Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Mar. 21, 2023 | Jun. 30, 2022 | |
Document Information Line Items | |||
Entity Registrant Name | ALLIED GAMING & ENTERTAINMENT INC. | ||
Trading Symbol | AGAE | ||
Document Type | 10-K | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Common Stock, Shares Outstanding | 39,085,470 | ||
Entity Public Float | $ 25,607,206 | ||
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, 2022 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | 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 | 6413 | ||
Auditor Name | ZH CPA, LLC | ||
Auditor Location | Denver, Colorado |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Current Assets | ||
Cash and cash equivalents | $ 11,167,442 | $ 92,887,030 |
Short-term investments | 70,000,000 | |
Interest receivable | 677,397 | |
Accounts receivable | 72,739 | 389,040 |
Prepaid expenses and other current assets | 459,274 | 984,777 |
Total Current Assets | 82,376,852 | 94,260,847 |
Restricted cash | 5,000,000 | 5,000,000 |
Property and equipment, net | 4,005,622 | 6,136,893 |
Digital assets | 49,761 | |
Intangible assets, net | 22,836 | 26,827 |
Deposits | 379,105 | 379,105 |
Operating lease right-of-use asset | 5,845,549 | |
Other assets | 49,950 | |
Total Assets | 97,729,675 | 105,803,672 |
Current Liabilities | ||
Accounts payable | 317,561 | 341,161 |
Accrued expenses and other current liabilities | 1,645,379 | 2,966,245 |
Accrued expenses - related party | 1,800,000 | |
Deferred revenue | 108,428 | 141,825 |
Operating lease liability, current portion | 1,227,164 | |
Total Current Liabilities | 3,298,532 | 5,249,231 |
Deferred rent | 1,907,634 | |
Operating lease liability, non-current portion | 6,527,075 | |
Total Liabilities | 9,825,607 | 7,156,865 |
Commitments and Contingencies (Note 12) | ||
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, 39,085,470 and 39,116,907 shares issued at December 31, 2022 and 2021, respectively, and 38,503,724 and 39,116,907 shares outstanding at December 31, 2022 and 2021, respectively | 3,909 | 3,912 |
Additional paid in capital | 198,526,614 | 197,784,972 |
Accumulated deficit | (110,235,568) | (99,411,683) |
Accumulated other comprehensive income | 219,675 | 269,606 |
Treasury stock, at cost, 581,746 and 0 shares at December 31, 2022 and 2021, respectively | (610,562) | |
Total Stockholders’ Equity | 87,904,068 | 98,646,807 |
Total Liabilities and Stockholders’ Equity | $ 97,729,675 | $ 105,803,672 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 39,085,470 | 39,116,907 |
Common stock, shares outstanding | 38,503,724 | 39,116,907 |
Treasury stock | 581,746 | 0 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Revenues: | ||
In-person | $ 6,100,912 | $ 4,201,259 |
Multiplatform content | 251,558 | 754,781 |
Total Revenues | 6,352,470 | 4,956,040 |
Costs and Expenses: | ||
In-person (exclusive of depreciation and amortization) | 4,994,610 | 3,688,527 |
Multiplatform content (exclusive of depreciation and amortization) | 109,563 | 386,723 |
Selling and marketing expenses | 234,813 | 294,417 |
General and administrative expenses | 10,482,421 | 13,052,963 |
Depreciation and amortization | 2,065,348 | 3,305,895 |
Impairment of property and equipment | 67,500 | |
Impairment of digital assets | 164,411 | |
Total Costs and Expenses | 18,118,666 | 20,728,525 |
Loss From Operations | (11,766,196) | (15,772,485) |
Other Income (Expense): | ||
Gain on forgiveness of PPP loans and interest | 912,475 | |
Other income, net | 153,009 | 68,917 |
Interest income (expense), net | 789,302 | (268,752) |
Total Other Expense | 942,311 | 712,640 |
Loss from continuing operations | (10,823,885) | (15,059,845) |
Income from discontinued operations | 66,741 | |
Gain on sale of WPT | 77,858,835 | |
Income from discontinued operations, net of tax | 77,925,576 | |
Net (loss) income | $ (10,823,885) | $ 62,865,731 |
Basic and Diluted Net Loss (Income) per Common Share | ||
Continuing operations (in Dollars per share) | $ (0.28) | $ (0.39) |
Discontinued operations, net of tax (in Dollars per share) | $ 2 | |
Weighted Average Number of Common Shares Outstanding: | ||
Weighted Average Number of Common Shares Outstanding basic (in Shares) | 39,071,501 | 39,004,317 |
Consolidated Statements of Op_2
Consolidated Statements of Operations (Parentheticals) - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | ||
Basic and Diluted Net Loss (Income) per Common Share Continuing operations | $ (0.28) | $ (0.39) |
Basic and Diluted Net Loss (Income) per Common Share Discontinued operations, net of tax | $ 2 | |
Weighted Average Number of Common Shares Outstanding diluted (in Shares) | 39,071,501 | 39,004,317 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Comprehensive (Loss) Income | ||
Net (Loss) Income | $ (10,823,885) | $ 62,865,731 |
Other comprehensive (loss) income: | ||
Foreign currency translation adjustments | (49,931) | 78,640 |
Total Comprehensive (Loss) Income | $ (10,873,816) | $ 62,944,371 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders’ Equity - USD ($) | Common Stock | Treasury Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income | Accumulated Deficit | Total |
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 | |||||
Stock-based compensation: | ||||||
Common stock issued | $ 13 | 199,987 | 200,000 | |||
Common stock issued (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 | |||||
Stock-based compensation: | ||||||
Restricted common stock | 82,345 | 82,345 | ||||
Stock options | 708,964 | 708,964 | ||||
Repurchases of common stock | $ (610,562) | (610,562) | ||||
Repurchases of common stock (in Shares) | 581,746 | |||||
Foreign currency translation adjustments | (49,931) | (49,931) | ||||
Shares withheld for employee payroll tax | $ (3) | (49,667) | (49,670) | |||
Shares withheld for employee payroll tax (in Shares) | (31,437) | |||||
Net income (loss) | (10,823,885) | (10,823,885) | ||||
Balance at Dec. 31, 2022 | $ 3,909 | $ (610,562) | $ 198,526,614 | $ 219,675 | $ (110,235,568) | $ 87,904,068 |
Balance (in Shares) at Dec. 31, 2022 | 39,085,470 | 581,746 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Cash Flows From Operating Activities | ||
Net (loss) income | $ (10,823,885) | $ 62,865,731 |
Adjustments to reconcile net (loss) income to net cash used in operating activities: | ||
Income from discontinued operations, net of tax provision | (77,925,576) | |
Stock-based compensation | 791,309 | 1,323,872 |
Shares withheld for employee payroll tax expense | (210,147) | |
Non-cash rent expense | 868,210 | |
Gain on forgiveness of PPP loans and interest | (912,475) | |
Digital currency received as revenue | (250,252) | |
Impairment of digital assets | 164,411 | |
Impairment of property and equipment | 67,500 | |
Loss on equipment disposal | 33,583 | |
Expenses paid using digital assets | 77,106 | |
Change in fair value of warrant liabilities | (3,100) | 200 |
Amortization of debt discount | 3,646 | |
Non-cash interest expense | 45,451 | |
Depreciation and amortization | 2,065,348 | 3,305,895 |
Deferred rent | 216,024 | 214,568 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 315,708 | (118,710) |
Interest receivable | (677,397) | |
Prepaid expenses and other current assets | 519,463 | (83,875) |
Deposits | 245,895 | |
Accounts payable | (22,356) | (556,783) |
Accrued expenses and other current liabilities | (3,159,571) | 1,087,802 |
Accrued interest | (146,894) | |
Operating lease liability | (1,083,178) | |
Due to affiliates | 697,548 | |
Deferred revenue | (33,397) | 84,807 |
Total Adjustments | (110,589) | (72,944,776) |
Net Cash Used In Operating Activities | (10,934,474) | (10,079,045) |
Cash Flows From Investing Activities | ||
Cash consideration for sale of WPT | 106,049,886 | |
Expenditures on software development costs | (49,950) | |
Purchases of short-term investments | (70,000,000) | |
Investment in digital assets | (41,026) | |
Purchases of property and equipment | (44,386) | (191,668) |
Net Cash (Used In) Provided By Investing Activities | (70,135,362) | 105,858,218 |
Cash Flows From Financing Activities | ||
Repayments of bridge loans | (3,421,096) | |
Purchase of treasury stock | (610,562) | |
Net Cash Used In Financing Activities | (610,562) | (3,421,096) |
Cash Flows From Discontinued Operations | ||
Operating activities | 63,956 | |
Investing activities | (17,259) | |
Change in cash balance of discontinued operations | 3,633,291 | |
Cash sold in connection with sale of WPT | (3,679,988) | |
Net Cash Provided By Discontinued Operations | ||
Effect of Exchange Rate Changes on Cash | (39,190) | 104,730 |
Net (Decrease) Increase In Cash, Cash Equivalents, And Restricted Cash | (81,719,588) | 92,462,807 |
Cash, cash equivalents, and restricted cash - Beginning of Year | 97,887,030 | 5,424,223 |
Cash, cash equivalents, and restricted cash - End of Year | 16,167,442 | 97,887,030 |
Cash and restricted cash consisted of the following: | ||
Cash | 11,167,442 | 92,887,030 |
Restricted cash | 5,000,000 | 5,000,000 |
Tota cash and restricted cash | 16,167,442 | 97,887,030 |
Supplemental Disclosures of Cash Flow Information | ||
Cash paid during the year for interest | 350,471 | |
Non-Cash Investing and Financing Activities: | ||
Shares withheld for accrued employee payroll tax liability | 49,670 | |
ROU asset and lease liability, net of deferred rent, recognized upon adoption of ASC 842 | 6,713,759 | |
Shares issued for redemption of debt and accrued interest | 821,867 | |
Forgiveness of amounts due to affiliate | $ 9,370,261 |
Background and Basis of Present
Background and Basis of Presentation | 12 Months Ended |
Dec. 31, 2022 | |
Background and Basis of Presentation [Abstract] | |
Background and Basis of Presentation | Note 1 – Background and Basis of Presentation Allied Gaming & Entertainment Inc. (“AGAE” and together with its subsidiaries, “the Company”) operates a public esports and entertainment company, consisting of the Allied Esports business and, until the sale of WPT on July 12, 2021, 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 Allied Esports GmbH (“AEG”). 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. AEG operates a mobile esports truck that serves as both a battleground and content generation hub and also operates a studio for recording and streaming gaming events. AGAE’s formerly 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”. 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 CSI. CSI owns 100% of each of the legal entities which comprise World Poker Tour. On July 12, 2021, the Company consummated the sale of the World Poker Tour business. As a result of the Company’s sale of WPT, the consolidated statements of operations and comprehensive loss for the year ended December 31, 2021, and the consolidated statements of cash flows for the year ended December 31, 2021, present the results and accounts of World Poker Tour as discontinued operations. See Note 3 – Sale of WPT. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Background and Basis of Presentation [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 AGAE 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 deferred tax assets, stock-based compensation, and accounts receivable reserves, 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. As of December 31, 2022 and 2021, the Company’s cash equivalents consist of Certificate of Deposits of $10 million and $0, respectively. Accrued interest receivable on cash equivalents totaled $80,137 and $0 at December 31, 2022 and 2021, respectively and is included in current assets in the accompanying consolidated balance sheets. Restricted Cash Restricted cash consists of $5.0 million 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). Short-term Investments Short-term investments consist of certificates of deposit with original maturities of greater than three months but less than or equal to twelve months when purchased. Accrued interest receivable on short-term investments totaled $597,260 and $0 at December 31, 2022 and 2021, respectively and is included in current assets in the accompanying consolidated balance sheets. Accounts Receivable Accounts receivable are carried at their contractual amounts less allowance for doubtful accounts. 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, 2022 and 2021, 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 Lessor of 10 years or Internal Use Software Development Costs The costs incurred in the preliminary stages of software development are expensed as incurred. Once an application has reached the development stage, internal and external costs, if direct and incremental, are capitalized and included within other assets on the accompanying balance sheet. Once they are ready for intended use they are amortized on a straight-line basis over their estimated useful lives. As of December 31, 2022 and 2021, no internal use software has been placed into service (see Note 12 – Commitments and Contingencies – System Development Agreement for additional details). 