Document and Entity Information
Document and Entity Information | 6 Months Ended |
Nov. 30, 2019 | |
Document And Entity Information | |
Entity Registrant Name | SIMPLICITY ESPORTS & GAMING Co |
Entity Central Index Key | 0001708410 |
Document Type | S-1 |
Amendment Flag | false |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business Flag | true |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Nov. 30, 2019 | May 31, 2019 | May 31, 2018 |
Current Assets | |||
Cash and cash equivalents | $ 647,460 | $ 1,540,158 | $ 458,063 |
Accounts receivable | 67,971 | ||
Inventory | 18,984 | ||
Prepaid expenses | 5,671 | 3,168 | |
Total Current Assets | 740,086 | 1,540,158 | 461,231 |
Other Assets | |||
Goodwill | 6,682,416 | 4,456,250 | |
Intangible assets, net | 1,425,629 | 1,528,441 | |
Deferred brokerage fees | 800,919 | ||
Property and equipment | 261,905 | 117,231 | |
Right of use asset, operating lease | 225,322 | 100,146 | |
Security deposits | 14,885 | 12,317 | |
Cash held in trust account | 52,895,652 | ||
Due from related party | 13,342 | ||
Total Other Assets | 9,424,419 | 6,214,385 | 52,895,652 |
TOTAL ASSETS | 10,164,505 | 7,754,543 | 53,356,883 |
Current Liabilities | |||
Loan payable- related party | 93,761 | 81,618 | |
Accounts payable | 17,232 | ||
Accrued expenses | 602,839 | 691,940 | 63,579 |
Convertible note payable | 1,000,000 | 1,000,000 | |
Operating lease obligation, current | 76,559 | 32,045 | |
Current portion of deferred revenues | 715,350 | ||
Stock payable | 50,000 | ||
Deferred legal fees | 100,000 | ||
Total Current Liabilities | 2,461,980 | 1,817,746 | 245,197 |
Operating lease obligation, net of current portion | 148,762 | 68,876 | |
Deferred revenues, less current portion | 923,712 | ||
Deferred underwriting fees | 1,820,000 | ||
Total Liabilities | 3,534,454 | 1,886,622 | 2,065,197 |
Commitments | |||
Common stock subject to possible redemption, $0.0001 par value; -0- and 4,560,757 shares as of May 31, 2019 and May 31, 2018, respectively at redemption value | 46,291,685 | ||
Stockholders' Equity | |||
Preferred stock - $0.0001 par value, 1,000,000 shares authorized; no shares issued and outstanding | |||
Common stock - $0.0001 par value; 20,000,000 shares authorized; 7,858,975, 7,003,975 and 2,252,743 shares issued and outstanding as of November 30, 2019, May 31, 2019 and May 31, 2018 respectively | 786 | 700 | 225 |
Additional paid-in capital | 11,034,952 | 9,442,027 | 5,009,310 |
Accumulated deficit | (4,421,528) | (3,574,806) | (9,534) |
Total Simplicity Esports and Gaming Company Stockholders' Equity | 6,614,210 | 5,867,921 | 5,000,001 |
Non-Controlling Interest | 15,841 | ||
Total Equity | 6,630,051 | 5,867,921 | |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 10,164,505 | $ 7,754,543 | $ 53,356,883 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Nov. 30, 2019 | May 31, 2019 | May 31, 2018 |
Statement of Financial Position [Abstract] | |||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Preferred stock, authorized | 1,000,000 | 1,000,000 | 1,000,000 |
Preferred stock, issued | |||
Preferred stock, outstanding | |||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Common stock, authorized | 20,000,000 | 20,000,000 | 20,000,000 |
Common stock, issued | 7,858,975 | 7,003,975 | 2,252,743 |
Common stock, outstanding | 7,858,975 | 7,003,975 | 2,252,743 |
Common stock subject to possible redemption, par value | $ 0.0001 | $ 0.0001 | |
Common stock subject to possible redemption, shares | 0 | 4,560,757 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Nov. 30, 2019 | Nov. 30, 2018 | Nov. 30, 2019 | Nov. 30, 2018 | May 31, 2019 | May 31, 2018 | |
Revenue | ||||||
Total Revenue | $ 245,498 | $ 319,991 | $ 37,995 | |||
Operating Expenses | ||||||
General and Administrative expenses | (819,305) | (3,139,567) | (1,258,257) | (3,381,602) | (4,353,189) | (530,564) |
Loss from Operations | (573,807) | (3,139,567) | (938,266) | (3,381,602) | (4,315,194) | (530,564) |
Other Income / (Expense) | ||||||
Debt Forgiveness Income | 8,523 | 93,761 | 369,206 | |||
Interest Expense | (6,675) | (13,350) | (23,268) | |||
Interest Income | 457 | 163,694 | 2,961 | 401,418 | 403,984 | 521,702 |
Total Other Income / (Expense) | 2,305 | 163,694 | 83,372 | 401,418 | 749,922 | 521,702 |
Loss Before Provision for Income Taxes | (571,502) | (2,975,873) | (854,894) | (2,980,184) | (3,565,272) | (8,862) |
Provision for Income Taxes | ||||||
Net loss attributable to noncontrolling interest | 8,172 | 8,172 | ||||
Net loss available to common shareholders | $ (563,329) | $ (2,975,873) | $ (846,722) | $ (2,980,184) | $ (3,565,272) | $ (8,862) |
Basic and Diluted Net Loss per share | $ (0.07) | $ (1.21) | $ (0.11) | $ (1.27) | $ (1) | $ 0 |
Basic and diluted Weighted Average Number of common shares outstanding | 7,840,513 | 2,457,256 | 7,551,106 | 2,354,655 | 3,566,488 | 2,050,790 |
Franchise Royalties and License Fees [Member] | ||||||
Revenue | ||||||
Total Revenue | $ 200,274 | $ 247,012 | ||||
Company Owned Stores Sales [Member] | ||||||
Revenue | ||||||
Total Revenue | 45,224 | 49,643 | ||||
Esports Revenue [Member] | ||||||
Revenue | ||||||
Total Revenue | $ 23,336 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) | Common Stock [Member] | Additional Paid-In Capital [Member] | Non-Controlling Interest [Member] | Accumulated Deficit [Member] | Total |
Beginning balance at May. 31, 2017 | $ 144 | $ 24,856 | $ (672) | $ 24,328 | |
Beginning balance, shares at May. 31, 2017 | 1,437,500 | ||||
Common Stock Subject to Redemption | $ (456) | (46,291,229) | (46,291,685) | ||
Common Stock Subject to Redemption, shares | (4,560,757) | ||||
Sale of 5,200,000 Units, net of underwriting discount and offering expenses | $ 520 | 48,160,700 | 48,161,220 | ||
Sale of 5,200,000 Units, net of underwriting discount and offering expenses, shares | 5,200,000 | ||||
Sale of 261,500 Private Units | $ 26 | 2,614,974 | 2,615,000 | ||
Sale of 261,500 Private Units, shares | 261,500 | ||||
Issuance of shares to underwriter | $ 5 | 499,995 | 500,000 | ||
Issuance of shares to underwriter, shares | 52,000 | ||||
Common Stock Forfeited by Sponsor | $ (14) | 14 | |||
Common Stock Forfeited by Sponsor, shares | (137,500) | ||||
Net loss | (8,862) | (8,862) | |||
Ending balance at May. 31, 2018 | $ 225 | 5,009,310 | (9,534) | ||
Ending balance, shares at May. 31, 2018 | 2,252,743 | ||||
Common Shares issued | 4,311 | 4,311 | |||
Common Shares issued, shares | 425 | ||||
Net loss | (4,311) | (4,311) | |||
Ending balance at Aug. 31, 2018 | $ 225 | 5,013,621 | (13,845) | 5,000,001 | |
Ending balance, shares at Aug. 31, 2018 | 2,253,168 | ||||
Beginning balance at May. 31, 2018 | $ 225 | 5,009,310 | (9,534) | ||
Beginning balance, shares at May. 31, 2018 | 2,252,743 | ||||
Net loss | (2,980,184) | ||||
Ending balance at Nov. 30, 2018 | $ 512 | 379,680 | (2,989,718) | (2,609,526) | |
Ending balance, shares at Nov. 30, 2018 | 5,119,390 | ||||
Beginning balance at May. 31, 2018 | $ 225 | 5,009,310 | (9,534) | ||
Beginning balance, shares at May. 31, 2018 | 2,252,743 | ||||
Common stock subject to redemption not redeemed | $ 11 | 11 | |||
Common stock subject to redemption not redeemed, shares | 112,497 | ||||
Shares issued for advisory services | $ 21 | 2,124,979 | 2,125,000 | ||
Shares issued for advisory services, shares | 208,000 | ||||
Common stock issued to Smaaash Founders | $ 200 | 200 | |||
Common stock issued to Smaaash Founders, shares | 2,000,000 | ||||
Rights shares | $ 54 | 383,161 | 383,215 | ||
Rights shares, shares | 546,150 | ||||
Vesting of Common Shares | 45,000 | 45,000 | |||
Cancellation of Smaaash Founders shares | $ (200) | 200 | |||
Cancellation of Smaaash Founders shares, shares | (2,000,000) | ||||
Common Shares issued in Acquisition | $ 300 | 6,089,700 | 6,090,000 | ||
Common Shares issued in Acquisition, shares | 3,000,000 | ||||
Common shares issued in Private Placement | $ 96 | 1,924,904 | 1,925,000 | ||
Common shares issued in Private Placement, shares | 962,500 | ||||
Common Shares issued from Employment Agreements | $ 18 | 18 | |||
Common Shares issued from Employment Agreements, shares | 180,000 | ||||
Common Shares issued for convertible note | $ 20 | 499,980 | 500,000 | ||
Common Shares issued for convertible note, shares | 193,648 | ||||
Common stock redemption | $ (45) | (6,635,207) | (6,635,252) | ||
Common stock redemption, shares | (451,563) | ||||
Net loss | (3,565,272) | (3,565,272) | |||
Ending balance at May. 31, 2019 | $ 700 | 9,442,027 | (3,574,806) | 5,867,921 | |
Ending balance, shares at May. 31, 2019 | 7,003,975 | ||||
Beginning balance at Aug. 31, 2018 | $ 225 | 5,013,621 | (13,845) | 5,000,001 | |
Beginning balance, shares at Aug. 31, 2018 | 2,253,168 | ||||
Common stock subject to redemption not redeemed | $ 11 | (7,138,003) | (7,137,992) | ||
Common stock subject to redemption not redeemed, shares | 112,072 | ||||
Shares issued for advisory services | $ 21 | 2,124,979 | 2,125,000 | ||
Shares issued for advisory services, shares | 208,000 | ||||
Common stock issued to Smaaash Founders | $ 200 | 200 | |||
Common stock issued to Smaaash Founders, shares | 2,000,000 | ||||
Rights shares | $ 55 | 379,083 | 379,138 | ||
Rights shares, shares | 546,150 | ||||
Net loss attributable to noncontrolling interest | |||||
Net loss | (2,975,873) | (2,975,873) | |||
Ending balance at Nov. 30, 2018 | $ 512 | 379,680 | (2,989,718) | (2,609,526) | |
Ending balance, shares at Nov. 30, 2018 | 5,119,390 | ||||
Beginning balance at May. 31, 2019 | $ 700 | 9,442,027 | (3,574,806) | 5,867,921 | |
Beginning balance, shares at May. 31, 2019 | 7,003,975 | ||||
Shares issued for PLAYlive Nation acquisition | $ 75 | 1,439,925 | 1,440,000 | ||
Shares issued for PLAYlive Nation acquisition, shares | 750,000 | ||||
Vesting of Common Shares | 63,000 | 63,000 | |||
Compensation to officer for shares issued for past services | 90,000 | 90,000 | |||
Shares issued for vesting of employment agreement awards | $ 11 | 11 | |||
Shares issued for vesting of employment agreement awards, shares | 105,000 | ||||
Non-controlling interest of original investment in subsidiaries | 24,013 | 24,013 | |||
Net loss attributable to noncontrolling interest | (8,172) | (8,172) | |||
Net loss | (846,722) | (846,722) | |||
Ending balance at Nov. 30, 2019 | $ 786 | $ 11,034,952 | $ 15,841 | $ (4,421,528) | $ 6,630,051 |
Ending balance, shares at Nov. 30, 2019 | 7,858,975 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) | 12 Months Ended |
May 31, 2018shares | |
Statement of Stockholders' Equity [Abstract] | |
Sale of units, net of underwriting discount and offering expenses, number of units sold | 5,200,000 |
Sale of private units, number of units sold | 261,500 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 6 Months Ended | 12 Months Ended | ||
Nov. 30, 2019 | Nov. 30, 2018 | May 31, 2019 | May 31, 2018 | |
Cash flows from operating activities: | ||||
Net (loss) income | $ (854,895) | $ (2,980,184) | $ (3,565,272) | $ (8,862) |
Adjustments to reconcile net (loss) income to net cash (used in) operating activities: | ||||
Interest earned on marketable securities held in trust account | (401,418) | (403,984) | (521,702) | |
Accrued expense to related party | 3,620 | |||
Depreciation expense | 21,148 | 5,298 | ||
Amortization expense | 102,812 | 85,677 | ||
Impairment of cost method investment | 150,000 | |||
Debt forgiveness income | (93,761) | (369,206) | ||
Issuance of shares for services | 153,011 | 2,125,000 | 2,170,110 | |
Changes in operating assets and liabilities: | ||||
Accounts receivable | (67,971) | |||
Inventory | (18,984) | |||
Prepaid expenses | (5,671) | 3,114 | 3,170 | |
Security deposits | (2,568) | (12,318) | ||
Deferred legal fees | (100,000) | |||
Deferred brokerage fees | 5,056 | |||
Deferred revenues | 14,812 | |||
Accounts payable | 13,658 | |||
Accrued expenses | (89,101) | 872,291 | 641,270 | 63,579 |
Due from related party | (13,342) | |||
Income taxes payable | (3,168) | |||
Net cash used in operating activities | (835,796) | (377,577) | (1,395,255) | (470,153) |
Cash flows from investing activities: | ||||
Investment at cost | (150,000) | (150,000) | ||
Investment of cash in Trust Account | (52,780,000) | |||
Interest income released from Trust Account | 401,418 | 406,050 | ||
Cash purchased in acquisition | 26,180 | 75,930 | ||
Lease liability net of lease asset | (776) | 775 | ||
Purchase of property and equipment | (156,319) | (122,529) | ||
Net cash provided by (used in) investing activities | (130,915) | 251,418 | (195,824) | (52,373,950) |
Cash flows from financing activities: | ||||
Payment of offering costs | (20,000) | (253,880) | ||
Cash in trust | 53,178,520 | 54,648,148 | ||
Non-controlling interest of original investment in subsidiaries | 24,013 | (45,455,596) | ||
Private placement funds received | 50,000 | |||
Gross proceeds from sale of Units, net of commissions | 50,860,100 | |||
Proceeds from sale of Private Units | 1,925,000 | 2,615,000 | ||
Proceeds from note payable - related party, net | 12,143 | 171,035 | ||
Repayment of note payable - related party, net | (120,089) | |||
Settlement of redeemable common stock | (46,291,685) | |||
Cash held in trust account used to settle common stock redemption obligation | (7,620,432) | |||
Net cash provided by financing activities | 74,013 | 7,702,924 | 2,673,174 | 53,272,166 |
Net change in cash and cash equivalents | (892,698) | 7,576,765 | 1,082,095 | 428,063 |
Cash and cash equivalents - beginning of period | 1,540,158 | 458,063 | 458,063 | 30,000 |
Cash and cash equivalents - end of period | 647,460 | 8,034,828 | 1,540,158 | 458,063 |
Supplemental Disclosures of Cash Flow Information: | ||||
Cash paid for interest | ||||
Cash paid for income taxes | ||||
Supplemental Non-Cash Investing and Financing Information | ||||
Common stock redemption obligation | 7,973,300 | |||
Common stock issued for consideration in an acquisition | 1,440,000 | 6,090,000 | ||
Deferred underwriting fees charged to additional paid in capital | 1,820,000 | |||
Deferred legal fees charged to additional paid in capital | 100,000 | |||
Issuance of common stock issued to underwriters charged to additional paid in capital | 44,327,271 | |||
Change in value of common stock subject to possible redemption | 1,967,441 | |||
Offering costs charged to additional paid capital | $ 25,000 | |||
Acquisition of PLAYlive: | ||||
Goodwill | 2,226,166 | |||
Property and equipment | 9,503 | |||
Deferred brokerage fees | 805,975 | |||
Accounts payable | (3,574) | |||
Deferred revenue | $ (1,624,250) |
Organization and Description of
Organization and Description of Business | 6 Months Ended | 12 Months Ended |
Nov. 30, 2019 | May 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Organization and Description of Business | NOTE 1 — ORGANIZATION AND DESCRIPTION OF BUSINESS Simplicity Esports and Gaming Company F/K/A Smaaash Entertainment Inc. (the “Company,” “we,” or “our”), was a blank check company organized under the laws of the State of Delaware on April 17, 2017. The Company was formed under the name I-AM Capital Acquisition Company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (“Business Combination”). On November 20, 2018, the Company changed its name from I-AM Capital Acquisition Company to Smaaash Entertainment Inc. On January 2, 2019, the Company changed its name from Smaaash Entertainment Inc. to Simplicity Esports and Gaming Company. Through our wholly owned subsidiary Simplicity Esports, LLC, acquired on January 2, 2019 (see Note 6), we have begun to implement a unique approach to ensure the ultimate fan friendly esports experience. Our intention is to have gamers involved at the grassroots level and feel a sense of unity as we compete with top class talent. Our management and players are known within the esports community and we plan to use their skills to create a seamless content creation plan helping gamers feel closer to our brand than any other in the industry. Simplicity is an established brand in the Esports industry with an engaged fan base competing in popular games across different genres, including Apex Legends®, PUBG®, Gears of War®, Overwatch®, League of Legends®, Smite®, and various EA Sports® titles. Additionally, the Simplicity stream team encompasses a unique group of casters, influencers, and personalities all of whom connect to Simplicity’s dedicated fan base. Simplicity also has begun to open and operate esports gaming centers that will provide the public an opportunity to experience and enjoy gaming and Esports in a social setting, regardless of skill or experience. Through our wholly owned subsidiary, PLAYlive Nation, Inc. (“PLAYlive”), acquired on July 29, 2019 (see Note 6), the Company has a network of franchised Gaming Centers across 13 states. PLAYlive offers a video gaming lounge concept to qualified franchisees. PLAYlive currently offers single-unit location franchises as well as agreements to develop multiple locations. This PLAYlive model is being interlaced with the esports gaming centers mentioned above to create the ultimate gaming center. | NOTE 1 — ORGANIZATION AND DESCRIPTION OF BUSINESS Simplicity Esports and Gaming Company F/K/A Smaaash Entertainment Inc. (the “Company,” “we,” or “our”), was an organized blank check company organized under the laws of the State of Delaware on April 17, 2017. The Company was formed under the name I-AM Capital Acquisition Company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (“Business Combination”). On November 20, 2018, the Company changed its name from I-AM Capital Acquisition Company to Smaaash Entertainment Inc. On January 2, 2019, the Company changed its name from Smaaash Entertainment Inc. to Simplicity Esports and Gaming Company. Through our wholly subsidiary, Simplicity Esports, LLC, acquired on January 2, 2019 (see Note 4). The Company has begun to implement a unique approach to ensure the ultimate fan friendly esports experience. Our intention is to have gamers involved at the grassroots level and feel a sense of unity as we compete with top class talent. Our management and players are known within the esports community and we plan to use their skills to create a seamless content creation plan helping gamers feel closer to our brand than any other in the industry. Simplicity is an established brand in the Esports industry with an engaged fan base competing in popular games across different genres, including PUBG, Gears of War, Smite, Guns of Boom, and multiple EA Sports titles. Additionally, the Simplicity stream team encompasses a unique group of casters, influencers, and personalities all of whom connect to Simplicity’s dedicated fan base. Simplicity also has begun to open and operate esports gaming centers that will provide the public an opportunity to experience and enjoy gaming and Esports in a social setting, regardless of skill or experience. The Company’s sponsor was I-AM Capital Partners LLC (the “Sponsor”). The Company selected May 31 as its fiscal year end. Financing The registration statement for the Company’s initial public offering (as described in Note 3) was declared effective by the United States Securities and Exchange Commission (the “SEC”) on August 16, 2017. The Company financed the Business Combination with the net proceeds from the sale of $50,000,000 of units in the initial public offering (the “Public Units”) and the sale of $2,545,000 of units (the “Private Units” and, together with the Public Units, the “Units”) in the simultaneous private placement (the “Private Placement” as described in Note 3). Upon the closing of the Initial Public Offering