,508 678 14,117 19,065 Other revenue - 618 100 722 Total Revenues Recognized at a Point in Time 1,524,003 284,461 2,476,110 972,574 Revenues Recognized Over a Period of Time: Sponsorship revenue 161,825 312,422 535,355 1,302,512 Total Revenues Recognized Over a Period of Time 161,825 312,422 535,355 1,302,512 Total Revenues $ 1,685,828 $ 596,883 $ 3,011,465 $ 2,275,086 |
Sale of WPT (Tables)
Sale of WPT (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of sale WPT | Cash consideration for sale of WPT (1) $ 106,155,004 Less: book value of assets sold: Cash 3,579,988 Accounts receivable 2,999,352 Restricted cash 100,000 Prepaid expenses and other assets 264,385 Property and equipment, net 1,429,706 Goodwill 4,083,621 Intangible assets, net 10,986,463 Deposits 79,500 Deferred production costs 12,684,054 Net book value of assets sold 36,207,069 Add: Liabilities assumed by buyer Accounts payable 487,579 Accrued expenses and other liabilities 5,567,072 Deferred revenue 1,807,176 Deferred rent 2,619,967 Total liabilities assumed 10,481,794 Gain on Sale of WPT $ 80,429,729 (1) Subject to post-closing adjustments. |
Schedule of sale WPT | For the Three Months Ended For the Nine Months Ended September 30, September 30, 2021 (1) 2020 2021 (1) 2020 Revenues $ 839,005 $ 5,291,419 $ 13,017,362 $ 14,240,556 Operating costs and expenses 3,990,745 4,798,588 14,805,920 13,613,988 (Loss) income from operations (3,151,740 ) 492,831 (1,788,558 ) 626,568 Gain on sale of WPT 80,429,729 - 80,429,729 - Other (expense) income, net - (1,693 ) 689,525 4,110 Net income from discontinued operations, before tax 77,277,989 491,138 79,330,696 630,678 Income tax - - - - Income from discontinued operations, net of tax provision $ 77,277,989 $ 491,138 $ 79,330,696 $ 630,678 (1) Through the date of the Sale Transaction on July 12, 2021. |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Accrued Expenses and Other Current Liabilities [Abstract] | |
Schedule of accrued expenses and other current liabilities | September 30, December 31, 2021 2020 Compensation expense $ 1,608,732 $ 1,010,734 (1) Current portion of deferred rent 190,719 148,919 Event costs 1,668 26,926 Legal and professional fees 701,546 307,135 Warrant liabilities 4,100 3,000 Unclaimed player prizes 12,272 45,171 Other accrued expenses 288,341 445,132 Other current liabilities 12,727 - $ 2,820,105 $ 1,987,017 (1) Accrued compensation expense as of December 31, 2020 includes approximately $571,000 payable to the employees of the Company’s continuing operations for their 2020 services. The Company paid such compensation from the proceeds of the Sale Transaction. |
Convertible Debt and Converti_2
Convertible Debt and Convertible Debt, Related Party (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Convertible Debt And Convertible Debt Related Party [Abstract] | |
Schedule of convertible debt | December 31, 2020 Gross Debt Convertible Convertible debt $ 1,000,000 $ - $ 1,000,000 Convertible debt, related party 1,000,000 - 1,000,000 Senior secured convertible notes 581,818 (3,646 ) 578,172 Total 2,581,818 (3,646 ) 2,578,172 Less: current portion (2,000,000 ) - (2,000,000 ) Convertible debt, non-current $ 581,818 $ (3,646 ) $ 578,172 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Stockholders' Equity Note [Abstract] | |
Schedule of the grant date value of the options granted | For the Three Months Ended For the Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Risk free interest rate 1.01 % 0.55% - 0.69 % 1.01% - 1.58 % 0.55% - 0.69 % Expected term (years) 6.25 6.25 6.25 6.25 Expected volatility 46 % 38 % 40% - 46 % 38 % Expected dividends 0.00 % 0.00 % 0.00 % 0.00 % |
Schedule of option activity | Weighted Weighted Average Average Number of Exercise Remaining Intrinsic Options Price Term (Yrs) Value Outstanding, January 1, 2021 2,430,000 $ 4.15 Granted 360,000 2.33 Exercised - - Expired - - Forfeited (225,000 ) 4.51 Outstanding, September 30, 2021 2,565,000 $ 3.88 6.76 $ - Exercisable, September 30, 2021 1,360,000 $ 4.09 4.79 $ - |