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, 2022, the Company recognized an impairment of $164,411 related to digital assets, and an impairment of $67,500 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 on long-lived assets 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. With regard to the warrants currently outstanding: ● 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, 2022 and 2021, the fair value of warrant liabilities related to our Sponsor Warrants totaled $100 and $3,200, 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 following table provides information about the Company’s financial assets measured at fair value on a recurring basis and indicates the level of the fair value hierarchy utilized to determine such fair values: As of December 31, 2022 Level 1 Level 2 Level 3 Total Digital assets $ 49,761 $ - $ - $ 49,761 Sponsor warrants - - 100 100 Short-term investments - 70,000,000 - 70,000,000 Total $ 49,761 $ 70,000,000 $ 100 $ 70,049,861 As of December 31, 2021 Level 1 Level 2 Level 3 Total Digital assets $ - $ - $ - $ - Sponsor warrants - - 3,200 3,200 Short-term investments - - - - Total $ - $ - $ 3,200 $ 3,200 The carrying amounts of the Company’s financial instruments, such as cash equivalents, accounts receivable, interest receivable, accounts payable, operating lease liabilities, 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, 2022 and 2021. 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, 2021 $ 3,000 Change in fair value of sponsor warrants 200 Balance, December 31, 2021 3,200 Change in fair value of sponsor warrants (3,100 ) Balance, December 31, 2022 $ 100 The key inputs into the Black-Scholes model at the relevant measurement dates were as follows: December 31, December 31, Input 2022 2021 Risk-free rate 4.57 % 0.97 % Remaining term in years 1.61 2.61 Expected volatility 56.0 % 46.0 % Exercise price $ 11.50 $ 11.50 Fair value of common stock $ 1.05 $ 1.81 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, 2022 and 2021, 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. Leases See Note 2 Significant Accounting Policies – Recently Adopted Accounting Pronouncements for further details on the adoption of ASC 842. 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 December 31, 2022 2021 Restricted common shares - 80,000 Options 1,675,000 2,415,000 Warrants 20,091,549 20,091,549 Equity purchase options - 600,000 Contingent consideration shares (1) 192,308 192,308 21,958,857 23,378,857 (1) Holders who elected to convert their convertible debt 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 August 9, 2019, 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 revenues from the rental of the Allied Esports arena and gaming trucks are recognized over the term of the event based on the number of days completed relative to the total days of the event, as this method best depicts the transfer of control to the customer. 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 revenue from the naming rights of its esports arena and from the production and distribution of programming over interactive live-streaming services. Sponsorship revenues from naming rights of the Company’s esports arena are recognized on a straight-line basis over the contractual term of the agreement. Subscription revenues from program distribution are recognized over the term of the contract under the “output method” as the programs are distributed. The Company has determined that this method provides a faithful depiction of the transfer of goods or services to the customer. 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, 2022 and 2021: For the Years Ended December 31, 2022 2021 Event revenue $ 2,803,396 $ 2,459,613 Sponsorship revenue 1,838,908 779,487 Food and beverage revenue 832,282 446,202 Ticket and gaming revenue 529,201 480,519 Merchandising revenue 97,125 35,338 Other revenue - 100 Total in-person revenue $ 6,100,912 $ 4,201,259 Multiplatform revenue Multiplatform revenue was comprised of the following for the years ended December 31, 2022 and 2021: For the Years Ended December 31, 2022 2021 NFT revenue $ 250,252 $ - Distribution revenue 1,306 754,781 Total multiplatform revenue $ 251,558 $ 754,781 The Company’s NFT revenue was generated from the sale of non-fungible tokens (NFTs). The Company’s NFTs exist on the Ethereum Blockchain under the Company’s EPICBEAST brand, a digital art collection of 1,958 unique beasts inspired by past and present e-sport games. The Company uses the NFT exchange, OpenSea, to facilitate the sale of NFTs. The Company, through OpenSea, has custody and control of the NFT prior to the delivery to the customer and records revenue at a point in time when the NFT is delivered to the customer and the customer pays. The Company has no obligations for returns, refunds or warranty after the NFT sale. The Company also earns a royalty of up to 10% of the sale price when an NFT is resold by its owner in a secondary market transaction. The Company recognizes this royalty as revenue when the sale is consummated. The Company’s 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 Years Ended December 31, 2022 2021 Revenues Recognized at a Point in Time: NFT revenue $ 250,252 $ - Distribution revenue 1,306 754,781 Food and beverage revenue 832,282 446,202 Ticket and gaming revenue 529,201 480,519 Merchandising revenue 97,125 35,338 Other revenue - 100 Total Revenues Recognized at a Point in Time 1,710,166 1,716,940 Revenues Recognized Over a Period of Time: Event revenue 2,803,396 2,459.613 Sponsorship revenue 1,838,908 779,487 Total Revenues Recognized Over a Period of Time 4,642,304 3,239,100 Total Revenues $ 6,352,470 $ 4,956,040 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, 2022 and 2021, the Company had contract liabilities of $108,428 and $141,825, respectively, which are included in deferred revenue on the balance sheet. As of December 31, 2022, $129,236 of 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 of $12,589 related to its December 31, 2021 deferred revenue balance and $108,428 related to its December 31, 2022 balance within the next twelve months. During the years ended December 31, 2022 and 2021, there was no revenue recognized from performance obligations satisfied (or partially satisfied) in previous periods. Digital Assets The Company accepts Ether as a form of payment for NFT sales. The Company accounts for digital assets held as the result of the receipt of Ether, as indefinite-lived intangible assets in accordance with ASC 350, Intangibles—Goodwill and Other. The Company has ownership of and control over the digital assets and the Company may use third-party custodial services to secure them. The digital assets are initially recorded at cost and are subsequently remeasured, net of any impairment losses incurred since the date of acquisition. The Company determines the fair value of its digital assets on a nonrecurring basis in accordance with ASC 820, Fair Value Measurement, based on quoted prices on the active exchange(s) that the Company has determined is the principal market for Ether (Level 1 inputs). The Company performs an analysis each quarter to identify whether events or changes in circumstances, or decreases in the quoted prices on active exchanges, indicate that it is more likely than not that the Company’s digital assets are impaired. In determining if an impairment has occurred, the Company considers the lowest market price quoted on an active exchange since acquiring the respective digital asset. If the then current carrying value of a digital asset exceeds the fair value, an impairment loss has occurred with respect to those digital assets in the amount equal to the difference between their carrying values and the fair value of such assets. The impaired digital assets are written down to their fair value at the time of impairment and this new cost basis will not be adjusted upward for any subsequent increase in fair value. Gains are not recorded until realized upon sale, at which point they are presented net of any impairment losses for the same digital assets held. In determining the gain or loss to be recognized upon sale, the Company calculates the difference between the sales price and carrying value of the digital assets sold immediately prior to sale. Impairment losses and gains or losses on sales are recognized within operating expenses in our consolidated statements of operations and comprehensive loss. The Company recorded an impairment loss of $164,411 for the year ended December 31, 2022. 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 $69,232 and $127,612 for the years ended December 31, 2022 and 2021, respectively. Concentration Risks Financial instruments that potentially subject the Company to concentration of credit risk consist of cash and cash equivalents, short-term investments, and accounts receivable. Concentrations of credit risk with respect to trade accounts receivable are generally diversified due to the large number of entities comprising the Company’s customer base and their dispersion across many different industries and geographies. The Company maintains cash deposits and short-term investments with major U.S. financial institutions that at various times may exceed Federal Deposit Insurance Corporation (“FDIC”) insurance 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, 2022 and 2021, 3% and 4%, respectively, of the Company’s revenues from continuing operations were from customers in foreign countries. During the year ended December 31, 2022, the Company’s three largest customers accounted for 17%, 16%, and 10% of the Company’s consolidated revenues from continuing operations. 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. As of December 31, 2022, the Company’s two largest customers represented 74% and 19%, respectively, of the Company’s accounts receivable. As of December 31, 2021, the Company’s four largest customers represented 31%, 29%, 15% and 10%, respectively, of the Company’s accounts receivable. 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 (1.0699 and 1.1342 at December 31, 2022 and 2021, respectively), and revenue and expense accounts are translated using the weighted average exchange rate in effect for the period (1.0536 and 1.1830 for the years ended December 31, 2022 and 2021, respectively). Resulting translation adjustments are made directly to accumulated other comprehensive income (loss). The Company engages in foreign currency denominated transactions with customers and suppliers, as well as between subsidiaries with different functional currencies. Realized losses of $17,641 and $53,538 arising from exchange rate fluctuations on transactions denominated in a currency other than the functional currency for the years ended December 31, 2022 and 2021, respectively, are recognized in operating results in the consolidated statements of operations. 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. Discontinued Operations The results of operations of WPT for the period from January 1 through July 12, 2021 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 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 our fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption will be permitted, but no earlier than for fiscal years beginning after December 15, 2020. The Company early adopted ASU 2020-06 effective January 1, 2023 which eliminates the need to assess whether a beneficial conversion feature needs to be recognized upon the issuance of new convertible instruments. The adoption of ASU 2020-06 is not expected to have a material impact on the Company’s financial position, results of operations or cash flows. Recently Adopted Accounting Pronouncements On May 3, 2021, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. This new standard provides clarification and reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (such as warrants) that remain equity classified after modification or exchange. This standard is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Issuers should apply the new standard prospectively to modifications or exchanges occurring after the effective date of the new standard. Early adoption is permitted, including adoption in an interim period. If an issuer elects to early adopt the new standard in an interim period, the guidance should be applied as of the beginning of the fiscal year that includes that interim period. This standard was adopted on January 1, 2022 and did not have a material impact on the Company’s consolidated financial statements. In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832), which increases the transparency of government assistance including the disclosure of (1) the type of assistance, (2) an entity’s accounting for the assistance, and (3) the effect of the assistance on an entity’s financial statements. The amendments in this update are effective for the Company in the financial statements issued for annual periods beginning after December 15, 2021. The Company adopted this standard on January 1, 2022 and it did not have a material effect on its consolidated financial statements. 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. 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) Target |
Sale of WPT
Sale of WPT | 12 Months Ended |
Dec. 31, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Sale of WPT | Note 3 – Sale of WPT Transaction During the first quarter of 2021, AGAE 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 $ 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 through the date of the Sale Transaction: For the period from January 1, through Revenues $ 13,017,362 Operating costs and expenses 13,640,146 (Loss) income from operations (622,784 ) Other income, net 689,525 (Loss) income from discontinued operations before the sale of WPT 66,741 Gain on sale of WPT 77,858,835 Net income from discontinued operations, before tax 77,925,576 Income tax - Income from discontinued operations, net of tax provision $ 77,925,576 |
