Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | May 20, 2022 | Jun. 30, 2021 | |
Document Information Line Items | |||
Entity Registrant Name | ALLIED ESPORTS ENTERTAINMENT, INC. | ||
Trading Symbol | AESE | ||
Document Type | 10-K | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Common Stock, Shares Outstanding | 39,116,907 | ||
Entity Public Float | $ 48,017,960 | ||
Amendment Flag | false | ||
Entity Central Index Key | 0001708341 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Well-known Seasoned Issuer | No | ||
Document Period End Date | Dec. 31, 2021 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Shell Company | false | ||
Entity Ex Transition Period | false | ||
ICFR Auditor Attestation Flag | false | ||
Document Annual 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 | 745 Fifth Ave | ||
Entity Address, Address Line Two | Suite 500 | ||
Entity Address, City or Town | New York | ||
Entity Address, State or Province | NY | ||
Entity Address, Postal Zip Code | 10151 | ||
City Area Code | (646) | ||
Local Phone Number | 768-4241 | ||
Title of 12(b) Security | Common Stock | ||
Security Exchange Name | NASDAQ | ||
Entity Interactive Data Current | Yes | ||
Auditor Firm ID | 688 | ||
Auditor Name | Marcum llp | ||
Auditor Location | Melville, New York |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Current Assets | ||
Cash | $ 92,887,030 | $ 424,223 |
Accounts receivable | 389,040 | 271,142 |
Prepaid expenses and other current assets | 984,777 | 909,766 |
Assets of discontinued operations | 45,363,817 | |
Total Current Assets | 94,260,847 | 46,968,948 |
Restricted cash | 5,000,000 | 5,000,000 |
Property and equipment, net | 6,136,893 | 9,275,729 |
Intangible assets, net | 26,827 | 30,818 |
Deposits | 379,105 | 625,000 |
Total Assets | 105,803,672 | 61,900,495 |
Current Liabilities | ||
Accounts payable | 341,161 | 901,353 |
Accrued expenses and other current liabilities | 2,966,245 | 1,987,017 |
Accrued expenses - related party | 1,800,000 | |
Accrued interest, current portion | 152,899 | |
Due to affiliates | 9,433,975 | |
Deferred revenue | 141,825 | 57,018 |
Bridge note payable | 1,421,096 | |
Convertible debt, curent portion | 1,000,000 | |
Convertible debt, related party, current portion | 1,000,000 | |
Loans payable, current portion | 539,055 | |
Liabilities of discontinued operations | 9,169,247 | |
Total Current Liabilities | 5,249,231 | 25,661,660 |
Deferred rent | 1,907,634 | 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 | 7,156,865 | 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, 39,116,907 and 38,506,844 shares issued and outstanding at December 31, 2021 and 2020, respectively | 3,912 | 3,851 |
Additional paid in capital | 197,784,972 | 195,488,181 |
Accumulated deficit | (99,411,683) | (162,277,414) |
Accumulated other comprehensive income | 269,606 | 190,966 |
Total Stockholders’ Equity | 98,646,807 | 33,405,584 |
Total Liabilities and Stockholders’ Equity | $ 105,803,672 | $ 61,900,495 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - $ / shares | Dec. 31, 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 | 39,116,907 | 38,506,844 |
Common stock, outstanding shares | 39,116,907 | 38,506,844 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues: | ||
In-person | $ 4,201,259 | $ 2,988,363 |
Multiplatform content | 754,781 | 222,442 |
Total Revenues | 4,956,040 | 3,210,805 |
Costs and Expenses: | ||
In-person (exclusive of depreciation and amortization) | 3,688,527 | 2,808,648 |
Multiplatform content (exclusive of depreciation and amortization) | 386,723 | 54,256 |
Online operating expenses | 202,396 | 186,702 |
Selling and marketing expenses | 294,417 | 259,892 |
General and administrative expenses | 12,850,567 | 16,283,617 |
Depreciation and amortization | 3,305,895 | 3,609,480 |
Impairment of investment in ESA | 6,138,631 | |
Impairment of property and equipment | 5,595,557 | |
Total Costs and Expenses | 20,728,525 | 34,936,783 |
Loss From Operations | (15,772,485) | (31,725,978) |
Other Income (Expense): | ||
Gain on forgiveness of PPP loans and interest | 912,475 | |
Other income, net | 68,917 | 176,015 |
Conversion inducement expense | (5,247,531) | |
Extinguishment loss on acceleration of debt redemption | (3,438,261) | |
Interest expense | (268,752) | (5,548,583) |
Total Other Income (Expense) | 712,640 | (14,058,360) |
Loss from continuing operations | (15,059,845) | (45,784,338) |
Income from discontinued operations | ||
Income from discontinued operations before the sale of WPT | 66,741 | 725,508 |
Gain on sale of WPT | 77,858,835 | |
Income from discontinued operations | 77,925,576 | 725,508 |
Net income (loss) | $ 62,865,731 | $ (45,058,830) |
Basic and Diluted Net (Loss) Income per Common Share | ||
Continuing operations (in Dollars per share) | $ (0.39) | $ (1.6) |
Discontinued operations (in Dollars per share) | $ 2 | $ 0.03 |
Weighted Average Number of Common Shares Outstanding: | ||
Basic (in Shares) | 39,004,317 | 28,687,361 |
Diluted (in Shares) | 39,004,317 | 28,687,361 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Comprehensive Income (Loss) | ||
Net Income (Loss) | $ 62,865,731 | $ (45,058,830) |
Other comprehensive income: | ||
Foreign currency translation adjustments | 78,640 | 54,789 |
Total Comprehensive Income (Loss) | $ 62,944,371 | $ (45,004,041) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders’ Equity - USD ($) | Common Stock | Additional Paid-in Capital | 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 | ||||
Common stock issued | $ 7 | 128,993 | 129,000 | ||
Common stock issued (in Shares) | 64,286 | ||||
Restricted shares issued | $ 20 | (20) | |||
Restricted shares issued (in Shares) | 199,143 | ||||
Amortization of stock options | 1,158,173 | 1,158,173 | |||
Amortization of restricted common stock | 459,220 | 459,220 | |||
Shares issued upon exercise of put option | $ 102 | 1,999,898 | 2,000,000 | ||
Shares issued upon exercise of put option (in Shares) | 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 | |||
Shares issued for redemption of debt and accrued interest | $ 968 | 13,217,123 | 13,218,091 | ||
Shares issued for redemption of debt and accrued interest (in Shares) | 9,678,840 | ||||
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) | (45,058,830) | (45,058,830) | |||
Other comprehensive income | 54,789 | 54,789 | |||
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 issued for cash | $ 13 | 199,987 | 200,000 | ||
Common stock issued for cash (in Shares) | 126,584 | ||||
Restricted shares issued | $ 8 | (8) | |||
Restricted shares issued (in Shares) | 80,000 | ||||
Amortization of stock options | 1,224,699 | 1,224,699 | |||
Amortization of restricted common stock | 260,433 | 260,433 | |||
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 | ||||
Shares withheld for employee payroll tax | $ (10) | (210,137) | (210,147) | ||
Shares withheld for employee payroll tax (in Shares) | (100,904) | ||||
Restricted stock awards forfeited upon resignation of employee | $ (3) | 3 | |||
Restricted stock awards forfeited upon resignation of employee (in Shares) | (25,000) | ||||
Net income (loss) | 62,865,731 | 62,865,731 | |||
Other comprehensive income | 78,640 | 78,640 | |||
Balance at Dec. 31, 2021 | $ 3,912 | $ 197,784,972 | $ 269,606 | $ (99,411,683) | $ 98,646,807 |
Balance (in Shares) at Dec. 31, 2021 | 39,116,907 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows | 12 Months Ended | |
Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | |
Cash Flows From Operating Activities | ||
Net income (loss) | $ 62,865,731 | $ (45,058,830) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||
Income from discontinued operations, net of tax provision | (77,925,576) | (725,508) |
Stock-based compensation | 1,323,872 | 5,141,988 |
Shares withheld for employee payroll tax expense | (210,147) | |
Gain on forgiveness of PPP loans and interest | (912,475) | |
Conversion inducement expense | 5,247,531 | |
Extinguishment loss on acceleration of debt redemption | 3,438,261 | |
Change in fair value of warrant liabilities | 200 | |
Amortization of debt discount | 3,646 | 3,021,033 |
Non-cash interest expense | 45,451 | 1,193,849 |
Depreciation and amortization | 3,305,895 | 3,609,480 |
Impairment of investments | 6,138,631 | |
Impairment of property and equipment | 5,595,557 | |
Deferred rent | 214,568 | 531,190 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (118,710) | 361,927 |
Prepaid expenses and other current assets | (83,875) | 185,668 |
Deposits | 245,895 | 7,963 |
Accounts payable | (556,783) | 687,625 |
Accrued expenses and other current liabilities | 1,087,802 | 667,263 |
Accrued interest | (146,894) | (647,959) |
Due to affiliates | 697,548 | 5,466,500 |
Deferred revenue | 84,807 | (36,220) |
Total Adjustments | (72,944,776) | 39,884,779 |
Net Cash Used In Operating Activities | (10,079,045) | (5,174,051) |
Cash Flows From Investing Activities | ||
Cash consideration for sale of WPT | 106,049,886 | |
Return of Simon investment | (3,650,000) | |
Investment in TV Azteca | (1,500,000) | |
Purchases of property and equipment | (191,668) | (355,769) |
Purchases of intangible assets | (750) | |
Net Cash Provided By (Used in) Investing Activities | 105,858,218 | (5,506,519) |
Cash Flows From Financing Activities | ||
Proceeds from 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 | (3,083,192) |
Investing activities | (17,259) | 868,028 |
Financing activities | 685,300 | |
Change in cash balance of discontinued operations | 3,633,291 | 1,529,864 |
Cash sold in connection with sale of WPT | (3,679,988) | |
Net Cash Provided By Discontinued Operations | ||
Effect of Exchange Rate Changes on Cash | 104,730 | 15,333 |
Net Increase (Decrease) In Cash And Restricted Cash | 92,462,807 | (1,503,194) |
Cash and restricted cash - Beginning of year | 5,424,223 | 6,927,417 |
Cash and restricted cash - End of year | 97,887,030 | 5,424,223 |
Cash and restricted cash consisted of the following: | ||
Cash | 92,887,030 | 424,223 |
Restricted cash | 5,000,000 | 5,000,000 |
Total | 97,887,030 | 5,424,223 |
Supplemental Disclosures of Cash Flow Information: | ||
Cash paid during the year 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 | 12,024,243 |
Forgiveness of amounts due to affiliate | 9,370,261 | |
Shares issued in satisfaction of employee bonus obligations | $ 474,000 |
Background and Basis of Present
Background and Basis of Presentation | 12 Months Ended |
Dec. 31, 2021 | |
Background [Abstract] | |
Background and Basis of Presentation | Note 1 – Background and Basis of Presentation Allied Esports Entertainment Inc., (“AESE” and formerly known as Black Ridge Acquisition Corp, or “BRAC”) was incorporated in Delaware on May 9, 2017. 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, prior to 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 in Europe that serves as both a battleground and content generation hub and also operates a studio for recording and streaming gaming events. AESE’s previous 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 a result of the Company’s sale of WPT, the Consolidated Balance Sheet as of December 31, 2020, the Consolidated Statements of Operations, the Consolidated Statements of Comprehensive Income (Loss), and the Consolidated Statements of Cash Flows for the years ended December 31, 2021 and 2020, present the results of World Poker Tour as discontinued operations and the related assets and liabilities are presented as assets and liabilities of discontinued operations. COVID-19 Pandemic. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Background [Abstract] | |
Significant Accounting Policies | Note 2 – Significant Accounting Policies Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements have been derived from the accounting records of AESE and its consolidated subsidiaries. All significant intercompany balances have been eliminated in the consolidated financial statements. The consolidated financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles (“U.S. GAAP”) and pursuant to the accounting rules and regulations of the United States Securities and Exchange Commission (“SEC”). Use of Estimates Preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, together with amounts disclosed in the related notes to the financial statements. The Company’s significant estimates used in these financial statements include, but are not limited to, the valuation and carrying amount of intangible assets, accounts receivable reserves, the valuation of investments, stock-based compensation, warrants and deferred tax assets, as well as the recoverability and useful lives of long-lived assets, including intangible assets and property and equipment. Certain of the Company’s estimates could be affected by external conditions, including those unique to the Company and general economic conditions. It is reasonably possible that these external factors could have an effect on the Company’s estimates and could cause actual results to differ from those estimates. Cash and Cash Equivalents All short-term investments of the Company that have a maturity of three months or less when purchased are considered to be cash equivalents. There were no cash equivalents as of December 31, 2021 or 2020. Restricted Cash Restricted cash consists of cash held in an escrow account to be utilized for various approved strategic initiatives and esports event programs pursuant to an agreement with Brookfield Property Partners. See Note 12 – Commitments and Contingencies, Investment Agreements. Accounts Receivable Accounts receivable are carried at their contractual amounts. Management establishes an allowance for doubtful accounts based on its historic loss experience and current economic conditions. Losses are charged to the allowance when management deems further collection efforts will not produce additional recoveries. As of December 31, 2021 and 2020, there was no allowance for doubtful accounts. Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation using the straight-line method over their estimated useful lives once the asset is placed in service. Leasehold improvements are amortized over the lesser of (a) the useful life of the asset; or (b) the remaining lease term (including renewal periods that are reasonably assured). Expenditures for maintenance and repairs which do not extend the economic useful life of the related assets are charged to operations as incurred, and expenditures which extend the economic life are capitalized. When assets are retired or otherwise disposed of, the costs and related accumulated depreciation or amortization are removed from the accounts and any gain or loss on disposal is recognized in the statement of operations for the respective period. The estimated useful lives of property and equipment are as follows: Office equipment 3 - 5 years Computer equipment 3 - 5 years Production equipment 5 years Furniture and fixtures 3 - 5 years Esports gaming truck 5 years Leasehold improvements 10 years Intangible Assets The Company’s intangible assets consist of the Allied Esports trademarks, which are being amortized over a useful life of 10 years. Intangible assets with indefinite lives are not amortized but are evaluated at least annually for impairment and more often whenever changes in facts and circumstances may indicate that the carrying value may not be recoverable. Impairment of Long-Lived Assets The Company reviews for the impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company measures the carrying amount of the asset against the estimated undiscounted future cash flows associated with it. Should the sum of the expected future net cash flows be less than the carrying value of the asset being evaluated, an impairment loss would be recognized for the amount by which the carrying value of the asset exceeds its fair value. The evaluation of asset impairment requires the Company to make assumptions about future cash flows over the life of the asset being evaluated. These assumptions require significant judgment and actual results may differ from assumed and estimated amounts. During the year ended December 31, 2020, the Company recognized an impairment of $6,138,631 related to certain investments, and an impairment of $5,595,557 related to property and equipment, due to management’s determination that the future cash flows from these assets are not expected to be sufficient to recover their carrying value. No impairment costs were recognized during the year ended December 31, 2021. 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 December 31, 2021 and 2020, the fair value of warrant liabilities related to our Sponsor Warrants totaled $3,200 and $3,000, respectively, which is included in accrued expenses and other current liabilities in the accompanying consolidated balance sheet. See Note 7 – Accrued Expenses and Other Current Liabilities. Fair Value of Financial Instruments The Company measures the fair value of financial assets and liabilities based on the guidance of ASC 820 “Fair Value Measurements and Disclosures” (“ASC 820”). ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value: Level 1 - quoted prices in active markets for identical assets or liabilities. Level 2 - quoted prices for similar assets and liabilities in active markets or inputs that are observable. Level 3 - inputs that are unobservable (for example, cash flow modeling inputs based on assumptions). 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 Sponsor Warrants are carried at fair value as of December 31, 2021 and 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, January 1, 2020 $ 3,000 Change in fair value of sponsor warrants - Balance, December 31, 2020 3,000 Change in fair value of sponsor warrants 200 Balance, December 31, 2021 $ 3,200 The key inputs into the Black-Scholes model at the relevant measurement dates were as follows: December 31, Input 2021 2020 Risk-free rate 0.97 % 0.27 % Remaining term in years 2.61 3.61 Expected volatility 46.0 % 42.0 % Exercise price $ 11.50 $ 11.50 Fair value of common stock $ 1.81 $ 1.58 Income Taxes The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of items that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the enactment date. The Company recognizes the tax benefit from an uncertain income tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement by examining taxing authorities. The Company’s policy is to recognize interest and penalties accrued on uncertain income tax positions in interest expense in the Company’s statements of operations. As of December 31, 2021 and 2020, the Company had no liability for unrecognized tax benefits. The Company does not expect the unrecognized tax benefits to change significantly over the next 12 months. Commitments and Contingencies Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. Net 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 potential (a) exercise of outstanding stock options and warrants; (b) the conversion of convertible instruments; and (c) vesting of restricted stock awards. The following securities are excluded from the calculation of weighted average dilutive common shares because their inclusion would have been anti-dilutive: As of 2021 2020 Restricted common shares 80,000 199,143 Options 2,415,000 2,430,000 Warrants 20,091,549 20,091,549 Convertible debt - 439,811 (1) Equity purchase options 600,000 600,000 Contingent consideration shares (2) 192,308 269,231 23,378,857 24,029,734 (1) Common stock equivalents associated with convertible debt were calculated based on the fixed conversion price in effect for voluntary holder conversions; however, for certain convertible notes there is a variable conversion price in effect under certain scenarios that is equal to 87% of lowest daily volume weighted average price over the prior ten days, subject to a $0.734 floor price. If the applicable convertible note principal and guaranteed interest were all converted at the floor price, the potentially dilutive shares related to convertible debt would be 1,154,789 shares. (2) Holders who elected to convert their Bridge Note into common stock are entitled to receive contingent consideration shares equal to the product of (i) 3,846,153 shares, multiplied by (ii) that holder’s investment amount, divided by (iii) $100,000,000, if at any time within five years after the August 9, 2019 closing date, the last exchange-reported sale price of common stock trades at or above $13.00 for thirty (30) consecutive calendar days. 