and the Private Placement on August 22, 2017, $50,750,000 was deposited in a trust account with Continental Stock Transfer and Trust Company acting as trustee (the “Trust Account”) as discussed below. Contained in the underwriting agreement for the Initial Public Offering was an over-allotment option allowing the underwriters to purchase from the Company up to an additional 750,000 Public Units (the “Over-Allotment Units”) and, in addition, the Company received a commitment from the Sponsor to purchase up to an additional 26,250 Private Units in order to maintain the amount of cash in the Trust Account equal to $10.15 per Public Unit sold in the Initial Public Offering. On September 13, 2017, the underwriters partially exercised their option and purchased 200,000 Over-Allotment Units, which were sold at an offering price of $10.00 per Unit, generating gross proceeds of $2,000,000. Also on September 13, 2017, simultaneously with the sale of the Over-Allotment Units, the Company consummated the sale of an additional 7,000 Placement Units (the “Over-Allotment Placement Units”), generating gross proceeds of $70,000. Trust Account The Trust Account was invested only in U.S. government treasury bills with a maturity of one hundred and eighty (180) days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act of 1940, which invested only in direct U.S. government obligations. Funds were to remain in the Trust Account until the earlier of (i) the consummation of its first Business Combination or (ii) the distribution of the Trust Account as described below. The remaining proceeds outside the Trust Account were allowed to be used to pay for business, legal and accounting due diligence on prospective acquisitions and continuing general and administrative expenses. Initial Business Combination The Company’s management had broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering. On August 21, 2018, the Company deposited into the Trust Account an aggregate of $303,610 (including interest earned on the funds in the Trust Account available for withdrawal), representing $0.058 per public share. As a result of such payment, the Company extended the period of time it had to consummate a Business Combination by three months to November 21, 2018. On November 20, 2018, the parties consummated the initial Business Combination. Upon consummation of the Business Combination, the Company issued 208,000 restricted shares to Chardan Capital Markets in consideration for advisory services provided. These restricted shares are valued at $10.21 per share totaling $2,125,000 and are on the statement of operations included in general and administrative expenses. At the special meeting of stockholders held on November 9, 2018, holders of 4,448,260 shares of the Company’s common stock sold in its Initial Public Offering ( “ On the Closing Date, the Company entered into a master franchise agreement (“Master Franchise Agreement”) and a master license and distribution agreement (“Master Distribution Agreement”) with Smaaash, as of February 28, 2019 this master franchise agreement and master distribution agreement are no longer in effect. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended | 12 Months Ended |
Nov. 30, 2019 | May 31, 2019 | |
Accounting Policies [Abstract] | ||
Summary of Significant Accounting Policies | NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X promulgated by the Securities and Exchange Commission (the “SEC”). Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited consolidated financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the consolidated financial position, operating results and cash flows for the periods presented. The accompanying unaudited consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K as filed with the SEC on August 29, 2019. The interim results for the three and six months ended November 30, 2019 are not necessarily indicative of the results to be expected for the year ending May 31, 2020 or for any future interim periods. Emerging Growth Company Section 102(b)(1) of the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a registration statement under the Securities Act of 1933, as amended (the “Securities Act”), declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. Basis of Consolidation The consolidated financial statements include the operations of the Company and its wholly owned subsidiaries, Simplicity Esports, LLC, PLAYlive Nation, Inc., and PLAYlive Nation Holdings, LLC and its 79% owned subsidiaries Simplicity Happy Valley, LLC and Simplicity Redmond, LLC. In November 2019, the Company organized Happy Valley, LLC and Redmond, LLC for the purpose of converting a franchised store into a Company owned store. All significant intercompany accounts and transactions have been eliminated in consolidation. Cash and cash equivalents The Company considers short-term interest-bearing investments with initial maturities of three months or less to be cash equivalents. The Company has no cash equivalents. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which at times, may exceed the Federal depository insurance coverage of $250,000. The Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts. Financial Instruments The fair value of the Company’s assets and liabilities, which qualify as financial instruments under the Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the consolidated balance sheet. Use of Estimates The preparation of financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Revenue Recognition As of January 1, 2018, the Company adopted Revenue from Contracts with Customers (Topic 606) (“ASC 606”). The new guidance sets forth a new five-step revenue recognition model which replaces the prior revenue recognition guidance in its entirety and is intended to eliminate numerous industry-specific pieces of revenue recognition guidance that have historically existed in GAAP. The underlying principle of the new standard is that a business or other organization will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects what it expects to receive in exchange for the goods or services. The standard also requires more detailed disclosures and provides additional guidance for transactions that were not addressed completely in the prior accounting guidance. The Company adopted the standard using the modified retrospective method and the adoption did not have a material impact on its financial statements. The Company recognizes revenue when performance obligations under the terms of a contract with the customer are satisfied. Product sales occur once control is transferred upon delivery to the customer. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods and services. Our revenue is derived from the three sources listed below. The following describes principal activities, separated by major product or service, from which the Company generates its revenues: Company-owned Stores Sales The Company-owned stores principally generate revenue from retail esports gaming centers. Revenues from Company-owned stores are recognized when the products are delivered or the service is provided. Franchise Royalties and Fees Franchise royalties which are based on a percentage of franchise store sales are recognized as sales occur. Any royalty reductions, including waivers or those offered as part of a new store development incentive or as incentive for other behaviors are recognized at the same time as the related royalty as they are not separately distinguishable from the full royalty rate. Franchise royalties are billed on a monthly basis. The Company recognizes initial franchise license fee revenue, when the Company has performed substantially all the services required in the franchise agreement. Fees received that do not meet these criteria are recorded as deferred revenues until earned. The pre-opening services provided to franchisees do not contain separate and distinct performance obligations from the franchise right; thus, the fees collected will be amortized on a straight-line basis beginning at the store opening date through the term of the franchise agreement, which is typically 10 years. Franchise license renewal fees, which generally occur every 10 years, are billed before the renewal date. Fees received for future license renewal periods are amortized over the life of the renewal period. The Company offers various incentive programs for franchisees including royalty incentives, new store opening incentives (i.e. development incentives) and other support initiatives. Royalties and franchise fees sales are reduced to reflect any royalty incentives earned or granted under these programs that are in the form of discounts. Commissary sales are comprised of food and supplies sold to franchised stores and are recognized as revenue upon shipment or delivery of the related products to the franchisees. Payments are generally due within 30 days. Fees for information services, including software maintenance fees, marketing fees and website maintenance, graphic and promotion fees are recognized as revenue as such services are provided. Esports revenue Esports revenue is a form of competition using video games. Most commonly, esports takes the form of organized, multiplayer video game competitions, particularly between professional players, individually or as teams. Revenues from Esports revenue are recognized when the competition is completed and prize money is awarded. Deferred Revenues Deferred revenues are classified as current or long-term based on when management estimates the revenues will be recognized. The Company receives payments from franchisees in advance of all performance obligations having been met, including but not limited to franchise locations being opened. As certain conditions agreed to in these franchise agreements are performed, revenues are recognized. Deferred costs include commissions paid to brokers related to the sale of specific new franchises which have not met revenue recognition criteria as of November 30, 2019. These costs are recognized in the same period as the initial franchise fee revenue is recognized. Accounts Receivable The Company estimates the allowance for doubtful accounts based on an analysis of specific customers (i.e. franchisees), taking into consideration the age of past due accounts and an assessment of the customer’s ability to pay. Accounts receivable are written off against the allowance when management determines it is probable the receivable is worthless. Customer account balances with invoices dated over 90 days old are considered delinquent and considered in the allowance assessment. The Company performs credit evaluations of its customers and, generally, requires no collateral. Management believes that all accounts receivable are collectible; therefore, no allowance for doubtful accounts has been recorded. Property and equipment Property and equipment and leasehold improvements are recorded at its historical cost. The cost of property and equipment is depreciated over the estimated useful lives, when placed in service, (ranging from 3 -5 years) of the related assets utilizing the straight-line method of depreciation. The cost of leasehold improvements is depreciated (amortized) over the lesser of the length of the related leases or the estimated useful lives of the assets. Ordinary repairs and maintenance are expensed when incurred and major repairs will be capitalized and expensed if it benefits future periods. Intangible Assets and impairment Intangible assets that are subject to amortization are reviewed for potential impairment whenever events or circumstances indicate that carrying amounts may not be recoverable. Assets not subject to amortization are tested for impairment at least annually. The Company has intangible assets subject to amortization related to its acquisition of Simplicity Esports, LLC and PLAYlive Nation, Inc. These costs are included in intangible assets on our consolidated balance sheet and amortized on a straight-line basis when placed into service over their estimated useful lives of the costs, which is 3 to 5 years. The Company periodically reviews its intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less that the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. Goodwill Goodwill is the excess of our purchase cost over the fair value of the net assets of acquired businesses. We do not amortize goodwill, but we assess our goodwill for impairment at least annually. Our assessment date was January 31, 2019 and qualitative considerations indicated no impairment. Franchise Locations Through PLAYlive, the Company’s wholly owned subsidiary the Company has entered into franchise agreements with third parties. As of November 30, 2019, approximately 47 locations were open and operating, in various states including Arizona, California, Idaho, Florida, Maryland, Michigan, Mississippi, Montana, Oregon, South Carolina, Texas, Utah and Washington. Stock-based compensation The Company records stock-based compensation in accordance with ASC 718, Compensation – Stock Compensation Equity-Based Payments to Non-Employees Leases In February 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-02-Leases (Topic 842), which significantly amends the way companies are required to account for leases. Under the updated leasing guidance, some leases that did not have to be reported previously are now required to be presented as an asset and liability on the balance sheet. In addition, for certain leases, what was previously classified as an operating expense must now be allocated between amortization expense and interest expense. The Company adopted this update as of January l, 2019 using the modified retrospective transition method and prior periods have not been restated. Upon implementation, the Company recognized an initial operating lease right-of-use asset of $110,003 and operating lease liability of $107,678. Due to the simplistic nature of the Company’s leases, no retained earnings adjustment was required. See Note 8 for further details Basic Income (Loss) per share The Company complies with accounting and disclosure requirements ASC Topic 260, “Earnings Per Share.” Basic income (loss) per share is calculated by dividing the Company’s net loss by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated by dividing the Company’s net income (loss) by the diluted weighted average number of shares outstanding during the period. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. At November 30, 2019, the Company had a convertible note and common stock warrants that could be converted into approximately, 6,924,000 common shares. These are not presented in the consolidated statements of operations as the effect of these shares is anti- dilutive. Income Taxes The Company complies with the accounting and reporting requirements of ASC Topic 740, “ Income Taxes ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. On December 22, 2017, the U.S. Tax Cuts and Jobs Act of 2017 (“Tax Reform”) was signed into law. As a result of Tax Reform, the U.S. statutory tax rate was lowered from 35% to 21% effective January 1, 2018, among other changes. ASC Topic 740 requires companies to recognize the effect of tax law changes in the period of enactment; therefore, the Company was required to revalue its deferred tax assets and liabilities at the new rate. The SEC issued Staff Accounting Bulletin No. 118 (“SAB 118”) to address the application of GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain tax effects of Tax Reform. The ultimate impact may differ from this provisional amount, possibly materially, as a result of additional analysis, changes in interpretations and assumptions the Company has made, additional regulatory guidance that may be issued, and actions the Company may take as a result of Tax Reform. Recently Issued and Recently Adopted Accounting Pronouncements Accounting standards promulgated by the FASB are subject to change. Changes in such standards may have an impact on the Company’s future financial statements. The following are a summary of recent accounting developments. In June 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting Subtopic 505-50, Equity—Equity-Based Payments to Non-Employees. The Company periodically reviews new accounting standards that are issued. Although some of these accounting standards may be applicable to the Company, the Company has not identified any other new standards that it believes merit further discussion, and the Company expects that none would have a significant impact on its financial statements. Going Concern, Liquidity and Management’s Plan The Company’s consolidated financial statements have been prepared assuming that it will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. As reflected in the consolidated financial statements, the Company has an accumulated deficit at November 30, 2019, a net loss and net cash used in operating activities for the reporting period then ended. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company has commenced operations and has begun to generate revenue; however, the Company’s cash position may not be sufficient to support the Company’s daily operations. Management intends to raise additional funds by way of a private or public offering. While the Company believes in the viability of its strategy to commence operations and generate sufficient revenue and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate sufficient revenue and its ability to raise additional funds by way of a public or private offering. The financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. | NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated financial statements are presented in U.S. dollars in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC. Emerging Growth Company Section 102(b)(1) of the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a registration statement under the Securities Act of 1933, as amended (the “Securities Act”), declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. Basis of Consolidation The consolidated financial statements include the operations of the Company and its wholly owned subsidiary, Simplicity Esports, LLC. All significant intercompany accounts and transactions have been eliminated in consolidation. Cash and cash equivalents The Company considers short-term interest bearing investments with initial maturities of three months or less to be cash equivalents. The Company has no cash equivalents. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which at times, may exceed the Federal depository insurance coverage of $250,000. The Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts. Financial Instruments The fair value of the Company’s assets and liabilities, which qualify as financial instruments under FASB ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the consolidated balance sheet. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Revenue Recognition As of January 1, 2018, the Company adopted Revenue from Contracts with Customers (Topic 606) (“ASC 606”). The new guidance sets forth a new five-step revenue recognition model which replaces the prior revenue recognition guidance in its entirety and is intended to eliminate numerous industry-specific pieces of revenue recognition guidance that have historically existed in U.S. GAAP. The underlying principle of the new standard is that a business or other organization will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects what it expects to receive in exchange for the goods or services. The standard also requires more detailed disclosures and provides additional guidance for transactions that were not addressed completely in the prior accounting guidance. The Company adopted the standard using the modified retrospective method and the adoption did not have a material impact on its financial statements. The Company recognizes revenue when performance obligations under the terms of a contract with the customer are satisfied. Product sales occur once control is transferred upon delivery to the customer. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods and services. Our revenue is derived from two sources, the first is from the sale of the rights to our players to third parties and second from participation and prize money awarded at gaming tournaments. Property and equipment Property and equipment and leasehold improvements are recorded at its historical cost. The cost of property and equipment is depreciated over the estimated useful lives, when placed in service, (ranging from 3 -5 years) of the related assets utilizing the straight-line method of depreciation. The cost of leasehold improvements is depreciated (amortized) over the lesser of the length of the related leases or the estimated useful lives of the assets. Ordinary repairs and maintenance are expensed when incurred and major repairs will be capitalized and expensed if it benefits future periods. Intangible Assets and impairment Intangible assets that are subject to amortization are reviewed for potential impairment whenever events or circumstances indicate that carrying amounts may not be recoverable. Assets not subject to amortization are tested for impairment at least annually. The Company had intangible assets subject to amortization related to its acquisition of Simplicity Esports, LLC. These costs were included in intangible assets on our balance sheet and amortized on a straight-line basis when placed into service over the estimated useful lives of the costs, which is 3 to 5 years. The Company periodically reviews its intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less that the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. Goodwill Goodwill is the excess of our purchase cost over the fair value of the net assets of acquired businesses. We do not amortize goodwill, but we assess our goodwill for impairment at least annually. Our assessment date was January 31, 2019 and qualitative considerations indicated no impairment. Stock-based compensation The Company records stock-based compensation in accordance with ASC 718, Compensation – Stock Compensation Equity-Based Payments to Non-Employees Restricted Cash Held in Escrow and Common Stock Redemption Obligations This amount is held in escrow with respect to a certain stock purchase agreement with Polar Asset Management Partners Inc. (“Polar”), pursuant to which Polar agreed to sell up to 490,000 shares of the Company’s common stock to the Company thirty days after the consummation of the transactions and a separate certain stock purchase agreement with the K2 Principal Fund L.P. (“K2”), pursuant to which K2 agreed to sell up to 220,000 shares of the Company’s common stock to the Company thirty days after the consummation of the Transactions. These purchase agreements were subsequently amended as of December 20, 2018, pursuant to which, among other things, the Company distributed to Polar and K2 an aggregate of $5,133,300 out of the escrow. See below “Amendments to Forward Purchase Agreements and Warrants,” for a more detailed description of the amendment. Under the terms of the purchase agreements, as amended, the Company will use the funds held in escrow to pay for such shares; however, the Company is only required to repurchase shares that were not previously sold by Polar and K2. Therefore, if the investors had already sold such shares by the determination date, then the Company would be able to keep a portion of the remaining funds held in escrow, depending on the prices at which the shares were sold by the investors. All shares were redeemed during the year, see statement of changes in stockholders’ equity. Amendments to Forward Purchase Agreements and Warrants On December 20, 2018, the Company, Polar, K2 and the Escrow Agent, entered into an Amendment (the “Amendment”), pursuant to which, among other things, the stock purchase agreements with Polar and K2 were amended to (x) reduce the purchase price per share payable by the Company at the closing of the Stock Sales from $11.23 per share to (1) first $6.00 per share up to 20% of the original number of Shares (as defined in the respective Purchase Agreement), (2) then $5.00 per remaining share up to 20% of the original number of Shares, (3) then $4.00 per remaining share up to 20% of the original number of Shares, (4) then $3.00 per remaining Share up to 20% of the original number of Shares, and (5) then $2.00 per remaining Share up to 20% of the original number of Shares, (y) to extend the outside date of the closing of the Stock Sales until January 18, 2019, and (z) to authorize the issuance of $3,542,700 and $1,590,600 from the Escrow Account to Polar and K2, respectively, as partial payment for the Shares prior to the final closing of the Stock Sales. Investments Investments in non-consolidated entities are accounted for using the equity method or cost basis depending upon the level of ownership and/or the Company’s ability to exercise significant influence over the operating and financial policies of the investee. When the equity method is used, investments are recorded at original cost and adjusted periodically to recognize the Company’s proportionate share of the investees’ net income or losses after the date of investment. When net losses from an investment accounted for under the equity method exceed its carrying amount, the investment balance is reduced to zero and additional losses are not provided for. The Company resumes accounting for the investment under the equity method if the entity subsequently reports net income and the Company’s share of that net income exceeds the share of net losses not recognized during the period the equity method was suspended. Investments are written down only when there is clear evidence that a decline in value that is other than temporary has occurred. Investments in equity securities that do not have readily determinable fair values and do not qualify for consolidation or the equity method are carried at cost. Dividends received from those companies are included in other income. Dividends received in excess of the Company’s proportionate share of accumulated earnings are applied as a reduction of the cost of the investment. Other than temporary impairments to fair value are charged against current period income. Our investments in privately held entities are accounted for under the cost method. During the quarter ended February 28, 2019 the Company recognized $150,000 of impairment expense related to the Smaaash acquisition. Leases In February of 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2016-02-Leases (Topic 842), which significantly amends the way companies are required to account for leases. Under the updated leasing guidance, some leases that did not have to be reported previously are now required to be presented as an asset and liability on the balance sheet. In addition, for certain leases, what was previously classified as an operating expense must now be allocated between amortization expense and interest expense. The Company adopted this update as of January l 2019 using the modified retrospective transition method and prior periods have not been restated. Upon implementation, the Company recognized an initial operating lease right-of-use asset of $110,003 and operating lease liability of $107,678. Due to the simplistic nature of the Company’s leases, no retained earnings adjustment was required. See Note 8 for further details Offering Costs The Company complies with the requirements of ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (SAB) Topic 5A — “Expenses of Offering”. Offering costs of approximately $3,728,000 consisting principally of underwriter discounts of $3,250,000 (including approximately $1,800,000 of which payment was deferred until the Company issued the underwriter a secured demand promissory note in the amount of $1,800,000) and approximately $478,000 of professional, printing, filing, regulatory and other costs have been charged to additional paid in capital upon completion of the Initial Public Offering. Common stock subject to possible redemption The Company accounts for its common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “ Distinguishing Liabilities from Equity Basic Income (Loss) per share The Company complies with accounting and disclosure requirements ASC Topic 260, “Earnings Per Share.” Net income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding for the period. Shares of common stock subject to possible redemption at May 31, 2018 have been excluded from the calculation of basic income (loss) per share and diluted loss per share for the year ended May 31, 2018 since such shares, if redeemed, only participate in their pro rata share of the Trust Account earnings. The Company has not considered the effect of (1) warrants sold in the Initial Public Offering and Private Placement to purchase shares of common stock (2) rights sold in the Initial Public Offering and Private Placement that convert into shares of common stock, and (3) the unit purchase option granted to the underwriter in the calculation of diluted income (loss) per share, for the year ended May 31, 2018, since the exercise of the warrants and the conversion of the rights into shares of common stock is contingent upon the occurrence of future events. At May 31, 2019 the Company had a convertible note, and warrants that could be converted into approximately, 6,942,000 common shares. These are not presented in the consolidated statements of operations as the effect of these shares is anti- dilutive. Income Taxes The Company complies with the accounting and reporting requirements of ASC Topic 740, “ Income Taxes ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statements recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. On December 22, 2017, the U.S. Tax Cuts and Jobs Act of 2017 (“Tax Reform”) was signed into law. As a result of Tax Reform, the U.S. statutory tax rate was lowered from 35% to 21% effective January 1, 2018, among other changes. ASC Topic 740 requires companies to recognize the effect of tax law changes in the period of enactment; therefore, the Company was required to revalue its deferred tax assets and liabilities at the new rate. The SEC issued Staff Accounting Bulletin No. 118 (“SAB 118”) to address the application of GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain tax effects of Tax Reform. The ultimate impact may differ from this provisional amount, possibly materially, as a result of additional analysis, changes in interpretations and assumptions the Company has made, additional regulatory guidance that may be issued, and actions the Company may take as a result of Tax Reform. Recent Accounting Pronouncements Accounting standards promulgated by the FASB are subject to change. Changes in such standards may have an impact on the Company’s future financial statements. The following are a summary of recent accounting developments. In June 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting Subtopic 505-50, Equity—Equity-Based Payments to Non-Employees. The Company periodically reviews new accounting standards that are issued. Although some of these accounting standards may be applicable to the Company, the Company has not identified any other new standards that it believes merit further discussion, and the Company expects that none would have a significant impact on its financial statements. Going Concern The Company’s consolidated financial statements have been prepared assuming that it will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. As reflected in the consolidated financial statements, the Company has an accumulated deficit at May 31, 2019, a net loss and net cash used in operating activities for the reporting period then ended. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company is attempting to commence operations and generate sufficient revenue; however, the Company’s cash position may not be sufficient to support the Company’s daily operations. Management intends to raise additional funds by way of a private or public offering. While the Company believes in the viability of its strategy to commence operations and generate sufficient revenue and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate sufficient revenue and its ability to raise additional funds by way of a public or private offering. The financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. |
Initial Public Offering and Pri
Initial Public Offering and Private Placement | 12 Months Ended |
May 31, 2019 | |
Equity [Abstract] | |
Initial Public Offering and Private Placement | NOTE 3 — INITIAL PUBLIC OFFERING AND PRIVATE PLACEMENT Initial Public Offering On August 22, 2017, the Company sold 5,000,000 Public Units at a purchase price of $10.00 per Public Unit in the Initial Public Offering, generating gross proceeds of $50.0 million. The Company incurred offering costs of approximately $3.7 million, inclusive of approximately $3.2 million of underwriting fees. The Company paid $1 million of underwriting fees upon the closing of the Initial Public Offering, issued 50,000 shares of common stock for underwriting fees, and deferred $1.82 million of underwriting fees until the consummation of the initial Business Combination. Each Unit consisted of one share of the Company’s common stock, one right to receive one-tenth of one share of the Company’s common stock upon consummation of the Company’s initial Business Combination (“Right”), and one redeemable warrant (“Warrant”). Each Warrant entitles the holder to purchase one share of common stock at an exercise price of $11.50 per share, subject to adjustment. No fractional shares will be issued upon exercise of the Warrants. The Warrants became exercisable 30 days after the completion of the initial Business Combination and will expire five years after the completion of the initial Business Combination or earlier upon redemption or liquidation. The Company may redeem the Warrants, in whole and not in part, at a price of $0.01 per Warrant upon 30 days’ notice (“30-day redemption period”), only in the event that the last sale price of the common stock equals or exceeds $21.00 per share for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which notice of redemption is given, provided there is an effective registration statement with respect to the shares of common stock underlying such Warrants and a current prospectus relating to those shares of common stock is available throughout the 30-day redemption period. If the Company calls the Warrants for redemption as described above, the Company’s management will have the option to require all holders that wish to exercise Warrants to do so on a “cashless basis.” In determining whether to require all holders to exercise their warrants on a “cashless basis,” management will consider, among other factors, the Company’s cash position, the number of Warrants that are outstanding and the dilutive effect on the Company’s stockholders of issuing the maximum number of shares of common stock issuable upon the exercise of the Warrants. Each holder of a Right received one-tenth (1/10) of one share of common stock upon consummation of the Business Combination. No fractional shares were issued upon exchange of the Rights. No additional consideration was paid by a holder of Rights in order to receive its additional shares upon consummation of the Business Combination as the consideration related thereto has been included in the Unit purchase price paid for by investors in the Initial Public Offering. The Company granted the underwriters a 45-day option to purchase up to 750,000 additional Public Units to cover any over-allotment, at the initial public offering price less any underwriting discounts and commissions. On September 13, 2017 the underwriters purchased 200,000 additional Public Units for gross proceeds of $2,000,000 less commissions of 110,000, of which $70,000 are deferred. The Company issued Maxim Group LLC (“Maxim”), as compensation for the Initial Public Offering, an aggregate of 52,000 shares, including 2,000 shares issued in connection with the partial exercise of the over-allotment option. The Company accounted for the fair value of these shares as an expense of the Initial Public Offering resulting in a charge directly to stockholders’ equity. Settlement Agreement On November 20, 2018, the Company entered into a settlement and release agreement (“Settlement Agreement”) with Maxim. Pursuant to the Settlement Agreement, the Company made a cash payment of $20,000 to Maxim and issued the Note in favor of Maxim in order to settle the payment obligations of the Company under the underwriting agreement dated August 16, 2017, by and between the Company and Maxim. The Company also agreed to remove the restrictive legends on an aggregate of 52,000 shares of its common stock held by Maxim and its affiliate. See “Note Payable” under Note 2 above. Unit Purchase Option At the time of the closing of the Initial Public Offering, the Company sold to Maxim, for an aggregate of $100, an option (the “UPO”) to purchase 250,000 Units (which increased to 260,000 units upon the partial exercise of the underwriters’ over-allotment option) (See Note 5). The Company has accounted for the fair value of the UPO, inclusive of the receipt of the $100 cash payment, as an expense of the Initial Public Offering resulting in a charge directly to shareholders’ equity. The Company estimates that the fair value of this UPO is approximately $743,600 (or $2.86 per Unit) using the Black-Scholes option-pricing model. The fair value of the UPO is estimated as of the date of grant using the following assumptions: (1) expected volatility of 35%, (2) risk-free interest rate of 1.73% and (3) expected life of five years. The UPO may be exercised for cash or on a “cashless” basis, at the holder’s option (except in the case of a forced cashless exercise upon the Company’s redemption of the Warrants, as described above), such that the holder may use the appreciated value of the UPO (the difference between the exercise prices of the UPO and the underlying Warrants and Rights, and the market price of the Units and underlying shares of common stock) to exercise the UPO without the payment of any cash. The Company will have no obligation to net cash settle the exercise of the UPO or the Warrants or Rights underlying the UPO. The holder of the UPO will not be entitled to exercise the UPO or the Warrants or Rights underlying the UPO unless a registration statement covering the securities underlying the UPO is effective or an exemption from registration is available. If the holder is unable to exercise the UPO or underlying Warrants or Rights, the UPO, Warrants or Rights, as applicable, will expire worthless. The Company granted the holders of the UPO, demand and “piggy back” registration rights for periods of five and seven years, respectively, from the effective date of the registration statement relating to the Initial Public Offering, including securities directly and indirectly issuable upon exercise of the UPO. Private Placement Concurrently with the closing of the Initial Public Offering, the Sponsor purchased an aggregate of 254,500 Private Units at $10.00 per Private Unit, generated gross proceeds of $2,545,000 in a Private Placement. The proceeds from the Private Units was added to the proceeds from the Initial Public Offering held in the Trust Account. The Private Units (including their component securities) were not transferable, assignable or salable until 30 days after the completion of the initial Business Combination and the warrants included in the Private Units (the “Private Placement Warrants”) will be non-redeemable so long as they are held by the Sponsor or their permitted transferees. If the Private Placement Warrants are held by someone other than the Sponsor or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Warrants included in the Public Units sold in the Initial Public Offering. Otherwise, the Private Placement Warrants and the Rights underlying the Private Units have terms and provisions that are identical to those of the Warrants and Rights, respectively, sold as part of the Public Units in the Initial Public Offering and have no net cash settlement provisions. On September 13, 2017 the Sponsor purchased 7,000 additional Private Units for gross proceeds of $70,000 upon the partial exercise of the over-allotment option. |