Investments
Investments | 12 Months Ended |
Dec. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Note 4 – Investments 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. Accordingly, there is $0 related to the Company’s investment in ESA on the Company’s balance sheet as of December 31, 2022 and 2021. |
Property and Equipment, net
Property and Equipment, net | 12 Months Ended |
Dec. 31, 2022 | |
Property and Equipment, Net [Abstract] | |
Property and Equipment, net | Note 5 – Property and Equipment, net Property and equipment consist of the following: As of December 31, 2022 2021 Office equipment (1) $ 793,395 $ 870,394 Computer equipment 563,042 546,945 Esports gaming truck 1,222,406 1,222,406 Furniture and fixtures 680,795 654,058 Production equipment 7,948,555 7,919,208 Leasehold improvements 4,578,081 4,678,038 15,786,274 15,891,049 Less: accumulated depreciation and amortization (11,780,652 ) (9,754,156 ) Property and equipment, net $ 4,005,622 $ 6,136,893 (1) The decrease in office equipment is a result of a decrease in the FX rate year over year. During the years ended December 31, 2022 and 2021, depreciation and amortization expense amounted to $2,061,357 and $3,305,698, respectively. During the years ended December 31, 2022 and 2021, the Company recorded impairment expense of $67,500 and $0 related to its property and equipment. |
Intangible Assets, net
Intangible Assets, net | 12 Months Ended |
Dec. 31, 2022 | |
Intangible Assets, net [Abstract] | |
Intangible Assets, net | Note 6 – Intangible Assets, net Intangible assets consist of the following: Intellectual Accumulated Total Balance as of January 1, 2022 $ 37,165 $ (10,338 ) $ 26,827 Amortization expense - (3,991 ) (3,991 ) Balance as of December 31, 2022 $ 37,165 $ (14,329 ) $ 22,836 Weighted average remaining amortization period at December 31, 2022 (in years) 5.7 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, 2022 and 2021, amortization expense amounted to $3,991 and $3,991, respectively. Estimated future amortization expense is as follows: Years Ended December 31, Amount 2023 $ 3,991 2024 3,991 2025 3,991 2026 3,991 2027 3,991 Thereafter 2,881 $ 22,836 |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure Text Block Supplement [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, 2022 2021 Compensation expense $ 1,546,805 $ 2,202,621 Current portion of deferred rent - 198,504 Event costs 8,411 8,874 Legal and professional fees 43,676 368,691 Warrant liabilities 100 3,200 Other accrued expenses 46,387 172,858 Accrued expenses and other current liabilities $ 1,645,379 $ 2,966,245 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, 2022 | |
Convertible Debt and Convertible Debt, Related Party [Abstract] | |
Convertible Debt and Convertible Debt, Related Party | Note 8 – Convertible Debt and Convertible Debt, Related Party Senior Secured Convertible Notes During January 2021, the Company issued 529,383 shares of its common stock in full satisfaction of principal and interest in the aggregate amount of $821,867 owed in connection with its Senior Secured Convertible Notes (the “Senior Notes”). During years ended December 31, 2022 and 2021, the Company recorded amortization of debt discount of $0 and $3,646, respectfully, and recorded non-cash interest expense in the amount $0 and $46,110, respectfully, related to the Senior Notes. No balance remains outstanding in connection with the Senior Secured Convertible Notes as of December 31, 2022 or December 31, 2021. Convertible Bridge Notes and Convertible Bridge Notes, Related Party Upon the sale of WPT, the Company repaid $2,000,000 in full satisfaction of all remaining balances owed on its convertible bridge notes payable (the “Convertible Bridge Notes”) (see Note 3 – Sale of WPT), of which $1,000,000 was paid in connection with a Convertible Bridge Note owed to the spouse of the Company’s then CEO and director. There was no balance outstanding on the Convertible Bridge Notes and all related debt discount was 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 Convertible Bridge Notes (of which $62,424 was in connection with the Convertible Bridge Note owed to the spouse of the Company’s then CEO and Director). |
Bridge Note Payable
Bridge Note Payable | 12 Months Ended |
Dec. 31, 2022 | |
Bridge Note Payable [Abstract] | |
Bridge Note Payable | Note 9 – Bridge Note Payable Upon the sale of WPT, the Company repaid $1,421,096 in full satisfaction of a Bridge Note Payable, such that the balance outstanding on the Bridge Note was $0 as of December 31, 2021 (see Note 8 – Convertible Debt and Convertible Debt, Related Party). The Company recorded interest expense of $0 and $89,643 during the years ended December 31, 2022 and 2021, respectively, in connection with the Bridge Note. See Note 3 - Sale of WPT. |
Loans Payable
Loans Payable | 12 Months Ended |
Dec. 31, 2022 | |
Loans Payable [Abstract] | |
Loans Payable | Note 10 – Loans Payable In August 2021, the Company was awarded full forgiveness of loans provided in connection with the Paycheck Protection Program (“PPP”) under the Cares Act 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, 2022 | |
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, 2022 2021 United States $ (10,233,357 ) $ (14,568,373 ) Foreign (590,528 ) (491,472 ) Loss before income taxes $ (10,823,885 ) $ (15,059,845 ) The income tax provision (benefit) from continuing operations for the years ended December 31, 2022 and 2021 consists of the following: For the Years Ended December 31, 2022 2021 Federal Current $ - $ - Deferred (1,911,425 ) (2,857,515 ) State and local: Current - - Deferred (182,041 ) (272,144 ) Foreign Current - - Deferred (79,577 ) (66,229 ) (2,173,043 ) (3,195,888 ) Change in valuation allowance 2,173,043 3,195,888 Income tax provision (benefit) $ - $ - The reconciliation of the expected tax expense (benefit) based on the U.S. federal statutory rates for 2022 and 2021, respectively, with the actual expense is as follows: For the Years Ended December 31, 2022 2021 U.S. Federal statutory rate 21.0 % 21.0 % State taxes, net of federal benefit 5.6 % 6.1 % Permanent differences (0.4 )% 1.5 % Untaxed foreign jurisdictions 0.0 % 0.0 % Lower taxed foreign jurisdictions (0.7 )% (0.4 )% Change in deferred taxes (4.4 )% (6.9 )% Rate change impact 0.0 % 0.0 % Change in valuation allowance (20.1 )% (21.3 )% Other (1.0 )% 0.0 % 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, 2022 2021 Deferred Tax Assets: Net operating loss carryforwards $ 15,989,995 $ 13,561,888 Production costs 267,152 272,810 Investment 5,506,829 5,800,616 Stock-based compensation 862,216 730,832 Capitalized start-up costs 125,727 224,682 Accruals and other 1,316,607 1,674,367 Gross deferred tax assets 24,068,526 22,265,195 Valuation Allowance (23,431,688 ) (21,258,645 ) Deferred tax assets, net of valuation allowance 636,838 1,006,550 Deferred Tax Liabilities: Property and equipment (636,838 ) (1,006,550 ) Deferred Tax Liabilities (636,838 ) (1,006,550 ) Deferred tax assets, net of valuation allowance $ - $ - As of December 31, 2022, the Company had $66,807,857, $22,313,829 and $5,316,581 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 tax purposes, 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, 2022 and 2021. The Company is subject to taxation in the U.S. and various state jurisdictions. In general, the Company’s tax returns remain subject to examination by various taxing authorities beginning with the tax year ended December 31, 2018. However, to the extent the Company has tax attribute carryforwards, the tax years in which the attribute was generated may still be adjusted upon examination by the Internal Revenue Service or state tax authorities. No tax audits were commenced or were in process during the years ended December 31, 2022 and 2021. 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, 2022 and 2021. The Company’s practice is to recognize interest and/or penalties related to income tax matters in interest expense. The Company had no accrual for interest or penalties at December 31, 2022 and December 31, 2021, 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, 2022 | |
Commitments and Contingencies [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’s portion of real estate taxes and $5 per square foot for common area maintenance costs. The Las Vegas Lease expires on May 31, 2023. However, the Company plans on extending the lease an additional five years representing an additional 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 $4,280 United States dollars) per month. The lease includes an option to extend for an additional three The Company’s aggregate rent expense incurred during the years ended December 31, 2022 and 2021 amounted to $1,722,801 and $1,714,895, respectively, of which $1,283,976 and $1,216,415, respectively, is included within in-person costs and $438,825 and $498,480, respectively, is included in general and administrative expenses on the accompanying consolidated statements of operations. A summary of the Company’s right-of-use assets and liabilities is as follows: For the Year Ended December 31, Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used in operating activities $ 1,083,178 Right-of-use assets obtained in exchange for lease obligations Operating leases $ - Weighted Average Remaining Lease Term Operating leases 5.42 Weighted Average Discount Rate Operating leases 5.0 % The scheduled future minimum lease payments under the Company’s continuing non-cancellable operating leases are as follows: For the Year Ending December 31, Amount 2023 $ 1,587,500 2024 1,650,000 2025 1,650,000 2026 1,650,000 2027 1,650,000 Thereafter 687,500 Total lease payments 8,875,000 Less: amount representing imputed interest (1,120,761 ) Present value of lease liability 7,754,239 Less: current portion (1,227,164 ) Lease liability, non-current portion $ 6,527,075 The right-of-use asset and operating lease liability balance includes the impact of the five-year renewal option that the Company is reasonably certain to exercise. However, the renewal option has not yet been executed. 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. The balance held in escrow as of December 31, 2022 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 not had further discussions on moving forward with any leases since they were delayed during the pandemic. System Development Agreement On October 31, 2022, the Company entered into a system development agreement to develop an Allied Gaming membership management system and event organizer system. Pursuant to the terms of the agreement, the Company has committed to spend an aggregate amount of $199,800 in four equal payments of $49,950. The Company made its first payment of $49,950 on November 23, 2022 which was capitalized and included within other assets on the accompanying balance sheet as of December 31, 2022. See Note 2 – Significant Accounting Policies – Internal Use Software Development Costs for additional details. Former Chief Executive Officer Agreements 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 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 and Resignation of Chief Executive Officer, President and General Counsel On July 13, 2021, the Company appointed Libing (Claire) Wu as its Chief Executive Officer, President and General Counsel. The Company entered into an employment agreement (the “CEO Agreement”) with Ms. Wu that provided for, among other things, payment to Ms. Wu of an annual base salary equal to $500,000, subject to certain cost-of-living adjustments. Upon commencement of her employment, Ms. Wu received a $200,000 bonus and was granted 80,000 shares of restricted common stock, subject to transfer and forfeiture restrictions until the shares’ scheduled vesting 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 were scheduled to vest in four equal annual installments commencing on the one-year anniversary of the grant date. On February 18, 2022, Ms. 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 in severance payable over an 18-month period which was expensed immediately, and accelerated vesting of 200,000 unvested stock options and 80,000 shares of restricted stock that were granted at the commencement of Ms. Wu’s employment. As no future substantive services will be performed by Ms. Wu, the Company recognized stock-based compensation expense of $0 and $258,979, respectively, related to the modification of these equity awards during the year ended December 31, 2022. At December 31, 2022, $333,333 of accrued expenses is included on the balance sheet, related to Ms. Wu’s severance benefit. The Release also contains a customary non-disparagement provision. 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 AGAE 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. 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 the 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. The Company recognized stock-based compensation expense of $32,909 related to the modification of these awards during the year ended December 31, 2022. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2022 | |
Stockholders' Equity Note [Abstract] | |