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. The Company recognizes revenue from continuing operations primarily from the following sources: In-person revenue The Company’s in-person revenue is comprised of event revenue, sponsorship revenue, merchandising revenue and other revenue. Event revenue is generated through Allied Esports events held at the Company’s esports properties. Event revenues recognized from the rental of the Allied Esports arena and gaming trucks are recognized at a point in time when the event occurs. In-person revenue also includes revenue from ticket sales, admission fees and food and beverage sales for events held at the Company’s esports properties. Ticket revenue is recognized at the completion of the applicable event. Point of sale revenues, such as food and beverage, gaming and merchandising revenues, are recognized when control of the related goods are transferred to the customer. The Company also generates sponsorship revenues for naming rights for, and rental of, the Company’s arena and gaming trucks. Sponsorship revenues from naming rights of the Company’s esports arena and from sponsorship arrangements are recognized on a straight-line basis over the contractual term of the agreement. The Company records deferred revenue to the extent that payment has been received for services that have yet to be performed. In-person revenue was comprised of the following for the years ended December 31, 2021 and 2020: For the December 31, 2021 2020 Event revenue $ 2,459,613 $ 574,536 Sponsorship revenue 779,487 1,730,198 Food and beverage revenue 446,202 310,826 Ticket and gaming revenue 480,519 349,526 Merchandising revenue 35,338 22,209 Other revenue 100 1,068 Total in-person revenue $ 4,201,259 $ 2,988,363 Multiplatform revenue The Company’s multiplatform content revenue is comprised of $754,781 and $222,442 as of December 31, 2021 and 2020, respectively, of distribution revenue. Distribution revenue is generated primarily through the distribution of content to online channels. Any advertising revenue earned by online channels is shared with the Company. The Company recognizes online advertising revenue at the point in time when the advertisements are placed in the video content. Revenue recognition The following table summarizes our revenue recognized under ASC 606 in our consolidated statements of operations: For the December 31, 2021 2020 Revenues Recognized at a Point in Time: Event revenue $ 2,459,613 $ 574,536 Distribution revenue 754,781 222,442 Food and beverage revenue 446,202 310,826 Ticket and gaming revenue 480,519 349,526 Merchandising revenue 35,338 22,209 Other revenue 100 1,068 Total Revenues Recognized at a Point in Time 4,176,553 1,480,607 Revenues Recognized Over a Period of Time: Sponsorship revenue 779,487 1,730,198 Total Revenues Recognized Over a Period of Time 779,487 1,730,198 Total Revenues $ 4,956,040 $ 3,210,805 The timing of the Company’s revenue recognition may differ from the timing of payment by its customers. A receivable is recorded when revenue is recognized prior to payment and the Company has an unconditional right to payment. Alternatively, when payment precedes the provision of the related services, the Company records deferred revenue until the performance obligations are satisfied. As of December 31, 2021 and 2020, the Company had contract liabilities of $141,825 and $57,018, respectively, which is included in deferred revenue on the balance sheet. As of December 31, 2021, all continuing operations’ performance obligations in connection with contract liabilities included within deferred revenue on the prior year consolidated balance sheet have been satisfied. The Company expects to satisfy the remaining performance obligations related to its December 31, 2021 deferred revenue balance within the next twelve months. During the years ended December 31, 2021 and 2020, there was no revenue recognized from performance obligations satisfied (or partially satisfied) in previous periods. Stock-Based Compensation The Company measures the cost of services received in exchange for an award of equity instruments based on the fair value of the award on the date of grant. The fair value amount is then recognized over the period during which services are required to be provided in exchange for the award, usually the vesting period. The estimation of stock-based awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from original estimates, such amounts are recorded as a cumulative adjustment in the period that the estimates are revised. The Company accounts for forfeitures as they occur. Advertising Costs Advertising costs from continuing operations are charged to operations in the year incurred and totaled $127,612 and $97,840 for the years ended December 31, 2021 and 2020, respectively. 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 (“FDIC”) 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 years ended December 31, 2021 and 2020, 4% and 10%, respectively, of the Company’s revenues from continuing operations were from customers in foreign countries. During the year ended December 31, 2021, the Company’s three largest customers accounted for 20%, 15%, and 13% of the Company’s consolidated revenues from continuing operations. During the year ended December 31, 2020, the Company’s two largest customer accounted for 41% and 13% of the Company’s consolidated revenues from continuing operations. As of December 31, 2021, the Company’s four largest customers represented 31%, 29%, 15% and 10%, respectively, of the Company’s accounts receivable. As of December 31, 2020, a single customer represented 74% of the Company’s accounts receivable 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 (1.1342 and 1.2264 at December 31, 2021 and 2020, respectively), and revenue and expense accounts are translated using the weighted average exchange rate in effect for the period (1.1830 and 1.1414 for the years ended December 31, 2021 and 2020, respectively). Resulting translation adjustments are made directly to accumulated other comprehensive income (loss). Losses of $53,538 and $0 arising from exchange rate fluctuations on transactions denominated in a currency other than the reporting currency for the years ended December 31, 2021 and 2020, respectively, are recognized in operating results in the consolidated statements of operations. The Company engages in foreign currency denominated transactions with customers and suppliers, as well as between subsidiaries with different functional currencies. 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 consolidated financial statements, except as disclosed. CARES Act On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”). The CARES Act, amongst other things, includes provisions relating to refundable payroll tax credits, deferment of employer social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property. Pursuant to Accounting Standards Codification Topic (“ASC 740”), the Company recognizes the tax effects of new tax legislation upon enactment. Accordingly, the CARES Act was effective beginning in the quarter ended March 31, 2020. The new tax provisions outlined in the CARES Act have not had a material impact on the Company’s consolidated financial statements. Discontinued Operations The assets and liabilities of WPT at December 31, 2020 are classified in the accompanying Consolidated Balance Sheets as “Current assets of discontinued operations,” and “Current liabilities of discontinued operations”. The results of operations of WPT for the period from January 1 through July 12, 2021 and for the year ended December 31, 2020 are included in “(Loss) income from discontinued operations, net of tax provision” in the accompanying Consolidated Statements of Operations. Reclassifications Certain prior year balances have been reclassified in order to conform to current year presentation. These reclassifications had no effect on previously reported results of operations or loss per share. Recently Issued Accounting Pronouncements In February 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-02, “Leases (Topic 842).” ASU 2016-02 requires that a lessee recognize the assets and liabilities that arise from operating leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. This amendment will be effective for private companies and emerging growth companies for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. The FASB issued ASU No. 2018-10 “Codification Improvements to Topic 842, Leases” and ASU No. 2018-11 “Leases (Topic 842) Targeted Improvements” in July 2018, and ASU No. 2018-20 “Leases (Topic 842) - Narrow Scope Improvements for Lessors” in December 2018. ASU 2018-10 and ASU 2018-20 provide certain amendments that affect narrow aspects of the guidance issued in ASU 2016-02. ASU 2018-11 allows all entities adopting ASU 2016-02 to choose an additional (and optional) transition method of adoption, under which an entity initially applies the new leases standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company expects that the adoption of this ASU will have a material impact on the Company’s consolidated financial statements, primarily as the result of recording right-of-use assets and lease liability obligations for its current operating lease. In June 2016, the FASB issued ASU No. 2016-13 “Financial Instruments - Credit Losses (Topic 326)” and also issued subsequent amendments to the initial guidance under ASU 2018-19, ASU 2019-04 and ASU 2019-05 (collectively Topic 326). Topic 326 requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. This replaces the existing incurred loss model with an expected loss model and requires the use of forward-looking information to calculate credit loss estimates. The Company will be required to adopt the provisions of this ASU on January 1, 2023, with early adoption permitted for certain amendments. Topic 326 must be adopted by applying a cumulative effect adjustment to retained earnings. The adoption of Topic 326 is not expected to have a material impact on the Company’s consolidated financial statements or disclosures. In February 2020, the FASB issued ASU No. 2020-02, Financial Instruments - Credit Losses (Topic 326) and Leases (Topic 842) – Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date (“ASU 2020-02”) which provides clarifying guidance and minor updates to ASU No. 2016-13 – Financial Instruments – Credit Loss (Topic 326) (“ASU 2016-13”) and related to ASU No. 2016-02 - Leases (Topic 842). ASU 2020-02 amends the effective date of ASU 2016-13, such that ASU 2016-13 and its amendments will be effective for the Company for interim and annual periods in fiscal years beginning after December 15, 2022. The adoption of ASU 2016-13 is not expected to have a material impact on the Company’s consolidated financial statements or disclosures. In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, to clarify the accounting for certain financial instruments with characteristics of liabilities and equity. The amendments in this update reduce the number of accounting models for convertible debt instruments and convertible preferred stock by removing the cash conversion model and the beneficial conversion feature model. Limiting the accounting models will result in fewer embedded conversion features being separately recognized from the host contract. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting and (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in-capital. In addition, this ASU improves disclosure requirements for convertible instruments and earnings-per-share guidance. The ASU also revises the derivative scope exception guidance to reduce form-over-substance-based accounting conclusions driven by remote contingent events. The amendments in this update are effective for the Company in fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption will be permitted, but no earlier than for fiscal years beginning after December 15, 2020. The adoption of ASU 2020-06 is not expected to have a material impact on the Company’s consolidated financial statements or disclosures. 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 does not expect the adoption of this standard to have a material effect on the Company’s consolidated financial statements. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities in accordance with Accounting Standards Codification Topic 606. ASU 2021-08 is effective for fiscal years beginning after December 15, 2022 and early adoption is permitted. While the Company is continuing to assess the timing of adoption and the potential impacts of ASU 2021-08, it does not expect ASU 2021-08 will have a material effect, if any, on its consolidated financial statements. 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 consolidated financial statements or disclosures. |
Sale of WPT
Sale of WPT | 12 Months Ended |
Dec. 31, 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 – Background 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 $77,858,835, as follows: Cash consideration for sale of WPT (1) $ 106,049,884 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 Less: transaction expenses (2) 2,465,774 Gain on Sale of WPT (3) $ 77,858,835 (1) Includes $105,120 of post-closing adjustments (2) Includes $1,165,774 of legal and professional fees and $1,300,000 of amounts reimbursed to the Company’s principal stockholder. See Note 7 - Accrued Expense and Other Current Liabilities for additional details (3) 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 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 has broadcasted globally in more than 150 countries and territories and its shows are sponsored by established brands in many areas, including watches, crystal, playing cards and online social poker operators. WPT also operates ClubWPT.com, a subscription-based site that offers its members inside access to the WPT content database, as well as sweepstakes-based poker product that allows members to play for real cash and prizes in 36 states and territories across the United States and 4 foreign countries. WPT also participates in strategic brand licensing, partnership, and sponsorship opportunities. Results of Discontinued Operations Results and net income (loss) from discontinued operations are as follows, reflecting the results and net income (loss) of the WPT business: For the Years Ended December 31, 2021 (1) 2020 Revenues $ 13,017,362 $ 20,149,042 Operating costs and expenses 13,640,146 19,425,951 (Loss) income from operations (622,784 ) 723,091 Other income, net 689,525 2,417 (Loss) income from discontinued operations before the sale of WPT (66,741 ) 725,508 Gain on sale of WPT 77,858,835 - Net income from discontinued operations, before tax 77,925,576 725,508 Income tax - - Income from discontinued operations, net of tax provision $ 77,925,576 $ 725,508 (1) Through the date of the Sale Transaction on July 12, 2021. Assets and liabilities held for sale as of December 31, 2020 were classified as current because the Sale Transaction was expected to and did close during 2021. The details are as follows: Assets Cash $ 3,633,292 Accounts receivable 1,804,627 Prepaid expenses and other assets 289,968 Property and equipment, net 1,674,355 Goodwill 4,083,621 Intangible assets, net 12,305,887 Deposits 79,500 Deferred production costs 12,058,592 Due from affiliates 9,433,975 Current assets held for sale $ 45,363,817 Liabilities Accounts payable $ 211,228 Accrued expenses and other liabilities 3,804,301 Accrued interest 4,224 Deferred revenue 1,970,668 Deferred rent 2,493,526 Loans payable (1) 685,300 Current liabilities held for sale $ 9,169,247 (1) Represents principal balance of PPP Loan. On January 26, 2021, WPT received notice from its lender that the entirety of the $685,300 of outstanding principal of the PPP Loan was forgiven. |
Investments
Investments | 12 Months Ended |
Dec. 31, 2021 | |
Disclosure Text Block Supplement [Abstract] | |
Investments | Note 4 – Investments As of December 31, 2021 and 2020, the Company owns a 25% non-voting membership interest in Esports Arena, LLC (“ESA”) and ESA’s wholly owned subsidiary. Because the Company does not have the ability to exercise significant influence over the operating and financial policies of ESA and because the investment doesn’t have a readily determinable market value, the Company elected to account for it using the adjusted cost method. During the second quarter of 2020, the Company recorded an additional impairment charge in the amount of $1,138,631, related to its investment in ESA, in order to reduce the carrying value of the Company’s investment in ESA to $0 at December 31, 2021 and 2020. The Company paid $3,500,000 to TV Azteca, S.A.B. DE C.V., a Grupo Salinas company (“TV Azteca”) in August 2019, and on March 4, 2020 the Company paid an additional $1,500,000 to TV Azteca in connection with a Strategic Investment Agreement with TV Azteca in order to expand the Allied Esports brand into Mexico. During December 2020, the Company recorded an impairment charge in the amount of $5,000,000, related to the investment in TV Azteca, such that that carrying value of the Company’s investment in TV Azteca is $0 at December 31, 2021 and 2020. (See Note 12 – Commitments and Contingencies, Investment Agreements). |
Property and Equipment, net
Property and Equipment, net | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, net | Note 5 – Property and Equipment, net Property and equipment consist of the following: As of December 31, 2021 2020 Office equipment $ 870,394 $ 868,309 Computer equipment 546,945 495,643 Esports gaming truck 1,222,406 1,222,406 Furniture and fixtures 654,058 654,058 Production equipment 7,919,208 7,841,985 Leasehold improvements 4,678,038 4,645,760 15,891,049 15,728,161 Less: accumulated depreciation and amortization (9,754,156 ) (6,452,432 ) Property and equipment, net $ 6,136,893 $ 9,275,729 During the years ended December 31, 2021 and 2020, depreciation and amortization expense amounted to $3,305,698 and $3,605,539, respectively. During the years ended December 31, 2021 and 2020, the Company recorded impairment expense of $0 and $5,595,557, respectively, related to its property and equipment. |
Intangible Assets, net
Intangible Assets, net | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets, net | Note 6 – Intangible Assets, net Intangible assets consist of the following: Intellectual Property Accumulated Amortization Total Balance as of January 1, 2020 $ 36,415 $ (2,406 ) $ 34,009 Purchases of intangibles 750 - 750 Amortization expense - (3,941 ) (3,941 ) Balance as of December 31, 2020 37,165 (6,347 ) 30,818 Amortization expense - (3,991 ) (3,991 ) Balance as of December 31, 2021 $ 37,165 $ (10,338 ) $ 26,827 Weighted average remaining amortization period at December 31, 2021 (in years) 6.7 Intangible assets consist of the Allied Esports trademarks, which are being amortized over a useful life of 10 years. During the years ended December 31, 2021 and 2020, amortization expense amounted to $3,991 and $3,941, respectively. Estimated future amortization expense is as follows: Years Ended December 31, Amount 2022 $ 3,991 2023 3,991 2024 3,991 2025 3,991 2026 3,991 Thereafter 6,872 $ 26,827 |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 12 Months Ended |