Property, Plant and Equipment
Property, Plant and Equipment | 6 Months Ended | 12 Months Ended |
Nov. 30, 2019 | May 31, 2019 | |
Property, Plant and Equipment [Abstract] | ||
Property, Plant and Equipment | NOTE 3 - PROPERTY, PLANT AND EQUIPMENT The following is a summary of property, plant, and equipment—at cost, less accumulated depreciation: November 30, 2019 Leasehold improvements 52,189 Property and equipment 236,147 Total cost 288,336 Less accumulated depreciation (26,431 ) Net, property plant and equipment $ 261,905 Depreciation expense for the six months ended November 30, 2019 and 2018 was $21,148 and $0, respectively. | NOTE 4 - PROPERTY, PLANT AND EQUIPMENT The following is a summary of property, plant, and equipment—at cost, less accumulated depreciation: May 31, Leasehold improvements 14,818 Property and equipment 107,711 Total cost 122,529 Less accumulated depreciation (5,298 ) Net, property plant and equipment $ 117,231 Depreciation expense for the years ended May 31, 2019 and 2018 was $5,298 and $0, respectively. |
Intangible Assets
Intangible Assets | 6 Months Ended | 12 Months Ended |
Nov. 30, 2019 | May 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Intangible Assets | NOTE 4 - INTANGIBLE ASSETS The following tables set forth the intangible assets, including accumulated amortization as of November 30, 2019: November 30, 2019 Remaining Accumulated Net Carrying Useful Life Cost Amortization Value Non-Competes 4 years $ 1,023,118 $ 187,572 $ 835,546 Trademarks Indefinite 588,000 - 588,000 Internet domain 2 years 3,000 917 2,083 $ 1,614,118 $ 188,489 $ 1,425,629 Amortization expense for the six months ended November 30, 2019 and 2018 was $102,812 and $0, respectively. | NOTE 5 - INTANGIBLE ASSETS The following tables set forth the intangible assets, including accumulated amortization as of May 31, 2019: May 31, 2019 Remaining Accumulated Net Carrying Useful Life Cost Amortization Value Non-Competes 4.50 years $ 1,023,118 $ 85,260 $ 937,858 Trademarks Indefinite 588,000 - 588,000 Internet domain 2.50 years 3,000 417 2,583 $ 1,614,118 $ 85,677 $ 1,528,441 The following table sets forth the future amortization of the Company’s intangible assets at May 31, 2019: 2020 2021 2022 2023 2024 Thereafter Total Non-Competes $ 204,624 $ 204,624 $ 204,624 $ 204,624 $ 119,362 $ - $ 937,858 Internet domain 1,000 1,000 583 - - - 2,583 Total $ 205,624 $ 205,624 $ 205,207 $ 204,624 $ 119,362 $ - $ 940,441 Amortization expense for the years ended May 31, 2019 and 2018 was $85,677 and $0, respectively. |
Acquisitions
Acquisitions | 6 Months Ended | 12 Months Ended |
Nov. 30, 2019 | May 31, 2019 | |
Business Combinations [Abstract] | ||
Acquisitions | NOTE 5 - ACQUISITIONS The Simplicity Esports, LLC Acquisition On January 4, 2019, the Company consummated the transactions contemplated by the share exchange agreement, dated December 21, 2018 (as amended by Amendment No. 1 to Share Exchange Agreement, dated December 28, 2018 and by Amendment No. 2 to Share Exchange Agreement, dated December 30, 2018, the “Share Exchange Agreement”) by and among the Company, Smaaash Entertainment, Inc. (“Smaaash”), each of the equity holders of Simplicity (“Simplicity Owners”) and Jed Kaplan, in the capacity as the representative of the Simplicity Owners (the “Representative”). Pursuant to the Share Exchange Agreement the Simplicity Owners transferred all the issued and outstanding equity interests of Simplicity to the Company in exchange for newly issued shares of common stock of the Company (the “Acquisition”). The Simplicity Owners received an aggregate of 300,000 shares of common stock at the closing of the Acquisition and an additional aggregate of 700,000 shares of common stock on January 7, 2019 and the remaining 2,000,000 shares in March of 2019. The acquisition of Simplicity, in an all-stock deal, creates a pure play esports team and entertainment platform opportunity, which we believe will increase shareholder value and boost our growth strategy as we endeavor the build out of our brick and mortar esports centers. The acquisition was accounted for by the Company using the acquisition method under business combination accounting. Under this method, the purchase price paid by the acquirer is allocated to the assets acquired and liabilities assumed as of the acquisition date based on the fair value. Determining the fair value of certain assets and liabilities assumed is judgmental in nature and often involves the use of significant estimates and assumptions. All fair value measurements of acquired assets and liabilities assumed are non-recurring in nature and classified as level 3 on the fair value hierarchy. The aggregate purchase price consisted of the following: Restricted stock consideration 6,090,000 Total $ 6,090,000 As noted in the table above, the Company issued 3,000,000 restricted shares of common stock as consideration which was valued at market at the date of the closing, fair value of approximately $6,090,000. The following table summarizes the estimated fair value of the Simplicity Esports, LLC assets acquired and liabilities assumed at the date of acquisition: Cash 76,000 Internet Domain 3,000 Trade names and trademarks 588,000 Non-Competes 1,023,118 Accounts payable and accrued liabilities (56,000 ) Goodwill 4,455,882 Total $ 6,090,000 Revenue and net loss included in the six months ended November 30, 2019 consolidated financial statements attributable to Simplicity Esports, LLC is approximately $67,000 and $413,000, respectively. The following unaudited pro forma information below presents the consolidated results operations data as if the acquisition of Simplicity Esports, LLC took place on June 1, 2018: Six Months Ended Total Revenue $ 16,000 Net Loss $ (3,180,000 ) Basic Net Loss Per Share $ (1.35 ) PLAYlive Nation Acquisition On July 29, 2019, the Company entered into a definitive agreement to acquire PLAYlive for total consideration of 750,000 shares of common stock. The PLAYlive acquisition closed on July 30, 2019. Founded in 2009 PLAYlive has a network of 44 franchised Gaming Centers across 13 states, serving over 150,000 unique gamers annually. The PLAYlive Centers offer customers a specialized entertainment gaming experience within a social setting. Customers are provided the opportunity to play and compete across an array of gaming titles on both consoles and high performance gaming PCs. Additionally, PLAYlive Gaming Centers serve as community gathering spaces for enthusiasts to play both board and card games such as Magic: The Gathering, Yu-Gi-Oh, and Pokémon. The acquisition was accounted for by the Company using the acquisition method under business combination accounting. Under this method, the purchase price paid by the acquirer is allocated to the assets acquired and liabilities assumed as of the acquisition date based on the fair value. Determining the fair value of certain assets and liabilities assumed is judgmental in nature and often involves the use of significant estimates and assumptions. Certain amounts below are provisional based on our best estimates using information available as of the reporting date. The Company is waiting for information to become available to finalize its valuation of certain elements of this transaction. Specifically, the assigned values for intellectual property, net deferred revenues, customer relationships, and goodwill are provisional in nature and subject to change upon the completion of the final valuation of such elements. All fair value measurements of acquired assets and liabilities assumed are non-recurring in nature and classified as level 3 on the fair value hierarchy. The aggregate purchase price consisted of the following: Restricted stock consideration 1,440,000 Total $ 1,440,000 As noted in the table above, the Company issued 750,000 restricted shares of common stock as consideration which was valued at market at the date of the closing, fair value of approximately $1,440,000. The following table summarizes the estimated fair value of the PLAYlive assets acquired and liabilities assumed at the date of acquisition: Cash 26,000 Property, plant and equipment (provisional) 9,000 Net deferred revenue (provisional) (818,000 ) Customer relationships (provisional) - Accounts payable and accrued liabilities (4,000 ) Goodwill (provisional) 2,227,000 Total $ 1,440,000 Revenue and net loss included in the six months ended November 30, 2019 consolidated financial statements attributable to PLAYlive is approximately $220,000 and $18,000, respectively. The following unaudited pro forma information below presents the consolidated results operations data as if the acquisition of PLAYlive took place on June 1, 2018: Six Months Ended Six Months Ended Total Revenue $ 437,000 $ 350,000 Net Loss $ (890,000 ) $ (3,017,000 ) Basic Net Loss Per Share $ (0.12 ) $ (1.28 ) | NOTE 6 - ACQUISITIONS The Simplicity Esports, LLC Acquisition On January 4, 2019, the Company consummated the transactions contemplated by the share exchange agreement, dated December 21, 2018 (as amended by Amendment No. 1 to Share Exchange Agreement, dated December 28, 2018 and by Amendment No. 2 to Share Exchange Agreement, dated December 30, 2018, the “Share Exchange Agreement”) by and among the Company, Smaaash Entertainment, Inc. (“Smaaash”), each of the equity holders of Simplicity (“Simplicity Owners”) and Jed Kaplan, in the capacity as the representative of the Simplicity Owners (the “Representative”). Pursuant to the Share Exchange Agreement the Simplicity Owners transferred all the issued and outstanding equity interests of Simplicity to the Company in exchange for newly issued shares of common stock of the Company (the “Acquisition”). The Simplicity Owners received an aggregate of 300,000 shares of common stock at the closing of the Acquisition and an additional aggregate of 700,000 shares of common stock on January 7, 2019 and the remaining 2,000,000 shares in March of 2019. The acquisition of Simplicity, in an all-stock deal, creates a pure play esports team and entertainment platform opportunity, which we believe will increase shareholder value and boost our growth strategy as we endeavor the build out of our brick and mortar esports centers. The acquisition was accounted for by the Company using the acquisition method under business combination accounting. Under this method, the purchase price paid by the acquirer is allocated to the assets acquired and liabilities assumed as of the acquisition date based on the fair value. Determining the fair value of certain assets and liabilities assumed is judgmental in nature and often involves the use of significant estimates and assumptions. All fair value measurements of acquired assets and liabilities assumed are non-recurring in nature and classified as level 3 on the fair value hierarchy. The aggregate purchase price consisted of the following: Restricted stock consideration 6,090,000 Total $ 6,090,000 As noted in the table above, the Company issued 3,000,000 restricted shares of common stock as consideration which was valued at market at the date of the closing, fair value of approximately $6,090,000. The following table summarizes the estimated fair value of The Simplicity Esports, LLC assets acquired and liabilities assumed at the date of acquisition: Cash 76,000 Internet Domain 3,000 Trade names and trademarks 588,000 Non-Competes 1,023,118 Accounts payable and accrued liabilities (56,000 ) Goodwill (provisional) 4,455,882 Total $ 6,090,000 Revenue and net loss included in the year ended May 31, 2019 consolidated financial statements attributable to Simplicity Esports, LLC is approximately $38,000 and $400,000, respectively. The following unaudited pro forma information below presents the consolidated results operations data as if the acquisition of Simplicity Esports, LLC took place on June 1, 2017: Year Ended May 31, 2019 Year Ended May 31, 2018 Total Revenue $ 53,932 $ — Net (Loss) $ (3,767,067 ) $ (210,657 ) Basic Net Loss Per Share $ (1.06 ) $ 0.00 |
Related Party Transactions
Related Party Transactions | 6 Months Ended | 12 Months Ended |
Nov. 30, 2019 | May 31, 2019 | |
Related Party Transactions [Abstract] | ||
Related Party Transactions | NOTE 6 — RELATED PARTY TRANSACTIONS The Sponsor loaned the Company $201,707 in the aggregate, to be used for a portion of the expenses of the Initial Public Offering and working capital purposes. The loan is non-interest bearing, unsecured and due at the earlier of December 31, 2017 or the closing of the Initial Public Offering. At November 30, 2018, $120,089 of the Sponsor’s loan was repaid. As of May 31, 2019, the balance of the Sponsor loan was $93,761, including imputed interest of $8,523. In August of 2019, the sponsor forgave this remaining balance and the Company recorded it as debt forgiveness income. The Company maintains its cash balance at a financial services company that is owned by an officer of the Company. As of November 30, 2019, the Company is owed $13,342 from the former PLAYlive owners. The advance is non-interest bearing and will be paid back within 90 days of the closing of the PLAYlive acquisition. | NOTE 7 — RELATED PARTY TRANSACTIONS Founder Shares On May 31, 2017, the Company issued 1,437,500 shares of the Company’s common stock to the Sponsor (the “Founder Shares”) in exchange for a capital contribution of $25,000. 137,500 of the Founder Shares were forfeited by the Sponsor upon the partial exercise of the underwriters’ over-allotment option. The Founder Shares are identical to the shares of common stock included in the Units and holders of Founder Shares have the same stockholder rights as public stockholders, except that (i) the Founder Shares and the shares of common stock underlying the Private Units are subject to certain transfer restrictions, and (ii) the Sponsor has entered into a letter agreement, pursuant to which it has agreed (A) to waive its redemption rights with respect to the Founder Shares, and the shares of common stock underlying the Private Units and the Public Units in connection with the completion of a Business Combination and (B) to waive its rights to liquidating distributions from the Trust Account with respect to the Founder Shares and the shares of common stock underlying the Private Units if the Company fails to complete a Business Combination within 12 months from the closing of the Initial Public Offering (or up to 21 months from the closing of the Initial Public Offering if the Company extends the period of time to consummate a Business Combination). With certain limited exceptions, the Founder Shares are not transferable, assignable or salable (except to the Company’s officers and directors and other persons or entities affiliated with the Sponsor, each of whom will be subject to the same transfer restrictions) until the earlier of one year after the completion of an initial Business Combination or earlier of (i) subsequent to the Company’s Business Combination, the last sale price of the common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after an initial Business Combination, or (ii) the date following the completion of an Initial Business Combination on which the Company completes a liquidation, merger, stock exchange or other similar transaction that results in all stockholders having the right to exchange their shares of common stock for cash, securities or other property. Private Units In addition, the Sponsor purchased an aggregate of 254,500 Private Units at $10.00 per Private Unit for proceeds of $2,545,000 in the aggregate in the Private Placement. This purchase took place on a private placement basis simultaneously with the completion of the Initial Public Offering. This issuance was be made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act. The Sponsor committed to purchase from the Company up to an additional 26,250 Private Units if the underwriters’ over-allotment option was exercised in full. On September 13, 2017, 7,000 additional Private Units were purchased by the Sponsor at $10.00 per Private Unit upon the partial exercise of the over-allotment option. Administrative Service Fee The Company agreed, commencing on the effective date of the Initial Public Offering through the earlier of the Company’s consummation of a Business Combination or its liquidation, to pay the Sponsor a monthly fee of $10,000 for office space, utilities and secretarial and administrative support. For the three months ended November 30, 2018, the Company has paid $30,080 which is presented as general and administrative expense on the accompanying statement of operations. In December 2018, this monthly administrative service fee agreement was terminated. Loan The Sponsor loaned the Company $201,707 in the aggregate, to be used for a portion of the expenses of the Initial Public Offering and working capital purposes. The loan is non-interest bearing, unsecured and due at the earlier of December 31, 2017 or the closing of the Initial Public Offering. As of November 30, 2018, $120,089 of the Sponsor’s loan has been repaid. As of May 31, 2019, the balance of the Sponsor loan is $93,761. The Company maintains its cash balance at a financial services company that is owned by an officer of the Company. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended | 12 Months Ended |