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 8.75 20,000 $ 2.17 120,000 8.85 120,000 $ 2.21 200,000 - - $ 2.48 160,000 - - $ 4.09 1,725,000 3.74 1,050,000 $ 5.66 280,000 7.97 170,000 2,565,000 4.79 1,360,000 |
Schedule of non-vested restricted stock activity | Weighted Number of Average Restricted Grant Date Stock Fair Value Non-vested balance, January 1, 2021 199,143 $ 2.03 Granted 80,000 2.00 Vested (174,143 ) 1.69 Forfeited (25,000 ) 2.17 Non-vested balance, September 30, 2021 80,000 $ 2.00 |
Business Organization and Nat_2
Business Organization and Nature of Operations (Details) | Jan. 19, 2021 |
Stock Purchase Agreement [Member] | |
Background and Basis of Presentation (Textual) | |
Subsidiary owned sale of equity, percentage | 100.00% |
CSI [Member] | |
Background and Basis of Presentation (Textual) | |
Subsidiary owned sale of equity, percentage | 100.00% |
Significant Accounting Polici_3
Significant Accounting Policies (Details) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($) | |
Significant Accounting Policies (Textual) | |||||
Fair value of warrant liabilities (in Dollars) | $ 4,100 | $ 4,100 | $ 3,000 | ||
Multiplatform content revenue (in Dollars) | $ 229,961 | $ 951 | $ 383,684 | $ 9 | |
Percentage of customers in foreign countries | 1.00% | 18.00% | 3.00% | 14.00% | |
Number of largest customers | 2 | 3 | 4 | 2 | |
Functional currency translation rate for balance sheet | 1.1589 | 1.1589 | 1.2264 | ||
Functional currency translation rate for revenue and expense accounts | 1.179 | 1.1243 | |||
Customer One [Member] | |||||
Significant Accounting Policies (Textual) | |||||
Percentage of consolidated revenues from continuing operations | 32.00% | 22.00% | |||
Customer Two [Member] | |||||
Significant Accounting Policies (Textual) | |||||
Percentage of consolidated revenues from continuing operations | 14.00% | ||||
Customer Three [Member] | |||||
Significant Accounting Policies (Textual) | |||||
Percentage of consolidated revenues from continuing operations | 13.00% | ||||
Customer Four [Member] | |||||
Significant Accounting Policies (Textual) | |||||
Percentage of consolidated revenues from continuing operations | 11.00% | ||||
Customer Two [Member] | |||||
Significant Accounting Policies (Textual) | |||||
Percentage of consolidated revenues from continuing operations | 15.00% | ||||
Customer Concentration Risk [Member] | Customer One [Member] | |||||
Significant Accounting Policies (Textual) | |||||
Percentage of consolidated revenues from continuing operations | 46.00% | 53.00% | |||
Customer Concentration Risk [Member] | Customer Two [Member] | |||||
Significant Accounting Policies (Textual) | |||||
Percentage of consolidated revenues from continuing operations | 15.00% | 18.00% | |||
Customer Concentration Risk [Member] | Customer Three [Member] | |||||
Significant Accounting Policies (Textual) | |||||
Percentage of consolidated revenues from continuing operations | 11.00% |
Significant Accounting Polici_4
Significant Accounting Policies (Details) - Schedule of weighted average dilutive common shares - shares | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Securities excluded from calculation of weighted average dilutive common shares | 23,528,857 | 27,199,762 |
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 | 80,000 | 199,143 |
Options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Securities excluded from calculation of weighted average dilutive common shares | 2,565,000 | 2,430,000 |
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 | 20,091,549 |
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 | |
Equity 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 | 192,308 | 269,231 |
Significant Accounting Polici_5
Significant Accounting Policies (Details) - Schedule of roll forward of the company’s level 3 instruments - Level 3 [Member] - USD ($) | 3 Months Ended | ||
Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | |
Significant Accounting Policies (Details) - Schedule of roll forward of the company’s level 3 instruments [Line Items] | |||
Fair value of beginning balance | $ 14,000 | $ 39,300 | $ 3,000 |