Dec. 31, 2021 | |
Accrued Expenses and Other Current Liabilities [Abstract] | |
Accrued Expenses and Other Current Liabilities | Note 7– Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consist of the following: As of December 31, 2021 2020 Compensation expense $ 2,202,621 $ 1,010,734 Current portion of deferred rent 198,504 297,874 Event costs 8,874 26,926 Legal and professional fees 368,691 307,135 Warrant liabilities 3,200 3,000 Unclaimed player prizes - 45,171 Other accrued expenses 172,858 268,751 Other current liabilities 11,497 27,426 Accrued expenses and other current liabilities $ 2,966,245 $ 1,987,017 Accrued expenses, related party (1) $ 1,800,000 $ - (1) Represents amounts accrued to reimburse a principal shareholder for costs incurred in connection with specified Company transactions, including $1,300,000 incurred in connection with the sale of WPT. See Note 12 - Commitments and Contingencies, Principal Shareholder Matter for additional details. |
Convertible Debt and Convertibl
Convertible Debt and Convertible Debt, Related Party | 12 Months Ended |
Dec. 31, 2021 | |
Convertible Debt and Convertible Debt, Related Party [Abstract] | |
Convertible Debt and Convertible Debt, Related Party | Note 8 – 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 Convertible Bridge Notes and Convertible Bridge Notes, Related Party During 2020, the holder of a $5,000,000 Bridge Note (the “Noteholder”) entered into certain Secured Convertible Note Modification and Conversion Agreements (the “Amendments) pursuant to which the Noteholder converted $2,000,000 of the principal amount of its $5,000,000 Bridge Note into an aggregate of 3,392,857 shares of the Company’s common stock including 1,250,000 shares upon the conversion of $2,000,000 of principal at a reduced conversion price of $1.60 per share, and 2,142,857 shares issued upon the conversion of the remaining principal of $3,000,000 at a reduced conversion price of $1.40 per share. The Company recorded a conversion inducement charge of $5,247,531 as a result of the Amendments, consisting of $4,998,845, representing the value of common stock issued upon conversion in excess of the common stock issuable under the original terms of the $5,000,000 Bridge Note, and $248,686, representing the excess of minimum interest payable pursuant to Amendment 3 over the interest payable pursuant to the original terms of the $5,000,000 Bridge Note. See Note 9 - Bridge Note Payable for additional details. Further, pursuant to the Amendments, minimum interest payable in the amount of $1,421,096 (the “Accrued Interest”) was converted into principal under the Noteholder’s Bridge Note. On June 8, 2020, the Company paid cash of $8,670,431 in satisfaction of principal in the amount of $7,000,000 and interest in the amount of $1,670,431 owed in connection with other Bridge Notes. Further, on June 8, 2020, the Company and the holders (the “Extending Bridge Noteholders”) of the two remaining Bridge Notes outstanding in the aggregate principal amount of $2,000,000 (together, the “Extended Bridge Notes”), of which principal in the amount of $1,000,000 was owed to the spouse of the Company’s Chief Executive Officer (“CEO”) and Director, entered into a Secured Convertible Note Modification (Extension) Agreement with the Company (together, the “Bridge Note Extensions”) pursuant to which, among other things, the Extending Bridge Noteholders agreed to extend the maturity date of their respective Extended Bridge Notes until February 23, 2022. On August 13, 2020, the Company paid in cash an aggregate of $425,096 related to interest payable on the Extended Bridge Notes. The Company repaid all remaining balances owed on the Extended Bridge Notes in full the from the proceeds of the Sale Transaction (see Note 3 – Sale of WPT). There was no balance outstanding on the Extended Bridge Notes and all related debt discount has been fully amortized as of December 31, 2021. During the year ended December 31, 2021, the Company recorded interest expense of $124,848 related to the Extended Bridge Notes (of which $62,424 was in connection with the Extended Bridge Note owed to the spouse of the Company’s CEO and Director). During the year ended December 31, 2020, the Company recorded interest expense of $1,433,054 (including amortization of debt discount of $166,384). Of the interest expense recorded during the year ended December 31, 2020, $716,527 (including amortization of debt discount of $83,192) was in connection with the Extended Bridge Note owed to the spouse of the Company’s CEO and Director. Senior Secured Convertible Notes On June 8, 2020, pursuant to a securities purchase agreement (the “Purchase Agreement”) between the Company and certain accredited investors (the “Investors”), the Company issued two senior secured convertible notes (the “Senior Notes”) with an aggregate principal balance of $9,600,000 and immediately vested five-year warrants to purchase an aggregate 1,454,546 shares of common stock at an exercise price of $4.125 per share for net cash proceeds of $9,000,000. The Senior Notes were secured by the assets of the Company, bore interest at 8% per annum and had a stated maturity date of June 8, 2022, with an aggregate of $1,536,000 of interest guaranteed to be paid to the Investors. The Senior Notes’ principal and two years of interest were payable in equal monthly installments (the “Monthly Redemption Payment”), commencing on August 7, 2020. Each Monthly Redemption Payment was payable at the Company’s option in cash, or in shares of common stock at a price equal to 87% of the lowest daily volume weighted average price in the 10 days prior to the scheduled payment date (the “Stock Settlement Price”). Each Investor was permitted to accelerate up to four Monthly Redemption Payments in any calendar month and could elect to have such accelerated Monthly Redemption Payments paid in shares of the Company’s common stock at the Stock Settlement Price of the contemporaneous or immediately prior Monthly Redemption Payment, instead of in cash. The Senior Notes were convertible at each Investor’s option, in whole or in part, and from time to time, into shares of the Company’s common stock (the “Holder Conversion Option” and together, with the Stock Settlement Option, the “ECOs”) at $3.30 per share. The Company determined that the ECOs contained a beneficial conversion feature (“BCF”) in the amount of $523,636, which was credited to additional paid in capital. Upon the issuance of the Senior Notes, the Company recorded a debt discount at issuance in the aggregate amount $6,296,556, consisting of (i) the $600,000 difference between the aggregate principal amount of the Senior Notes and the cash proceeds received, (ii) the relative fair value of the warrants of $1,205,959 (which were credited to additional paid in capital), (iii) two years’ guaranteed interest of $1,536,000 (credited to interest payable), (iv) the BCF of $523,636 (credited to additional paid in capital), (v) non-cash interest in the amount of $1,664,000, representing the difference between the anticipated issuance date fair value of common stock issued and the Stock Settlement Price, for Monthly Redemption Payments (credited to interest payable), and (vi) financing costs of $766,961. The debt discount was being amortized using the effective interest method over the term of the Senior Notes. During the year ended December 31, 2020, the Company issued 9,678,840 shares of its common stock, as Monthly Redemption Payments in satisfaction of aggregate amount of $9,018,182 of principal and $1,442,909 of interest payable owed on the Senior Notes as well as $2,757,000 of non-cash interest accrued on the Senior Notes. During January 2021, the Company issued 529,383 shares of its common stock as Monthly Redemption Payments in full satisfaction of the remaining $821,867 balance owned under the Senior Notes, including (i) principal in the aggregate amount of $581,818, (ii) $93,091 of interest payable owed on the Senior Notes, and (iii) $146,958 of non-cash interest accrued on the Senior Notes. During years ended December 31, 2021 and 2020, the Company recorded amortization of debt discount of $3,646 and $2,854,649, respectfully, and recorded non-cash interest expense in the amount $46,110 and $1,193,849, respectfully, related to the Senior Notes. During the year ended December 31, 2020, the Company recorded an extinguishment loss of $3,438,261 in connection with the extinguishment of Senior Notes resulting from accelerated Monthly Redemption Payments. |
Bridge Note Payable
Bridge Note Payable | 12 Months Ended |
Dec. 31, 2021 | |
Bridge Note Payable [Abstract] | |
Bridge Note Payable | Note 9 – Bridge Note Payable The Bridge Note Payable of $1,421,096 at December 31, 2020 consists of the Amended Bridge Note (see Note 8 – Convertible Debt and Convertible Debt, Related Party). The Company recorded interest expense of $89,643 and $60,698 during the years ended December 31, 2021 and 2020, respectively, 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 | 12 Months Ended |
Dec. 31, 2021 | |
Bridge Note Payable [Abstract] | |
Loans Payable | Note 10 – 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. In August 2021, the Company was awarded full forgiveness of the PPP Loans and accrued interest thereon. During the year ended December 31, 2021, the Company recognized a gain on forgiveness of the PPP Loans and accrued interest in the amount of $912,475. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 11 – Income Taxes The Company and its subsidiaries file income tax returns in the United States (federal and California) and Germany. The U.S. and foreign components of loss before income taxes from continuing operations were as follows: For the Years Ended December 31, 2021 2020 United States $ (14,568,373 ) $ (45,315,394 ) Foreign (491,472 ) (468,944 ) Loss before income taxes $ (15,059,845 ) $ (45,784,338 ) The income tax provision (benefit) from continuing operations for the years ended December 31, 2021 and 2020 consists of the following: For the Years Ended December 31, 2021 2020 Federal Current $ - $ - Deferred (2,857,515 ) (7,159,062 ) State and local: Current - - Deferred (272,144 ) (681,815 ) Foreign Current - - Deferred (66,229 ) (63,193 ) (3,195,888 ) (7,904,070 ) Change in valuation allowance 3,195,888 7,904,070 Income tax provision (benefit) $ - $ - The reconciliation of the expected tax expense (benefit) based on the U.S. federal statutory rates for 2021 and 2020, respectively, with the actual expense is as follows: For the Years Ended December 31, 2021 2020 U.S. Federal statutory rate 21.0 % 21.0 % State taxes, net of federal benefit 6.1 % 6.3 % Permanent differences 1.5 % (10.7 )% Untaxed foreign jurisdictions 0.0 % 0.0 % Lower taxed foreign jurisdictions (0.4 )% (0.1 )% Change in deferred taxes (6.9 )% (0.9 )% Rate change impact 0.0 % 1.0 % Change in valuation allowance (21.3 )% (17.0 )% Other 0.0 % 0.4 % Total 0.0 % 0.0 % The tax effects of temporary differences that give rise to deferred tax assets are presented below: As of December 31, 2021 2020 Deferred Tax Assets: Net operating loss carryforwards $ 13,561,888 $ 13,022,656 Production costs 272,810 274,355 Investment 5,800,616 2,909,497 Stock-based compensation 730,832 387,410 Capitalized start-up costs 224,682 322,793 Property and equipment - 1,022,026 Accruals and other 1,674,367 1,252,731 Gross deferred tax assets 22,265,195 19,191,468 Valuation Allowance (21,258,645 ) (19,191,468 ) Deferred tax assets, net of valuation allowance 1,006,550 - Deferred Tax Liabilities: Property and equipment (1,006,550 ) - Deferred Tax Liabilities (1,006,550 ) - Deferred tax assets, net of valuation allowance $ - $ - As of December 31, 2021, the Company had $57,256,984, $14,681,537 and $4,726,053 of federal, state and foreign net operating loss (“NOL”) carryforwards available to offset against future taxable income. The federal NOL may be carried forward indefinitely. For state, these NOLs will begin to expire in 2038. For the foreign NOLs, these NOLs can be carried forward indefinitely. The federal and state NOL carryovers are subject to annual limitations under Section 382 of the U.S. Internal Revenue Code when there is a greater than 50% ownership change, as determined under the regulations. The Company is not aware that any annual limitations have been triggered. The Company remains subject to the possibility that a future greater than 50% ownership change could trigger annual limitations on the usage of NOLs. For federal income tax purposes, the Company’s future utilization of its NOLs may be limited to 80% of taxable income as provided under Tax Cuts and Jobs Act of 2017. The Company assesses the likelihood that deferred tax assets will be realized. ASC 740, “Income Taxes” requires that a valuation allowance be established when it is “more likely than not” that all, or a portion of, deferred tax assets will not be realized. A review of all available positive and negative evidence needs to be considered, including the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies. After consideration of all the information available, management believes that uncertainty exists with respect to future realization of its deferred tax assets and has, therefore, established a full valuation allowance as of December 31, 2021 and 2020. The Company’s tax returns remain subject to examination by various taxing authorities beginning with the tax year ended December 31, 2017. No tax audits were commenced or were in process during the years ended December 31, 2021 and 2020. The Company reviews its filing positions for all open tax years in all U.S. federal and state jurisdictions where the Company is required to file. The Company recognizes liabilities for uncertain tax positions based on a two-step process. To the extent a tax position does not meet a more-likely-than-not level of certainty, no benefit is recognized in the financial statements. If a position meets the more-likely-than-not level of certainty, it is recognized in the consolidated financial statements at the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. The Company has not recognized any liability related to uncertain tax provisions as of December 31, 2021 and 2020. The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company had no accrual for interest or penalties at December 31, 2021 and December 31, 2020, respectively, and has not recognized interest and/or penalties during the years then ended as there are no material unrecognized tax benefits. Management does not anticipate any material changes to the amount of unrecognized tax benefits within in the next 12 months. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 12 – Commitments and Contingencies Litigations, Claims, and Assessments The Company is involved in various disputes, claims, liens and litigation matters arising out of the normal course of business. While the outcome of these disputes, claims, liens and litigation matters cannot be predicted with certainty, after consulting with legal counsel, management does not believe that the outcome of these matters will have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. Principal Shareholder Matter During August 2021, the Company received a $2.3 million expense reimbursement request from a principal shareholder. The principal shareholder alleged 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. On April 6, 2022, the Company reached a settlement agreement with the principal shareholder in which the Company agreed to reimburse the principal shareholder an aggregate of $1.8 million for the full and final settlement of any and all claims by the principal shareholder. Operating Leases Effective on March 23, 2017, Allied Esports entered into a non-cancellable operating lease for 30,000 square feet of event space in Las Vegas, Nevada, for the purpose of hosting Esports activities (the “Las Vegas Lease”). The Arena opened to the public on March 23, 2018 (the “Commencement Date”). Initial lease terms are for minimum monthly payments of $125,000 for 60 months from the Commencement Date with an option to extend for an additional 60 months at $137,500 per month. Additional annual tenant obligations are estimated at $2 per square foot for Allied Esports’ portion of real estate taxes and $5 per square foot for common area maintenance costs. On November 5, 2020, Allied Esports entered into an amendment of the Las Vegas Lease (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 was paid in its entirety by December 31, 2021; (ii) the monthly rent to be paid for the period from June 25 through December 31, 2020 (the “Rent Relief Period) was reduced to an amount equal to 20% of gross sales (excluding food sales) at the event space (the “Percentage Rent”), (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 (“the extension period”). 