Stockholders’ Equity | Note 13 – Stockholders’ Equity Equity Incentive 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, 2022 there were 1,344,904 shares available under the plan. Equity Purchase Option On August 19, 2019, the Company sold an option to purchase up to 600,000 units, exercisable at $11.50 per Unit, in connection with AGAE’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 represented the ability to buy such securities directly (and not units). The Equity Purchase Option expired on October 4, 2022. Common Stock 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). During the year ended December 31, 2021, the Company issued to its non-executive directors an aggregate of 126,584 shares of common stock from its 2019 Equity Incentive Plan for their director services to the Company. The Company recognized stock-based compensation of $200,000 in connection with the issuance of these shares during the year ended December 31, 2021. Treasury Stock On November 21, 2022, the Company’s Board of Directors authorized a stock repurchase program of up to $10 million of its outstanding shares of common stock. For the year ended December 31, 2022, the Company repurchased 581,746 shares at a cost of $610,562. As of December 31, 2022, approximately $9.4 million of authorization remained available to repurchase common stock under this program. Stock Options A summary of the option activity during the year ended December 31, 2022 is presented below: Weighted Weighted Average Average Number of Exercise Remaining Intrinsic Options Price Term (Yrs) Value Outstanding, January 1, 2022 2,415,000 $ 3.73 Granted - - Exercised - - Expired (615,000 ) 3.97 Forfeited (125,000 ) 3.55 Outstanding, December 31, 2022 1,675,000 $ 2.54 4.73 $ - Exercisable, December 31, 2022 1,280,000 $ 3.74 6.74 $ - Options outstanding and exercisable as of December 31, 2022 are as follows: Options Outstanding Options Exercisable Weighted Average Outstanding Number of Remaining Life Exercisable Number of Exercise Price Options In Years Options $ 2.11 40,000 7.50 20,000 $ 2.17 120,000 7.60 120,000 $ 2.21 350,000 7.19 237,500 $ 2.48 120,000 8.35 60,000 $ 4.09 765,000 5.69 612,500 $ 5.66 280,000 6.72 230,000 1,675,000 6.74 1,280,000 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. 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. There were no options granted during the year ended December 31, 2022. The grant date value of options granted during the year ended December 31, 2021 was calculated using the Black-Scholes option pricing model, with the following assumptions used: Risk free interest rate 0.94% - 1.58% Expected term (years) 6.25 Expected volatility 40% - 46% Expected dividends 0.00% The weighted average grant date fair value of the stock options granted during the year ended December 31, 2021 was $1.00 per share. 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, 2022 and 2021, the Company recorded $708,964 and $1,224,699, respectively, of stock-based compensation expense related to stock options, of which $0 and $767,942, 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, 2022, there was $347,858 of unrecognized stock-based compensation expense related to the stock options that will be recognized over the weighted average remaining vesting period of 1.7 years. Restricted Common Stock A summary of the non-vested restricted common stock activity during the year ended December 31, 2022 is presented below: Weighted Number of Average Restricted Grant Date Stock Fair Value Non-vested balance, January 1, 2022 80,000 $ 2.00 Vested (80,000 ) 2.00 Non-vested balance, December 31, 2022 - $ - For the years ended December 31, 2022 and 2021, the Company recorded $82,345 and $260,433, respectively, of stock-based compensation expense related to restricted stock of which $0 and $14,848, respectively, was included in (loss) income from discontinued operations before the sale of WPT on the accompanying statements of operations. As of December 31, 2022, all stock-based compensation expense related to restricted stock has been recognized. 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. During the year ended December 31, 2022, 31,437 shares of common stock valued at $49,670 were withheld by the Company to cover employee payroll tax liabilities in connection with the vesting of restricted stock vested during the year ended December 31, 2022. Restricted Stock Units On January 19, 2021, the Company entered into a Restricted Stock Unit Agreement with a 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 (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 Transaction (provided that the Former CEO provides consulting services (when, as and if requested) to the Company through such 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. 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. 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. Warrants Prior to the August 9, 2019 Closing Date of the Merger (see Note 1 – Background and Basis of Presentation), Black Ridge Acquisition Corp. (“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 Gaming 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, 2022 is presented below: Warrants Outstanding Warrants Exercisable Exercise Price Exercisable Into Outstanding Weighted Exercisable $ 11.50 Common Stock 18,637,003 1.6 18,637,003 $ 4.13 Common Stock 1,454,546 2.4 1,454,546 20,091,549 20,091,549 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 14 – Subsequent Events License Agreement On February 27, 2023, Allied Mobile Entertainment, Inc (“AME”), a newly incorporated and wholly owned subsidiary of AGAE, entered into an agreement with a global internet technology company under which AME was granted a five-year exclusive worldwide (excluding the PRC) software license to operate four mobile casual games for a $500,000 up-front fee and a one-time technical upgrade service fee of $65,000. The license agreement provides AME with an option to renew the agreement for an additional five years under identical terms and conditions and a priority to negotiate a perpetual license following the five-year renewal period. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Background and Basis of Presentation [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 AGAE 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 deferred tax assets, stock-based compensation, and accounts receivable reserves, 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. As of December 31, 2022 and 2021, the Company’s cash equivalents consist of Certificate of Deposits of $10 million and $0, respectively. Accrued interest receivable on cash equivalents totaled $80,137 and $0 at December 31, 2022 and 2021, respectively and is included in current assets in the accompanying consolidated balance sheets. |
Restricted Cash | Restricted Cash Restricted cash consists of $5.0 million 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). |
Short-term Investments | Short-term Investments Short-term investments consist of certificates of deposit with original maturities of greater than three months but less than or equal to twelve months when purchased. Accrued interest receivable on short-term investments totaled $597,260 and $0 at December 31, 2022 and 2021, respectively and is included in current assets in the accompanying consolidated balance sheets. |
Accounts Receivable | Accounts Receivable Accounts receivable are carried at their contractual amounts less allowance for doubtful accounts. 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, 2022 and 2021, 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 Lessor of 10 years or |
Internal Use Software Development Costs | Internal Use Software Development Costs The costs incurred in the preliminary stages of software development are expensed as incurred. Once an application has reached the development stage, internal and external costs, if direct and incremental, are capitalized and included within other assets on the accompanying balance sheet. Once they are ready for intended use they are amortized on a straight-line basis over their estimated useful lives. As of December 31, 2022 and 2021, no internal use software has been placed into service (see Note 12 – Commitments and Contingencies – System Development Agreement for additional details). |
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, 2022, the Company recognized an impairment of $164,411 related to digital assets, and an impairment of $67,500 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 on long-lived assets 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. With regard to the warrants currently outstanding: ● 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, 2022 and 2021, the fair value of warrant liabilities related to our Sponsor Warrants totaled $100 and $3,200, 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 following table provides information about the Company’s financial assets measured at fair value on a recurring basis and indicates the level of the fair value hierarchy utilized to determine such fair values: As of December 31, 2022 Level 1 Level 2 Level 3 Total Digital assets $ 49,761 $ - $ - $ 49,761 Sponsor warrants - - 100 100 Short-term investments - 70,000,000 - 70,000,000 Total $ 49,761 $ 70,000,000 $ 100 $ 70,049,861 As of December 31, 2021 Level 1 Level 2 Level 3 Total Digital assets $ - $ - $ - $ - Sponsor warrants - - 3,200 3,200 Short-term investments - - - - Total $ - $ - $ 3,200 $ 3,200 The carrying amounts of the Company’s financial instruments, such as cash equivalents, accounts receivable, interest receivable, accounts payable, operating lease liabilities, 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, 2022 and 2021. 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, 2021 $ 3,000 Change in fair value of sponsor warrants 200 Balance, December 31, 2021 3,200 Change in fair value of sponsor warrants (3,100 ) Balance, December 31, 2022 $ 100 The key inputs into the Black-Scholes model at the relevant measurement dates were as follows: December 31, December 31, Input 2022 2021 Risk-free rate 4.57 % 0.97 % Remaining term in years 1.61 2.61 Expected volatility 56.0 % 46.0 % Exercise price $ 11.50 $ 11.50 Fair value of common stock $ 1.05 $ 1.81 |
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, 2022 and 2021, 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. |
Leases | Leases See Note 2 Significant Accounting Policies – Recently Adopted Accounting Pronouncements for further details on the adoption of ASC 842. |
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 December 31, 2022 2021 Restricted common shares - 80,000 Options 1,675,000 2,415,000 Warrants 20,091,549 20,091,549 Equity purchase options - 600,000 Contingent consideration shares (1) 192,308 192,308 21,958,857 23,378,857 (1) Holders who elected to convert their convertible debt 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 August 9, 2019, 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 revenues from the rental of the Allied Esports arena and gaming trucks are recognized over the term of the event based on the number of days completed relative to the total days of the event, as this method best depicts the transfer of control to the customer. 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 revenue from the naming rights of its esports arena and from the production and distribution of programming over interactive live-streaming services. Sponsorship revenues from naming rights of the Company’s esports arena are recognized on a straight-line basis over the contractual term of the agreement. Subscription revenues from program distribution are recognized over the term of the contract under the “output method” as the programs are distributed. The Company has determined that this method provides a faithful depiction of the transfer of goods or services to the customer. 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, 2022 and 2021: For the Years Ended December 31, 2022 2021 Event revenue $ 2,803,396 $ 2,459,613 Sponsorship revenue 1,838,908 779,487 Food and beverage revenue 832,282 446,202 Ticket and gaming revenue 529,201 480,519 Merchandising revenue 97,125 35,338 Other revenue - 100 Total in-person revenue $ 6,100,912 $ 4,201,259 Multiplatform revenue Multiplatform revenue was comprised of the following for the years ended December 31, 2022 and 2021: For the Years Ended December 31, 2022 2021 NFT revenue $ 250,252 $ - Distribution revenue 1,306 754,781 Total multiplatform revenue $ 251,558 $ 754,781 The Company’s NFT revenue was generated from the sale of non-fungible tokens (NFTs). The Company’s NFTs exist on the Ethereum Blockchain under the Company’s EPICBEAST brand, a digital art collection of 1,958 unique beasts inspired by past and present e-sport games. The Company uses the NFT exchange, OpenSea, to facilitate the sale of NFTs. The Company, through OpenSea, has custody and control of the NFT prior to the delivery to the customer and records revenue at a point in time when the NFT is delivered to the customer and the customer pays. The Company has no obligations for returns, refunds or warranty after the NFT sale. The Company also earns a royalty of up to 10% of the sale price when an NFT is resold by its owner in a secondary market transaction. The Company recognizes this royalty as revenue when the sale is consummated. The Company’s 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 Years Ended December 31, 2022 2021 Revenues Recognized at a Point in Time: NFT revenue $ 250,252 $ - Distribution revenue 1,306 754,781 Food and beverage revenue 832,282 446,202 Ticket and gaming revenue 529,201 480,519 Merchandising revenue 97,125 35,338 Other revenue - 100 Total Revenues Recognized at a Point in Time 1,710,166 1,716,940 Revenues Recognized Over a Period of Time: Event revenue 2,803,396 2,459.613 Sponsorship revenue 1,838,908 779,487 Total Revenues Recognized Over a Period of Time 4,642,304 3,239,100 Total Revenues $ 6,352,470 $ 4,956,040 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, 2022 and 2021, the Company had contract liabilities of $108,428 and $141,825, respectively, which are included in deferred revenue on the balance sheet. As of December 31, 2022, $129,236 of 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 of $12,589 related to its December 31, 2021 deferred revenue balance and $108,428 related to its December 31, 2022 balance within the next twelve months. During the years ended December 31, 2022 and 2021, there was no revenue recognized from performance obligations satisfied (or partially satisfied) in previous periods. |