Change in fair value of sponsor warrants | (9,900) | (25,300) | 36,300 |
Fair value of ending balance | $ 4,100 | $ 14,000 | $ 39,300 |
Significant Accounting Polici_6
Significant Accounting Policies (Details) - Schedule of key inputs into the black-scholes model at the relevant measurement dates - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Schedule of key inputs into the black-scholes model at the relevant measurement dates [Abstract] | ||
Risk-free rate | 0.53% | 0.27% |
Remaining term in years | 2 years 10 months 9 days | 3 years 7 months 9 days |
Expected volatility | 46.00% | 42.00% |
Exercise price | $ 11.5 | $ 11.5 |
Fair value of common stock | $ 1.77 | $ 1.58 |
Significant Accounting Polici_7
Significant Accounting Policies (Details) - Schedule of deferred revenue - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Total Revenues | $ 1,685,828 | $ 596,883 | $ 3,011,465 | $ 2,275,086 |
Event Revenue [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenues | 1,002,452 | 126,289 | 1,420,364 | 412,361 |
Event Revenue [Member] | Point in Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenues | 1,002,452 | 126,289 | 1,420,364 | 412,361 |
Sponsorship Revenue [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenues | 161,825 | 314,924 | 535,355 | 1,305,014 |
Sponsorship Revenue [Member] | Point in Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenues | 2,502 | 2,502 | ||
Sponsorship Revenue [Member] | Over a Period of Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenues | 161,825 | 312,422 | 535,355 | 1,302,512 |
Food and Beverage Revenue [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenues | 129,549 | 34,427 | 300,357 | 266,726 |
Food and Beverage Revenue [Member] | Point in Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenues | 129,549 | 34,427 | 300,357 | 266,726 |
Ticket and Gaming Revenue [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenues | 159,533 | 118,996 | 357,488 | 270,247 |
Ticket and Gaming Revenue [Member] | Point in Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenues | 159,533 | 118,996 | 357,488 | 270,247 |
Merchandising Revenue [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenues | 2,508 | 678 | 14,117 | 19,065 |
Merchandising Revenue [Member] | Point in Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenues | 2,508 | 678 | 14,117 | 19,065 |
Other Revenue [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenues | 618 | 100 | 722 | |
Other Revenue [Member] | Point in Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenues | 618 | 100 | 722 | |
Total in-person revenue [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenues | 1,455,867 | 595,932 | 2,627,781 | 2,274,135 |
Distribution Revenue [Member] | Point in Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenues | 229,961 | 951 | 383,684 | 951 |
Total Revenues Recognized at a Point in Time [Member] | Point in Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenues | 1,524,003 | 284,461 | 2,476,110 | 972,574 |
Total Revenues Recognized Over a Period of Time [Member] | Over a Period of Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenues | $ 161,825 | $ 312,422 | $ 535,355 | $ 1,302,512 |
Sale of WPT (Details)
Sale of WPT (Details) - USD ($) | Jul. 12, 2021 | Sep. 30, 2021 | Sep. 30, 2020 |
Discontinued Operations (Textual) | |||
Purchase price | $ 105,000,000 | ||
Forgiveness of amounts due to affiliate | $ 9,370,261 | $ 9,370,261 | |
Gain on sale of WPT | $ 80,429,729 |
Sale of WPT (Details) - Schedul
Sale of WPT (Details) - Schedule of sale WPT - Sale of WPT [Member] | Jul. 12, 2021USD ($) | |
Sale of WPT (Details) - Schedule of sale WPT [Line Items] | ||
Cash consideration for sale of WPT | $ 106,155,004 | [1] |
Less: book value of assets sold: | ||
Cash | 3,579,988 | |
Accounts receivable | 2,999,352 | |
Restricted cash | 100,000 | |
Prepaid expenses and other assets | 264,385 | |
Property and equipment, net | 1,429,706 | |
Goodwill | 4,083,621 | |
Intangible assets, net | 10,986,463 | |
Deposits | 79,500 | |
Deferred production costs | 12,684,054 | |