Nov. 30, 2019 | May 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Commitments and Contingencies | NOTE 7 — COMMITMENTS AND CONTINGENCIES Nasdaq Delisting On December 10, 2018, the Company received a written notice (the “Notice”) from the Listing Qualifications Division of The Nasdaq Stock Market LLC (“Nasdaq”) indicating that the Company has not complied with the requirements of IM-5101-2 of the listing rules of Nasdaq (the “Listing Rules”). The Notice stated that after its Business Combination, the Company had not demonstrated that its common stock met Listing Rule 5505(b)(1) that requires a market value of publicly held shares of at least $15 million. Additionally, the Company has not provided evidence that its common stock has at least 300 round lot holders as required by Listing Rule 5505(a)(3) and that its warrant has at least 400 round lot holders as required by Listing Rule 5515(a)(4). Finally,the Company does not comply with Listing Rule 5515(a)(2) which requires that for initial listing of a warrant the underlying security must be listed on Nasdaq. On January 7, 2019, the Company received a second written notice from Nasdaq informing it that the Company failed to comply with Listing Rule 5250(e)(2) which requires companies listed on Nasdaq to timely file notification forms for the Listing of Additional Shares (the “LAS Notification”). The Company was required to submit the LAS Notification 15 days prior to the issuance of the securities, however, the Company filed the LAS Notification for the issuance of the Series A-1 Note and Series A-2 Note and for the share exchange under our Share Exchange Agreement after such 15-day periods. Nasdaq notified the Company that each of these matters serves as an additional and separate basis for delisting the Company’s securities and that the review panel will consider these matters in rendering a determination regarding the Company’s continued listing on Nasdaq. The Company’s management decided that moving from Nasdaq to the OTCQB is more appropriate for the Company at this time, while the Company builds out its planned network of retail esport centers. On April 1, 2019, the Company was notified by Nasdaq that it would delist the Company’s common stock and warrants. The Company’s common stock and warrants were previously suspended from trading on Nasdaq, effective January 25, 2019. On April 2, 2019, Nasdaq filed a Notification of Removal from Listing and/or Registration under Section 12(b) of the Securities and Exchange Act of 1934 on Form 25 with the Securities and Exchange Commission relating to the Company’s common stock and warrants. As a result, the Company’s common stock and warrants were delisted from Nasdaq effective April 2, 2019. The Company’s common stock and warrants currently have been quoted on the OTCQB under the symbols “WINR” and “WINRW,” respectively. Registration Rights Pursuant to a registration rights agreement the Company entered into with its initial stockholders and initial purchasers of the Private Units (and constituent securities) at the closing of the Initial Public Offering, the Company is required to register certain securities for sale under the Securities Act. These holders are entitled under the registration rights agreement to make up to three demands that the Company register certain of its securities held by them for sale under the Securities Act and to have the securities covered thereby registered for resale pursuant to Rule 415 under the Securities Act. In addition, these holders have the right to include their securities in other registration statements filed by the Company. The Company will bear the costs and expenses of filing any such registration statements. Unit Purchase Option The Company sold to the underwriters (and/or their designees), for $100, an option to purchase up to a total of 250,000 Units (which increased to 260,000 Units upon the partial exercise of the underwriters’ over-allotment option), exercisable at $11.50 per Unit (or an aggregate exercise price of $2,990,000) upon the closing of the Initial Public Offering. The UPO may be exercised for cash or on a cashless basis, at the holder’s option, at any time during the period commencing on the later of the first anniversary of the effective date of the registration statement relating to the Initial Public Offering and the closing of the Company’s initial Business Combination and terminating on the fifth anniversary of such effectiveness date. The Units issuable upon exercise of this UPO are identical to those offered in the Initial Public Offering, except that the exercise price of the warrants underlying the Units sold to the underwriters is $13.00 per share. Note Payable On November 20, 2018, the Company paid its underwriter $20,000 and issued its underwriter a secured demand promissory note (the “Note”) in the amount of $1,800,000. The Note accrued interest at 8% per annum from the date of the Note through and including May 20, 2019, 12% per annum from and including May 21, 2019 through and including August 20, 2019, and 15% per annum from and including August 21, 2019, through and including November 20, 2019. If a late payment had occurred and continued, the interest rate would have increased to 12% per annum from the date of the Note through and including August 20, 2019 and 18% per annum from after August 21, 2019. If a late payment had remained outstanding for over 48 hours, Maxim could have required the Company to redeem all or any part of the Note at a redemption price equal to 125% of the Alternate Payment Amount. The principal and interest of the Note was payable upon demand by Maxim or from time to time, in accordance the following schedule: (i) one third of the principal, accrued and unpaid interest and any late charges on May 20, 2019; (ii) one third of the principal, accrued and unpaid interest and any late charges on August 20, 2019; and (iii) one third of the principal, accrued and unpaid interest and any late charges on November 20, 2019. The Note was secured by a first priority security interest in all personal property and assets of the Company excluding the assets held in escrow with respect to (i) that certain stock purchase agreement with Polar, pursuant to which Polar agreed to sell up to 490,000 shares of the Company’s common stock to the Company thirty days after the consummation of the Business Combination and (ii) that certain stock purchase agreement with K2, pursuant to which K2 agreed to sell up to 220,000 shares of the Company’s common stock to the Company thirty days after the consummation of the Business Combination. The amount payable under the Note could also have been paid in shares of common stock of the Company or securities convertible or exercisable into shares of common stock of the Company (the “Alternate Equity Payment”) if and only if the Company and Maxim mutually agree on both the purchase price and, if applicable, the conversion and/or exercise price of each security of the Company issued in such Alternative Equity Payment. Otherwise, the payment should be made in cash only. So long as any amount under the Note remained outstanding, all cash proceeds received by the Company from any sales of its securities was to be used to repay this Note. Convertible Note Payable On December 20, 2018, the Company entered into a securities exchange agreement (“Exchange Agreement”) with Maxim Group LLC (the “Holder”). Pursuant to the terms of the Exchange Agreement, the Holder agreed to surrender and exchange the Note. In exchange, the Company issued to the Holder a Series A-1 Exchange Convertible Note in the principal amount of $500,000 (the “Series A-1 Note”) and a Series A-2 Exchange Convertible Note in the principal amount of $1,000,000 (the “Series A-2 Note,” and collectively with Series A-1 Note, the “Exchange Notes”). The original amount of the promissory note was $1,800,000, the total amount of the two exchange notes is $1,500,000, and the difference of $300,000 has been recorded as debt forgiveness income during the three months ended February 28, 2019. The Series A-1 Note bears interest at 2.67% per annum, payable quarterly and has a maturity date of the earlier of the closing date of the Acquisition (as defined below) or June 20, 2020 (the “Maturity Date”). The Company may pay the interest in cash or at its sole discretion, in shares of its common stock or a combination of cash and common stock. However, the Company may only pay the interest in shares of its common stock if (i) all the equity conditions specified in the note (“Equity Conditions”) have been met (unless waived by the Holder in writing) during the 20 trading days immediately prior to the interest payment date (“Interest Notice Period”), (ii) the Company has provided proper notice pursuant to the terms of the note and (iii) the Company has delivered to the Holder’s account certain number of shares of its common stock to be applied against such interest payment prior to (but no more than five trading days before) the Interest Notice Period. The Series A-1 Note is convertible into shares of the Company’s common stock (“Conversion Shares”) at an initial conversion price of $1.93 per share, subject to adjustment for any stock dividends and splits, rights offerings, distributions, combinations or similar transactions. Upon the closing of the Acquisition, the conversion price will be automatically adjusted to equal the arithmetic average of the volume weighted average price (“VWAP”) of the Company’s common stock in the five trading days prior to the closing date of the Acquisition. The Holder may convert the Series A-1 Note at any time, in whole or in part, provided that upon receipt of a notice of conversion from the Holder, the Company has the right to repay all or any portion of the Series A-1 Note included in the notice of conversion. Additionally, the Series A-1 Note will automatically convert into shares of the Company’s common stock on the earlier of the Maturity Date or the closing date of the Acquisition provided that (i) no event of default then exists, and (ii) solely if such automatic conversion date is also the Maturity Date, each of the Equity Conditions have been met (unless waived in writing by the Holder) on each trading day during the 20 trading day period ending on the trading day immediately prior to the automatic conversation date. At any time prior to the Maturity Date, the Company may also elect to redeem some or all of the outstanding principal amount for cash in an amount (the “Optional Redemption Amount”) equal to the sum of (a) 100% of the then outstanding principal amount of the note, (b) accrued but unpaid interest and (c) all liquidated damages and other amounts due in respect of the note (the “Optional Redemption”). The Company may only effect an Optional Redemption if each of the Equity Conditions have been met (unless waived in writing by the Holder) on each trading day during the period commencing on the date when the notice of the Optional Redemption is delivered to the date of the Optional Redemption and through and including the date payment of the Optional Redemption Amount is actually made in full. Except as otherwise provided in the Series A-1 Note, including, without limitation, an Option Redemption, the Company may not prepay any portion of the principal amount of the note without the prior written consent of the Holder. The Company is not permitted to convert any portion of the Series A-1 Note if doing so results in the Holder beneficially owning more than 4.99% of the outstanding common stock of the Company after giving effect to such conversion, provided that on 61 days’ prior written notice from the Holder to the Company, that percentage may increase to 9.99%. However, if there is an automatic conversion, and the conversion would result in the Company issuing a number of shares in excess of the beneficial ownership limitation, then any such shares in excess of the beneficial ownership limitation will be held in abeyance for the benefit of the Holder until such time or times, if ever, as its right thereto would not result in the Holder exceeding the beneficial ownership limitation, at which time or times the Holder will be issued such shares to the same extent as if there had been no such limitation. The Series A-1 Note contains restrictive covenants which, among other things, restrict the Company’s ability to repay or repurchase any indebtedness, make distributions on or repurchase its common stock or enter into transactions with its affiliates. The Series A-2 Note has terms substantially similar to those of the Series A-1 Note except that the Series A-2 Note has a maturity date of June 20, 2020 and an initial conversion price of $1.93 which will be automatically adjusted to the lower of (i) the conversion price then in effect and (ii) the greater of the arithmetic average of the VWAP of the Company’s common stock in the five trading days prior to the notice of conversion and $0.50. As of December 31, 2018, upon the closing of the Acquisition, the Series A-1 Note automatically converted into 193,648 shares of the Company’s common stock. Operating Lease - Right of Use Obligation The Company adopted Topic 842 on January 1, 2019. The Company elected to adopt this standard using the optional modified retrospective transition method and recognized a cumulative-effect adjustment to the consolidated balance sheet on the date of adoption. Comparative periods have not been restated. With the adoption of Topic 842, the Company’s consolidated balance sheet now contains the following line items: Operating lease right-of-use assets, Current portion of operating lease liabilities and Operating lease liabilities, net of current portion. As all the existing leases subject to the new lease standard were previously classified as operating leases by the Company, they were similarly classified as operating leases under the new standard. The Company has determined that the identified operating leases did not contain non-lease components and require no further allocation of the total lease cost. Additionally, the agreements in place did not contain information to determine the rate implicit in the leases, so we used our incremental borrowing rate as the discount rate. Our weighted average discount rate is 12% and 10% and the weighted average remaining lease term is 56 months. As of November 30, 2019, operating lease right-of-use assets and liabilities arising from operating leases was $225,322 and $225,321, respectively. During the six months ended November 30, 2019, cash paid for amounts included for the measurement of lease liabilities was approximately $16,000 and the Company recorded operating lease expense of approximately $32,000. | NOTE 8 — COMMITMENTS AND CONTINGENCIES Nasdaq Delisting On December 10, 2018, the Company received a written notice (the “Notice”) from the Listing Qualifications Division of The Nasdaq Stock Market LLC (“Nasdaq”) indicating that the Company has not complied with the requirements of IM-5101-2 of the listing rules of Nasdaq (the “Listing Rules”). The Notice stated that after its Business Combination, the Company had not demonstrated that its common stock met Listing Rule 5505(b)(1) that requires a market value of publicly held shares of at least $15 million. Additionally, the Company has not provided evidence that its common stock has at least 300 round lot holders as required by Listing Rule 5505(a)(3) and that its warrant has at least 400 round lot holders as required by Listing Rule 5515(a)(4). Finally, the Company does not comply with Listing Rule 5515(a)(2) which requires that for initial listing of a warrant the underlying security must be listed on Nasdaq. On January 7, 2019, the Company received a second written notice from Nasdaq informing it that the Company failed to comply with Listing Rule 5250(e)(2) which requires companies listed on Nasdaq to timely file notification forms for the Listing of Additional Shares (the “LAS Notification”). The Company was required to submit the LAS Notification 15 days prior to the issuance of the securities, however, the Company filed the LAS Notification for the issuance of the Series A-1 Note and Series A-2 Note and for the share exchange under our Share Exchange Agreement after such 15-day periods. Nasdaq notified the Company that each of these matters serves as an additional and separate basis for delisting the Company’s securities and that the review panel will consider these matters in rendering a determination regarding the Company’s continued listing on Nasdaq. Management of Simplicity Esports and Gamily Company has decided that moving from The Nasdaq Stock Market (“Nasdaq”) to the OTCQB is more appropriate for the Company at this time, while the Company builds out its planned network of retail esport centers. On April 1, 2019, the Company was notified by Nasdaq that it would delist the Company’s common stock and warrants. The Company’s common stock and warrants were previously suspended from trading on Nasdaq, effective January 25, 2019. On April 2, 2019, Nasdaq filed a Notification of Removal from Listing and/or Registration under Section 12(b) of the Securities and Exchange Act of 1934 on Form 25 with the Securities and Exchange Commission relating to the Company’s common stock and warrants. As a result, the Company’s common stock and warrants were delisted from Nasdaq effective April 2, 2019. The Company’s common stock and warrants currently have been quoted on the OTCQB under the symbols “WINR” and “WINRW,” respectively. Registration Rights Pursuant to a registration rights agreement the Company entered into with its initial stockholders and initial purchasers of the Private Units (and constituent securities) at the closing of the Initial Public Offering, the Company is required to register certain securities for sale under the Securities Act. These holders are entitled under the registration rights agreement to make up to three demands that the Company register certain of its securities held by them for sale under the Securities Act and to have the securities covered thereby registered for resale pursuant to Rule 415 under the Securities Act. In addition, these holders have the right to include their securities in other registration statements filed by the Company. The Company will bear the costs and expenses of filing any such registration statements. Unit Purchase Option The Company sold to the underwriters (and/or their designees), for $100, an option to purchase up to a total of 250,000 Units (which increased to 260,000 Units upon the partial exercise of the underwriters’ over-allotment option), exercisable at $11.50 per Unit (or an aggregate exercise price of $2,990,000) upon the closing of the Initial Public Offering. The UPO may be exercised for cash or on a cashless basis, at the holder’s option, at any time during the period commencing on the later of the first anniversary of the effective date of the registration statement relating to the Initial Public Offering and the closing of the Company’s initial Business Combination and terminating on the fifth anniversary of such effectiveness date. The Units issuable upon exercise of this UPO are identical to those offered in the Initial Public Offering, except that the exercise price of the warrants underlying the Units sold to the underwriters is $13.00 per share. Note Payable On November 20, 2018, the Company paid its underwriter $20,000 and issued its underwriter a secured demand promissory note (the “Note”) in the amount of $1,800,000. The Note accrued interest at 8% per annum from the date of the Note through and including May 20, 2019, 12% per annum from and including May 21, 2019 through and including August 20, 2019, and 15% per annum from and including August 21, 2019, through and including November 20, 2019. If a late payment had occurred and continued, the interest rate would have increased to 12% per annum from the date of the Note through and including August 20, 2019 and 18% per annum from after August 21, 2019. If a late payment had remained outstanding for over 48 hours, Maxim could have required the Company to redeem all or any part of the Note at a redemption price equal to 125% of the Alternate Payment Amount. The principal and interest of the Note was payable upon demand by Maxim or from time to time, in accordance the following schedule: (i) one third of the principal, accrued and unpaid interest and any late charges on May 20, 2019; (ii) one third of the principal, accrued and unpaid interest and any late charges on August 20, 2019; and (iii) one third of