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. There was no shortfall during the Rent Relief Period. Rent expense incurred during the rent relief period under the Amended Las Vegas Lease was $200,570. The Las Vegas Lease expires on May 31, 2023. However, the Company plans on extending the lease an additional five years and a commitment of $8,250,000. The Company also leases office and production space in Germany, pursuant to a lease dated August 1, 2020 which expires on July 31, 2023 (the “Germany Lease”). Rent expense under the lease is €4,000 (approximately $4,536 United States dollars) per month. The lease includes an option to extend for an additional three-year term. The Company’s aggregate rent expense incurred during the years ended December 31, 2021 and 2020 amounted to $1,714,894 and $1,967,967, respectively, of which $1,216,415 and $1,390,093, respectively, is included within in-person costs and $498,480 and $577,874, respectively, is included in general and administrative expenses on the accompanying consolidated statements of operations. The scheduled future minimum lease payments under the Company’s continuing non-cancellable operating leases are as follows: Year ending December 31, Amount 2022 $ 1,554,432 2023 669,252 $ 2,223,684 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 no longer the guarantor of WPT’s lease of Los Angeles, California office space (the “LA Lease”). The Company and the purchaser of WPT are working toward releasing the Company as a guarantor on the Irvine lease. Investment Agreements TV Azteca Investment In June 2019, the Company entered into an exclusive ten-year strategic investment and revenue sharing agreement (the “TV Azteca Agreement”) with TV Azteca, in order to expand the Allied Esports brand into Mexico. Pursuant to the terms of the TV Azteca Agreement, as amended, TV Azteca purchased 742,692 shares of AESE common stock for $5,000,000. Through December 31, 2020, the Company paid $5,000,000 in connection with the TV Azteca agreement. On December 31, 2020, the Company recognized an impairment of $5,000,000 related to its investment in TV Azteca due to management’s determination that the future cash flows are not expected to be sufficient to recover the carrying value of this investment. Simon Agreement In June 2019, the Company entered into an agreement (the “Simon Agreement”) with Simon Equity Development, LLC (“Simon”), a shareholder of the Company, pursuant to which Allied Esports would conduct a series of mobile esports gaming tournaments and events at selected Simon shopping malls and online called the Simon Cup, in each of 2019, 2020 and 2021, and would also develop esports and gaming venues at certain Simon shopping malls in the U.S. In connection with the Simon Agreement, AESE placed $4,950,000 of cash into an escrow account to be utilized for various strategic initiatives including the build-out of branded esports facilities at Simon malls, and esports event programs. On October 22, 2019, $1,300,000 was released from escrow in order to fund expenses incurred in connection with the 2019 Simon Cup. The Simon Agreement and the related Escrow Agreement, as amended, permitted Simon to request the return of any funds remaining in escrow if the parties did not agree on the 2020 spending plan by March 8, 2020. On March 18, 2020, as the COVID-19 pandemic accelerated in the United States, Simon notified the escrow agent that the parties had not agreed on a 2020 spending plan and requested the return of the remaining funds in the escrow account. The escrow agent returned the remaining $3,650,000 to Simon on March 26, 2020. During the year ended December 31, 2020, the Company recorded $3,650,000 of stock-based compensation related to the return of cash held in escrow, which is reflected in general and administrative expense on the accompanying consolidated statements of operations. Brookfield Partnership On January 14, 2020, the Company issued 758,725 shares of its common stock to BPR Cumulus LLC, an affiliate of Brookfield Property Partners (“Brookfield”) in exchange for $5,000,000 (the “Purchase Price”) pursuant to a Share Purchase Agreement (the “Brookfield Agreement”). The Purchase Price was placed into escrow and is to be used by the Company or its subsidiaries to develop integrated esports experience venues at mutually agreed upon shopping malls owned and/or operated by Brookfield or any of its affiliates (each, an “Investor Mall”), that will include a dedicated gaming space and production capabilities to attract and to activate esports and other emerging live events (each, an “Esports Venue”). To that end, half of the Purchase Price will be released from escrow to the Company upon the execution of a written lease agreement between Brookfield and the Company for the first Esports Venue, and the other half will be released to the Company upon the execution of a written lease agreement between Brookfield and the Company for the second Esports Venue. Further, pursuant to the Brookfield Agreement, the Company must create, produce, and execute three (3) esports events during each calendar year 2020, 2021 and 2022 that will include the Company’s esports truck at one or more Investor Malls at mutually agreed times. The balance held in escrow as of December 31, 2021 is $5,000,000 and is reflected in restricted cash on the accompanying consolidated balance sheet. As of the date of this document, no additional documents have been drafted or executed between the Company and Brookfield as the parties have agreed not to move forward with any leases until the pandemic has ended. Former Chief Executive Officer Agreements On April 24, 2020, the CEO Agreement between the Company and Frank Ng, who served as Chief Executive Officer and director of the Company (“Former CEO”), was amended such that effective May 1, 2020, the Former CEO’s annual salary was reduced by 80% to $60,000 for a six-month period. On September 30, 2020, the Former CEO Agreement was further amended such that effective November 1, 2020, the Former CEO’s annual salary would be $210,000 for a six-month period, and thereafter the initial annual base salary of $300,000 set forth in the Former CEO Agreement would be restored. On December 31, 2020, the Former CEO Agreement was further amended such that Mr. Ng’s annual salary was increased to $400,000 per year payable in cash, and that the Company may, but was no longer required to, issue to Mr. Ng any shares of the Company’s common stock as compensation for his services. 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. 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 “Next 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 Next CEO Agreement expires automatically on the five-year anniversary of the effective date. However, the Next 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 Next CEO Agreement can be terminated by the Company or by Ms. Wu prior to expiration. In the event the Next CEO Agreement is terminated without cause (as described in the Next CEO Agreement) by the Company, or by Ms. Wu for good reason (as described in the Next 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. See Note 14 – Subsequent Events related to the Next CEO’s resignation. Board of Directors 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. 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. 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. 2020 Cash Bonus Payments On December 30, 2020, the Company’s Board of Directors authorized the payment of an aggregate of approximately $1,245,000 in cash bonus payments to its employees for services provided during the year 2020, contingent upon the closing of the sale of WPT. During July 2021, cash bonuses of $1,245,000 were paid from the proceeds of the Sale Transaction, of which approximately $674,000 was paid to the employees of WPT and approximately $571,000 was paid to the employees of the Company’s continuing operations. Change of Control Agreements On December 30, 2020, the Company’s Board of Directors authorized the Company to enter into an agreement with the Company’s CEO which, upon the closing of a transaction that resulted in a change-in-control of WPT, as defined, would obligate the Company to pay the CEO $1,000,000 upon the earlier of his termination of employment with AESE without cause, as defined, or the two-year anniversary of the closing of the change-in-control transaction. Payment may be made in either cash or shares of AESE common stock (valued at the trailing 10-day volume-weighted-average-price prior to the issuance date), at the Company’s discretion (See Note 13 – Stockholders’ Equity, Restricted Stock Units). On December 30, 2020, the Company’s Board of Directors authorized WPT to enter into agreements with the WPT CEO and General Counsel which, upon the closing of a transaction that resulted in a change-in-control of WPT, as defined, would obligate WPT to pay the WPT CEO and General Counsel aggregate lump-sum severance payments of $522,827. On December 30, 2020, Company’s Board of Directors approved, subject to a change-in-control of WPT which accelerates the vesting of AESE option grants held by WPT employees, the extension of the exercise period of the options as follows: (i) the options to purchase an aggregate of 340,000 shares of AESE common stock held by the WPT CEO and General Counsel may be exercised until the 10-year anniversary of the issuance date, and (ii) the remaining options to purchase an aggregate of 300,000 shares of AESE common stock may be exercised until the one-year anniversary of the change-in-control. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
Stockholders’ Equity | Note 13 – Stockholders’ Equity Amendment to Company Charter On July 27, 2020, the Company filed an Amendment to its Second Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to increase the number of shares of common stock currently authorized by the Certificate by 10,000,000 shares, from 65,000,000 shares to 75,000,000 shares. On November 4, 2020, the Company filed with the Delaware Secretary of State an amendment to its Second Amended and Restated Certificate of Incorporation to increase the total number of authorized shares of its common stock from 75,000,000 shares to 100,000,000 shares. Equity Incentive Plan On August 9, 2019, the Company’s Equity Incentive Plan (the “Incentive Plan”) was approved by the Company’s stockholders. The Incentive Plan is administered by the Board of Directors, or a committee designated by the Board of Directors to do so. The effective date of the Incentive Plan was December 19, 2018. The Incentive Plan provides the grant of incentive stock options (“ISOs”), nonstatutory stock options, stock appreciation rights, restricted common stock awards, restricted common stock unit awards, as well as other stock-based awards that are deemed to be consistent with the purposes of the plan. On December 30, 2021, the stockholders 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 3,763,305 shares. As of December 31, 2021 there were 304,904 shares available under the plan. Put Option Agreement and Exercise On February 25, 2020 (the “Effective Date”), the Company entered into a Put Option Agreement (the “Agreement”) with the Chairman of the Company’s Board of Director (the “Chairman”), pursuant to which the Company has an option in its discretion, to sell shares of its common stock (the “Option Shares”) to the Chairman for aggregate gross proceeds of up to $2.0 million, at a purchase price of $1.963 per Option Share. On March 9, 2020, the Company provided notice to the Chairman that it had elected to exercise the Put Option to sell 1,018,848 Option Shares at a purchase price of $1.963 per share for total proceeds of $2,000,000. The Option Shares were issued on May 15, 2020. On September 29, 2020, the Company received proceeds of $21,875 from the Chairman, representing the disgorgement of short swing profits realized from the sale of shares. Equity Purchase Option Prior to the Closing Date, BRAC sold an option to purchase up to 600,000 units, exercisable at $11.50 per Unit, in connection with BRAC’s initial public offering (the “Equity Purchase Option”). Each Unit consisted of one and one-tenth shares of common stock and a warrant to purchase one share of common stock at $11.50 per share. Effective upon the closing of the Merger, the units converted by their terms into the shares and warrants, and the option now represents the ability to buy such securities directly (and not units). The Equity Purchase Option may be exercised on either a cash or a cashless basis, at the holder’s option, and expires on October 4, 2022. These previously issued BRAC Shares and Warrant Purchase Options are deemed to be issued in connection with the Merger, as a result of the reverse recapitalization. Common Stock On January 14, 2020, the Company issued 758,725 shares of its common stock to an investor in exchange for $5,000,000 (the “Purchase Price”) pursuant the Brookfield Agreement (see Note 12 – Commitments and Contingencies, Brookfield Partnership). On August 6, 2020, the Company issued 50,000 shares of common stock to its Chief Financial Officer. The shares were immediately vested with no restrictions and had a grant date value of $109,000. On September 24, 2020, the Company issued 14,286 shares of common stock to the Chairman of the Board of Directors. The common stock was immediately vested with no restrictions and had a grant date value of $20,000. On August 7, 2020, the Company issued 217,999 shares of common stock with a grant date value of $474,000 to certain officers and employees of the Company, in satisfaction of bonus obligations incurred in previous years, which were included in accrued expenses as of December 31, 2019. On April 29, 2020, the Company issued 3,392,857 shares of its common stock valued at $9,998,845 upon the conversion of $5,000,000 debt (see Note 8 – Convertible Debt and Convertible Debt, Related Party, Convertible Bridge Notes and Convertible Bridge Notes, Related Party). During the year ended December 31, 2020, the Company issued 9,678,840 shares of its common stock valued at $13,218,091 for the redemption of $10,461,191 of debt and accrued interest (see Note 8 – Convertible Debt and Convertible Debt, Related Party, Senior Secured Convertible Notes). In January 2021, the Company issued 529,383 shares of its common stock valued at $821,867 for the redemption of $674,909 of debt and accrued interest (See Note 8 - Convertible Debt and Convertible Debt, Related Party, Senior Secured Convertible Notes). For the years ended December 31, 2021 and 2020, the Company issued to its non-executive directors an aggregate of 126,584 and 64,286 shares of common stock, respectively, from its 2019 Equity Incentive Plan for their director services to the Company. For the years ended December 31, 2021 and 2020, the Company recognized stock-based compensation of $200,000 and $129,000, respectively, in connection with the issuance of these shares. Stock Options A summary of the option activity during the year ended December 31, 2021 is presented below: Weighted Average Weighted Average Number of Exercise Remaining Intrinsic Options Price Term (Yrs) Value Outstanding, January 1, 2021 2,430,000 $ 4.15 Granted 510,000 2.29 Exercised - - Expired - - Forfeited (525,000 ) 4.27 Outstanding, December 31, 2021 2,415,000 $ 3.73 7.52 $ - Exercisable, December 31, 2021 1,360,000 $ 4.08 6.34 $ - Options outstanding and exercisable as of December 31, 2021 are as follows: Options Outstanding Options Exercisable Outstanding Weighted Exercisable Exercise Number of Average Remaining Number of Price Options Life In Years Options $ 2.11 80,000 8.50 20,000 $ 2.17 120,000 8.60 120,000 $ 2.21 350,000 - - $ 2.48 160,000 - - $ 4.09 1,425,000 5.84 1,060,000 $ 5.66 280,000 7.72 160,000 2,415,000 6.34 1,360,000 The option grants described below were issued from the Company’s 2019 Stock Incentive Plan (“Incentive Plan”). 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 being amortized over the vesting period. On November 11, 2021, the Company granted ten-year stock options to purchase an aggregate of 150,000 shares of common stock to several of its directors. 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 $159,756 and are being amortized into expense over the vesting period. The grant date value of options granted during the years ended December 31, 2021 and 2020 were calculated using the Black-Scholes option pricing model, with the following assumptions used: For the December 31, 2021 2020 Risk free interest rate 0.94% - 1.58% 0.55% - 0.69% Expected term (years) 6.25 6.25 Expected volatility 40% - 46% 38% Expected dividends 0.00% 0.00% The weighted average grant date fair value of the stock options granted during the years ended December 31, 2021 and 2020 was approximately $1.00 and $0.80 per share, respectively. The expected term used for options is the estimated period of time that options granted are expected to be outstanding. The Company utilizes the “simplified” method to develop an estimate of the expected term of “plain vanilla” option grants. The Company is utilizing an expected volatility figure based on a review of the historical volatilities, over a period of time, equivalent to the expected life of the instrument being valued, of similarly positioned public companies within its industry. The risk-free interest rate was determined from the implied yields from U.S. Treasury zero-coupon bonds with a remaining term consistent with the expected term of the instrument being valued. For the years ended December 31, 2021 and 2020, the Company recorded $1,224,699 and $1,158,173, respectively, of stock-based compensation expense related to stock options, of which $767,942 and $214,239, respectively, was included in (loss) income from discontinued operations before the sale of WPT on the accompanying consolidated statements of operations. As of December 31, 2021, there was $1,220,881 of unrecognized stock-based compensation expense related to the stock options that will be recognized over the weighted average remaining vesting period of 2.5 years. Restricted Common Stock A summary of the non-vested restricted common stock activity during the year ended December 31, 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, December 31, 2021 80,000 $ 2.00 For the years ended December 31, 2021 and 2020, the Company recorded $260,433 and $459,220, respectively, of stock-based compensation expense related to restricted stock of which $14,848 and $40,165, respectively, was included in (loss) income from discontinued operations before the sale of WPT on the accompanying statements of operations. As of December 31, 2021, there was $99,946 of unrecognized stock-based compensation expense related to restricted stock that will be recognized over the weighted average remaining vesting period of 0.6 years. During the year ended December 31, 2021, 100,904 shares of common stock valued at $210,147 were withheld by the Company to cover employee payroll tax liabilities in connection with the vesting of restricted stock, including 23,411 shares valued at $50,802 for employee payroll tax liabilities related to restricted stock vested during the year ended December 31, 2020 and 77,493 shares valued at $159,345 for restricted stock vested during the year ended December 31, 2021. Restricted Stock Units On January 19, 2021, the Company entered into a Restricted Stock Unit Agreement with the Former CEO, pursuant to which the Former 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 Former CEO remains continuously employed by the Company through such date), or the termination of the Former 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 Former 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 Former 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 $1,000,000 for the year ended December 31, 2021, representing the full amortization of this award because the Company doesn’t expect the Former CEO to provide substantive services (See Note 12 – Commitments and Contingencies – Change of Control Agreements). Warrants Prior to the August 9, 2019 Closing Date of the Merger (see Note 1 – Background and Basis of Presentation), BRAC issued 14,305,000 five-year warrants (the “BRAC Warrants”) for the purchase of the Company’s common stock at $11.50 per share in connection with BRAC’s initial public offering. These previously issued BRAC Warrants are deemed to be issued in connection with the Merger, as a result of the reverse recapitalization. As of result of the August 9, 2019 Merger, the Company issued to the former owners of Allied Esports and WPT five-year warrants to purchase an aggregate of 3,800,003 shares of common stock at a price of $11.50 per share and issued five-year warrants for the purchase of an aggregate of 532,000 shares of common stock to the Noteholders with an exercise price of $11.50 per share. On June 8, 2020, the Company issued warrants for the purchase of 1,454,546 shares of common stock at $4.13 per share in connection with the issuance of Senior Secured Convertible Notes (See Note 8 – Convertible Debt and Convertible Debt, Related Party, Senior Secured Convertible Notes). A summary of warrants outstanding and exercisable as of December 31, 2021 is presented below: Warrants Outstanding Warrants Exercisable Exercise Price Exercisable Into Outstanding Weighted Exercisable $ 11.50 Common Stock 18,637,003 2.6 18,637,003 $ 4.13 Common Stock 1,454,546 3.4 1,454,546 20,091,549 20,091,549 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 14 – Subsequent Events Resignation of Chief Executive Officer On February 18, 2022, Libing (Claire) Wu resigned as Chief Executive Officer and General Counsel of the Company. In connection with her resignation, the Company entered into a Separation Agreement and Release with Ms. Wu (the “Release”) pursuant to which, among other things, Ms. Wu released the Company from any and all claims she may have against the Company (subject to certain exclusions), and the Company agreed to provide Ms. Wu with certain separation benefits, including $750,000 (gross) in severance pay payable over an 18-month period, accelerated vesting of 200,000 unvested stock options previously granted to Ms. Wu pursuant to an Option Agreement dated effective July 13, 2021, extended the exercise period to exercise such options to July 13, 2031, respectively, and accelerated vesting of 80,000 shares of restricted stock previously granted to Ms. Wu pursuant to an Executive Restricted Stock Agreement dated July 13, 2021. The Release also contains a customary non-disparagement provision. Board of Directors On February 18, 2022, Jerry Lewin resigned as a Class C Director of the Company. In appreciation of Mr. Lewin’s services to the Company as a director, Chair of the Compensation Committee and a member of the Audit Committee, the Company paid to Mr. Lewin $25,000, accelerated vesting of 40,000 unvested stock options previously granted to Mr. Lewin pursuant to an Option Agreement dated effective May 6, 2021, and extended the exercise period of such options to May 6, 2031 |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Background [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements have been derived from the accounting records of AESE and its consolidated subsidiaries. All significant intercompany balances have been eliminated in the consolidated financial statements. The consolidated financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles (“U.S. GAAP”) and pursuant to the accounting rules and regulations of the United States Securities and Exchange Commission (“SEC”). |