Net book value of assets sold | 36,207,069 | |
Add: Liabilities assumed by buyer | ||
Accounts payable | 487,579 | |
Accrued expenses and other liabilities | 5,567,072 | |
Deferred revenue | 1,807,176 | |
Deferred rent | 2,619,967 | |
Total liabilities assumed | 10,481,794 | |
Gain on Sale of WPT | $ 80,429,729 | |
[1] | Through the date of the Sale Transaction on July 12, 2021. |
Sale of WPT (Details) - Sched_2
Sale of WPT (Details) - Schedule of Net (loss) income from discontinued operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2021 | [1] | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | ||
Schedule of Net (loss) income from discontinued operations [Abstract] | ||||||
Revenues | $ 839,005 | $ 5,291,419 | $ 13,017,362 | [1] | $ 14,240,556 | |
Operating costs and expenses | 3,990,745 | 4,798,588 | 14,805,920 | [1] | 13,613,988 | |
(Loss) income from operations | (3,151,740) | 492,831 | (1,788,558) | [1] | 626,568 | |
Gain on sale of WPT | 80,429,729 | 80,429,729 | ||||
Other (expense) income, net | (1,693) | 689,525 | [1] | 4,110 | ||
Net income from discontinued operations, before tax | 77,277,989 | 491,138 | 79,330,696 | [1] | 630,678 | |
Income tax | [1] | |||||
Income from discontinued operations, net of tax provision | $ 77,277,989 | $ 491,138 | $ 79,330,696 | [1] | $ 630,678 | |
[1] | Through the date of the Sale Transaction on July 12, 2021. |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Details) | Dec. 31, 2020USD ($) |
Accrued Expenses and Other Current Liabilities [Abstract] | |
Accrued compensation expense | $ 571,000 |
Accrued Expenses and Other Cu_4
Accrued Expenses and Other Current Liabilities (Details) - Schedule of accrued expenses and other current liabilities - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 | |
Schedule of accrued expenses and other current liabilities [Abstract] | |||
Compensation expense | $ 1,608,732 | $ 1,010,734 | [1] |
Current portion of deferred rent | 190,719 | 148,919 | |
Event costs | 1,668 | 26,926 | |
Legal and professional fees | 701,546 | 307,135 | |
Warrant liabilities | 4,100 | 3,000 | |
Unclaimed player prizes | 12,272 | 45,171 | |
Other accrued expenses | 288,341 | 445,132 | |
Other current liabilities | 12,727 | ||
Total | $ 2,820,105 | $ 1,987,017 | |
[1] | Accrued compensation expense as of December 31, 2020 includes approximately $571,000 payable to the employees of the Company’s continuing operations for their 2020 services. The Company paid such compensation from the proceeds of the Sale Transaction. |
Convertible Debt and Converti_3
Convertible Debt and Convertible Debt, Related Party (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Jan. 31, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Convertible Debt and Convertible Debt, Related Party (Textual) | |||||
Amortization of debt discount | $ 3,646 | $ 1,639,150 | |||
Senior secured convertible notes, description | the Company issued 529,383 shares of its common stock, as Monthly Redemption Payments in satisfaction of an aggregate amount of $581,818 of principal and $93,091 of interest payable owed on the Senior Notes as well as $146,958 of non-cash interest accrued on the Senior Notes. Of the 529,383 shares issued, 132,346 shares were issued in connection with accelerated Monthly Redemption Payments in the aggregate amount of $168,727 (representing $145,454 and $23,273 of principal and interest, respectively). The Company recorded additional non-cash interest expense in the amount of $0 and $46,110 in connection with Monthly Redemption Payments during the three and nine months ended September 30, 2021, respectively. As of September 30, 2021, all principal and interest owed in connection with the Senior Notes has been repaid in full. | ||||
Bridge Note [Member] | |||||
Convertible Debt and Convertible Debt, Related Party (Textual) | |||||
Amortization of debt discount | $ 2,693 | 154,500 | |||
Related Party Convertible Debt [Member] | |||||
Convertible Debt and Convertible Debt, Related Party (Textual) | |||||
Interest expense | $ 2,958 | 32,919 | 62,425 | 130,052 | |