the principal, accrued and unpaid interest and any late charges on November 20, 2019. The Note was secured by a first priority security interest in all personal property and assets of the Company excluding the assets held in escrow with respect to (i) that certain stock purchase agreement with Polar, pursuant to which Polar agreed to sell up to 490,000 shares of the Company’s common stock to the Company thirty days after the consummation of the Business Combination and (ii) that certain stock purchase agreement with K2, pursuant to which K2 agreed to sell up to 220,000 shares of the Company’s common stock to the Company thirty days after the consummation of the Business Combination. The amount payable under the Note could also have been paid in shares of common stock of the Company or securities convertible or exercisable into shares of common stock of the Company (the “Alternate Equity Payment”) if and only if the Company and Maxim mutually agree on both the purchase price and, if applicable, the conversion and/or exercise price of each security of the Company issued in such Alternative Equity Payment. Otherwise, the payment should be made in cash only. So long as any amount under the Note remained outstanding, all cash proceeds received by the Company from any sales of its securities was to be used to repay this Note. Convertible Note Payable On December 20, 2018, the Company entered into a securities exchange agreement (“Exchange Agreement”) with Maxim Group LLC (the “Holder”). Pursuant to the terms of the Exchange Agreement, the Holder agreed to surrender and exchange the Note. In exchange, the Company issued to the Holder a Series A-1 Exchange Convertible Note in the principal amount of $500,000 (the “Series A-1 Note”) and a Series A-2 Exchange Convertible Note in the principal amount of $1,000,000 (the “Series A-2 Note,” and collectively with Series A-1 Note, the “Exchange Notes”). The original amount of the promissory note was $1,800,000, the total amount of the two exchange notes is $1,500,000, and the difference of $300,000 has been recorded as debt forgiveness income. The Series A-1 Note bears interest at 2.67% per annum, payable quarterly and has a maturity date of the earlier of the closing date of the Simplicity Esports Acquisition (as defined below) or June 20, 2020 (the “Maturity Date”). The Company may pay the interest in cash or at its sole discretion, in shares of its common stock or a combination of cash and common stock. However, the Company may only pay the interest in shares of its common stock if (i) all the equity conditions specified in the note (“Equity Conditions”) have been met (unless waived by the Holder in writing) during the 20 trading days immediately prior to the interest payment date (“Interest Notice Period”), (ii) the Company has provided proper notice pursuant to the terms of the note and (iii) the Company has delivered to the Holder’s account certain number of shares of its common stock to be applied against such interest payment prior to (but no more than five trading days before) the Interest Notice Period. The Series A-1 Note is convertible into shares of the Company’s common stock (“Conversion Shares”) at an initial conversion price of $1.93 per share, subject to adjustment for any stock dividends and splits, rights offerings, distributions, combinations or similar transactions. Upon the closing of the Simplicity Esports Acquisition, the conversion price will be automatically adjusted to equal the arithmetic average of the volume weighted average price (“VWAP”) of the Company’s common stock in the five trading days prior to the closing date of the Simplicity Esports Acquisition. The Holder may convert the Series A-1 Note at any time, in whole or in part, provided that upon receipt of a notice of conversion from the Holder, the Company has the right to repay all or any portion of the Series A-1 Note included in the notice of conversion. Additionally, the Series A-1 Note will automatically convert into shares of the Company’s common stock on the earlier of the Maturity Date or the closing date of the Simplicity Esports Acquisition provided that (i) no event of default then exists, and (ii) solely if such automatic conversion date is also the Maturity Date, each of the Equity Conditions have been met (unless waived in writing by the Holder) on each trading day during the 20 trading day period ending on the trading day immediately prior to the automatic conversation date. At any time prior to the Maturity Date, the Company may also elect to redeem some or all of the outstanding principal amount for cash in an amount (the “Optional Redemption Amount”) equal to the sum of (a) 100% of the then outstanding principal amount of the note, (b) accrued but unpaid interest and (c) all liquidated damages and other amounts due in respect of the note (the “Optional Redemption”). The Company may only effect an Optional Redemption if each of the Equity Conditions have been met (unless waived in writing by the Holder) on each trading day during the period commencing on the date when the notice of the Optional Redemption is delivered to the date of the Optional Redemption and through and including the date payment of the Optional Redemption Amount is actually made in full. Except as otherwise provided in the Series A-1 Note, including, without limitation, an Option Redemption, the Company may not prepay any portion of the principal amount of the note without the prior written consent of the Holder. The Company is not permitted to convert any portion of the Series A-1 Note if doing so results in the Holder beneficially owning more than 4.99% of the outstanding common stock of the Company after giving effect to such conversion, provided that on 61 days’ prior written notice from the Holder to the Company, that percentage may increase to 9.99%. However, if there is an automatic conversion, and the conversion would result in the Company issuing a number of shares in excess of the beneficial ownership limitation, then any such shares in excess of the beneficial ownership limitation will be held in abeyance for the benefit of the Holder until such time or times, if ever, as its right thereto would not result in the Holder exceeding the beneficial ownership limitation, at which time or times the Holder will be issued such shares to the same extent as if there had been no such limitation. The Series A-1 Note contains restrictive covenants which, among other things, restrict the Company’s ability to repay or repurchase any indebtedness, make distributions on or repurchase its common stock or enter into transactions with its affiliates. The Series A-2 Note has terms substantially similar to those of the Series A-1 Note except that the Series A-2 Note has a maturity date of June 20, 2020 and an initial conversion price of $1.93 which will be automatically adjusted to the lower of (i) the conversion price then in effect and (ii) the greater of the arithmetic average of the VWAP of the Company’s common stock in the five trading days prior to the notice of conversion and $0.50. As of December 31, 2018, upon the closing of the Simplicity Esports Acquisition, the Series A-1 Note automatically converted into 193,648 shares of the Company’s common stock. Operating Lease Right of Use Obligation The Company adopted Topic 842 on January 1, 2019. The Company elected to adopt this standard using the optional modified retrospective transition method and recognized a cumulative-effect adjustment to the consolidated balance sheet on the date of adoption. Comparative periods have not been restated. With the adoption of Topic 842, the Company’s consolidated balance sheet now contains the following line items: Operating lease right-of-use assets, Current portion of operating lease liabilities and Operating lease liabilities, net of current portion. As all the existing leases subject to the new lease standard were previously classified as operating leases by the Company, they were similarly classified as operating leases under the new standard. The Company has determined that the identified operating leases did not contain non-lease components and require no further allocation of the total lease cost. Additionally, the agreements in place did not contain information to determine the rate implicit in the leases, so we used our incremental borrowing rate as the discount rate. Our weighted average discount rate is 12% and the weighted average remaining lease term is 56 months. As of May 31, 2019, operating lease right-of-use assets and liabilities arising from operating leases was $100,146 and $100,921, respectively. During the year ended May 31, 2019, cash paid for amounts included for the measurement of lease liabilities was approximately $7,000 and the Company recorded operating lease expense of $10,000. The following is a schedule showing the future minimum lease payments under operating leases by years and the present value of the minimum payments as of May 31, 2019. 2020 $ 25,858 2021 $ 29,311 2022 $ 30,484 2023 $ 31,703 2024 $ 24,484 Total Operating Lease Obligations $ 141,840 Less: Amount representing interest $ (40,919 ) Present Value of minimum lease payments $ 100,921 |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended | 12 Months Ended |
Nov. 30, 2019 | May 31, 2019 | |
Equity [Abstract] | ||
Stockholders' Equity | NOTE 8 — STOCKHOLDERS’ EQUITY Common Stock The Company is authorized to issue 20,000,000 shares of common stock with a par value of $0.0001 per share. Holders of the shares of the Company’s common stock are entitled to one vote for each share. At November 30, 2019, there were 7,858,975 shares of common stock issued and outstanding. Preferred Stock The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per share. At November 30, 2019, there were no shares of preferred stock issued or outstanding. Private Placement Beginning in February 2019, the Company sold units in connection with a private offering by the Company to raise working capital of up to $2,000,000 (the “Offering Amount” ) through the sale to accredited investors only of up to up to 1,000,000 “Units” of the Company’s securities, at a purchase price of $2.00 per Unit, with each Unit consisting of (i) one share of common stock, par value $0.0001 per share of the Company (the “Common Stock”) and (ii) a warrant to purchase one share of Common Stock, exercisable at a price of $4.00 per share, exercisable at any time within five years of issuance (each, a “Warrant”) as provided for in the Company’s Term Sheet for Unit Offering dated February 6, 2019 (the “Term Sheet”). For the year ended May 31, 2019, the Company sold 962,500 units for gross proceeds of $1,925,000. During the six months ended November 30, 2019, the Company sold 25,000 units for gross proceeds of $50,000, the common shares underlying the units have not been issued yet and the $50,000 is included on the balance sheet with current liabilities. During the six months ended November 30, 2019, the Company issued 750,000 shares of common stock for the acquisition of PLAYlive. The shares were valued at $1,440,000 the fair value at the time of issuance. Stock-Based Compensation On March 27, 2019, the Company issued 180,000 shares of common stock to three employees. The shares were issued in conjunction with their employment agreements and vest ratably through December 31, 2019. As of November 30, 2019, 180,000 shares have vested, and for the year ended May 31, 2019 and the six months ended November 30, 2019, the Company recognized $27,000 and $63,000 of stock-based compensation, respectively, based on the trading price on March 27, 2019 (measurement date) of $0.60 per share. As of November 30, 2019, unrecognized compensation cost related to these shares is nil. In November 2019, the Company recorded $90,000 of stock-based compensation for shares issued to an officer for past services provided. Warrants For the year ended May 31, 2018, the Company issued 5,461,500 warrants in conjunction with its Initial Public Offering. These warrants are exercisable for five years from November 20, 2018, the date of the initial business combination and have an exercise price equal to $11.50. For the year ended May 31, 2019, the Company issued 962,500 warrants in conjunction with the above-mentioned private placement. These warrants are exercisable for 5 years and have an exercise price of $4.00 A summary of the status of the Company’s outstanding stock warrants for the six months ended November 30, 2019 is as follows: Number of Average Expiration Outstanding – May 31, 2019 6,424,000 10.38 Granted – November 30, 2019 - Outstanding – November 30, 2019 6,424.000 $ 10.38 May 2024 Warrants exercisable at November 30, 2019 6,424,000 | NOTE 9 — STOCKHOLDERS’ EQUITY Common Stock The Company is authorized to issue 20,000,000 shares of common stock with a par value of $0.0001 per share. Holders of the shares of the Company’s common stock are entitled to one vote for each share. At May 31, 2019, there were 7,003,975 shares of common stock issued and outstanding. Preferred Stock The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per share. At May 31, 2019, there were no shares of preferred stock issued or outstanding. Private Placement Beginning in February of 2019 and closing in May of 2019, the Company sold units in connection with a private offering by the Company to raise working capital of up to $2,000,000 (the “Offering Amount”) through the sale to accredited investors only of up to up to 1,000,000 “Units” of the Company’s securities, at a purchase price of $2.00 per Unit, with each Unit consisting of (i) one share of common stock, par value $0.0001 per share of the Company (the “Common Stock”) and (ii) a warrant to purchase one share of Common Stock, exercisable at a price of $4.00 per share, exercisable at any time within five years of issuance (each, a “Warrant”) as provided for in the Company’s Term Sheet for Unit Offering dated February 6, 2019 (the “Term Sheet”). The Company sold 962,500 units for gross proceeds of $1,925,000. Stock Based Compensation On March 27, 2019 the Company issued 180,000 shares of common stock to 3 employees. The shares were issued in conjunction with their employment agreements and vest ratably through December 31, 2019. As of May 31, 2019, 75,000 shares have vested, and the Company recognized $45,000 of stock-based compensation based on the trading price on March 27, 2019 (measurement date) of $0.60 per share. As of May 31, 2019, unrecognized compensation cost related to these shares is $63,000. Warrants For the year ended May 31, 2018, the Company issued 5,461,500 warrants in conjunction with its Initial Public Offerings. These warrants are exercisable for five years from November 20, 2018, the date of the initial business combination and have an exercise price equal to $11.50. For the year ended May 31, 2019, the Company issued 962,500 warrants in conjunction with the above mentioned private placement. These warrants are exercisable for 5 years and have an exercise price of $4.00 A summary of the status of the Company’s outstanding stock warrants for the years ended May 31, 2019 and 2018 is as follows: Number of Average Expiration Outstanding – May 31, 2017 - $ - Granted – August 2017 5,461,500 11.50 November 2023 Outstanding – May 31, 2018 5,461,500 11.50 Granted – May 31, 2019 962,500 4.00 May 2024 Outstanding – May 31, 2019 6,424.000 $ 10.38 Warrants exercisable at May 31, 2019 6,424,000 |
Income Taxes
Income Taxes | 12 Months Ended |
May 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 10 - INCOME TAXES For the year ended May 31, 2019 and 2018, the income tax provisions for current taxes were $0. Deferred income taxes reflect the net tax effects of permanent and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The temporary differences that result in deferred tax assets and liabilities are the results of carry forward tax losses, amortization and impairment expense. The components of the net deferred tax assets for the year ended May 31, 2019 and 2018 are as follows: Year ended May 31, 2019 Year ended May 31, 2018 Net Operating Loss $ 364,000 $ 2,000 Impairment of cost method investment 38,000 - Gross deferred tax asset 402,000 - Less: Valuation allowance (381,000 ) (2,000 ) Net deferred tax asset $ 21,000 $ - Deferred tax liabilities: Amortization of intangible assets (21,000 ) - Net deferred assets/liabilities - - In assessing the realization of the deferred tax assets, management considers whether it is more likely than not that some portion of all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. After consideration of all of the information available, management believes that significant uncertainty exists with respect to future realization of the deferred tax assets and has therefore established a valuation allowance, in an amount equal to gross deferred tax assets less deferred tax liabilities. For the year ended May 31, 2019, the change in the valuation allowance was $379,000. The table below summarizes the reconciliation of our income tax provision computed at the federal statutory rate of 21% for the year ended May 31, 2019 and 28% for the year ended May 31, 2018 and the actual tax provisions for the year ended May 31, 2019 and 2018. 2019 2018 Expected provision (benefit) at statutory rate (21.0 )% (28.0 )% State taxes, net of federal tax benefit (4.4 )% (0 )% Change in federal rate - % 7 % Permanent differences-stock based compensation 15.0 - Increase in valuation allowance 10.4 % 21 % Total provision (benefit) for income taxes 0.0 % 0.0 % At May 31, 2019 and May 31, 2018 the Company had Federal net operating loss carry forwards of approximately $1,434,000 and $9,500, respectively. The net operating loss of approximately $1,434,000 can be carried forward indefinitely subject to annual usage limitations. In accordance with Section 382 of the Internal Revenue Code, deductibility of the Company’s NOLs may be subject to an annual limitation in the event of a change in control as defined under the regulations. On December 22, 2017, the Tax Cuts and Jobs Act was signed into legislation. As part of the legislation, the U.S. corporate income tax rate was reduced to 21%. The Company files income tax returns in the U.S. federal jurisdiction in various state and local jurisdictions and is subject to examination by the various taxing authorities. |
Trust Account and Fair Value Me
Trust Account and Fair Value Measurements | 12 Months Ended |
May 31, 2019 | |
Trust Account And Fair Value Measurements | |
Trust Account and Fair Value Measurements | NOTE 11 — TRUST ACCOUNT AND FAIR VALUE MEASUREMENTS The Trust Account was invested in U.S. government securities, within the meaning set forth in the Investment Company Act, had a maturity of 180 days or less or in any open-ended investment company that held itself out as a money market fund selected by the Company meeting the conditions of Rule 2a-7 of the Investment Company Act. The Company’s amended and restated certificate of incorporation provided that, other than the withdrawal of interest to pay income taxes and up to $600,000 of interest to pay working capital expenses if any, none of the funds held in the Trust Account would be released until the earlier of: (i) the completion of the Business Combination; (ii) the redemption of 100% of the shares of common stock included in the Public Units sold in the Initial Public Offering if the Company was unable to complete its initial Business Combination within 12 months (or 21 months if extended) from the closing of the Initial Public Offering (subject to the requirements of law). The funds were released from the Trust Account on November 20, 2018 upon the Closing of the initial Business Combination. The Company followed the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually. The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company sought to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy was used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities: Level 1: Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2: Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. Level 3: Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability. The following table presents information about the Company’s assets that are measured at fair value on a recurring basis at November 30, 2018 and May 31, 2018, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value: Description Level May 31, 2019 May 31, 2018 Assets: Cash and marketable securities held in Trust Account 1 $ -0- $ 52,895,652 |