Digital Assets | Digital Assets The Company accepts Ether as a form of payment for NFT sales. The Company accounts for digital assets held as the result of the receipt of Ether, as indefinite-lived intangible assets in accordance with ASC 350, Intangibles—Goodwill and Other. The Company has ownership of and control over the digital assets and the Company may use third-party custodial services to secure them. The digital assets are initially recorded at cost and are subsequently remeasured, net of any impairment losses incurred since the date of acquisition. The Company determines the fair value of its digital assets on a nonrecurring basis in accordance with ASC 820, Fair Value Measurement, based on quoted prices on the active exchange(s) that the Company has determined is the principal market for Ether (Level 1 inputs). The Company performs an analysis each quarter to identify whether events or changes in circumstances, or decreases in the quoted prices on active exchanges, indicate that it is more likely than not that the Company’s digital assets are impaired. In determining if an impairment has occurred, the Company considers the lowest market price quoted on an active exchange since acquiring the respective digital asset. If the then current carrying value of a digital asset exceeds the fair value, an impairment loss has occurred with respect to those digital assets in the amount equal to the difference between their carrying values and the fair value of such assets. The impaired digital assets are written down to their fair value at the time of impairment and this new cost basis will not be adjusted upward for any subsequent increase in fair value. Gains are not recorded until realized upon sale, at which point they are presented net of any impairment losses for the same digital assets held. In determining the gain or loss to be recognized upon sale, the Company calculates the difference between the sales price and carrying value of the digital assets sold immediately prior to sale. Impairment losses and gains or losses on sales are recognized within operating expenses in our consolidated statements of operations and comprehensive loss. The Company recorded an impairment loss of $164,411 for the year ended December 31, 2022. |
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 $69,232 and $127,612 for the years ended December 31, 2022 and 2021, respectively. |
Concentration Risks | Concentration Risks Financial instruments that potentially subject the Company to concentration of credit risk consist of cash and cash equivalents, short-term investments, and accounts receivable. Concentrations of credit risk with respect to trade accounts receivable are generally diversified due to the large number of entities comprising the Company’s customer base and their dispersion across many different industries and geographies. The Company maintains cash deposits and short-term investments with major U.S. financial institutions that at various times may exceed Federal Deposit Insurance Corporation (“FDIC”) insurance 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, 2022 and 2021, 3% and 4%, respectively, of the Company’s revenues from continuing operations were from customers in foreign countries. During the year ended December 31, 2022, the Company’s three largest customers accounted for 17%, 16%, and 10% of the Company’s consolidated revenues from continuing operations. 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. As of December 31, 2022, the Company’s two largest customers represented 74% and 19%, respectively, of the Company’s accounts receivable. As of December 31, 2021, the Company’s four largest customers represented 31%, 29%, 15% and 10%, respectively, of the Company’s accounts receivable. |
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 (1.0699 and 1.1342 at December 31, 2022 and 2021, respectively), and revenue and expense accounts are translated using the weighted average exchange rate in effect for the period (1.0536 and 1.1830 for the years ended December 31, 2022 and 2021, respectively). Resulting translation adjustments are made directly to accumulated other comprehensive income (loss). The Company engages in foreign currency denominated transactions with customers and suppliers, as well as between subsidiaries with different functional currencies. Realized losses of $17,641 and $53,538 arising from exchange rate fluctuations on transactions denominated in a currency other than the functional currency for the years ended December 31, 2022 and 2021, respectively, are recognized in operating results in the consolidated statements of operations. |
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. |
Discontinued Operations | Discontinued Operations The results of operations of WPT for the period from January 1 through July 12, 2021 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 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 our fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption will be permitted, but no earlier than for fiscal years beginning after December 15, 2020. The Company early adopted ASU 2020-06 effective January 1, 2023 which eliminates the need to assess whether a beneficial conversion feature needs to be recognized upon the issuance of new convertible instruments. The adoption of ASU 2020-06 is not expected to have a material impact on the Company’s financial position, results of operations or cash flows. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements On May 3, 2021, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. This new standard provides clarification and reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (such as warrants) that remain equity classified after modification or exchange. This standard is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Issuers should apply the new standard prospectively to modifications or exchanges occurring after the effective date of the new standard. Early adoption is permitted, including adoption in an interim period. If an issuer elects to early adopt the new standard in an interim period, the guidance should be applied as of the beginning of the fiscal year that includes that interim period. This standard was adopted on January 1, 2022 and did not have a material impact on the Company’s consolidated financial statements. In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832), which increases the transparency of government assistance including the disclosure of (1) the type of assistance, (2) an entity’s accounting for the assistance, and (3) the effect of the assistance on an entity’s financial statements. The amendments in this update are effective for the Company in the financial statements issued for annual periods beginning after December 15, 2021. The Company adopted this standard on January 1, 2022 and it did not have a material effect on its consolidated financial statements. 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. 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 adopted ASU 2016-02 on December 31, 2022, effective January 1, 2022 under the modified retrospective transition approach using effective date as the date of initial application. Upon transition, the Company applied the package of practical expedients permitted under ASC 842 transition guidance to its entire lease portfolio on January 1, 2022. As a result, the Company was not required to reassess (i) whether any expired or existing contracts are or contain leases, (ii) the classification of any expired or existing leases, and (iii) initial direct costs for any existing leases. Furthermore, the Company made an accounting policy election not to recognize lease assets and lease liabilities for leases with a term of 12 months or less, as permitted by ASC 842. The Company determines lease existence and classification at inception when an agreement conveys the right to control identified property for a period of time in exchange for consideration. The adoption of this ASU had a material impact on the Company’s financial statements, primarily as a result of recording right-of-use assets and lease liabilities for its operating leases in the approximate amounts of $6.7 million and $8.8 million and derecognizing deferred rent in the approximate amount of $2.1 million. |
Significant Accounting Polici_2
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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 Lessor of 10 years or |
Schedule of financial assets measured at fair value | As of December 31, 2022 Level 1 Level 2 Level 3 Total Digital assets $ 49,761 $ - $ - $ 49,761 Sponsor warrants - - 100 100 Short-term investments - 70,000,000 - 70,000,000 Total $ 49,761 $ 70,000,000 $ 100 $ 70,049,861 As of December 31, 2021 Level 1 Level 2 Level 3 Total Digital assets $ - $ - $ - $ - Sponsor warrants - - 3,200 3,200 Short-term investments - - - - Total $ - $ - $ 3,200 $ 3,200 |
Schedule of roll forward of the company’s level 3 instruments | Balance, January 1, 2021 $ 3,000 Change in fair value of sponsor warrants 200 Balance, December 31, 2021 3,200 Change in fair value of sponsor warrants (3,100 ) Balance, December 31, 2022 $ 100 |
Schedule of key inputs into the black-scholes model at the relevant measurement dates | December 31, December 31, Input 2022 2021 Risk-free rate 4.57 % 0.97 % Remaining term in years 1.61 2.61 Expected volatility 56.0 % 46.0 % Exercise price $ 11.50 $ 11.50 Fair value of common stock $ 1.05 $ 1.81 |
Schedule of weighted average dilutive common shares | As of December 31, 2022 2021 Restricted common shares - 80,000 Options 1,675,000 2,415,000 Warrants 20,091,549 20,091,549 Equity purchase options - 600,000 Contingent consideration shares (1) 192,308 192,308 21,958,857 23,378,857 (1) Holders who elected to convert their convertible debt 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 August 9, 2019, the last exchange-reported sale price of common stock trades at or above $13.00 for thirty (30) consecutive calendar days. |
Schedule of In-person revenue | For the Years Ended December 31, 2022 2021 Event revenue $ 2,803,396 $ 2,459,613 Sponsorship revenue 1,838,908 779,487 Food and beverage revenue 832,282 446,202 Ticket and gaming revenue 529,201 480,519 Merchandising revenue 97,125 35,338 Other revenue - 100 Total in-person revenue $ 6,100,912 $ 4,201,259 |
Schedule of multiplatform revenue | For the Years Ended December 31, 2022 2021 NFT revenue $ 250,252 $ - Distribution revenue 1,306 754,781 Total multiplatform revenue $ 251,558 $ 754,781 |
Adjustment under 606 [Member] | |
Significant Accounting Policies (Tables) [Line Items] | |
Schedule of revenue recognized under ASC 606 | For the Years Ended December 31, 2022 2021 Revenues Recognized at a Point in Time: NFT revenue $ 250,252 $ - Distribution revenue 1,306 754,781 Food and beverage revenue 832,282 446,202 Ticket and gaming revenue 529,201 480,519 Merchandising revenue 97,125 35,338 Other revenue - 100 Total Revenues Recognized at a Point in Time 1,710,166 1,716,940 Revenues Recognized Over a Period of Time: Event revenue 2,803,396 2,459.613 Sponsorship revenue 1,838,908 779,487 Total Revenues Recognized Over a Period of Time 4,642,304 3,239,100 Total Revenues $ 6,352,470 $ 4,956,040 |
Sale of WPT (Tables)
Sale of WPT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of gain on the sale of the WPT business | 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 $ 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. |
Schedule of net income (loss) from discontinued operations | For the period from January 1, through Revenues $ 13,017,362 Operating costs and expenses 13,640,146 (Loss) income from operations (622,784 ) Other income, net 689,525 (Loss) income from discontinued operations before the sale of WPT 66,741 Gain on sale of WPT 77,858,835 Net income from discontinued operations, before tax 77,925,576 Income tax - Income from discontinued operations, net of tax provision $ 77,925,576 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property and Equipment, Net [Abstract] | |
Schedule of property and equipment | As of December 31, 2022 2021 Office equipment (1) $ 793,395 $ 870,394 Computer equipment 563,042 546,945 Esports gaming truck 1,222,406 1,222,406 Furniture and fixtures 680,795 654,058 Production equipment 7,948,555 7,919,208 Leasehold improvements 4,578,081 4,678,038 15,786,274 15,891,049 Less: accumulated depreciation and amortization (11,780,652 ) (9,754,156 ) Property and equipment, net $ 4,005,622 $ 6,136,893 (1) The decrease in office equipment is a result of a decrease in the FX rate year over year. |