Amortization of debt discount | 2,693 | 11,885 | |||
Bridge Notes [Member] | |||||
Convertible Debt and Convertible Debt, Related Party (Textual) | |||||
Interest expense | $ 2,959 | $ 32,919 | $ 62,424 | $ 1,255,497 |
Convertible Debt and Converti_4
Convertible Debt and Convertible Debt, Related Party (Details) - Schedule of convertible debt | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Schedule of convertible debt [Abstract] | |
Convertible debt, Gross Principal Amount | $ 1,000,000 |
Convertible debt, Debt Discount | |
Convertible Debt, Net of Debt Discount | 1,000,000 |
Convertible debt, related party, Gross Principal Amount | 1,000,000 |
Convertible debt, related party, Debt Discount | |
Convertible debt, related party, Convertible Debt, Net of Debt Discount | 1,000,000 |
Senior secured convertible notes, Gross Principal Amount | 581,818 |
Senior secured convertible notes, Debt Discount | (3,646) |
Senior secured convertible notes, Convertible Debt, Net of Debt Discount | 578,172 |
Total, Gross Principal Amount | 2,581,818 |
Total, Debt Discount | (3,646) |
Total, Convertible Debt, Net of Debt Discount | 2,578,172 |
Less: current portion, Gross Principal Amount | (2,000,000) |
Less: current portion, Debt Discount | |
Less: current portion, Convertible Debt, Net of Debt Discount | (2,000,000) |
Convertible debt, non-current, Gross Principal Amount | 581,818 |
Convertible debt, non-current, Debt Discount | (3,646) |
Convertible debt, non-current, Convertible Debt, Net of Debt Discount | $ 578,172 |
Bridge Note Payable (Details)
Bridge Note Payable (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Bridge Note Payable (Textual) | ||||
Interest expense | $ 5,136 | $ 17,742 | $ 89,643 | $ 17,742 |
Loans Payable (Details)
Loans Payable (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
May 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Loans Payable (Textual) | |||||
Aggregate cash proceeds | $ 907,129 | $ 907,129 | |||
Bearing interest percent rate | 0.98% | ||||
Interest rate, description | Monthly amortized principal and interest payments were scheduled to begin in July 2021 and the notes were scheduled to mature in April 2022. While the PPP Loans currently have two-year maturities, the amended law permits the borrower to request five-year maturities from its lenders. | ||||
Loans Payable [Member] | |||||
Loans Payable (Textual) | |||||
Interest expense on PPP loans | $ 756 | $ 3,936 | $ 5,163 | $ 6,626 |
Commitments and Contingencies (
Commitments and Contingencies (Details) | Jul. 13, 2021USD ($)$ / sharesshares | Jul. 06, 2021 | Nov. 05, 2020 | May 29, 2021 | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Aug. 31, 2021USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 19, 2029shares | Sep. 19, 2021shares | Nov. 21, 2019USD ($) |
Commitments and Contingencies (Textual) | ||||||||||||
Expense reimbursement request | $ 2,300,000 | |||||||||||
Lease and rent description | 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) $299,250 of deferred minimum monthly rent and additional rent due under the lease for the period from April 1, 2020 through June 3, 2020 must be paid in its entirety by December 31, 2021; (ii) the monthly rent to be paid for the period from June 25, 2020 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”), (iii) the initial term of the lease was extended for two additional months until May 31, 2023, and (iv) the option period to extend the lease was extended to between April 1, 2022 and September 30, 2022. | |||||||||||
Minimum rent payment | $ 194,000 | |||||||||||
Severance pay | $ 400,000 | |||||||||||
Accelerated vesting of unvested stock option | $ 225,000 | |||||||||||
Compensation for non-executive directors | On July 6, 2021, the Board approved the following compensation for non-executive directors: (i) annual $30,000 fee for director services; (ii) annual $10,000 fee for non-chair committee services (capped at $10,000 per director); and (iii) annual $15,000 fee for committee chairs (capped at $15,000 per director). | |||||||||||