Use of Estimates | Use of Estimates Preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, together with amounts disclosed in the related notes to the financial statements. The Company’s significant estimates used in these financial statements include, but are not limited to, the valuation and carrying amount of intangible assets, accounts receivable reserves, the valuation of investments, stock-based compensation, warrants and deferred tax assets, as well as the recoverability and useful lives of long-lived assets, including intangible assets and property and equipment. Certain of the Company’s estimates could be affected by external conditions, including those unique to the Company and general economic conditions. It is reasonably possible that these external factors could have an effect on the Company’s estimates and could cause actual results to differ from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents All short-term investments of the Company that have a maturity of three months or less when purchased are considered to be cash equivalents. There were no cash equivalents as of December 31, 2021 or 2020. |
Restricted Cash | Restricted Cash Restricted cash consists of cash held in an escrow account to be utilized for various approved strategic initiatives and esports event programs pursuant to an agreement with Brookfield Property Partners. See Note 12 – Commitments and Contingencies, Investment Agreements. |
Accounts Receivable | Accounts Receivable Accounts receivable are carried at their contractual amounts. Management establishes an allowance for doubtful accounts based on its historic loss experience and current economic conditions. Losses are charged to the allowance when management deems further collection efforts will not produce additional recoveries. As of December 31, 2021 and 2020, there was no allowance for doubtful accounts. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation using the straight-line method over their estimated useful lives once the asset is placed in service. Leasehold improvements are amortized over the lesser of (a) the useful life of the asset; or (b) the remaining lease term (including renewal periods that are reasonably assured). Expenditures for maintenance and repairs which do not extend the economic useful life of the related assets are charged to operations as incurred, and expenditures which extend the economic life are capitalized. When assets are retired or otherwise disposed of, the costs and related accumulated depreciation or amortization are removed from the accounts and any gain or loss on disposal is recognized in the statement of operations for the respective period. The estimated useful lives of property and equipment are as follows: Office equipment 3 - 5 years Computer equipment 3 - 5 years Production equipment 5 years Furniture and fixtures 3 - 5 years Esports gaming truck 5 years Leasehold improvements 10 years |
Intangible Assets | Intangible Assets The Company’s intangible assets consist of the Allied Esports trademarks, which are being amortized over a useful life of 10 years. Intangible assets with indefinite lives are not amortized but are evaluated at least annually for impairment and more often whenever changes in facts and circumstances may indicate that the carrying value may not be recoverable. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company reviews for the impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company measures the carrying amount of the asset against the estimated undiscounted future cash flows associated with it. Should the sum of the expected future net cash flows be less than the carrying value of the asset being evaluated, an impairment loss would be recognized for the amount by which the carrying value of the asset exceeds its fair value. The evaluation of asset impairment requires the Company to make assumptions about future cash flows over the life of the asset being evaluated. These assumptions require significant judgment and actual results may differ from assumed and estimated amounts. During the year ended December 31, 2020, the Company recognized an impairment of $6,138,631 related to certain investments, and an impairment of $5,595,557 related to property and equipment, due to management’s determination that the future cash flows from these assets are not expected to be sufficient to recover their carrying value. No impairment costs were recognized during the year ended December 31, 2021. |
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 December 31, 2021 and 2020, the fair value of warrant liabilities related to our Sponsor Warrants totaled $3,200 and $3,000, respectively, which is included in accrued expenses and other current liabilities in the accompanying consolidated balance sheet. See Note 7 – Accrued Expenses and Other Current Liabilities. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company measures the fair value of financial assets and liabilities based on the guidance of ASC 820 “Fair Value Measurements and Disclosures” (“ASC 820”). ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value: Level 1 - quoted prices in active markets for identical assets or liabilities. Level 2 - quoted prices for similar assets and liabilities in active markets or inputs that are observable. Level 3 - inputs that are unobservable (for example, cash flow modeling inputs based on assumptions). 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 Sponsor Warrants are carried at fair value as of December 31, 2021 and 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, January 1, 2020 $ 3,000 Change in fair value of sponsor warrants - Balance, December 31, 2020 3,000 Change in fair value of sponsor warrants 200 Balance, December 31, 2021 $ 3,200 The key inputs into the Black-Scholes model at the relevant measurement dates were as follows: December 31, Input 2021 2020 Risk-free rate 0.97 % 0.27 % Remaining term in years 2.61 3.61 Expected volatility 46.0 % 42.0 % Exercise price $ 11.50 $ 11.50 Fair value of common stock $ 1.81 $ 1.58 |
Income Taxes | Income Taxes The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of items that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the enactment date. The Company recognizes the tax benefit from an uncertain income tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement by examining taxing authorities. The Company’s policy is to recognize interest and penalties accrued on uncertain income tax positions in interest expense in the Company’s statements of operations. As of December 31, 2021 and 2020, the Company had no liability for unrecognized tax benefits. The Company does not expect the unrecognized tax benefits to change significantly over the next 12 months. |
Commitments and Contingencies | Commitments and Contingencies Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. |
Net Loss per Common Share | Net 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 potential (a) exercise of outstanding stock options and warrants; (b) the conversion of convertible instruments; and (c) vesting of restricted stock awards. The following securities are excluded from the calculation of weighted average dilutive common shares because their inclusion would have been anti-dilutive: As of 2021 2020 Restricted common shares 80,000 199,143 Options 2,415,000 2,430,000 Warrants 20,091,549 20,091,549 Convertible debt - 439,811 (1) Equity purchase options 600,000 600,000 Contingent consideration shares (2) 192,308 269,231 23,378,857 24,029,734 (1) Common stock equivalents associated with convertible debt were calculated based on the fixed conversion price in effect for voluntary holder conversions; however, for certain convertible notes there is a variable conversion price in effect under certain scenarios that is equal to 87% of lowest daily volume weighted average price over the prior ten days, subject to a $0.734 floor price. If the applicable convertible note principal and guaranteed interest were all converted at the floor price, the potentially dilutive shares related to convertible debt would be 1,154,789 shares. (2) Holders who elected to convert their Bridge Note into common stock are entitled to receive contingent consideration shares equal to the product of (i) 3,846,153 shares, multiplied by (ii) that holder’s investment amount, divided by (iii) $100,000,000, if at any time within five years after the August 9, 2019 closing date, the last exchange-reported sale price of common stock trades at or above $13.00 for thirty (30) consecutive calendar days. |
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. The Company recognizes revenue from continuing operations primarily from the following sources: In-person revenue The Company’s in-person revenue is comprised of event revenue, sponsorship revenue, merchandising revenue and other revenue. Event revenue is generated through Allied Esports events held at the Company’s esports properties. Event revenues recognized from the rental of the Allied Esports arena and gaming trucks are recognized at a point in time when the event occurs. In-person revenue also includes revenue from ticket sales, admission fees and food and beverage sales for events held at the Company’s esports properties. Ticket revenue is recognized at the completion of the applicable event. Point of sale revenues, such as food and beverage, gaming and merchandising revenues, are recognized when control of the related goods are transferred to the customer. The Company also generates sponsorship revenues for naming rights for, and rental of, the Company’s arena and gaming trucks. Sponsorship revenues from naming rights of the Company’s esports arena and from sponsorship arrangements are recognized on a straight-line basis over the contractual term of the agreement. The Company records deferred revenue to the extent that payment has been received for services that have yet to be performed. In-person revenue was comprised of the following for the years ended December 31, 2021 and 2020: For the December 31, 2021 2020 Event revenue $ 2,459,613 $ 574,536 Sponsorship revenue 779,487 1,730,198 Food and beverage revenue 446,202 310,826 Ticket and gaming revenue 480,519 349,526 Merchandising revenue 35,338 22,209 Other revenue 100 1,068 Total in-person revenue $ 4,201,259 $ 2,988,363 Multiplatform revenue The Company’s multiplatform content revenue is comprised of $754,781 and $222,442 as of December 31, 2021 and 2020, respectively, of distribution revenue. Distribution revenue is generated primarily through the distribution of content to online channels. Any advertising revenue earned by online channels is shared with the Company. The Company recognizes online advertising revenue at the point in time when the advertisements are placed in the video content. Revenue recognition The following table summarizes our revenue recognized under ASC 606 in our consolidated statements of operations: For the December 31, 2021 2020 Revenues Recognized at a Point in Time: Event revenue $ 2,459,613 $ 574,536 Distribution revenue 754,781 222,442 Food and beverage revenue 446,202 310,826 Ticket and gaming revenue 480,519 349,526 Merchandising revenue 35,338 22,209 Other revenue 100 1,068 Total Revenues Recognized at a Point in Time 4,176,553 1,480,607 Revenues Recognized Over a Period of Time: Sponsorship revenue 779,487 1,730,198 Total Revenues Recognized Over a Period of Time 779,487 1,730,198 Total Revenues $ 4,956,040 $ 3,210,805 The timing of the Company’s revenue recognition may differ from the timing of payment by its customers. A receivable is recorded when revenue is recognized prior to payment and the Company has an unconditional right to payment. Alternatively, when payment precedes the provision of the related services, the Company records deferred revenue until the performance obligations are satisfied. As of December 31, 2021 and 2020, the Company had contract liabilities of $141,825 and $57,018, respectively, which is included in deferred revenue on the balance sheet. As of December 31, 2021, all continuing operations’ performance obligations in connection with contract liabilities included within deferred revenue on the prior year consolidated balance sheet have been satisfied. The Company expects to satisfy the remaining performance obligations related to its December 31, 2021 deferred revenue balance within the next twelve months. During the years ended December 31, 2021 and 2020, there was no revenue recognized from performance obligations satisfied (or partially satisfied) in previous periods. |
Stock-Based Compensation | Stock-Based Compensation The Company measures the cost of services received in exchange for an award of equity instruments based on the fair value of the award on the date of grant. The fair value amount is then recognized over the period during which services are required to be provided in exchange for the award, usually the vesting period. The estimation of stock-based awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from original estimates, such amounts are recorded as a cumulative adjustment in the period that the estimates are revised. The Company accounts for forfeitures as they occur. |
Advertising Costs | Advertising Costs Advertising costs from continuing operations are charged to operations in the year incurred and totaled $127,612 and $97,840 for the years ended December 31, 2021 and 2020, respectively. |
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 (“FDIC”) 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 years ended December 31, 2021 and 2020, 4% and 10%, respectively, of the Company’s revenues from continuing operations were from customers in foreign countries. During the year ended December 31, 2021, the Company’s three largest customers accounted for 20%, 15%, and 13% of the Company’s consolidated revenues from continuing operations. During the year ended December 31, 2020, the Company’s two largest customer accounted for 41% and 13% of the Company’s consolidated revenues from continuing operations. As of December 31, 2021, the Company’s four largest customers represented 31%, 29%, 15% and 10%, respectively, of the Company’s accounts receivable. As of December 31, 2020, a single customer represented 74% of the Company’s accounts receivable 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 (1.1342 and 1.2264 at December 31, 2021 and 2020, respectively), and revenue and expense accounts are translated using the weighted average exchange rate in effect for the period (1.1830 and 1.1414 for the years ended December 31, 2021 and 2020, respectively). Resulting translation adjustments are made directly to accumulated other comprehensive income (loss). Losses of $53,538 and $0 arising from exchange rate fluctuations on transactions denominated in a currency other than the reporting currency for the years ended December 31, 2021 and 2020, respectively, are recognized in operating results in the consolidated statements of operations. The Company engages in foreign currency denominated transactions with customers and suppliers, as well as between subsidiaries with different functional currencies. |
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 consolidated financial statements, except as disclosed. |
CARES Act | CARES Act On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”). The CARES Act, amongst other things, includes provisions relating to refundable payroll tax credits, deferment of employer social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property. Pursuant to Accounting Standards Codification Topic (“ASC 740”), the Company recognizes the tax effects of new tax legislation upon enactment. Accordingly, the CARES Act was effective beginning in the quarter ended March 31, 2020. The new tax provisions outlined in the CARES Act have not had a material impact on the Company’s consolidated financial statements. |
Discontinued Operations | Discontinued Operations The assets and liabilities of WPT at December 31, 2020 are classified in the accompanying Consolidated Balance Sheets as “Current assets of discontinued operations,” and “Current liabilities of discontinued operations”. The results of operations of WPT for the period from January 1 through July 12, 2021 and for the year ended December 31, 2020 are included in “(Loss) income from discontinued operations, net of tax provision” in the accompanying Consolidated Statements of Operations. |
Reclassifications | Reclassifications Certain prior year balances have been reclassified in order to conform to current year presentation. These reclassifications had no effect on previously reported results of operations or loss per share. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In February 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-02, “Leases (Topic 842).” ASU 2016-02 requires that a lessee recognize the assets and liabilities that arise from operating leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. This amendment will be effective for private companies and emerging growth companies for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. The FASB issued ASU No. 2018-10 “Codification Improvements to Topic 842, Leases” and ASU No. 2018-11 “Leases (Topic 842) Targeted Improvements” in July 2018, and ASU No. 2018-20 “Leases (Topic 842) - Narrow Scope Improvements for Lessors” in December 2018. ASU 2018-10 and ASU 2018-20 provide certain amendments that affect narrow aspects of the guidance issued in ASU 2016-02. ASU 2018-11 allows all entities adopting ASU 2016-02 to choose an additional (and optional) transition method of adoption, under which an entity initially applies the new leases standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company expects that the adoption of this ASU will have a material impact on the Company’s consolidated financial statements, primarily as the result of recording right-of-use assets and lease liability obligations for its current operating lease. In June 2016, the FASB issued ASU No. 2016-13 “Financial Instruments - Credit Losses (Topic 326)” and also issued subsequent amendments to the initial guidance under ASU 2018-19, ASU 2019-04 and ASU 2019-05 (collectively Topic 326). Topic 326 requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. This replaces the existing incurred loss model with an expected loss model and requires the use of forward-looking information to calculate credit loss estimates. The Company will be required to adopt the provisions of this ASU on January 1, 2023, with early adoption permitted for certain amendments. Topic 326 must be adopted by applying a cumulative effect adjustment to retained earnings. The adoption of Topic 326 is not expected to have a material impact on the Company’s consolidated financial statements or disclosures. In February 2020, the FASB issued ASU No. 2020-02, Financial Instruments - Credit Losses (Topic 326) and Leases (Topic 842) – Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date (“ASU 2020-02”) which provides clarifying guidance and minor updates to ASU No. 2016-13 – Financial Instruments – Credit Loss (Topic 326) (“ASU 2016-13”) and related to ASU No. 2016-02 - Leases (Topic 842). ASU 2020-02 amends the effective date of ASU 2016-13, such that ASU 2016-13 and its amendments will be effective for the Company for interim and annual periods in fiscal years beginning after December 15, 2022. The adoption of ASU 2016-13 is not expected to have a material impact on the Company’s consolidated financial statements or disclosures. In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, to clarify the accounting for certain financial instruments with characteristics of liabilities and equity. The amendments in this update reduce the number of accounting models for convertible debt instruments and convertible preferred stock by removing the cash conversion model and the beneficial conversion feature model. Limiting the accounting models will result in fewer embedded conversion features being separately recognized from the host contract. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting and (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in-capital. In addition, this ASU improves disclosure requirements for convertible instruments and earnings-per-share guidance. The ASU also revises the derivative scope exception guidance to reduce form-over-substance-based accounting conclusions driven by remote contingent events. The amendments in this update are effective for the Company in fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption will be permitted, but no earlier than for fiscal years beginning after December 15, 2020. The adoption of ASU 2020-06 is not expected to have a material impact on the Company’s consolidated financial statements or disclosures. 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 does not expect the adoption of this standard to have a material effect on the Company’s consolidated financial statements. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities in accordance with Accounting Standards Codification Topic 606. ASU 2021-08 is effective for fiscal years beginning after December 15, 2022 and early adoption is permitted. While the Company is continuing to assess the timing of adoption and the potential impacts of ASU 2021-08, it does not expect ASU 2021-08 will have a material effect, if any, on its consolidated financial statements. |