Intangible Assets, net (Tables)
Intangible Assets, net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Intangible Assets, net [Abstract] | |
Schedule of intangible assets | Intellectual Accumulated Total Balance as of January 1, 2022 $ 37,165 $ (10,338 ) $ 26,827 Amortization expense - (3,991 ) (3,991 ) Balance as of December 31, 2022 $ 37,165 $ (14,329 ) $ 22,836 Weighted average remaining amortization period at December 31, 2022 (in years) 5.7 |
Schedule of estimated future amortization expense | Years Ended December 31, Amount 2023 $ 3,991 2024 3,991 2025 3,991 2026 3,991 2027 3,991 Thereafter 2,881 $ 22,836 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure Text Block Supplement [Abstract] | |
Schedule of accrued expenses and other current liabilities | As of December 31, 2022 2021 Compensation expense $ 1,546,805 $ 2,202,621 Current portion of deferred rent - 198,504 Event costs 8,411 8,874 Legal and professional fees 43,676 368,691 Warrant liabilities 100 3,200 Other accrued expenses 46,387 172,858 Accrued expenses and other current liabilities $ 1,645,379 $ 2,966,245 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. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of loss before income taxes from continuing operation | For the Years Ended December 31, 2022 2021 United States $ (10,233,357 ) $ (14,568,373 ) Foreign (590,528 ) (491,472 ) Loss before income taxes $ (10,823,885 ) $ (15,059,845 ) |
Schedule of income tax provision (benefit) | For the Years Ended December 31, 2022 2021 Federal Current $ - $ - Deferred (1,911,425 ) (2,857,515 ) State and local: Current - - Deferred (182,041 ) (272,144 ) Foreign Current - - Deferred (79,577 ) (66,229 ) (2,173,043 ) (3,195,888 ) Change in valuation allowance 2,173,043 3,195,888 Income tax provision (benefit) $ - $ - |
Schedule of expected tax expense (benefit) | For the Years Ended December 31, 2022 2021 U.S. Federal statutory rate 21.0 % 21.0 % State taxes, net of federal benefit 5.6 % 6.1 % Permanent differences (0.4 )% 1.5 % Untaxed foreign jurisdictions 0.0 % 0.0 % Lower taxed foreign jurisdictions (0.7 )% (0.4 )% Change in deferred taxes (4.4 )% (6.9 )% Rate change impact 0.0 % 0.0 % Change in valuation allowance (20.1 )% (21.3 )% Other (1.0 )% 0.0 % Total 0.0 % 0.0 % |
Schedule of deferred tax assets | As of December 31, 2022 2021 Deferred Tax Assets: Net operating loss carryforwards $ 15,989,995 $ 13,561,888 Production costs 267,152 272,810 Investment 5,506,829 5,800,616 Stock-based compensation 862,216 730,832 Capitalized start-up costs 125,727 224,682 Accruals and other 1,316,607 1,674,367 Gross deferred tax assets 24,068,526 22,265,195 Valuation Allowance (23,431,688 ) (21,258,645 ) Deferred tax assets, net of valuation allowance 636,838 1,006,550 Deferred Tax Liabilities: Property and equipment (636,838 ) (1,006,550 ) Deferred Tax Liabilities (636,838 ) (1,006,550 ) Deferred tax assets, net of valuation allowance $ - $ - |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies [Abstract] | |
Schedule of right-of-use assets and liabilities | For the Year Ended December 31, Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used in operating activities $ 1,083,178 Right-of-use assets obtained in exchange for lease obligations Operating leases $ - Weighted Average Remaining Lease Term Operating leases 5.42 Weighted Average Discount Rate Operating leases 5.0 % |
Schedule of minimum lease payments | For the Year Ending December 31, Amount 2023 $ 1,587,500 2024 1,650,000 2025 1,650,000 2026 1,650,000 2027 1,650,000 Thereafter 687,500 Total lease payments 8,875,000 Less: amount representing imputed interest (1,120,761 ) Present value of lease liability 7,754,239 Less: current portion (1,227,164 ) Lease liability, non-current portion $ 6,527,075 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Stockholders' Equity Note [Abstract] | |
Schedule of option activity | Weighted Weighted Average Average Number of Exercise Remaining Intrinsic Options Price Term (Yrs) Value Outstanding, January 1, 2022 2,415,000 $ 3.73 Granted - - Exercised - - Expired (615,000 ) 3.97 Forfeited (125,000 ) 3.55 Outstanding, December 31, 2022 1,675,000 $ 2.54 4.73 $ - Exercisable, December 31, 2022 1,280,000 $ 3.74 6.74 $ - |
Schedule of options outstanding and exercisable | Options Outstanding Options Exercisable Weighted Average Outstanding Number of Remaining Life Exercisable Number of Exercise Price Options In Years Options $ 2.11 40,000 7.50 20,000 $ 2.17 120,000 7.60 120,000 $ 2.21 350,000 7.19 237,500 $ 2.48 120,000 8.35 60,000 $ 4.09 765,000 5.69 612,500 $ 5.66 280,000 6.72 230,000 1,675,000 6.74 1,280,000 |
Schedule of grant date value of options granted | Risk free interest rate 0.94% - 1.58% Expected term (years) 6.25 Expected volatility 40% - 46% Expected dividends 0.00% |
Schedule of non-vested restricted common stock | Weighted Number of Average Restricted Grant Date Stock Fair Value Non-vested balance, January 1, 2022 80,000 $ 2.00 Vested (80,000 ) 2.00 Non-vested balance, December 31, 2022 - $ - |
Schedule of warrants outstanding and exercisable | Warrants Outstanding Warrants Exercisable Exercise Price Exercisable Into Outstanding Weighted Exercisable $ 11.50 Common Stock 18,637,003 1.6 18,637,003 $ 4.13 Common Stock 1,454,546 2.4 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% |
CSI [Member] | |
Background and Basis of Presentation (Textual) | |
Subsidiary owned sale of equity, percentage | 100% |
Significant Accounting Polici_3
Significant Accounting Policies (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Significant Accounting Policies (Textual) | ||
Certificate of deposits | $ 10,000,000 | $ 0 |
Interest receivable on cash equivalents | 80,137 | 0 |
Restricted cash | 5,000,000 | |
Interest receivable on short-term investments | $ 597,260 | 0 |
Intangible assets useful life | 10 years | |
Impairment of digital assets | $ 164,411 | |
Sponsor warrants | $ 100 | 3,200 |
Percentage of likelihood | 50% | |
Contingent consideration shares, description | (1)Holders who elected to convert their convertible debt 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 August 9, 2019, the last exchange-reported sale price of common stock trades at or above $13.00 for thirty (30) consecutive calendar days. | |
Royalty percentage | 10% | |
Contract liabilities | $ 108,428 | 141,825 |
Deferred revenue | 129,236 | 12,589 |
Deferred revenue | 108,428 | |
Impairment loss | 164,411 | |
Advertising costs | $ 69,232 | $ 127,612 |
Percentage of customers in foreign countries | 3% | 4% |
Functional currency translation rate for balance sheet (in Dollars per share) | $ 1.0699 | $ 1.1342 |
Functional currency translation rate for revenue and expense accounts (in Dollars per share) | $ 1.0536 | $ 1.183 |
Realized losses | $ 17,641 | $ 53,538 |
Right-of-use assets | 6,700,000 | |
Operating leases lease liabilities | 8,800,000 | |
Deferred rent | 2,100,000 | |
Property and Equipment [Member] | ||
Significant Accounting Policies (Textual) | ||
Impairment of property and equipment | $ 67,500 | |
Customer One [Member] | ||
Significant Accounting Policies (Textual) | ||
Percentage of consolidate revenues from continuing operations | 17% | 20% |
Percentage of accounts receivable | 74% | 31% |
Customer Two [Member] | ||
Significant Accounting Policies (Textual) | ||
Percentage of consolidate revenues from continuing operations | 16% | 15% |
Percentage of accounts receivable | 19% | 29% |
Customers Three [Member] | ||
Significant Accounting Policies (Textual) | ||
Percentage of consolidate revenues from continuing operations | 10% | 13% |
Percentage of accounts receivable | 15% | |
Customers Four [Member] | ||
Significant Accounting Policies (Textual) | ||
Percentage of accounts receivable | 10% |
Significant Accounting Polici_4
Significant Accounting Policies (Details) - Schedule of estimated useful lives of property and equipment | 12 Months Ended |
Dec. 31, 2022 | |
Office Equipment [Member] | Minimum [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 years |
Office Equipment [Member] | Maximum [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Computer Equipment [Member] | Minimum [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 years |
Computer Equipment [Member] | Maximum [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Production equipment [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Furniture and Fixtures [Member] | Minimum [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 years |
Furniture and Fixtures [Member] | Maximum [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Esports gaming truck [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Leasehold Improvements [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Leasehold improvements | 10 years |
Significant Accounting Polici_5
Significant Accounting Policies (Details) - Schedule of financial assets measured at fair value - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Significant Accounting Policies (Details) - Schedule of financial assets measured at fair value [Line Items] | ||
Digital assets | $ 49,761 | |
Sponsor warrants | 100 | 3,200 |
Short-term investments | 70,000,000 | |
Total | 70,049,861 | 3,200 |
Level 1 [Member] | ||
Significant Accounting Policies (Details) - Schedule of financial assets measured at fair value [Line Items] | ||
Digital assets | 49,761 | |
Sponsor warrants | ||
Short-term investments | ||
Total | 49,761 | |
Level 2 [Member] | ||
Significant Accounting Policies (Details) - Schedule of financial assets measured at fair value [Line Items] | ||
Digital assets | ||
Sponsor warrants | ||
Short-term investments | 70,000,000 | |
Total | 70,000,000 | |
Level 3 [Memebr] | ||
Significant Accounting Policies (Details) - Schedule of financial assets measured at fair value [Line Items] | ||
Digital assets | ||
Sponsor warrants | 100 | 3,200 |
Short-term investments | ||
Total | $ 100 | $ 3,200 |
Significant Accounting Polici_6
Significant Accounting Policies (Details) - Schedule of roll forward of the company’s level 3 instruments - Level 3 [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Significant Accounting Policies (Details) - Schedule of roll forward of the company’s level 3 instruments [Line Items] | ||
Fair value of beginning balance | $ 3,200 | $ 3,000 |
Fair value of ending balance | 100 | 3,200 |
Change in fair value of sponsor warrants | $ (3,100) | $ 200 |
Significant Accounting Polici_7
Significant Accounting Policies (Details) - Schedule of key inputs into the black-scholes model at the relevant measurement dates - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule Of Key Inputs Into The Black Scholes Model At The Relevant Measurement Dates Abstract | ||
Risk-free rate | 4.57% | 0.97% |
Remaining term in years | 1 year 7 months 9 days | 2 years 7 months 9 days |
Expected volatility | 56% | 46% |
Exercise price | $ 11.5 | $ 11.5 |
Fair value of common stock | $ 1.05 | $ 1.81 |
Significant Accounting Polici_8
Significant Accounting Policies (Details) - Schedule of weighted average dilutive common shares - shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
securities are excluded from calculation of weighted average dilutive common shares | 21,958,857 | 23,378,857 | |
Restricted common shares [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
securities are excluded from calculation of weighted average dilutive common shares | 80,000 | ||
Options [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
securities are excluded from calculation of weighted average dilutive common shares | 1,675,000 | 2,415,000 | |
Warrants [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
securities are excluded from calculation of weighted average dilutive common shares | 20,091,549 | 20,091,549 | |
Equity purchase options [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
securities are excluded from calculation of weighted average dilutive common shares | 600,000 | ||
Contingent consideration shares [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
securities are excluded from calculation of weighted average dilutive common shares | [1] | 192,308 | 192,308 |
[1] Holders who elected to convert their convertible debt 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 August 9, 2019, the last exchange-reported sale price of common stock trades at or above $13.00 for thirty (30) consecutive calendar days. |
Significant Accounting Polici_9
Significant Accounting Policies (Details) - Schedule of In-person revenue - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue, Major Customer [Line Items] | ||
Total in-person revenue | $ 6,100,912 | $ 4,201,259 |
Event Revenue [Member] | ||
Revenue, Major Customer [Line Items] | ||
Total in-person revenue | 2,803,396 | 2,459,613 |
Sponsorship Revenue [Member] | ||
Revenue, Major Customer [Line Items] | ||
Total in-person revenue | 1,838,908 | 779,487 |
Food and Beverage Revenue [Member] | ||
Revenue, Major Customer [Line Items] | ||
Total in-person revenue | 832,282 | 446,202 |
Ticket and Gaming Revenue [Member] | ||
Revenue, Major Customer [Line Items] | ||
Total in-person revenue | 529,201 | 480,519 |
Merchandising Revenue [Member] | ||
Revenue, Major Customer [Line Items] | ||