Lease of Irvine [Member] | ||||||||||||
Commitments and Contingencies (Textual) | ||||||||||||
Lease description | The lease expires on October 1, 2033. Current base rent pursuant to the Irvine Lease is $41,027 per month, increasing to $58,495 per month over the term of the lease. | |||||||||||
lease of Los Angeles [Member] | ||||||||||||
Commitments and Contingencies (Textual) | ||||||||||||
Lease description | The lease expires on November 30, 2031. Current base rent pursuant to the LA Lease is $38,533.50 per month, increasing to $51,785.80 per month over the term on the lease. | |||||||||||
With in-person [Member] | ||||||||||||
Commitments and Contingencies (Textual) | ||||||||||||
Aggregate rent expense | $ 317,550 | $ 353,887 | $ 891,977 | $ 1,068,440 | ||||||||
Mr Kim’s [Member] | Ms Rogers [Member] | ||||||||||||
Commitments and Contingencies (Textual) | ||||||||||||
Accelerated vesting shares (in Shares) | shares | 10,000 | |||||||||||
General and Administrative Expense [Member] | ||||||||||||
Commitments and Contingencies (Textual) | ||||||||||||
Aggregate rent expense | 46,535 | 95,304 | 219,161 | 313,377 | ||||||||
Ms. Wu [Member] | ||||||||||||
Commitments and Contingencies (Textual) | ||||||||||||
Cost-of-living adjustments | $ 500,000 | |||||||||||
Incentive bonus of annual salary | 60.00% | |||||||||||
Bonus payable received | $ 200,000 | |||||||||||
Restricted common stock | $ 80,000 | |||||||||||
Shares option vested | Aug. 16, 2022 | |||||||||||
Number of purchase of share option (in Shares) | shares | 200,000 | |||||||||||
Exercise price per share (in Dollars per share) | $ / shares | $ 2.21 | |||||||||||
Mr. Ng [Member] | ||||||||||||
Commitments and Contingencies (Textual) | ||||||||||||
Accelerated vesting shares (in Shares) | shares | 10,000 | |||||||||||
Forecast [Member] | ||||||||||||
Commitments and Contingencies (Textual) | ||||||||||||
Vested outstanding shares issued (in Shares) | shares | 20,000 | |||||||||||
Forecast [Member] | Mr. Ng [Member] | ||||||||||||
Commitments and Contingencies (Textual) | ||||||||||||
Vested outstanding shares issued (in Shares) | shares | 20,000 | |||||||||||
Minimum [Member] | ||||||||||||
Commitments and Contingencies (Textual) | ||||||||||||
Number of board of directors | 10 | |||||||||||
Maximum [Member] | ||||||||||||
Commitments and Contingencies (Textual) | ||||||||||||
Number of board of directors | 11 | |||||||||||
Aggregate Rent Expense [Member] | ||||||||||||
Commitments and Contingencies (Textual) | ||||||||||||
Aggregate rent expense | $ 364,085 | $ 449,191 | $ 1,111,138 | $ 1,381,817 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | Jul. 13, 2021 | Jul. 06, 2021 | May 06, 2021 | Jan. 04, 2021 | Jan. 19, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Nov. 11, 2021 | Aug. 13, 2021 |
Stockholders' Equity (Textual) | |||||||||||
Stock based compensation | $ 156,000 | ||||||||||
Stock option (in Shares) | 200,000 | 160,000 | |||||||||
Shares vest in equal annual installments | 4 years | 4 years | |||||||||
Exercise price (in Dollars per share) | $ 2.21 | $ 2.48 | |||||||||
Aggregate grant date fair value | $ 202,910 | $ 145,777 | |||||||||
Purchase of an aggregate shares (in Shares) | 340,000 | ||||||||||
Purchase of common shares (in Shares) | 187,500 | ||||||||||
Stock-based compensation expense | $ 151,220 | $ 508,268 | $ 1,081,362 | $ 4,729,643 | |||||||
Restricted shares of common stock (in Shares) | 11,521 | ||||||||||
Stock based compensation included in discontinued operation | $ 15,466 | ||||||||||
Restricted stock unit agreement, description | On July 6, 2021, the Board approved the following compensation for non-executive directors: (i) annual $30,000 fee for director services; (ii) annual $10,000 fee for non-chair committee services (capped at $10,000 per director); and (iii) annual $15,000 fee for committee chairs (capped at $15,000 per director). | ||||||||||
Pay of award cash | $ 1,000,000 | ||||||||||
Plan [Member] | |||||||||||
Stockholders' Equity (Textual) | |||||||||||
Number of shares of common stock available (in Shares) | 233,444 | 233,444 | 3,763,305 | ||||||||