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 consolidated financial statements or disclosures. |
Significant Accounting Polici_2
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Significant Accounting Policies (Tables) [Line Items] | |
Schedule of estimated useful lives of property and equipment | Office equipment 3 - 5 years Computer equipment 3 - 5 years Production equipment 5 years Furniture and fixtures 3 - 5 years Esports gaming truck 5 years Leasehold improvements 10 years |
Schedule of roll forward of the company’s level 3 instruments | Balance, January 1, 2020 $ 3,000 Change in fair value of sponsor warrants - Balance, December 31, 2020 3,000 Change in fair value of sponsor warrants 200 Balance, December 31, 2021 $ 3,200 |
Schedule of key inputs into the black-scholes model at the relevant measurement dates | December 31, Input 2021 2020 Risk-free rate 0.97 % 0.27 % Remaining term in years 2.61 3.61 Expected volatility 46.0 % 42.0 % Exercise price $ 11.50 $ 11.50 Fair value of common stock $ 1.81 $ 1.58 |
Schedule of weighted average dilutive common shares | As of 2021 2020 Restricted common shares 80,000 199,143 Options 2,415,000 2,430,000 Warrants 20,091,549 20,091,549 Convertible debt - 439,811 (1) Equity purchase options 600,000 600,000 Contingent consideration shares (2) 192,308 269,231 23,378,857 24,029,734 (1) Common stock equivalents associated with convertible debt were calculated based on the fixed conversion price in effect for voluntary holder conversions; however, for certain convertible notes there is a variable conversion price in effect under certain scenarios that is equal to 87% of lowest daily volume weighted average price over the prior ten days, subject to a $0.734 floor price. If the applicable convertible note principal and guaranteed interest were all converted at the floor price, the potentially dilutive shares related to convertible debt would be 1,154,789 shares. (2) Holders who elected to convert their Bridge Note into common stock are entitled to receive contingent consideration shares equal to the product of (i) 3,846,153 shares, multiplied by (ii) that holder’s investment amount, divided by (iii) $100,000,000, if at any time within five years after the August 9, 2019 closing date, the last exchange-reported sale price of common stock trades at or above $13.00 for thirty (30) consecutive calendar days. |
In-person [Member] | |
Significant Accounting Policies (Tables) [Line Items] | |
Schedule of revenue recognition | For the December 31, 2021 2020 Event revenue $ 2,459,613 $ 574,536 Sponsorship revenue 779,487 1,730,198 Food and beverage revenue 446,202 310,826 Ticket and gaming revenue 480,519 349,526 Merchandising revenue 35,338 22,209 Other revenue 100 1,068 Total in-person revenue $ 4,201,259 $ 2,988,363 |
Adjustment under 606 [Member] | |
Significant Accounting Policies (Tables) [Line Items] | |
Schedule of revenue recognition | For the December 31, 2021 2020 Revenues Recognized at a Point in Time: Event revenue $ 2,459,613 $ 574,536 Distribution revenue 754,781 222,442 Food and beverage revenue 446,202 310,826 Ticket and gaming revenue 480,519 349,526 Merchandising revenue 35,338 22,209 Other revenue 100 1,068 Total Revenues Recognized at a Point in Time 4,176,553 1,480,607 Revenues Recognized Over a Period of Time: Sponsorship revenue 779,487 1,730,198 Total Revenues Recognized Over a Period of Time 779,487 1,730,198 Total Revenues $ 4,956,040 $ 3,210,805 |
Sale of WPT (Tables)
Sale of WPT (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of sale WPT | Cash consideration for sale of WPT (1) $ 106,049,884 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 Less: transaction expenses (2) 2,465,774 Gain on Sale of WPT (3) $ 77,858,835 Assets Cash $ 3,633,292 Accounts receivable 1,804,627 Prepaid expenses and other assets 289,968 Property and equipment, net 1,674,355 Goodwill 4,083,621 Intangible assets, net 12,305,887 Deposits 79,500 Deferred production costs 12,058,592 Due from affiliates 9,433,975 Current assets held for sale $ 45,363,817 Liabilities Accounts payable $ 211,228 Accrued expenses and other liabilities 3,804,301 Accrued interest 4,224 Deferred revenue 1,970,668 Deferred rent 2,493,526 Loans payable (1) 685,300 Current liabilities held for sale $ 9,169,247 |
Schedule of net income (loss) from discontinued operations | For the Years Ended December 31, 2021 (1) 2020 Revenues $ 13,017,362 $ 20,149,042 Operating costs and expenses 13,640,146 19,425,951 (Loss) income from operations (622,784 ) 723,091 Other income, net 689,525 2,417 (Loss) income from discontinued operations before the sale of WPT (66,741 ) 725,508 Gain on sale of WPT 77,858,835 - Net income from discontinued operations, before tax 77,925,576 725,508 Income tax - - Income from discontinued operations, net of tax provision $ 77,925,576 $ 725,508 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and equipment | As of December 31, 2021 2020 Office equipment $ 870,394 $ 868,309 Computer equipment 546,945 495,643 Esports gaming truck 1,222,406 1,222,406 Furniture and fixtures 654,058 654,058 Production equipment 7,919,208 7,841,985 Leasehold improvements 4,678,038 4,645,760 15,891,049 15,728,161 Less: accumulated depreciation and amortization (9,754,156 ) (6,452,432 ) Property and equipment, net $ 6,136,893 $ 9,275,729 |
Intangible Assets, net (Tables)
Intangible Assets, net (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | Intellectual Property Accumulated Amortization Total Balance as of January 1, 2020 $ 36,415 $ (2,406 ) $ 34,009 Purchases of intangibles 750 - 750 Amortization expense - (3,941 ) (3,941 ) Balance as of December 31, 2020 37,165 (6,347 ) 30,818 Amortization expense - (3,991 ) (3,991 ) Balance as of December 31, 2021 $ 37,165 $ (10,338 ) $ 26,827 Weighted average remaining amortization period at December 31, 2021 (in years) 6.7 |
Schedule of estimated future amortization expense | Years Ended December 31, Amount 2022 $ 3,991 2023 3,991 2024 3,991 2025 3,991 2026 3,991 Thereafter 6,872 $ 26,827 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accrued Expenses and Other Current Liabilities [Abstract] | |
Schedule of accrued expenses and other current liabilities | As of December 31, 2021 2020 Compensation expense $ 2,202,621 $ 1,010,734 Current portion of deferred rent 198,504 297,874 Event costs 8,874 26,926 Legal and professional fees 368,691 307,135 Warrant liabilities 3,200 3,000 Unclaimed player prizes - 45,171 Other accrued expenses 172,858 268,751 Other current liabilities 11,497 27,426 Accrued expenses and other current liabilities $ 2,966,245 $ 1,987,017 Accrued expenses, related party (1) $ 1,800,000 $ - (1) Represents amounts accrued to reimburse a principal shareholder for costs incurred in connection with specified Company transactions, including $1,300,000 incurred in connection with the sale of WPT. See Note 12 - Commitments and Contingencies, Principal Shareholder Matter for additional details. |
Convertible Debt and Converti_2
Convertible Debt and Convertible Debt, Related Party (Tables) | 12 Months Ended |
Dec. 31, 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 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of loss before income taxes from continuing operation | For the Years Ended December 31, 2021 2020 United States $ (14,568,373 ) $ (45,315,394 ) Foreign (491,472 ) (468,944 ) Loss before income taxes $ (15,059,845 ) $ (45,784,338 ) |
Schedule of income tax provision (benefit) | For the Years Ended December 31, 2021 2020 Federal Current $ - $ - Deferred (2,857,515 ) (7,159,062 ) State and local: Current - - Deferred (272,144 ) (681,815 ) Foreign Current - - Deferred (66,229 ) (63,193 ) (3,195,888 ) (7,904,070 ) Change in valuation allowance 3,195,888 7,904,070 Income tax provision (benefit) $ - $ - |
Schedule of expected tax expense (benefit) | For the Years Ended December 31, 2021 2020 U.S. Federal statutory rate 21.0 % 21.0 % State taxes, net of federal benefit 6.1 % 6.3 % Permanent differences 1.5 % (10.7 )% Untaxed foreign jurisdictions 0.0 % 0.0 % Lower taxed foreign jurisdictions (0.4 )% (0.1 )% Change in deferred taxes (6.9 )% (0.9 )% Rate change impact 0.0 % 1.0 % Change in valuation allowance (21.3 )% (17.0 )% Other 0.0 % 0.4 % Total 0.0 % 0.0 % |
Schedule of deferred tax assets | As of December 31, 2021 2020 Deferred Tax Assets: Net operating loss carryforwards $ 13,561,888 $ 13,022,656 Production costs 272,810 274,355 Investment 5,800,616 2,909,497 Stock-based compensation 730,832 387,410 Capitalized start-up costs 224,682 322,793 Property and equipment - 1,022,026 Accruals and other 1,674,367 1,252,731 Gross deferred tax assets 22,265,195 19,191,468 Valuation Allowance (21,258,645 ) (19,191,468 ) Deferred tax assets, net of valuation allowance 1,006,550 - Deferred Tax Liabilities: Property and equipment (1,006,550 ) - Deferred Tax Liabilities (1,006,550 ) - Deferred tax assets, net of valuation allowance $ - $ - |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum lease payments | Year ending December 31, Amount 2022 $ 1,554,432 2023 669,252 $ 2,223,684 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Stockholders' Equity (Tables) [Line Items] | |
Schedule of option activity | Weighted Average Weighted Average Number of Exercise Remaining Intrinsic Options Price Term (Yrs) Value Outstanding, January 1, 2021 2,430,000 $ 4.15 Granted 510,000 2.29 Exercised - - Expired - - Forfeited (525,000 ) 4.27 Outstanding, December 31, 2021 2,415,000 $ 3.73 7.52 $ - Exercisable, December 31, 2021 1,360,000 $ 4.08 6.34 $ - |
Schedule of options outstanding and exercisable | Options Outstanding Options Exercisable Outstanding Weighted Exercisable Exercise Number of Average Remaining Number of Price Options Life In Years Options $ 2.11 80,000 8.50 20,000 $ 2.17 120,000 8.60 120,000 $ 2.21 350,000 - - $ 2.48 160,000 - - $ 4.09 1,425,000 5.84 1,060,000 $ 5.66 280,000 7.72 160,000 2,415,000 6.34 1,360,000 |
Schedule of grant date value of options granted | For the December 31, 2021 2020 Risk free interest rate 0.94% - 1.58% 0.55% - 0.69% Expected term (years) 6.25 6.25 Expected volatility 40% - 46% 38% Expected dividends 0.00% 0.00% |
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, December 31, 2021 80,000 $ 2.00 |
Warrants [Member] | |
Stockholders' Equity (Tables) [Line Items] | |
Schedule of options outstanding and exercisable | Warrants Outstanding Warrants Exercisable Exercise Price Exercisable Into Outstanding Weighted Exercisable $ 11.50 Common Stock 18,637,003 2.6 18,637,003 $ 4.13 Common Stock 1,454,546 3.4 1,454,546 20,091,549 20,091,549 |
Background and Basis of Prese_2
Background and Basis of Presentation (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) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Significant Accounting Policies (Textual) | ||
Intangible assets useful life | 10 years | |
Impairment of investments (in Dollars) | $ 6,138,631 | |
Impairment of investments (in Dollars) | 5,000,000 | |
Fair value of warrant liabilities (in Dollars) | $ 3,200 | 3,000 |
Percentage of likelihood | 50.00% | |
Percentage of variable conversion | 87.00% | |
Floor price (in Dollars per share) | $ 0.734 | |
Anti-dilutive shares related to convertible debt (in Shares) | 1,154,789 | |
Contingent consideration shares description | (i) 3,846,153 shares, multiplied by (ii) that holder’s investment amount, divided by (iii) $100,000,000, if at any time within five years after the August 9, 2019 closing date, the last exchange-reported sale price of common stock trades at or above $13.00 for thirty (30) consecutive calendar days. | |
Multiplatform revenue (in Dollars) | $ 754,781 | 222,442 |
Contract liabilities (in Dollars) | $ 141,825 | 57,018 |
Timeline for satisfying remaining performance obligations | 12 months | |
Advertising costs (in Dollars) | $ 127,612 | $ 97,840 |
Percentage of customers in foreign countries | 4.00% | 10.00% |
Functional currency translation rate for balance sheet (in Dollars per share) | $ 1.1342 | $ 1.2264 |
Functional currency translation rate for revenue and expense accounts (in Dollars per share) | $ 1.183 | $ 1.1414 |
Accumulated other comprehensive income (loss) (in Dollars) | $ 53,538 | $ 0 |
Property and Equipment [Member] | ||
Significant Accounting Policies (Textual) | ||
Impairment of investments (in Dollars) | $ 5,595,557 | |
Customer One [Member] | ||
Significant Accounting Policies (Textual) | ||
Percentage of accounts receivable from continuing operations | 20.00% | 41.00% |
Customer Two [Member] | ||
Significant Accounting Policies (Textual) | ||
Percentage of accounts receivable from continuing operations | 15.00% | 13.00% |
Customer Three [Member] | ||
Significant Accounting Policies (Textual) | ||
Percentage of accounts receivable from continuing operations | 13.00% | |
Customer Concentration Risk [Member] | Customer One [Member] | ||
Significant Accounting Policies (Textual) | ||
Percentage of accounts receivable from continuing operations | 31.00% | |
Customer Concentration Risk [Member] | Customer Two [Member] | ||
Significant Accounting Policies (Textual) | ||
Percentage of accounts receivable from continuing operations | 29.00% | |
Customer Concentration Risk [Member] | Customer Three [Member] | ||
Significant Accounting Policies (Textual) | ||
Percentage of accounts receivable from continuing operations | 15.00% | |
Customer Concentration Risk [Member] | Customer Four [Member] | ||
Significant Accounting Policies (Textual) | ||
Percentage of accounts receivable from continuing operations | 10.00% | |
Accounts Receivable [Member] | Customer One [Member] | ||
Significant Accounting Policies (Textual) | ||
Percentage of accounts receivable from continuing operations | 74.00% |
Significant Accounting Polici_4
Significant Accounting Policies (Details) - Schedule of estimated useful lives of property and equipment | 12 Months Ended |
Dec. 31, 2021 | |
Office equipment [Member] | |
Significant Accounting Policies (Details) - Schedule of estimated useful lives of property and equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 years |
Office equipment [Member] | Minimum [Member] | |
Significant Accounting Policies (Details) - Schedule of estimated useful lives of property and equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Computer equipment [Member] | |
Significant Accounting Policies (Details) - Schedule of estimated useful lives of property and equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 years |
Computer equipment [Member] | Minimum [Member] | |
Significant Accounting Policies (Details) - Schedule of estimated useful lives of property and equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Production equipment [Member] | Maximum [Member] | |
Significant Accounting Policies (Details) - Schedule of estimated useful lives of property and equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Furniture and fixtures [Member] | |
Significant Accounting Policies (Details) - Schedule of estimated useful lives of property and equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 years |
Furniture and fixtures [Member] | Minimum [Member] | |
Significant Accounting Policies (Details) - Schedule of estimated useful lives of property and equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Esports gaming truck [Member] | Maximum [Member] | |
Significant Accounting Policies (Details) - Schedule of estimated useful lives of property and equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Leasehold Improvements [Member] | Maximum [Member] | |
Significant Accounting Policies (Details) - Schedule of estimated useful lives of property and equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 10 years |
Significant Accounting Polici_5
Significant Accounting Policies (Details) - Schedule of roll forward of the company’s level 3 instruments - Level 3 [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Significant Accounting Policies (Details) - Schedule of roll forward of the company’s level 3 instruments [Line Items] | ||
Fair value of beginning balance | $ 3,000 | $ 3,000 |
Change in fair value of sponsor warrants | 200 | |
Fair value of ending balance | $ 3,200 | $ 3,000 |
Significant Accounting Polici_6
Significant Accounting Policies (Details) - Schedule of key inputs into the black-scholes model at the relevant measurement dates - $ / shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule of key inputs into the black-scholes model at the relevant measurement dates [Abstract] | ||
Risk-free rate | 0.97% | 0.27% |
Remaining term in years | 2 years 7 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 | $ 1.81 | $ 1.58 |
Significant Accounting Polici_7
Significant Accounting Policies (Details) - Schedule of weighted average dilutive common shares - shares | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Securities excluded from calculation of weighted average dilutive common shares | 23,378,857 | 24,029,734 | ||
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 | 2,415,000 | 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 | 439,811 | [1] | ||
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 | [2] | 192,308 | 269,231 | |