Segment and Related Information
Segment and Related Information | 6 Months Ended |
Nov. 30, 2019 | |
Segment Reporting [Abstract] | |
Segment and Related Information | NOTE 9 — SEGMENT AND RELATED INFORMATION Historically, the Company had one operating segment. However, with the acquisition of PLAYlive and the opening of Company-owned retail stores, the Company’s operations are now managed through three operating segments: Franchise royalties and license fees, Company-owned stores and Esports revenue. These three operating segments and corporate are presented below as its reportable segments. Summarized financial information concerning our reportable segments for the six months ended November 30, 2019 is shown in the following table: Revenues Net Depreciation Capital Goodwill Total Franchise royalties and license fees $ 247,000 $ (9,000 ) $ 2,000 $ - $ 2,226,000 $ 3,147,000 Company-owned stores 50,000 (142,000 ) 19,000 153,000 - 558,000 Esports revenue 23,000 (97,000 ) 103,000 3,000 4,456,000 5,890,000 Corporate - (607,000 ) - - - 569,000 Total $ 320,000 $ (855,000 ) $ 124,000 $ 156,000 $ 6,682,000 $ 10,164,000 |
Subsequent Events
Subsequent Events | 6 Months Ended | 12 Months Ended |
Nov. 30, 2019 | May 31, 2019 | |
Subsequent Events [Abstract] | ||
Subsequent Events | NOTE 10 — SUBSEQUENT EVENTS In accordance with ASC 855-10, Company management reviewed all material events through the date of this report and determined that there are no material subsequent events to report. | NOTE 12 — SUBSEQUENT EVENTS On July 29, 2019, Simplicity Esports and Gaming Company entered into a definitive agreement to acquire PLAYlive Nation, Inc. (“PLAYlive”) for total consideration of 750,000 shares of common stock. The PLAYlive acquisition closed on July 30, 2019. This transaction will be accounted for by the Company using the acquisition method under business combination accounting. Founded in 2009 PLAYlive has a network of 44 franchised Gaming Centers across 11 states, serving over 150,000 unique gamers annually. The PLAYlive Centers offer customers a specialized entertainment gaming experience within a social setting. Customers are provided the opportunity to play and compete across an array of gaming titles on both consoles and high performance gaming PCs. Additionally, PLAYlive Gaming Centers serve as community gathering spaces for enthusiasts to play both board and card games such as Magic: The Gathering, Yu-Gi-Oh, and Pokémon. In June of 2019, the Company entered into a 5 year operating lease for its corporate office, rent is approximately $700 per month. In August of 2019, the Company opened its second gaming center and in connection with this gaming center entered into a 5 year operating lease in Deland, Florida. Rent is approximately $2,500 per month for the first year and contains customary escalation clauses. In August of 2019, the $93,761 Loan Payable - related party was forgiven by the related party. This will be recorded as debt forgiveness by the Company. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended | 12 Months Ended |
Nov. 30, 2019 | May 31, 2019 | |
Accounting Policies [Abstract] | ||
Basis of Presentation | Basis of Presentation The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X promulgated by the Securities and Exchange Commission (the “SEC”). Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited consolidated financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the consolidated financial position, operating results and cash flows for the periods presented. The accompanying unaudited consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K as filed with the SEC on August 29, 2019. The interim results for the three and six months ended November 30, 2019 are not necessarily indicative of the results to be expected for the year ending May 31, 2020 or for any future interim periods. | Basis of Presentation The accompanying consolidated financial statements are presented in U.S. dollars in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC. |
Emerging Growth Company | Emerging Growth Company Section 102(b)(1) of the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a registration statement under the Securities Act of 1933, as amended (the “Securities Act”), declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. | Emerging Growth Company Section 102(b)(1) of the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a registration statement under the Securities Act of 1933, as amended (the “Securities Act”), declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. |
Basis of Consolidation | Basis of Consolidation The consolidated financial statements include the operations of the Company and its wholly owned subsidiaries, Simplicity Esports, LLC, PLAYlive Nation, Inc., and PLAYlive Nation Holdings, LLC and its 79% owned subsidiaries Simplicity Happy Valley, LLC and Simplicity Redmond, LLC. In November 2019, the Company organized Happy Valley, LLC and Redmond, LLC for the purpose of converting a franchised store into a Company owned store. All significant intercompany accounts and transactions have been eliminated in consolidation. | Basis of Consolidation The consolidated financial statements include the operations of the Company and its wholly owned subsidiary, Simplicity Esports, LLC. All significant intercompany accounts and transactions have been eliminated in consolidation. |
Cash and Cash Equivalents | Cash and cash equivalents The Company considers short-term interest-bearing investments with initial maturities of three months or less to be cash equivalents. The Company has no cash equivalents. | Cash and cash equivalents The Company considers short-term interest bearing investments with initial maturities of three months or less to be cash equivalents. The Company has no cash equivalents. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which at times, may exceed the Federal depository insurance coverage of $250,000. The Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts. | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which at times, may exceed the Federal depository insurance coverage of $250,000. The Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts. |
Financial Instruments | Financial Instruments The fair value of the Company’s assets and liabilities, which qualify as financial instruments under the Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the consolidated balance sheet. | Financial Instruments The fair value of the Company’s assets and liabilities, which qualify as financial instruments under FASB ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the consolidated balance sheet. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Revenue Recognition | Revenue Recognition As of January 1, 2018, the Company adopted Revenue from Contracts with Customers (Topic 606) (“ASC 606”). The new guidance sets forth a new five-step revenue recognition model which replaces the prior revenue recognition guidance in its entirety and is intended to eliminate numerous industry-specific pieces of revenue recognition guidance that have historically existed in GAAP. The underlying principle of the new standard is that a business or other organization will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects what it expects to receive in exchange for the goods or services. The standard also requires more detailed disclosures and provides additional guidance for transactions that were not addressed completely in the prior accounting guidance. The Company adopted the standard using the modified retrospective method and the adoption did not have a material impact on its financial statements. The Company recognizes revenue when performance obligations under the terms of a contract with the customer are satisfied. Product sales occur once control is transferred upon delivery to the customer. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods and services. Our revenue is derived from the three sources listed below. The following describes principal activities, separated by major product or service, from which the Company generates its revenues: Company-owned Stores Sales The Company-owned stores principally generate revenue from retail esports gaming centers. Revenues from Company-owned stores are recognized when the products are delivered or the service is provided. Franchise Royalties and Fees Franchise royalties which are based on a percentage of franchise store sales are recognized as sales occur. Any royalty reductions, including waivers or those offered as part of a new store development incentive or as incentive for other behaviors are recognized at the same time as the related royalty as they are not separately distinguishable from the full royalty rate. Franchise royalties are billed on a monthly basis. The Company recognizes initial franchise license fee revenue, when the Company has performed substantially all the services required in the franchise agreement. Fees received that do not meet these criteria are recorded as deferred revenues until earned. The pre-opening services provided to franchisees do not contain separate and distinct performance obligations from the franchise right; thus, the fees collected will be amortized on a straight-line basis beginning at the store opening date through the term of the franchise agreement, which is typically 10 years. Franchise license renewal fees, which generally occur every 10 years, are billed before the renewal date. Fees received for future license renewal periods are amortized over the life of the renewal period. The Company offers various incentive programs for franchisees including royalty incentives, new store opening incentives (i.e. development incentives) and other support initiatives. Royalties and franchise fees sales are reduced to reflect any royalty incentives earned or granted under these programs that are in the form of discounts. Commissary sales are comprised of food and supplies sold to franchised stores and are recognized as revenue upon shipment or delivery of the related products to the franchisees. Payments are generally due within 30 days. Fees for information services, including software maintenance fees, marketing fees and website maintenance, graphic and promotion fees are recognized as revenue as such services are provided. Esports revenue Esports revenue is a form of competition using video games. Most commonly, esports takes the form of organized, multiplayer video game competitions, particularly between professional players, individually or as teams. Revenues from Esports revenue are recognized when the competition is completed and prize money is awarded. | Revenue Recognition As of January 1, 2018, the Company adopted Revenue from Contracts with Customers (Topic 606) (“ASC 606”). The new guidance sets forth a new five-step revenue recognition model which replaces the prior revenue recognition guidance in its entirety and is intended to eliminate numerous industry-specific pieces of revenue recognition guidance that have historically existed in U.S. GAAP. The underlying principle of the new standard is that a business or other organization will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects what it expects to receive in exchange for the goods or services. The standard also requires more detailed disclosures and provides additional guidance for transactions that were not addressed completely in the prior accounting guidance. The Company adopted the standard using the modified retrospective method and the adoption did not have a material impact on its financial statements. The Company recognizes revenue when performance obligations under the terms of a contract with the customer are satisfied. Product sales occur once control is transferred upon delivery to the customer. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods and services. Our revenue is derived from two sources, the first is from the sale of the rights to our players to third parties and second from participation and prize money awarded at gaming tournaments. |
Deferred Revenues | Deferred Revenues Deferred revenues are classified as current or long-term based on when management estimates the revenues will be recognized. The Company receives payments from franchisees in advance of all performance obligations having been met, including but not limited to franchise locations being opened. As certain conditions agreed to in these franchise agreements are performed, revenues are recognized. Deferred costs include commissions paid to brokers related to the sale of specific new franchises which have not met revenue recognition criteria as of November 30, 2019. These costs are recognized in the same period as the initial franchise fee revenue is recognized. | |
Accounts Receivable | Accounts Receivable The Company estimates the allowance for doubtful accounts based on an analysis of specific customers (i.e. franchisees), taking into consideration the age of past due accounts and an assessment of the customer’s ability to pay. Accounts receivable are written off against the allowance when management determines it is probable the receivable is worthless. Customer account balances with invoices dated over 90 days old are considered delinquent and considered in the allowance assessment. The Company performs credit evaluations of its customers and, generally, requires no collateral. Management believes that all accounts receivable are collectible; therefore, no allowance for doubtful accounts has been recorded. | |
Property and Equipment | Property and equipment Property and equipment and leasehold improvements are recorded at its historical cost. The cost of property and equipment is depreciated over the estimated useful lives, when placed in service, (ranging from 3 -5 years) of the related assets utilizing the straight-line method of depreciation. The cost of leasehold improvements is depreciated (amortized) over the lesser of the length of the related leases or the estimated useful lives of the assets. Ordinary repairs and maintenance are expensed when incurred and major repairs will be capitalized and expensed if it benefits future periods. | Property and equipment Property and equipment and leasehold improvements are recorded at its historical cost. The cost of property and equipment is depreciated over the estimated useful lives, when placed in service, (ranging from 3 -5 years) of the related assets utilizing the straight-line method of depreciation. The cost of leasehold improvements is depreciated (amortized) over the lesser of the length of the related leases or the estimated useful lives of the assets. Ordinary repairs and maintenance are expensed when incurred and major repairs will be capitalized and expensed if it benefits future periods. |
Intangible Assets and Impairment | Intangible Assets and impairment Intangible assets that are subject to amortization are reviewed for potential impairment whenever events or circumstances indicate that carrying amounts may not be recoverable. Assets not subject to amortization are tested for impairment at least annually. The Company has intangible assets subject to amortization related to its acquisition of Simplicity Esports, LLC and PLAYlive Nation, Inc. These costs are included in intangible assets on our consolidated balance sheet and amortized on a straight-line basis when placed into service over their estimated useful lives of the costs, which is 3 to 5 years. The Company periodically reviews its intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less that the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. | Intangible Assets and impairment Intangible assets that are subject to amortization are reviewed for potential impairment whenever events or circumstances indicate that carrying amounts may not be recoverable. Assets not subject to amortization are tested for impairment at least annually. The Company had intangible assets subject to amortization related to its acquisition of Simplicity Esports, LLC. These costs were included in intangible assets on our balance sheet and amortized on a straight-line basis when placed into service over the estimated useful lives of the costs, which is 3 to 5 years. The Company periodically reviews its intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less that the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. |
Goodwill | Goodwill Goodwill is the excess of our purchase cost over the fair value of the net assets of acquired businesses. We do not amortize goodwill, but we assess our goodwill for impairment at least annually. Our assessment date was January 31, 2019 and qualitative considerations indicated no impairment. | Goodwill Goodwill is the excess of our purchase cost over the fair value of the net assets of acquired businesses. We do not amortize goodwill, but we assess our goodwill for impairment at least annually. Our assessment date was January 31, 2019 and qualitative considerations indicated no impairment. |
Franchise Locations | Franchise Locations Through PLAYlive, the Company’s wholly owned subsidiary the Company has entered into franchise agreements with third parties. As of November 30, 2019, approximately 47 locations were open and operating, in various states including Arizona, California, Idaho, Florida, Maryland, Michigan, Mississippi, Montana, Oregon, South Carolina, Texas, Utah and Washington. | |
Stock-based Compensation | Stock-based compensation The Company records stock-based compensation in accordance with ASC 718, Compensation – Stock Compensation Equity-Based Payments to Non-Employees | Stock-based compensation The Company records stock-based compensation in accordance with ASC 718, Compensation – Stock Compensation Equity-Based Payments to Non-Employees |
Restricted Cash Held in Escrow and Common Stock Redemption Obligations | Restricted Cash Held in Escrow and Common Stock Redemption Obligations This amount is held in escrow with respect to a certain stock purchase agreement with Polar Asset Management Partners Inc. (“Polar”), pursuant to which Polar agreed to sell up to 490,000 shares of the Company’s common stock to the Company thirty days after the consummation of the transactions and a separate certain stock purchase agreement with the K2 Principal Fund L.P. (“K2”), pursuant to which K2 agreed to sell up to 220,000 shares of the Company’s common stock to the Company thirty days after the consummation of the Transactions. These purchase agreements were subsequently amended as of December 20, 2018, pursuant to which, among other things, the Company distributed to Polar and K2 an aggregate of $5,133,300 out of the escrow. See below “Amendments to Forward Purchase Agreements and Warrants,” for a more detailed description of the amendment. Under the terms of the purchase agreements, as amended, the Company will use the funds held in escrow to pay for such shares; however, the Company is only required to repurchase shares that were not previously sold by Polar and K2. Therefore, if the investors had already sold such shares by the determination date, then the Company would be able to keep a portion of the remaining funds held in escrow, depending on the prices at which the shares were sold by the investors. All shares were redeemed during the year, see statement of changes in stockholders’ equity. | |