Stock Options [Member] | |||||||||||
Stockholders' Equity (Textual) | |||||||||||
Stock-based compensation expense | $ 613,070 | 312,117 | $ 1,122,767 | 766,279 | |||||||
Net income of discontinued operations | 633,197 | 55,063 | 746,410 | 156,695 | |||||||
Unrecognized compensation expense | 1,191,826 | $ 1,191,826 | |||||||||
Weighted average remaining vesting period | 2 years 6 months 21 days | ||||||||||
Restricted Stock [Member] | |||||||||||
Stockholders' Equity (Textual) | |||||||||||
Stock-based compensation expense | 58,923 | 265,050 | $ 219,853 | 496,361 | |||||||
Net income of discontinued operations | (12,425) | $ 13,836 | 14,848 | $ 26,302 | |||||||
Unrecognized compensation expense | 140,274 | $ 140,274 | |||||||||
Weighted average remaining vesting period | 10 months 24 days | ||||||||||
Restricted Stock Units (RSUs) [Member] | |||||||||||
Stockholders' Equity (Textual) | |||||||||||
Stock-based compensation expense | $ 100,000 | $ 300,000 | |||||||||
Restricted stock unit agreement, description | pursuant to which the CEO received restricted stock units having a stated value equal to $1,000,000. The restricted stock units represent the right to receive $1,000,000, contingent upon the closing of the Sale Transaction, which is payable upon the earlier of the two-year anniversary of the closing date of the Sale Transaction (provided that the CEO remains continuously employed by the Company through such date), or the termination of the CEO’s employment without cause after the closing of the Sale Transaction (as defined in his employment agreement) (as applicable, the “Vesting Date”). | ||||||||||
2019 Equity Incentive Plan [Member] | Minimum [Member] | |||||||||||
Stockholders' Equity (Textual) | |||||||||||
Common stock authorized (in Shares) | 3,463,305 | ||||||||||
2019 Equity Incentive Plan [Member] | Maximum [Member] | |||||||||||
Stockholders' Equity (Textual) | |||||||||||
Common stock authorized (in Shares) | 7,800,000 | ||||||||||
Equity Incentive Plan [Member] | |||||||||||
Stockholders' Equity (Textual) | |||||||||||
Aggregate shares of common stock (in Shares) | 126,584 | ||||||||||
Stock based compensation | $ 200,000 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - Schedule of the grant date value of the options granted - Equity Option [Member] | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Stockholders' Equity (Details) - Schedule of the grant date value of the options granted [Line Items] | ||||
Expected term (years) | 6 years 3 months | 6 years 3 months | 6 years 3 months | |
Expected volatility | 38.00% | 38.00% | ||
Expected dividends | 0.00% | 0.00% | 0.00% | |
Minimum [Member] | ||||
Stockholders' Equity (Details) - Schedule of the grant date value of the options granted [Line Items] | ||||
Risk free interest rate | 1.01% | 0.55% | 1.01% | 0.55% |
Expected term (years) | 6 years 3 months | |||
Expected volatility | 46.00% | 40.00% | ||
Expected dividends | 0.00% | |||
Maximum [Member] | ||||
Stockholders' Equity (Details) - Schedule of the grant date value of the options granted [Line Items] | ||||
Risk free interest rate | 0.69% | 1.58% | 0.69% | |
Expected volatility | 46.00% |
Stockholders' Equity (Details_2
Stockholders' Equity (Details) - Schedule of option activity - Options [Member] | 9 Months Ended |
Sep. 30, 2021USD ($)$ / sharesshares | |
Stockholders' Equity (Details) - Schedule of option activity [Line Items] | |
Number of Options, Outstanding at beginning | shares | 2,430,000 |
Weighted Average Exercise Price, Outstanding at beginning | $ / shares | $ 4.15 |
Intrinsic Value, Outstanding at beginning | $ | |
Number of Options, Exercisable | shares | 1,360,000 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 4.09 |
Weighted Average Remaining Term (Yrs), Exercisable | 4 years 9 months 14 days |
Intrinsic Value, Exercisable | $ | |
Number of Options, Granted | shares | 360,000 |
Weighted Average Exercise Price, Granted | $ / shares | $ 2.33 |
Number of Options, Exercised | shares | |
Weighted Average Exercise Price, Exercised | $ / shares | |