[1] | Common stock equivalents associated with convertible debt were calculated based on the fixed conversion price in effect for voluntary holder conversions; however, for certain convertible notes there is a variable conversion price in effect under certain scenarios that is equal to 87% of lowest daily volume weighted average price over the prior ten days, subject to a $0.734 floor price. If the applicable convertible note principal and guaranteed interest were all converted at the floor price, the potentially dilutive shares related to convertible debt would be 1,154,789 shares. | |||
[2] | Holders who elected to convert their Bridge Note into common stock are entitled to receive contingent consideration shares equal to the product of (i) 3,846,153 shares, multiplied by (ii) that holder’s investment amount, divided by (iii) $100,000,000, if at any time within five years after the August 9, 2019 closing date, the last exchange-reported sale price of common stock trades at or above $13.00 for thirty (30) consecutive calendar days. |
Significant Accounting Polici_8
Significant Accounting Policies (Details) - Schedule of revenue recognition - In-person [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||
Total in-person revenue | $ 4,201,259 | $ 2,988,363 |
Event Revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total in-person revenue | 2,459,613 | 574,536 |
Sponsorship Revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total in-person revenue | 779,487 | 1,730,198 |
Food and Beverage Revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total in-person revenue | 446,202 | 310,826 |
Ticket and Gaming Revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total in-person revenue | 480,519 | 349,526 |
Merchandising Revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total in-person revenue | 35,338 | 22,209 |
Other revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total in-person revenue | $ 100 | $ 1,068 |
Significant Accounting Polici_9
Significant Accounting Policies (Details) - Schedule of revenue recognition - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||
Total Revenues | $ 4,956,040 | $ 3,210,805 |
Point in Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 4,176,553 | 1,480,607 |
Over a Period of Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 779,487 | 1,730,198 |
Event revenue [Member] | Point in Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 2,459,613 | 574,536 |
Distribution revenue [Member] | Point in Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 754,781 | 222,442 |
Food and beverage revenue [Member] | Point in Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 446,202 | 310,826 |
Ticket and gaming revenue [Member] | Point in Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 480,519 | 349,526 |
Merchandising revenue [Member] | Point in Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 35,338 | 22,209 |
Other revenue [Member] | Point in Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 100 | 1,068 |
Sponsorship revenue [Member] | Over a Period of Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | $ 779,487 | $ 1,730,198 |
Sale of WPT (Details)
Sale of WPT (Details) - USD ($) | Jul. 12, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Jan. 26, 2021 |
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 | $ 77,858,835 | |||
Post-closing adjustments | 105,120 | |||
Legal and professional fees | 1,165,774 | |||
Reimbursed principal amounts | $ 1,300,000 | |||
Outstanding principal | $ 685,300 |
Sale of WPT (Details) - Schedul
Sale of WPT (Details) - Schedule of sale WPT - Sale of WPT [Member] - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 | |
Sale of WPT (Details) - Schedule of sale WPT [Line Items] | |||
Cash consideration for sale of WPT | [1] | $ 106,049,884 | |
Less: book value of assets sold | |||
Cash | 3,579,988 | $ 3,633,292 | |
Accounts receivable | 2,999,352 | 1,804,627 | |
Restricted cash | 100,000 | ||
Prepaid expenses and other assets | 264,385 | 289,968 | |
Property and equipment, net | 1,429,706 | 1,674,355 | |
Goodwill | 4,083,621 | 4,083,621 | |
Intangible assets, net | 10,986,463 | 12,305,887 | |
Deposits | 79,500 | 79,500 | |
Deferred production costs | 12,684,054 | 12,058,592 | |
Net book value of assets sold | 36,207,069 | ||
Due from affiliates | 9,433,975 | ||
Current assets held for sale | 45,363,817 | ||
Add: liabilities assumed by buyer | |||
Accounts payable | 487,579 | 211,228 | |
Accrued expenses and other liabilities | 5,567,072 | 3,804,301 | |
Accrued interest | 4,224 | ||
Deferred revenue | 1,807,176 | 1,970,668 | |
Deferred rent | 2,619,967 | 2,493,526 | |
Loans payable | [2] | 685,300 | |
Current liabilities held for sale | $ 9,169,247 | ||
Total liabilities assumed | 10,481,794 | ||
Less: transaction expenses | [3] | 2,465,774 | |
Gain on Sale of WPT | [2] | $ 77,858,835 | |
[1] | Includes $105,120 of post-closing adjustments | ||
[2] | 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 | ||
[3] | Includes $1,165,774 of legal and professional fees and $1,300,000 of amounts reimbursed to the Company’s principal stockholder. See Note 7 - Accrued Expense and Other Current Liabilities for additional details |
Sale of WPT (Details) - Sched_2
Sale of WPT (Details) - Schedule of net income (loss) from discontinued operations - Sale of WPT [Member] - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | [1] | Dec. 31, 2020 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Revenues | $ 13,017,362 | $ 20,149,042 | |
Operating costs and expenses | 13,640,146 | 19,425,951 | |
(Loss) income from operations | (622,784) | 723,091 | |
Other income, net | 689,525 | 2,417 | |
(Loss) income from discontinued operations before the sale of WPT | (66,741) | 725,508 | |
Gain on sale of WPT | 77,858,835 | ||
Net income from discontinued operations, before tax | 77,925,576 | 725,508 | |
Income tax | |||
Income from discontinued operations, net of tax provision | $ 77,925,576 | $ 725,508 | |
[1] | Through the date of the Sale Transaction on July 12, 2021. |
Investments (Details)
Investments (Details) - USD ($) | 1 Months Ended | 6 Months Ended | |||
Dec. 31, 2020 | Aug. 31, 2019 | Jun. 30, 2020 | Dec. 31, 2021 | Mar. 04, 2020 | |
E S A [Member] | |||||
Investments (Details) [Line Items] | |||||
Ownership percentage | 25.00% | ||||
Additional impairment charge | $ 1,138,631 | ||||
Investment amount | $ 0 | ||||
TV Azteca [Member] | |||||
Investments (Details) [Line Items] | |||||
Additional impairment charge | $ 5,000,000 | ||||
Investment amount | $ 0 | $ 0 | |||
Additional amount paid | $ 3,500,000 | ||||
Additional amount paid | $ 1,500,000 |
Property and Equipment, net (De
Property and Equipment, net (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation and amortization expense | $ 3,305,698 | $ 3,605,539 |
Impairment expense | $ 0 | $ 5,595,557 |
Property and Equipment, net (_2
Property and Equipment, net (Details) - Schedule of Property and equipment - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Total Property and equipment, | $ 15,891,049 | $ 15,728,161 |
Less: accumulated depreciation and amortization | (9,754,156) | (6,452,432) |
Property and equipment, net | 6,136,893 | 9,275,729 |
Office equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total Property and equipment, | 870,394 | 868,309 |
Computer equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total Property and equipment, | 546,945 | 495,643 |
Esports gaming truck [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total Property and equipment, | 1,222,406 | 1,222,406 |
Furniture and fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total Property and equipment, | 654,058 | 654,058 |
Production equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total Property and equipment, | 7,919,208 | 7,841,985 |
Leasehold improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total Property and equipment, | $ 4,678,038 | $ 4,645,760 |
Intangible Assets, net (Details
Intangible Assets, net (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Straight-line basis estimated useful lives, description | Intangible assets consist of the Allied Esports trademarks, which are being amortized over a useful life of 10 years. | |
Amortization expense | $ 3,991 | $ 3,941 |
Intangible Assets, net (Detai_2
Intangible Assets, net (Details) - Schedule of intangible assets - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||
Balance at beginning | $ 30,818 | $ 34,009 |
Balance at ending | 26,827 | 30,818 |
Purchases of intangibles | 750 | |
Amortization expense | (3,991) | (3,941) |
Intellectual Property [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Balance at beginning | 37,165 | 36,415 |
Balance at ending | $ 37,165 | 37,165 |
Weighted average remaining amortization period | 6 years 8 months 12 days | |
Purchases of intangibles | 750 | |
Amortization expense | ||
Accumulated Amortization [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Balance at beginning | (6,347) | (2,406) |
Balance at ending | (10,338) | (6,347) |
Purchases of intangibles | ||
Amortization expense | $ (3,991) | $ (3,941) |
Intangible Assets, net (Detai_3
Intangible Assets, net (Details) - Schedule of estimated future amortization expense | Dec. 31, 2021USD ($) |
Schedule of estimated future amortization expense [Abstract] | |
2022 | $ 3,991 |
2023 | 3,991 |
2024 | 3,991 |
2025 | 3,991 |
2026 | 3,991 |
Thereafter | 6,872 |
Total | $ 26,827 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Details) | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Accrued Expenses and Other Current Liabilities [Abstract] | |
Incurred cost | $ 1,300,000 |
Accrued Expenses and Other Cu_4
Accrued Expenses and Other Current Liabilities (Details) - Schedule of accrued expenses and other current liabilities - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule of accrued expenses and other current liabilities [Abstract] | |||
Compensation expense | $ 2,202,621 | $ 1,010,734 | |
Current portion of deferred rent | 198,504 | 297,874 | |
Event costs | 8,874 | 26,926 | |
Legal and professional fees | 368,691 | 307,135 | |
Warrant liabilities | 3,200 | 3,000 | |
Unclaimed player prizes | 45,171 | ||
Other accrued expenses | 172,858 | 268,751 | |
Other current liabilities | 11,497 | 27,426 | |
Accrued expenses and other current liabilities | 2,966,245 | 1,987,017 | |
Accrued expenses, related party | [1] | $ 1,800,000 | |
[1] | Represents amounts accrued to reimburse a principal shareholder for costs incurred in connection with specified Company transactions, including $1,300,000 incurred in connection with the sale of WPT. See Note 12 - Commitments and Contingencies, Principal Shareholder Matter for additional details. |
Convertible Debt and Converti_3
Convertible Debt and Convertible Debt, Related Party (Details) - USD ($) | Aug. 13, 2020 | Aug. 07, 2020 | Jun. 08, 2020 | Jan. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 |
Convertible Debt and Convertible Debt, Related Party (Textual) | ||||||
Agreement, description | the holder of a $5,000,000 Bridge Note (the “Noteholder”) entered into certain Secured Convertible Note Modification and Conversion Agreements (the “Amendments) pursuant to which the Noteholder converted $2,000,000 of the principal amount of its $5,000,000 Bridge Note into an aggregate of 3,392,857 shares of the Company’s common stock including 1,250,000 shares upon the conversion of $2,000,000 of principal at a reduced conversion price of $1.60 per share, and 2,142,857 shares issued upon the conversion of the remaining principal of $3,000,000 at a reduced conversion price of $1.40 per share. The Company recorded a conversion inducement charge of $5,247,531 as a result of the Amendments, consisting of $4,998,845, representing the value of common stock issued upon conversion in excess of the common stock issuable under the original terms of the $5,000,000 Bridge Note, and $248,686, representing the excess of minimum interest payable pursuant to Amendment 3 over the interest payable pursuant to the original terms of the $5,000,000 Bridge Note. See Note 9 - Bridge Note Payable for additional details. Further, pursuant to the Amendments, minimum interest payable in the amount of $1,421,096 (the “Accrued Interest”) was converted into principal under the Noteholder’s Bridge Note. | |||||
Interest payable, description | On August 13, 2020, the Company paid in cash an aggregate of $425,096 related to interest payable on the Extended Bridge Notes. | |||||
Monthly redemption payment, description | Each Monthly Redemption Payment was payable at the Company’s option in cash, or in shares of common stock at a price equal to 87% of the lowest daily volume weighted average price in the 10 days prior to the scheduled payment date (the “Stock Settlement Price”). | |||||
Common stock per share | $ 3.3 | |||||
Conversion feature amount | $ 523,636 | |||||
Debt instrument, description | the Company recorded a debt discount at issuance in the aggregate amount $6,296,556, consisting of (i) the $600,000 difference between the aggregate principal amount of the Senior Notes and the cash proceeds received, (ii) the relative fair value of the warrants of $1,205,959 (which were credited to additional paid in capital), (iii) two years’ guaranteed interest of $1,536,000 (credited to interest payable), (iv) the BCF of $523,636 (credited to additional paid in capital), (v) non-cash interest in the amount of $1,664,000, representing the difference between the anticipated issuance date fair value of common stock issued and the Stock Settlement Price, for Monthly Redemption Payments (credited to interest payable), and (vi) financing costs of $766,961. The debt discount was being amortized using the effective interest method over the term of the Senior Notes. | |||||
Senior secured convertible notes, description | During January 2021, the Company issued 529,383 shares of its common stock as Monthly Redemption Payments in full satisfaction of the remaining $821,867 balance owned under the Senior Notes, including (i) principal in the aggregate amount of $581,818, (ii) $93,091 of interest payable owed on the Senior Notes, and (iii) $146,958 of non-cash interest accrued on the Senior Notes. | During the year ended December 31, 2020, the Company issued 9,678,840 shares of its common stock, as Monthly Redemption Payments in satisfaction of aggregate amount of $9,018,182 of principal and $1,442,909 of interest payable owed on the Senior Notes as well as $2,757,000 of non-cash interest accrued on the Senior Notes. | ||||
Amortization of debt discount | $ 3,646 | $ 3,021,033 | ||||
Extinguishment loss | (3,438,261) | |||||
Purchase Agreement [Member] | ||||||
Convertible Debt and Convertible Debt, Related Party (Textual) | ||||||
Agreement, description | pursuant to a securities purchase agreement (the “Purchase Agreement”) between the Company and certain accredited investors (the “Investors”), the Company issued two senior secured convertible notes (the “Senior Notes”) with an aggregate principal balance of $9,600,000 and immediately vested five-year warrants to purchase an aggregate 1,454,546 shares of common stock at an exercise price of $4.125 per share for net cash proceeds of $9,000,000. The Senior Notes were secured by the assets of the Company, bore interest at 8% per annum and had a stated maturity date of June 8, 2022, with an aggregate of $1,536,000 of interest guaranteed to be paid to the Investors. | |||||
Senior Secured Convertible Notes [Member] | ||||||
Convertible Debt and Convertible Debt, Related Party (Textual) | ||||||
Amortization of debt discount | 3,646 | 2,854,649 | ||||
Interest expense | 46,110 | $ 1,193,849 | ||||
Extinguishment loss | $ 3,438,261 | |||||
Bridge Note [Member] | ||||||
Convertible Debt and Convertible Debt, Related Party (Textual) | ||||||
Bridge notes, description | the Company paid cash of $8,670,431 in satisfaction of principal in the amount of $7,000,000 and interest in the amount of $1,670,431 owed in connection with other Bridge Notes. Further, on June 8, 2020, the Company and the holders (the “Extending Bridge Noteholders”) of the two remaining Bridge Notes outstanding in the aggregate principal amount of $2,000,000 (together, the “Extended Bridge Notes”), of which principal in the amount of $1,000,000 was owed to the spouse of the Company’s Chief Executive Officer (“CEO”) and Director, entered into a Secured Convertible Note Modification (Extension) Agreement with the Company (together, the “Bridge Note Extensions”) pursuant to which, among other things, the Extending Bridge Noteholders agreed to extend the maturity date of their respective Extended Bridge Notes until February 23, 2022. | |||||
interest expense description | the Company recorded interest expense of $124,848 related to the Extended Bridge Notes (of which $62,424 was in connection with the Extended Bridge Note owed to the spouse of the Company’s CEO and Director). During the year ended December 31, 2020, the Company recorded interest expense of $1,433,054 (including amortization of debt discount of $166,384). Of the interest expense recorded during the year ended December 31, 2020, $716,527 (including amortization of debt discount of $83,192) was in connection with the Extended Bridge Note owed to the spouse of the Company’s CEO and Director. |
Convertible Debt and Converti_4
Convertible Debt and Convertible Debt, Related Party (Details) - Schedule of convertible debt | 12 Months Ended |
Dec. 31, 2020USD ($) | |
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 ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Bridge Note Payable (Textual) | ||
Bridge note payable | $ 1,421,096 | |
Interest expense | $ 89,643 | $ 60,698 |
Loans Payable (Details)
Loans Payable (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |
May 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Loans Payable (Textual) | |||
Aggregate cash proceeds | $ 907,129 | $ 907,129 | |
Bearing interest percent rate | 0.98% | ||
Loans Payable [Member] | |||
Loans Payable (Textual) | |||
PPP Loan and Interest Expense | $ 912,475 |
Income Taxes (Details)
Income Taxes (Details) | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Income Tax Disclosure [Abstract] | |
Federal, net operating loss | $ 57,256,984 |
State, net operating loss | 14,681,537 |
Foreign, net operating loss | $ 4,726,053 |
Percentage of ownership | 50.00% |
Ownership change percentage | $ 0.50 |
Limited to taxable income percentage | $ 0.80 |
Percentage of likelihood | If a position meets the more-likely-than-not level of certainty, it is recognized in the consolidated financial statements at the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. |
Income Taxes (Details) - Schedu
Income Taxes (Details) - Schedule of components of loss before income taxes from continuing operation - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule of components of loss before income taxes from continuing operation [Abstract] | ||
United States | $ (14,568,373) | $ (45,315,394) |
Foreign | (491,472) | (468,944) |
Loss before income taxes | $ (15,059,845) | $ (45,784,338) |
Income Taxes (Details) - Sche_2
Income Taxes (Details) - Schedule of income tax provision (benefit) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Federal | ||
Current | ||
Deferred | (2,857,515) | (7,159,062) |
State and local: | ||
Current | ||
Deferred | (272,144) | (681,815) |
Foreign | ||
Current | ||
Deferred | (66,229) | (63,193) |
Income Tax Expense Benefit Gross | (3,195,888) | (7,904,070) |
Change in valuation allowance | 3,195,888 | 7,904,070 |
Income tax provision (benefit) |
Income Taxes (Details) - Sche_3
Income Taxes (Details) - Schedule of expected tax expense (benefit) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule of expected tax expense (benefit) [Abstract] | ||
U.S. Federal statutory rate | 21.00% | 21.00% |
State taxes, net of federal benefit | 6.10% | 6.30% |
Permanent differences | 1.50% | (10.70%) |
Untaxed foreign jurisdictions | 0.00% | 0.00% |
Lower taxed foreign jurisdictions | (0.40%) | (0.10%) |
Change in deferred taxes | (6.90%) | (0.90%) |