Total in-person revenue | $ 97,125 | 35,338 |
Other revenue [Member] | ||
Revenue, Major Customer [Line Items] | ||
Total in-person revenue | $ 100 |
Significant Accounting Polic_10
Significant Accounting Policies (Details) - Schedule of multiplatform revenue - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
NFT revenue [Member] | ||
Segment Reporting Information [Line Items] | ||
Total multiplatform revenue | $ 250,252 | |
Distribution revenue [Member] | ||
Segment Reporting Information [Line Items] | ||
Total multiplatform revenue | 1,306 | $ 754,781 |
Total multiplatform revenue [Member] | ||
Segment Reporting Information [Line Items] | ||
Total multiplatform revenue | $ 251,558 | $ 754,781 |
Significant Accounting Polic_11
Significant Accounting Policies (Details) - Schedule of revenue recognized under ASC 606 - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Revenues Recognized at a Point in Time: | ||
Total Revenue | $ 6,352,470 | $ 4,956,040 |
Point in Time [Member] | ||
Revenues Recognized at a Point in Time: | ||
Total Revenue | 1,710,166 | 1,716,940 |
NFT revenue [Member] | Point in Time [Member] | ||
Revenues Recognized at a Point in Time: | ||
Total Revenue | 250,252 | |
Distribution revenue [Member] | Point in Time [Member] | ||
Revenues Recognized at a Point in Time: | ||
Total Revenue | 1,306 | 754,781 |
Food and beverage revenue [Member] | Point in Time [Member] | ||
Revenues Recognized at a Point in Time: | ||
Total Revenue | 832,282 | 446,202 |
Ticket and gaming revenue [Member] | Point in Time [Member] | ||
Revenues Recognized at a Point in Time: | ||
Total Revenue | 529,201 | 480,519 |
Merchandising revenue [Member] | Point in Time [Member] | ||
Revenues Recognized at a Point in Time: | ||
Total Revenue | 97,125 | 35,338 |
Other revenue [Member] | Point in Time [Member] | ||
Revenues Recognized at a Point in Time: | ||
Total Revenue | 100 | |
Event revenue [Member] | Point in Time [Member] | ||
Revenues Recognized at a Point in Time: | ||
Total Revenue | 2,803,396 | 2,459.613 |
Event revenue [Member] | Over a Period of Time [Member] | ||
Revenues Recognized at a Point in Time: | ||
Total Revenue | 4,642,304 | 3,239,100 |
Sponsorship revenue [Member] | Over a Period of Time [Member] | ||
Revenues Recognized at a Point in Time: | ||
Total Revenue | $ 1,838,908 | $ 779,487 |
Sale of WPT (Details)
Sale of WPT (Details) - USD ($) | 12 Months Ended | ||
Jul. 12, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |||
Total base purchase price | $ 105,000,000 | ||
Amounts due from affiliates | $ 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 |
Sale of WPT (Details) - Schedul
Sale of WPT (Details) - Schedule of gain on the sale of the WPT business | 12 Months Ended | |
Dec. 31, 2022 USD ($) | ||
Schedule Of Gain On The Sale Of The Wpt Business Abstract | ||
Cash consideration for sale of WPT | $ 106,049,884 | [1] |
Less: book value of assets sold | ||
Cash | 3,579,988 | |
Accounts receivable | 2,999,352 | |
Restricted cash | 100,000 | |
Prepaid expenses and other assets | 264,385 | |
Property and equipment, net | 1,429,706 | |
Goodwill | 4,083,621 | |
Intangible assets, net | 10,986,463 | |
Deposits | 79,500 | |
Deferred production costs | 12,684,054 | |
Net book value of assets sold | 36,207,069 | |
Add: liabilities assumed by buyer | ||
Accounts payable | 487,579 | |
Accrued expenses and other liabilities | 5,567,072 | |
Deferred revenue | 1,807,176 | |
Deferred rent | 2,619,967 | |
Total liabilities assumed | 10,481,794 | |
Less: transaction expenses | 2,465,774 | [2] |
Gain on sale of WPT | $ 77,858,835 | |
[1] Includes $105,120 of post-closing adjustments Includes $1,165,774 of legal and professional fees and $1,300,000 of amounts reimbursed to the Company’s principal stockholder. See Note 7 - Accrued Expense and Other Current Liabilities for additional details |
Sale of WPT (Details) - Sched_2
Sale of WPT (Details) - Schedule of net income (loss) from discontinued operations | 6 Months Ended |
Jul. 12, 2021 USD ($) | |
Schedule Of Net Income Loss From Discontinued Operations Abstract | |
Revenues | $ 13,017,362 |
Operating costs and expenses | 13,640,146 |
(Loss) income from operations | (622,784) |
Other income, net | 689,525 |
(Loss) income from discontinued operations before the sale of WPT | 66,741 |
Gain on sale of WPT | 77,858,835 |
Net income from discontinued operations, before tax | 77,925,576 |
Income tax | |
Income from discontinued operations, net of tax provision | $ 77,925,576 |
Investments (Details)
Investments (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Investments (Details) [Line Items] | ||
Non-voting membership interest | 25% | |
Investment amount | $ 0 | $ 0 |
ESA [Member] | ||
Investments (Details) [Line Items] | ||
Additional impairment charge | $ 1,138,631 |
Property and Equipment, net (De
Property and Equipment, net (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Property and Equipment, Net [Abstract] | ||
Depreciation and amortization expense | $ 2,061,357 | $ 3,305,698 |
Impairment expense | $ 67,500 | $ 0 |
Property and Equipment, net (_2
Property and Equipment, net (Details) - Schedule of property and equipment - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | |||
Total Property and equipment, | $ 15,786,274 | $ 15,891,049 | |
Less: accumulated depreciation and amortization | (11,780,652) | (9,754,156) | |
Property and equipment, net | 4,005,622 | 6,136,893 | |
Office equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total Property and equipment, | [1] | 793,395 | 870,394 |
Computer equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total Property and equipment, | 563,042 | 546,945 | |
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, | 680,795 | 654,058 | |
Production equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total Property and equipment, | 7,948,555 | 7,919,208 | |
Leasehold improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total Property and equipment, | $ 4,578,081 | $ 4,678,038 | |
[1]The decrease in office equipment is a result of a decrease in the FX rate year over year. |
Intangible Assets, net (Details
Intangible Assets, net (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Intangible Assets, net [Abstract] | ||
Amortized useful life | 10 years | |
Amortization expense | $ 3,991 | $ 3,991 |
Intangible Assets, net (Detai_2
Intangible Assets, net (Details) - Schedule of intangible assets | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Finite-Lived Intangible Assets [Line Items] | |
Balance at beginning | $ 26,827 |
Amortization expense | (3,991) |
Balance at ending | 22,836 |
Intellectual Property [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Balance at beginning | 37,165 |
Balance at ending | $ 37,165 |
Weighted average remaining amortization period at December 31, 2022 (in years) | 5 years 8 months 12 days |
Accumulated Amortization [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Balance at beginning | $ (10,338) |
Amortization expense | (3,991) |
Balance at ending | $ (14,329) |
Intangible Assets, net (Detai_3
Intangible Assets, net (Details) - Schedule of estimated future amortization expense | Dec. 31, 2022 USD ($) |
Schedule of estimated future amortization expense [Abstract] | |
2023 | $ 3,991 |
2024 | 3,991 |
2025 | 3,991 |
2026 | 3,991 |
2027 | 3,991 |
Thereafter | 2,881 |
Total | $ 22,836 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Details) | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
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, 2022 | Dec. 31, 2021 | |
Schedule of accrued expenses and other current liabilities [Abstract] | |||
Compensation expense | $ 1,546,805 | $ 2,202,621 | |
Current portion of deferred rent | 198,504 | ||
Event costs | 8,411 | 8,874 | |
Legal and professional fees | 43,676 | 368,691 | |
Warrant liabilities | 100 | 3,200 | |
Other accrued expenses | 46,387 | 172,858 | |
Accrued expenses and other current liabilities | 1,645,379 | 2,966,245 | |
Accrued expenses, related party(1) | [1] | $ 1,800,000 | |
[1] Represents amounts accrued to reimburse a principal shareholder for costs incurred in connection with specified Company transactions, including $1,300,000 incurred in connection with the sale of WPT. See Note 12 - Commitments and Contingencies, Principal Shareholder Matter for additional details. |
Convertible Debt and Converti_2
Convertible Debt and Convertible Debt, Related Party (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |
Jan. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Bridge Note Payable [Abstract] | |||
Shares for principal and interest outstanding (in Shares) | 529,383 | ||
Aggregate amount | $ 821,867 | ||
Debt discount | $ 0 | $ 3,646 | |
Interest expense | $ 0 | 46,110 | |
Bridge notes, description | the Company repaid $2,000,000 in full satisfaction of all remaining balances owed on its convertible bridge notes payable (the “Convertible Bridge Notes”) (see Note 3 – Sale of WPT), of which $1,000,000 was paid in connection with a Convertible Bridge Note owed to the spouse of the Company’s then CEO and director. There was no balance outstanding on the Convertible Bridge Notes and all related debt discount was fully amortized as of December 31, 2021. | ||
Interest expense | 124,848 | ||
Convertible amount | $ 62,424 |
Bridge Note Payable (Details)
Bridge Note Payable (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Bridge Note Payable [Abstract] | ||
Bridge note payable | $ 1,421,096 | $ 0 |
Interest expense | $ 0 | $ 89,643 |
Loans Payable (Details)
Loans Payable (Details) | 12 Months Ended |
Dec. 31, 2021 USD ($) | |
Loans Payable [Abstract] | |
PPP loan and accrued interest | $ 912,475 |
Income Taxes (Details)
Income Taxes (Details) | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Income Taxes (Details) [Line Items] | |
Federal, net operating loss | $ 66,807,857 |
State, net operating loss | 22,313,829 |
Foreign, net operating loss | $ 5,316,581 |
Ownership change percentage | 50% |
Limited to taxable income percentage | 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. |
U.S. Internal Revenue [Member] | |
Income Taxes (Details) [Line Items] | |
Percentage of ownership | 50% |
Income Taxes (Details) - Schedu
Income Taxes (Details) - Schedule of components of loss before income taxes from continuing operation - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule of components of loss before income taxes from continuing operation [Abstract] | ||
United States | $ (10,233,357) | $ (14,568,373) |
Foreign | (590,528) | (491,472) |
Loss before income taxes | $ (10,823,885) | $ (15,059,845) |
Income Taxes (Details) - Sche_2
Income Taxes (Details) - Schedule of income tax provision (benefit) - Income Taxes [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Federal | ||
Current | ||
Deferred | (1,911,425) | (2,857,515) |
State and local: | ||
Current | ||
Deferred | (182,041) | (272,144) |
Foreign | ||
Current | ||
Deferred | (79,577) | (66,229) |
Income Tax Expense Benefit Gross | (2,173,043) | (3,195,888) |
Change in valuation allowance | 2,173,043 | 3,195,888 |
Income tax provision (benefit) |
Income Taxes (Details) - Sche_3
Income Taxes (Details) - Schedule of expected tax expense (benefit) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule of expected tax expense (benefit) [Abstract] | ||
U.S. Federal statutory rate | 21% | 21% |
State taxes, net of federal benefit | 5.60% | 6.10% |
Permanent differences | (0.40%) | 1.50% |
Untaxed foreign jurisdictions | 0% | 0% |
Lower taxed foreign jurisdictions | (0.70%) | (0.40%) |
Change in deferred taxes | (4.40%) | (6.90%) |
Rate change impact | 0% | 0% |
Change in valuation allowance | (20.10%) | (21.30%) |
Other | (1.00%) | 0% |
Total | 0% | 0% |
Income Taxes (Details) - Sche_4
Income Taxes (Details) - Schedule of deferred tax assets - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred Tax Assets: | ||
Net operating loss carryforwards | $ 15,989,995 | $ 13,561,888 |
Production costs | 267,152 | 272,810 |
Investment | 5,506,829 | 5,800,616 |
Stock-based compensation | 862,216 | 730,832 |
Capitalized start-up costs | 125,727 | 224,682 |
Accruals and other | 1,316,607 | 1,674,367 |
Gross deferred tax assets | 24,068,526 | 22,265,195 |
Valuation Allowance | (23,431,688) | (21,258,645) |
Deferred tax assets, net of valuation allowance | 636,838 | 1,006,550 |
Deferred Tax Liabilities: | ||
Property and equipment | (636,838) | (1,006,550) |
Deferred Tax Liabilities | (636,838) | (1,006,550) |
Deferred tax assets, net of valuation allowance |
Commitments and Contingencies_2
Commitments and Contingencies (Details) | 1 Months Ended | 12 Months Ended | |||||||||
Apr. 06, 2022 USD ($) | Jul. 13, 2021 USD ($) $ / shares shares | Jul. 06, 2021 | Oct. 31, 2022 | Feb. 18, 2022 USD ($) shares | Aug. 31, 2021 USD ($) | Mar. 23, 2017 | Dec. 31, 2022 USD ($) | Dec. 31, 2022 EUR (€) | Sep. 19, 2021 shares | Jan. 14, 2020 USD ($) shares | |
Commitments and Contingencies (Details) [Line Items] | |||||||||||
Expense reimbursement request | $ 2,300,000 | ||||||||||
Settlement amount | $ 1,800,000 | ||||||||||
Lease and rent description | 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’s portion of real estate taxes and $5 per square foot for common area maintenance costs. The Las Vegas Lease expires on May 31, 2023. However, the Company plans on extending the lease an additional five years representing an additional commitment of $8,250,000. | ||||||||||