Number of Options, Expired | shares | |
Weighted Average Exercise Price, Expired | $ / shares | |
Number of Options, Forfeited | shares | (225,000) |
Weighted Average Exercise Price, Forfeited | $ / shares | $ 4.51 |
Number of Options, Outstanding at ending | shares | 2,565,000 |
Weighted Average Exercise Price, Outstanding at ending | $ / shares | $ 3.88 |
Weighted Average Remaining Term (Yrs), Outstanding at ending | 6 years 9 months 3 days |
Intrinsic Value, Outstanding at ending | $ |
Stockholders' Equity (Details_3
Stockholders' Equity (Details) - Schedule of options outstanding and exercisable | 9 Months Ended |
Sep. 30, 2021$ / sharesshares | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Outstanding Number of Options, Options Outstanding | 2,565,000 |
Weighted Average Remaining Life In Years, Options Exercisable | 4 years 9 months 14 days |
Exercisable Number of Options, Options Exercisable | 1,360,000 |
2.11 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise Price, Options Outstanding (in Dollars per share) | $ / shares | $ 2.11 |
Outstanding Number of Options, Options Outstanding | 80,000 |
Weighted Average Remaining Life In Years, Options Exercisable | 8 years 9 months |
Exercisable Number of Options, Options Exercisable | 20,000 |
2.17 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise Price, Options Outstanding (in Dollars per share) | $ / shares | $ 2.17 |
Outstanding Number of Options, Options Outstanding | 120,000 |
Weighted Average Remaining Life In Years, Options Exercisable | 8 years 10 months 6 days |
Exercisable Number of Options, Options Exercisable | 120,000 |
2.21 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise Price, Options Outstanding (in Dollars per share) | $ / shares | $ 2.21 |
Outstanding Number of Options, Options Outstanding | 200,000 |
Weighted Average Remaining Life In Years, Options Exercisable | |
Exercisable Number of Options, Options Exercisable | |
2.48 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise Price, Options Outstanding (in Dollars per share) | $ / shares | $ 2.48 |
Outstanding Number of Options, Options Outstanding | 160,000 |
Weighted Average Remaining Life In Years, Options Exercisable | |
Exercisable Number of Options, Options Exercisable | |
4.09 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise Price, Options Outstanding (in Dollars per share) | $ / shares | $ 4.09 |
Outstanding Number of Options, Options Outstanding | 1,725,000 |
Weighted Average Remaining Life In Years, Options Exercisable | 3 years 8 months 26 days |
Exercisable Number of Options, Options Exercisable | 1,050,000 |
5.66 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise Price, Options Outstanding (in Dollars per share) | $ / shares | $ 5.66 |
Outstanding Number of Options, Options Outstanding | 280,000 |
Weighted Average Remaining Life In Years, Options Exercisable | 7 years 11 months 19 days |
Exercisable Number of Options, Options Exercisable | 170,000 |
Stockholders' Equity (Details_4
Stockholders' Equity (Details) - Schedule of non-vested restricted stock activity | 9 Months Ended |
Sep. 30, 2021$ / sharesshares | |
Schedule of non-vested restricted stock activity [Abstract] | |
Number of Restricted Stock, balance at beginning | shares | 199,143 |
Weighted Average Grant Date Fair Value, balance at beginning | $ / shares | $ 2.03 |
Number of Restricted Stock, balance at ending | shares | 80,000 |
Weighted Average Grant Date Fair Value, balance at ending | $ / shares | $ 2 |
Number of Restricted Stock, Granted | shares | 80,000 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | $ 2 |
Number of Restricted Stock, Vested | shares | (174,143) |
Weighted Average Grant Date Fair Value, Vested | $ / shares | $ 1.69 |
Number of Restricted Stock, Forfeited | shares | (25,000) |
Weighted Average Grant Date Fair Value, Forfeited | $ / shares | $ 2.17 |
Subsequent Events (Details)
Subsequent Events (Details) | Nov. 11, 2021shares |
Subsequent Event [Member] | |
Subsequent Events (Details) [Line Items] | |
Stock option shares | 150,000 |