Rate change impact | 0.00% | 1.00% |
Change in valuation allowance | (21.30%) | (17.00%) |
Other | 0.00% | 0.40% |
Total | 0.00% | 0.00% |
Income Taxes (Details) - Sche_4
Income Taxes (Details) - Schedule of deferred tax assets - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred Tax Assets: | ||
Net operating loss carryforwards | $ 13,561,888 | $ 13,022,656 |
Production costs | 272,810 | 274,355 |
Investment | 5,800,616 | 2,909,497 |
Stock-based compensation | 730,832 | 387,410 |
Capitalized start-up costs | 224,682 | 322,793 |
Property and equipment | 1,022,026 | |
Accruals and other | 1,674,367 | 1,252,731 |
Gross deferred tax assets | 22,265,195 | 19,191,468 |
Valuation Allowance | (21,258,645) | (19,191,468) |
Deferred tax assets, net of valuation allowance | 1,006,550 | |
Deferred Tax Liabilities: | ||
Property and equipment | (1,006,550) | |
Deferred Tax Liabilities | (1,006,550) | |
Deferred tax assets, net of valuation allowance |
Commitments and Contingencies_2
Commitments and Contingencies (Details) | Jul. 13, 2021USD ($)$ / sharesshares | Jul. 06, 2021 | Nov. 05, 2020 | Jan. 14, 2020USD ($)shares | Dec. 30, 2020USD ($) | Sep. 30, 2020USD ($) | Apr. 24, 2020USD ($) | Mar. 26, 2020USD ($) | Mar. 23, 2017 | Aug. 31, 2021USD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2021EUR (€) | Dec. 31, 2020USD ($) | Dec. 30, 2020USD ($) | Sep. 19, 2029shares | Sep. 19, 2021shares | Nov. 21, 2019USD ($) | Jun. 30, 2019USD ($)shares |
Commitments and Contingencies (Textual) | ||||||||||||||||||
Expense reimbursement request | $ 2,300,000 | |||||||||||||||||
Aggregate amount | $ 1,800,000 | |||||||||||||||||
Lease and rent description | On November 5, 2020, Allied Esports entered into an amendment of the Las Vegas Lease (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 was paid in its entirety by December 31, 2021; (ii) the monthly rent to be paid for the period from June 25 through December 31, 2020 (the “Rent Relief Period) was reduced to an amount equal to 20% of gross sales (excluding food sales) at the event space (the “Percentage Rent”), (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 (“the extension period”). | Allied Esports entered into a non-cancellable operating lease for 30,000 square feet of event space in Las Vegas, Nevada, for the purpose of hosting Esports activities (the “Las Vegas Lease”). The Arena opened to the public on March 23, 2018 (the “Commencement Date”). Initial lease terms are for minimum monthly payments of $125,000 for 60 months from the Commencement Date with an option to extend for an additional 60 months at $137,500 per month. Additional annual tenant obligations are estimated at $2 per square foot for Allied Esports’ portion of real estate taxes and $5 per square foot for common area maintenance costs. | ||||||||||||||||
Rent expense | $ 4,536 | € 4,000 | ||||||||||||||||
Aggregate rent expenses | $ 1,714,894 | $ 1,967,967 | ||||||||||||||||
Lease term 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. | 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. | ||||||||||||||||
Investment payment | 5,000,000 | |||||||||||||||||
Impairment to investment | 5,000,000 | |||||||||||||||||
Held in escrow | $ 5,000,000 | |||||||||||||||||
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). | |||||||||||||||||
Cash bonuses payments | $ 1,245,000 | |||||||||||||||||
Obligate to pay | 1,000,000 | |||||||||||||||||
Aggregate lump-sum severance payments | $ 522,827 | |||||||||||||||||
Change-in-control of WPT, description | On December 30, 2020, Company’s Board of Directors approved, subject to a change-in-control of WPT which accelerates the vesting of AESE option grants held by WPT employees, the extension of the exercise period of the options as follows: (i) the options to purchase an aggregate of 340,000 shares of AESE common stock held by the WPT CEO and General Counsel may be exercised until the 10-year anniversary of the issuance date, and (ii) the remaining options to purchase an aggregate of 300,000 shares of AESE common stock may be exercised until the one-year anniversary of the change-in-control. | |||||||||||||||||
Rent Relief Period [Member] | ||||||||||||||||||
Commitments and Contingencies (Textual) | ||||||||||||||||||
Minimum rent payment | 194,000 | |||||||||||||||||
Rent expense | $ 200,570 | |||||||||||||||||
Lease expire date | May 31, 2023 | May 31, 2023 | ||||||||||||||||
Commitment rent amount | $ 8,250,000 | |||||||||||||||||
Brookfield [Member] | ||||||||||||||||||
Commitments and Contingencies (Textual) | ||||||||||||||||||
Exchange amount | $ 5,000,000 | |||||||||||||||||
In-person [Member] | ||||||||||||||||||
Commitments and Contingencies (Textual) | ||||||||||||||||||
Aggregate rent expenses | 1,216,415 | 1,390,093 | ||||||||||||||||
Forecast [Member] | ||||||||||||||||||
Commitments and Contingencies (Textual) | ||||||||||||||||||
Vested outstanding shares issued (in Shares) | shares | 20,000 | |||||||||||||||||
Simon Agreement [Member] | ||||||||||||||||||
Commitments and Contingencies (Textual) | ||||||||||||||||||
cash deposit | 4,950,000 | |||||||||||||||||
Escrow released amount | 1,300,000 | |||||||||||||||||
Escrow returned amount | $ 3,650,000 | |||||||||||||||||
Cash held in escrow | 3,650,000 | |||||||||||||||||
Chief Executive Officer [Member] | ||||||||||||||||||
Commitments and Contingencies (Textual) | ||||||||||||||||||
Percentage reduction in salary | 80.00% | |||||||||||||||||
Annual salary | $ 210,000 | $ 60,000 | ||||||||||||||||
Initial annual base salary | $ 300,000 | |||||||||||||||||
Mr. Ng’s [Member] | ||||||||||||||||||
Commitments and Contingencies (Textual) | ||||||||||||||||||
Annual salary | 400,000 | |||||||||||||||||
Ms. Wu [Member] | ||||||||||||||||||
Commitments and Contingencies (Textual) | ||||||||||||||||||
Annual base salary | $ 500,000 | |||||||||||||||||
Incentive bonus of annual salary | 60.00% | |||||||||||||||||
Bonus payable received | $ 200,000 | |||||||||||||||||
Restricted common stock | $ 80,000 | |||||||||||||||||
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 | |||||||||||||||||
Mr. Ng [Member] | Forecast [Member] | ||||||||||||||||||
Commitments and Contingencies (Textual) | ||||||||||||||||||
Vested outstanding shares issued (in Shares) | shares | 20,000 | |||||||||||||||||
Employees [Member] | ||||||||||||||||||
Commitments and Contingencies (Textual) | ||||||||||||||||||
Cash bonuses payments | $ 1,245,000 | |||||||||||||||||
Paid to employees | $ 571,000 | 571,000 | ||||||||||||||||
WPT [Member] | ||||||||||||||||||
Commitments and Contingencies (Textual) | ||||||||||||||||||
Paid to employees | $ 674,000 | $ 674,000 | ||||||||||||||||
BPR Cumulus LLC [Member] | ||||||||||||||||||
Commitments and Contingencies (Textual) | ||||||||||||||||||
Shares issued (in Shares) | shares | 758,725 | |||||||||||||||||
Ms Rogers [Member] | Mr Kim’s [Member] | ||||||||||||||||||
Commitments and Contingencies (Textual) | ||||||||||||||||||
Accelerated vesting shares (in Shares) | shares | 10,000 | |||||||||||||||||
TV Azteca Investment [Member] | ||||||||||||||||||
Commitments and Contingencies (Textual) | ||||||||||||||||||
Shares purchased (in Shares) | shares | 742,692 | |||||||||||||||||
Aggregate purchase amount | $ 5,000,000 | |||||||||||||||||
General and Administrative Expense [Member] | ||||||||||||||||||
Commitments and Contingencies (Textual) | ||||||||||||||||||
Aggregate rent expenses | $ 498,480 | $ 577,874 |
Commitments and Contingencies_3
Commitments and Contingencies (Details) - Schedule of future minimum lease payments | Dec. 31, 2021USD ($) |
Schedule of future minimum lease payments [Abstract] | |
2022 | $ 1,554,432 |
2023 | 669,252 |
Total | $ 2,223,684 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | Nov. 11, 2021 | Jul. 13, 2021 | Jul. 06, 2021 | May 06, 2021 | Nov. 04, 2020 | Aug. 09, 2020 | Aug. 07, 2020 | Aug. 06, 2020 | Mar. 09, 2020 | Jan. 14, 2020 | Aug. 09, 2019 | Jan. 31, 2021 | Jan. 19, 2021 | Sep. 29, 2020 | Sep. 24, 2020 | Jul. 27, 2020 | Apr. 29, 2020 | Feb. 25, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 30, 2021 |
Stockholders' Equity (Textual) | |||||||||||||||||||||
Number of authorized shares increased (in Shares) | 10,000,000 | ||||||||||||||||||||
Issued of common stock (in Shares) | 758,725 | 529,383 | |||||||||||||||||||
Common stock value | $ 5,000,000 | $ 821,867 | $ 200,000 | $ 5,000,000 | |||||||||||||||||
Debt and accrued interest | $ 674,909 | ||||||||||||||||||||
Stock option (in Shares) | 150,000 | 200,000 | 160,000 | ||||||||||||||||||
Shares vest in equal annual installments | 4 years | 4 years | 4 years | ||||||||||||||||||
Exercise price (in Dollars per share) | $ 2.21 | $ 2.21 | $ 2.48 | ||||||||||||||||||
Aggregate grant date fair value | $ 159,756 | $ 202,910 | $ 145,777 | ||||||||||||||||||
Weighted Average grant date fair value (in Dollars per share) | $ 1 | $ 0.8 | |||||||||||||||||||
Employee payroll tax liabilities, description | During the year ended December 31, 2021, 100,904 shares of common stock valued at $210,147 were withheld by the Company to cover employee payroll tax liabilities in connection with the vesting of restricted stock, including 23,411 shares valued at $50,802 for employee payroll tax liabilities related to restricted stock vested during the year ended December 31, 2020 and 77,493 shares valued at $159,345 for restricted stock vested during the year ended December 31, 2021. | ||||||||||||||||||||
Non-executive directors compensation 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 | ||||||||||||||||||||
Senior secured convertible notes warrant issuance description | Prior to the August 9, 2019 Closing Date of the Merger (see Note 1 – Background and Basis of Presentation), BRAC issued 14,305,000 five-year warrants (the “BRAC Warrants”) for the purchase of the Company’s common stock at $11.50 per share in connection with BRAC’s initial public offering. These previously issued BRAC Warrants are deemed to be issued in connection with the Merger, as a result of the reverse recapitalization. As of result of the August 9, 2019 Merger, the Company issued to the former owners of Allied Esports and WPT five-year warrants to purchase an aggregate of 3,800,003 shares of common stock at a price of $11.50 per share and issued five-year warrants for the purchase of an aggregate of 532,000 shares of common stock to the Noteholders with an exercise price of $11.50 per share. | ||||||||||||||||||||
Warrants to purchase common stock (in Shares) | 1,454,546 | ||||||||||||||||||||
Price per warrant (in Dollars per share) | $ 4.13 | ||||||||||||||||||||
Put Option Agreement [Member] | |||||||||||||||||||||
Stockholders' Equity (Textual) | |||||||||||||||||||||
Aggregate gross proceeds | $ 2,000,000 | ||||||||||||||||||||
Purchase price of per option share (in Dollars per share) | $ 1.963 | ||||||||||||||||||||
Exercise of put options (in Shares) | 1,018,848 | ||||||||||||||||||||
Put option purchase price of per share (in Dollars per share) | $ 1.963 | ||||||||||||||||||||
Total proceeds of option shares (in Shares) | 2,000,000 | ||||||||||||||||||||
Gross proceeds | $ 21,875 | ||||||||||||||||||||
Equity purchase option description | Prior to the Closing Date, BRAC sold an option to purchase up to 600,000 units, exercisable at $11.50 per Unit, in connection with BRAC’s initial public offering (the “Equity Purchase Option”). Each Unit consisted of one and one-tenth shares of common stock and a warrant to purchase one share of common stock at $11.50 per share. Effective upon the closing of the Merger, the units converted by their terms into the shares and warrants, and the option now represents the ability to buy such securities directly (and not units). The Equity Purchase Option may be exercised on either a cash or a cashless basis, at the holder’s option, and expires on October 4, 2022. | ||||||||||||||||||||
Minimum [Member] | |||||||||||||||||||||
Stockholders' Equity (Textual) | |||||||||||||||||||||
Authorized shares of common stock (in Shares) | 75,000,000 | 65,000,000 | |||||||||||||||||||
Maximum [Member] | |||||||||||||||||||||
Stockholders' Equity (Textual) | |||||||||||||||||||||
Authorized shares of common stock (in Shares) | 100,000,000 | 75,000,000 | |||||||||||||||||||
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) | 3,763,305 | ||||||||||||||||||||
Non-executive directors [Member] | |||||||||||||||||||||
Stockholders' Equity (Textual) | |||||||||||||||||||||
Aggregate shares of common stock (in Shares) | 126,584 | 64,286 | |||||||||||||||||||
Stock based compensation | $ 200,000 | $ 129,000 | |||||||||||||||||||
Chief Financial Officer [Member] | |||||||||||||||||||||
Stockholders' Equity (Textual) | |||||||||||||||||||||
Option to purchase of common shares (in Shares) | 50,000 | ||||||||||||||||||||
Vested grant value | $ 109,000 | ||||||||||||||||||||
Board of Directors Chairman [Member] | |||||||||||||||||||||
Stockholders' Equity (Textual) | |||||||||||||||||||||
Issued of common stock (in Shares) | 14,286 | ||||||||||||||||||||
Vested grant value | $ 20,000 | ||||||||||||||||||||
Officers and employees [Member | |||||||||||||||||||||
Stockholders' Equity (Textual) | |||||||||||||||||||||
Issued of common stock (in Shares) | 217,999 | ||||||||||||||||||||
Fair value at date of grant | $ 474,000 | ||||||||||||||||||||
Plan [Member] | |||||||||||||||||||||
Stockholders' Equity (Textual) | |||||||||||||||||||||
Number of shares of common stock available (in Shares) | 304,904 | ||||||||||||||||||||
Stock Options [Member] | |||||||||||||||||||||
Stockholders' Equity (Textual) | |||||||||||||||||||||
Stock-based compensation expense | $ 1,224,699 | 1,158,173 | |||||||||||||||||||
Income (loss) of discontinued operations | 767,942 | 214,239 | |||||||||||||||||||
Unrecognized compensation expense | $ 1,220,881 | ||||||||||||||||||||
Weighted average remaining vesting period | 2 years 6 months | ||||||||||||||||||||
Restricted Stock [Member] | |||||||||||||||||||||
Stockholders' Equity (Textual) | |||||||||||||||||||||
Stock-based compensation expense | $ 260,433 | 459,220 | |||||||||||||||||||
Income (loss) of discontinued operations | 14,848 | $ 40,165 | |||||||||||||||||||
Unrecognized compensation expense | $ 99,946 | ||||||||||||||||||||
Weighted average remaining vesting period | 7 months 6 days | ||||||||||||||||||||
Restricted Stock Units (RSUs) [Member] | |||||||||||||||||||||
Stockholders' Equity (Textual) | |||||||||||||||||||||
Stock-based compensation expense | $ 1,000,000 | ||||||||||||||||||||
Non-executive directors compensation description | pursuant to which the Former 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 Former CEO remains continuously employed by the Company through such date), or the termination of the Former CEO’s employment without cause after the closing of the Sale Transaction (as defined in his employment agreement) (as applicable, the “Vesting Date”). | ||||||||||||||||||||
Convertible Debt [Member] | |||||||||||||||||||||
Stockholders' Equity (Textual) | |||||||||||||||||||||
Issued of common stock (in Shares) | 3,392,857 | 9,678,840 | |||||||||||||||||||
Common stock value | $ 9,998,845 | $ 13,218,091 | |||||||||||||||||||
Conversion of units | $ 5,000,000 | ||||||||||||||||||||
Debt and accrued interest | $ 10,461,191 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - Schedule of option activity - Stock Options [Member] | 12 Months Ended |
Dec. 31, 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, Granted | shares | 510,000 |
Weighted Average Exercise Price, Granted | $ / shares | $ 2.29 |
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 | (525,000) |
Weighted Average Exercise Price, Forfeited | $ / shares | $ 4.27 |
Number of Options, Outstanding at ending | shares | 2,415,000 |
Weighted Average Exercise Price, Outstanding at ending | $ / shares | $ 3.73 |
Weighted Average Remaining Term (Yrs), Outstanding at ending | 7 years 6 months 7 days |
Intrinsic Value, Outstanding at ending | $ | |
Number of Options, Exercisable | shares | 1,360,000 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 4.08 |
Weighted Average Remaining Term (Yrs), Exercisable | 6 years 4 months 2 days |
Intrinsic Value, Exercisable | $ |
Stockholders' Equity (Details_2
Stockholders' Equity (Details) - Schedule of options outstanding and exercisable | 12 Months Ended |
Dec. 31, 2021$ / sharesshares | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Outstanding Number of Options, Options Outstanding | 2,415,000 |
Weighted Average Remaining Life In Years, Options Exercisable | 6 years 4 months 2 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 6 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 7 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 | 350,000 |
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 | 1,425,000 |
Weighted Average Remaining Life In Years, Options Exercisable | 5 years 10 months 2 days |
Exercisable Number of Options, Options Exercisable | 1,060,000 |
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 8 months 19 days |
Exercisable Number of Options, Options Exercisable | 160,000 |
Stockholders' Equity (Details_3
Stockholders' Equity (Details) - Schedule of grant date value of options granted - Stock Options [Member] | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Stockholders' Equity (Details) - Schedule of grant date value of options granted [Line Items] | ||
Expected term (years) | 6 years 3 months | 6 years 3 months |
Expected volatility | 38.00% | |
Expected dividends | 0.00% | 0.00% |
Minimum [Member] | ||
Stockholders' Equity (Details) - Schedule of grant date value of options granted [Line Items] | ||
Risk free interest rate | 0.94% | 0.55% |
Expected volatility | 40.00% | |
Maximum [Member] | ||
Stockholders' Equity (Details) - Schedule of grant date value of options granted [Line Items] | ||
Risk free interest rate | 1.58% | 0.69% |
Expected volatility | 46.00% |
Stockholders' Equity (Details_4
Stockholders' Equity (Details) - Schedule of non-vested restricted stock activity | 12 Months Ended |
Dec. 31, 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, 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 |
Number of Restricted Stock, balance at ending | shares | 80,000 |
Weighted Average Grant Date Fair Value, balance at ending | $ / shares | $ 2 |
Stockholders' Equity (Details_5
Stockholders' Equity (Details) - Schedule of warrants outstanding and exercisable | 12 Months Ended |
Dec. 31, 2021$ / sharesshares | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Outstanding Number of Warrants, Warrants Outstanding | 20,091,549 |
Exercisable Number of Warrants, Warrants Exercisable | 20,091,549 |
11.50 [Member] | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise Price, Warrants Outstanding (in Dollars per share) | $ / shares | $ 11.5 |
Exercisable Into, Warrants Outstanding | Common Stock |
Outstanding Number of Warrants, Warrants Outstanding | 18,637,003 |
Weighted Average Remaining Life in Years, Warrants Exercisable | 2 years 7 months 6 days |
Exercisable Number of Warrants, Warrants Exercisable | 18,637,003 |
4.13 [Member] | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise Price, Warrants Outstanding (in Dollars per share) | $ / shares | $ 4.13 |
Exercisable Into, Warrants Outstanding | Common Stock |
Outstanding Number of Warrants, Warrants Outstanding | 1,454,546 |
Weighted Average Remaining Life in Years, Warrants Exercisable | 3 years 4 months 24 days |
Exercisable Number of Warrants, Warrants Exercisable | 1,454,546 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Jul. 13, 2021 | May 06, 2021 |
Subsequent Events [Abstract] | ||
Severance payable (in Dollars) | $ 750,000 | |
Unvested stock options granted | 200,000 | 40,000 |
Vesting restricted stock | 80,000 | |
Unvested Stock (in Dollars) | $ 25,000 |