Rent expense | $ 4,280 | € 4,000 | |||||||||
Lease option extend | 3 years | 3 years | |||||||||
Aggregate rent expense description | The Company’s aggregate rent expense incurred during the years ended December 31, 2022 and 2021 amounted to $1,722,801 and $1,714,895, respectively, of which $1,283,976 and $1,216,415, respectively, is included within in-person costs and $438,825 and $498,480, respectively, is included in general and administrative expenses on the accompanying consolidated statements of operations. | The Company’s aggregate rent expense incurred during the years ended December 31, 2022 and 2021 amounted to $1,722,801 and $1,714,895, respectively, of which $1,283,976 and $1,216,415, respectively, is included within in-person costs and $438,825 and $498,480, respectively, is included in general and administrative expenses on the accompanying consolidated statements of operations. | |||||||||
Shares issued (in Shares) | shares | 758,725 | ||||||||||
Restricted cash | $ 5,000,000 | ||||||||||
System development agreement description | the Company entered into a system development agreement to develop an Allied Gaming membership management system and event organizer system. Pursuant to the terms of the agreement, the Company has committed to spend an aggregate amount of $199,800 in four equal payments of $49,950. The Company made its first payment of $49,950 on November 23, 2022 which was capitalized and included within other assets on the accompanying balance sheet as of December 31, 2022. See Note 2 – Significant Accounting Policies – Internal Use Software Development Costs for additional details. | ||||||||||
Accelerated vesting of unvested stock options | $ 225,000 | ||||||||||
Stock-based compensation expense | 258,979 | ||||||||||
Accrued expenses | 333,333 | ||||||||||
Accelerated vesting shares (in Shares) | shares | 10,000 | ||||||||||
Vested outstanding shares issued (in Shares) | shares | 20,000 | ||||||||||
Compensation for non-executive directors description | 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). | ||||||||||
Brookfield [Member] | |||||||||||
Commitments and Contingencies (Details) [Line Items] | |||||||||||
Aggregate purchase amount | $ 5,000,000 | ||||||||||
Board of Directors [Member] | |||||||||||
Commitments and Contingencies (Details) [Line Items] | |||||||||||
Unvested stock (in Shares) | shares | 40,000 | ||||||||||
Stock-based compensation expense | 32,909 | ||||||||||
Amount paid | $ 25,000 | ||||||||||
Exercise period date | May 06, 2021 | ||||||||||
Mr. Ng’s [Member] | |||||||||||
Commitments and Contingencies (Details) [Line Items] | |||||||||||
Severance pay | 400,000 | ||||||||||
Vested outstanding shares issued (in Shares) | shares | 20,000 | ||||||||||
Ms. Wu [Member] | |||||||||||
Commitments and Contingencies (Details) [Line Items] | |||||||||||
Annual base salary | 500,000 | ||||||||||
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 | ||||||||||
Severance payable | $ 750,000 | ||||||||||
Unvested stock (in Shares) | shares | 200,000 | ||||||||||
Shares of restricted stock (in Shares) | shares | 80,000 | ||||||||||
Stock-based compensation expense | $ 0 | ||||||||||
Mr . Ng [Member] | |||||||||||
Commitments and Contingencies (Details) [Line Items] | |||||||||||
Vested outstanding shares issued (in Shares) | shares | 10,000 |
Commitments and Contingencies_3
Commitments and Contingencies (Details) - Schedule of right-of-use assets and liabilities | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Cash paid for amounts included in the measurement of lease liabilities: | |
Operating cash flows used in operating activities | $ 1,083,178 |
Weighted Average Remaining Lease Term | |
Weighted Average Remaining Lease Term Operating leases | 5 years 5 months 1 day |
Weighted Average Discount Rate | |
Weighted Average Discount Rate Operating leases | 5% |
Commitments and Contingencies_4
Commitments and Contingencies (Details) - Schedule of minimum lease payments - Operating lease [Member] | Dec. 31, 2022 USD ($) |
Commitments and Contingencies (Details) - Schedule of minimum lease payments [Line Items] | |
2023 | $ 1,587,500 |
2024 | 1,650,000 |
2025 | 1,650,000 |
2026 | 1,650,000 |
2027 | 1,650,000 |
Thereafter | 687,500 |
Total lease payments | 8,875,000 |
Less: amount representing imputed interest | (1,120,761) |
Present value of lease liability | 7,754,239 |
Less: current portion | (1,227,164) |
Lease liability, non-current portion | $ 6,527,075 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||||||||||
Nov. 11, 2021 | Jul. 13, 2021 | May 06, 2021 | Jun. 08, 2020 | Aug. 09, 2019 | Feb. 18, 2022 | Jan. 31, 2021 | Jan. 19, 2021 | Aug. 19, 2019 | Dec. 31, 2022 | Dec. 31, 2021 | Nov. 21, 2022 | Dec. 30, 2021 | Jan. 14, 2020 | |
Stockholders' Equity (Textual) | ||||||||||||||
Number of shares of common stock available (in Shares) | 1,344,904 | |||||||||||||
Equity purchase option description | the Company sold an option to purchase up to 600,000 units, exercisable at $11.50 per Unit, in connection with AGAE’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 represented the ability to buy such securities directly (and not units). The Equity Purchase Option expired on October 4, 2022. | |||||||||||||
Common stock issued (in Shares) | 39,085,470 | 39,116,907 | ||||||||||||
Common stock value | $ 3,909 | $ 3,912 | ||||||||||||
Debt and accrued interest | $ 821,867 | |||||||||||||
Aggregate shares of common stock (in Shares) | 758,725 | |||||||||||||
Stock based compensation | 258,979 | |||||||||||||
Stock repurchase program authorized | $ 10,000,000 | |||||||||||||
Number of shares repurchased | 581,746 | |||||||||||||
Cost of repurchased | 610,562 | |||||||||||||
Remaining value of common stock available for repurchase | 9,400,000 | |||||||||||||
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 | |||||||||||
Payment to director | $ 25,000 | |||||||||||||
Unvested stock options (in Shares) | 40,000 | |||||||||||||
Weighted average grant date fair value of stock options per share (in Dollars per share) | $ 1 | |||||||||||||
Description of employee payroll tax liabilities | 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 unit description | On January 19, 2021, the Company entered into a Restricted Stock Unit Agreement with a 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 (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 Transaction (provided that the Former CEO provides consulting services (when, as and if requested) to the Company through such date). | |||||||||||||
Pay of award cash | 1,000,000 | |||||||||||||
Accrued compensation expense | 1,000,000 | |||||||||||||
Warrants merger description | Prior to the August 9, 2019 Closing Date of the Merger (see Note 1 – Background and Basis of Presentation), Black Ridge Acquisition Corp. (“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 Gaming 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 | |||||||||||||
Equity Incentive Plan [Member] | Minimum [Member] | ||||||||||||||
Stockholders' Equity (Textual) | ||||||||||||||
Common stock authorized (in Shares) | 3,463,305 | |||||||||||||
Equity Incentive Plan [Member] | Maximum [Member] | ||||||||||||||
Stockholders' Equity (Textual) | ||||||||||||||
Common stock authorized (in Shares) | 3,763,305 | |||||||||||||
Stock Options [Member] | ||||||||||||||
Stockholders' Equity (Textual) | ||||||||||||||
Stock-based compensation expense | 708,964 | $ 1,224,699 | ||||||||||||
Income (loss) from discontinued operations | 0 | 767,942 | ||||||||||||
Unrecognized stock based compensation expense | $ 347,858 | |||||||||||||
Weighted average remaining vesting period | 1 year 8 months 12 days | |||||||||||||
Restricted Stock [Member] | ||||||||||||||
Stockholders' Equity (Textual) | ||||||||||||||
Common stock issued (in Shares) | 31,437 | |||||||||||||
Common stock value | $ 49,670 | |||||||||||||
Stock-based compensation expense | 82,345 | 260,433 | ||||||||||||
Income (loss) from discontinued operations | $ 0 | $ 14,848 | ||||||||||||
Non-executive directors [Member] | ||||||||||||||
Stockholders' Equity (Textual) | ||||||||||||||
Aggregate shares of common stock (in Shares) | 126,584 | |||||||||||||
Stock based compensation | $ 200,000 | |||||||||||||
Convertible Debt [Member] | ||||||||||||||
Stockholders' Equity (Textual) | ||||||||||||||
Common stock issued (in Shares) | 529,383 | |||||||||||||
Common stock value | $ 821,867 | |||||||||||||
Debt and accrued interest | $ 674,909 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - Schedule of option activity | 12 Months Ended |
Dec. 31, 2022 USD ($) $ / shares shares | |
Schedule of Option Activity [Abstract] | |
Number of Options Outstanding beginning balance | shares | 2,415,000 |
Weighted Average Exercise Price Outstanding beginning balance | $ / shares | $ 3.73 |
Number of Options, Granted | shares | |
Weighted Average, Exercise Price Granted | $ / shares | |
Number of Options, Exercised | shares | |
Weighted Average, Exercise Price Exercised | $ / shares | |
Number of Options, Expired | shares | (615,000) |
Weighted Average, Exercise Price Expired | $ / shares | $ 3.97 |
Number of Options, Forfeited | shares | (125,000) |
Weighted Average, Exercise Price Forfeited | $ / shares | $ 3.55 |
Number of Options, Outstanding beginning balance | shares | 1,675,000 |
Weighted Average, Exercise Price Outstanding ending balance | $ / shares | $ 2.54 |
Weighted Average, Remaining Term (Yrs) Outstanding ending balance | 4 years 8 months 23 days |
Intrinsic Value, Outstanding ending balance | $ | |
Number of Options, Exercisable | shares | 1,280,000 |
Weighted Average, Exercise Price Exercisable | $ / shares | $ 3.74 |
Weighted Average, Remaining Term (Yrs) Exercisable | 6 years 8 months 26 days |
Intrinsic Value, Exercisable | $ |
Stockholders' Equity (Details_2
Stockholders' Equity (Details) - Schedule of options outstanding and exercisable | 12 Months Ended |
Dec. 31, 2022 $ / shares shares | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Outstanding Number of Options, Options Outstanding | 1,675,000 |
Weighted Average Remaining Life In Years, Options Exercisable | 6 years 8 months 26 days |
Exercisable Number of Options, Options Exercisable | 1,280,000 |
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 | 40,000 |
Weighted Average Remaining Life In Years, Options Exercisable | 7 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 | 7 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 | 7 years 2 months 8 days |
Exercisable Number of Options, Options Exercisable | 237,500 |
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 | 120,000 |
Weighted Average Remaining Life In Years, Options Exercisable | 8 years 4 months 6 days |
Exercisable Number of Options, Options Exercisable | 60,000 |
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 | 765,000 |
Weighted Average Remaining Life In Years, Options Exercisable | 5 years 8 months 8 days |
Exercisable Number of Options, Options Exercisable | 612,500 |
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 | 6 years 8 months 19 days |
Exercisable Number of Options, Options Exercisable | 230,000 |
Stockholders' Equity (Details_3
Stockholders' Equity (Details) - Schedule of grant date value of options granted - Stock Options [Member] | 12 Months Ended |
Dec. 31, 2022 | |
Stockholders' Equity (Details) - Schedule of grant date value of options granted [Line Items] | |
Expected term (years) | 6 years 3 months |
Expected dividends | 0% |
Minimum [Member] | |
Stockholders' Equity (Details) - Schedule of grant date value of options granted [Line Items] | |
Risk free interest rate | 0.94% |
Expected volatility | 40% |
Maximum [Member] | |
Stockholders' Equity (Details) - Schedule of grant date value of options granted [Line Items] | |
Risk free interest rate | 1.58% |
Expected volatility | 46% |
Stockholders' Equity (Details_4
Stockholders' Equity (Details) - Schedule of non-vested restricted common stock | 12 Months Ended |
Dec. 31, 2022 $ / shares shares | |
Schedule of Non Vested Restricted Common Stock [Abstract] | |
Number of Restricted Stock, balance at beginning | shares | 80,000 |
Weighted Average Grant Date Fair Value, balance at beginning | $ / shares | $ 2 |
Number of Restricted Stock, balance at ending | shares | |
Weighted Average Grant Date Fair Value, balance at ending | $ / shares | |
Number of Restricted Stock, Vested | shares | (80,000) |
Weighted Average Grant Date Fair Value, Vested | $ / shares | $ 2 |
Stockholders' Equity (Details_5
Stockholders' Equity (Details) - Schedule of warrants outstanding and exercisable | 12 Months Ended |
Dec. 31, 2022 $ / shares shares | |
Class of Warrant or Right [Line Items] | |
Outstanding Number of Warrants, Warrants Outstanding | 20,091,549 |
Exercisable Number of Warrants, Warrants Exercisable | 20,091,549 |
11.50 [Member] | |
Class of Warrant or Right [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 | 1 year 7 months 6 days |
Exercisable Number of Warrants, Warrants Exercisable | 18,637,003 |
4.13 [Member] | |
Class of Warrant or Right [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 | 2 years 4 months 24 days |
Exercisable Number of Warrants, Warrants Exercisable | 1,454,546 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Events [Member] | 1 Months Ended |
Feb. 27, 2023 USD ($) | |
Subsequent Events (Details) [Line Items] | |
Software license | $ 500,000 |
Service fee | $ 65,000 |