Amendments to Forward Purchase Agreements and Warrants | Amendments to Forward Purchase Agreements and Warrants On December 20, 2018, the Company, Polar, K2 and the Escrow Agent, entered into an Amendment (the “Amendment”), pursuant to which, among other things, the stock purchase agreements with Polar and K2 were amended to (x) reduce the purchase price per share payable by the Company at the closing of the Stock Sales from $11.23 per share to (1) first $6.00 per share up to 20% of the original number of Shares (as defined in the respective Purchase Agreement), (2) then $5.00 per remaining share up to 20% of the original number of Shares, (3) then $4.00 per remaining share up to 20% of the original number of Shares, (4) then $3.00 per remaining Share up to 20% of the original number of Shares, and (5) then $2.00 per remaining Share up to 20% of the original number of Shares, (y) to extend the outside date of the closing of the Stock Sales until January 18, 2019, and (z) to authorize the issuance of $3,542,700 and $1,590,600 from the Escrow Account to Polar and K2, respectively, as partial payment for the Shares prior to the final closing of the Stock Sales. | |
Investments | Investments Investments in non-consolidated entities are accounted for using the equity method or cost basis depending upon the level of ownership and/or the Company’s ability to exercise significant influence over the operating and financial policies of the investee. When the equity method is used, investments are recorded at original cost and adjusted periodically to recognize the Company’s proportionate share of the investees’ net income or losses after the date of investment. When net losses from an investment accounted for under the equity method exceed its carrying amount, the investment balance is reduced to zero and additional losses are not provided for. The Company resumes accounting for the investment under the equity method if the entity subsequently reports net income and the Company’s share of that net income exceeds the share of net losses not recognized during the period the equity method was suspended. Investments are written down only when there is clear evidence that a decline in value that is other than temporary has occurred. Investments in equity securities that do not have readily determinable fair values and do not qualify for consolidation or the equity method are carried at cost. Dividends received from those companies are included in other income. Dividends received in excess of the Company’s proportionate share of accumulated earnings are applied as a reduction of the cost of the investment. Other than temporary impairments to fair value are charged against current period income. Our investments in privately held entities are accounted for under the cost method. During the quarter ended February 28, 2019 the Company recognized $150,000 of impairment expense related to the Smaaash acquisition. | |
Leases | Leases In February 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-02-Leases (Topic 842), which significantly amends the way companies are required to account for leases. Under the updated leasing guidance, some leases that did not have to be reported previously are now required to be presented as an asset and liability on the balance sheet. In addition, for certain leases, what was previously classified as an operating expense must now be allocated between amortization expense and interest expense. The Company adopted this update as of January l, 2019 using the modified retrospective transition method and prior periods have not been restated. Upon implementation, the Company recognized an initial operating lease right-of-use asset of $110,003 and operating lease liability of $107,678. Due to the simplistic nature of the Company’s leases, no retained earnings adjustment was required. See Note 8 for further details | Leases In February of 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2016-02-Leases (Topic 842), which significantly amends the way companies are required to account for leases. Under the updated leasing guidance, some leases that did not have to be reported previously are now required to be presented as an asset and liability on the balance sheet. In addition, for certain leases, what was previously classified as an operating expense must now be allocated between amortization expense and interest expense. The Company adopted this update as of January l 2019 using the modified retrospective transition method and prior periods have not been restated. Upon implementation, the Company recognized an initial operating lease right-of-use asset of $110,003 and operating lease liability of $107,678. Due to the simplistic nature of the Company’s leases, no retained earnings adjustment was required. See Note 8 for further details |
Offering Costs | Offering Costs The Company complies with the requirements of ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (SAB) Topic 5A — “Expenses of Offering”. Offering costs of approximately $3,728,000 consisting principally of underwriter discounts of $3,250,000 (including approximately $1,800,000 of which payment was deferred until the Company issued the underwriter a secured demand promissory note in the amount of $1,800,000) and approximately $478,000 of professional, printing, filing, regulatory and other costs have been charged to additional paid in capital upon completion of the Initial Public Offering. | |
Common Stock Subject to Possible Redemption | Common stock subject to possible redemption The Company accounts for its common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “ Distinguishing Liabilities from Equity | |
Basic Income (Loss) Per Share | Basic Income (Loss) per share The Company complies with accounting and disclosure requirements ASC Topic 260, “Earnings Per Share.” Basic income (loss) per share is calculated by dividing the Company’s net loss by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated by dividing the Company’s net income (loss) by the diluted weighted average number of shares outstanding during the period. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. At November 30, 2019, the Company had a convertible note and common stock warrants that could be converted into approximately, 6,924,000 common shares. These are not presented in the consolidated statements of operations as the effect of these shares is anti- dilutive. | Basic Income (Loss) per share The Company complies with accounting and disclosure requirements ASC Topic 260, “Earnings Per Share.” Net income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding for the period. Shares of common stock subject to possible redemption at May 31, 2018 have been excluded from the calculation of basic income (loss) per share and diluted loss per share for the year ended May 31, 2018 since such shares, if redeemed, only participate in their pro rata share of the Trust Account earnings. The Company has not considered the effect of (1) warrants sold in the Initial Public Offering and Private Placement to purchase shares of common stock (2) rights sold in the Initial Public Offering and Private Placement that convert into shares of common stock, and (3) the unit purchase option granted to the underwriter in the calculation of diluted income (loss) per share, for the year ended May 31, 2018, since the exercise of the warrants and the conversion of the rights into shares of common stock is contingent upon the occurrence of future events. At May 31, 2019 the Company had a convertible note, and warrants that could be converted into approximately, 6,942,000 common shares. These are not presented in the consolidated statements of operations as the effect of these shares is anti- dilutive. |
Income Taxes | Income Taxes The Company complies with the accounting and reporting requirements of ASC Topic 740, “ Income Taxes ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. On December 22, 2017, the U.S. Tax Cuts and Jobs Act of 2017 (“Tax Reform”) was signed into law. As a result of Tax Reform, the U.S. statutory tax rate was lowered from 35% to 21% effective January 1, 2018, among other changes. ASC Topic 740 requires companies to recognize the effect of tax law changes in the period of enactment; therefore, the Company was required to revalue its deferred tax assets and liabilities at the new rate. The SEC issued Staff Accounting Bulletin No. 118 (“SAB 118”) to address the application of GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain tax effects of Tax Reform. The ultimate impact may differ from this provisional amount, possibly materially, as a result of additional analysis, changes in interpretations and assumptions the Company has made, additional regulatory guidance that may be issued, and actions the Company may take as a result of Tax Reform. | Income Taxes The Company complies with the accounting and reporting requirements of ASC Topic 740, “ Income Taxes ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statements recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. On December 22, 2017, the U.S. Tax Cuts and Jobs Act of 2017 (“Tax Reform”) was signed into law. As a result of Tax Reform, the U.S. statutory tax rate was lowered from 35% to 21% effective January 1, 2018, among other changes. ASC Topic 740 requires companies to recognize the effect of tax law changes in the period of enactment; therefore, the Company was required to revalue its deferred tax assets and liabilities at the new rate. The SEC issued Staff Accounting Bulletin No. 118 (“SAB 118”) to address the application of GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain tax effects of Tax Reform. The ultimate impact may differ from this provisional amount, possibly materially, as a result of additional analysis, changes in interpretations and assumptions the Company has made, additional regulatory guidance that may be issued, and actions the Company may take as a result of Tax Reform. |
Recently Issued and Recently Adopted Accounting Pronouncements | Recently Issued and Recently Adopted Accounting Pronouncements Accounting standards promulgated by the FASB are subject to change. Changes in such standards may have an impact on the Company’s future financial statements. The following are a summary of recent accounting developments. In June 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting Subtopic 505-50, Equity—Equity-Based Payments to Non-Employees. The Company periodically reviews new accounting standards that are issued. Although some of these accounting standards may be applicable to the Company, the Company has not identified any other new standards that it believes merit further discussion, and the Company expects that none would have a significant impact on its financial statements. | Recent Accounting Pronouncements Accounting standards promulgated by the FASB are subject to change. Changes in such standards may have an impact on the Company’s future financial statements. The following are a summary of recent accounting developments. In June 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting Subtopic 505-50, Equity—Equity-Based Payments to Non-Employees. The Company periodically reviews new accounting standards that are issued. Although some of these accounting standards may be applicable to the Company, the Company has not identified any other new standards that it believes merit further discussion, and the Company expects that none would have a significant impact on its financial statements. |
Going Concern, Liquidity and Management's Plan | Going Concern, Liquidity and Management’s Plan The Company’s consolidated financial statements have been prepared assuming that it will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. As reflected in the consolidated financial statements, the Company has an accumulated deficit at November 30, 2019, a net loss and net cash used in operating activities for the reporting period then ended. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company has commenced operations and has begun to generate revenue; however, the Company’s cash position may not be sufficient to support the Company’s daily operations. Management intends to raise additional funds by way of a private or public offering. While the Company believes in the viability of its strategy to commence operations and generate sufficient revenue and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate sufficient revenue and its ability to raise additional funds by way of a public or private offering. The financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. | Going Concern The Company’s consolidated financial statements have been prepared assuming that it will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. As reflected in the consolidated financial statements, the Company has an accumulated deficit at May 31, 2019, a net loss and net cash used in operating activities for the reporting period then ended. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company is attempting to commence operations and generate sufficient revenue; however, the Company’s cash position may not be sufficient to support the Company’s daily operations. Management intends to raise additional funds by way of a private or public offering. While the Company believes in the viability of its strategy to commence operations and generate sufficient revenue and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate sufficient revenue and its ability to raise additional funds by way of a public or private offering. The financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 6 Months Ended | 12 Months Ended |
Nov. 30, 2019 | May 31, 2019 | |
Property, Plant and Equipment [Abstract] | ||
Schedule of Property, Plant and Equipment | The following is a summary of property, plant, and equipment—at cost, less accumulated depreciation: November 30, 2019 Leasehold improvements 52,189 Property and equipment 236,147 Total cost 288,336 Less accumulated depreciation (26,431 ) Net, property plant and equipment $ 261,905 | The following is a summary of property, plant, and equipment—at cost, less accumulated depreciation: May 31, Leasehold improvements 14,818 Property and equipment 107,711 Total cost 122,529 Less accumulated depreciation (5,298 ) Net, property plant and equipment $ 117,231 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 6 Months Ended | 12 Months Ended |
Nov. 30, 2019 | May 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Schedule of Intangible Assets | The following tables set forth the intangible assets, including accumulated amortization as of November 30, 2019: November 30, 2019 Remaining Accumulated Net Carrying Useful Life Cost Amortization Value Non-Competes 4 years $ 1,023,118 $ 187,572 $ 835,546 Trademarks Indefinite 588,000 - 588,000 Internet domain 2 years 3,000 917 2,083 $ 1,614,118 $ 188,489 $ 1,425,629 | The following tables set forth the intangible assets, including accumulated amortization as of May 31, 2019: May 31, 2019 Remaining Accumulated Net Carrying Useful Life Cost Amortization Value Non-Competes 4.50 years $ 1,023,118 $ 85,260 $ 937,858 Trademarks Indefinite 588,000 - 588,000 Internet domain 2.50 years 3,000 417 2,583 $ 1,614,118 $ 85,677 $ 1,528,441 |
Schedule of Future Amortization of Intangible Assets | The following table sets forth the future amortization of the Company’s intangible assets at May 31, 2019: 2020 2021 2022 2023 2024 Thereafter Total Non-Competes $ 204,624 $ 204,624 $ 204,624 $ 204,624 $ 119,362 $ - $ 937,858 Internet domain 1,000 1,000 583 - - - 2,583 Total $ 205,624 $ 205,624 $ 205,207 $ 204,624 $ 119,362 $ - $ 940,441 |
Acquisitions (Tables)
Acquisitions (Tables) | 6 Months Ended | 12 Months Ended |
Nov. 30, 2019 | May 31, 2019 | |
Business Acquisition [Line Items] | ||
Schedule of Aggregate Purchase Price | The aggregate purchase price consisted of the following: Restricted stock consideration 6,090,000 Total $ 6,090,000 | |
Schedule of Estimated Fair Value of Assets Acquired and Liabilities | The following table summarizes the estimated fair value of The Simplicity Esports, LLC assets acquired and liabilities assumed at the date of acquisition: Cash 76,000 Internet Domain 3,000 Trade names and trademarks 588,000 Non-Competes 1,023,118 Accounts payable and accrued liabilities (56,000 ) Goodwill (provisional) 4,455,882 Total $ 6,090,000 | |
Schedule of Unaudited Pro Forma Information Below Presents the Consolidated Results Operations | The following unaudited pro forma information below presents the consolidated results operations data as if the acquisition of Simplicity Esports, LLC took place on June 1, 2017: Year Ended May 31, 2019 Year Ended May 31, 2018 Total Revenue $ 53,932 $ — Net (Loss) $ (3,767,067 ) $ (210,657 ) Basic Net Loss Per Share $ (1.06 ) $ 0.00 | |
Simplicity Esports, LLC Acquisition [Member] | ||
Business Acquisition [Line Items] | ||
Schedule of Aggregate Purchase Price | The aggregate purchase price consisted of the following: Restricted stock consideration 6,090,000 Total $ 6,090,000 | |
Schedule of Estimated Fair Value of Assets Acquired and Liabilities | The following table summarizes the estimated fair value of the Simplicity Esports, LLC assets acquired and liabilities assumed at the date of acquisition: Cash 76,000 Internet Domain 3,000 Trade names and trademarks 588,000 Non-Competes 1,023,118 Accounts payable and accrued liabilities (56,000 ) Goodwill 4,455,882 Total $ 6,090,000 | |
Schedule of Unaudited Pro Forma Information Below Presents the Consolidated Results Operations | The following unaudited pro forma information below presents the consolidated results operations data as if the acquisition of Simplicity Esports, LLC took place on June 1, 2018: Six Months Ended Total Revenue $ 16,000 Net Loss $ (3,180,000 ) Basic Net Loss Per Share $ (1.35 ) | |
PLAYlive Nations, Acquisition [Member] | ||
Business Acquisition [Line Items] | ||
Schedule of Aggregate Purchase Price | The aggregate purchase price consisted of the following: Restricted stock consideration 1,440,000 Total $ 1,440,000 | |
Schedule of Estimated Fair Value of Assets Acquired and Liabilities | The following table summarizes the estimated fair value of the PLAYlive assets acquired and liabilities assumed at the date of acquisition: Cash 26,000 Property, plant and equipment (provisional) 9,000 Net deferred revenue (provisional) (818,000 ) Customer relationships (provisional) - Accounts payable and accrued liabilities (4,000 ) Goodwill (provisional) 2,227,000 Total $ 1,440,000 | |
Schedule of Unaudited Pro Forma Information Below Presents the Consolidated Results Operations | The following unaudited pro forma information below presents the consolidated results operations data as if the acquisition of PLAYlive took place on June 1, 2018: Six Months Ended Six Months Ended Total Revenue $ 437,000 $ 350,000 Net Loss $ (890,000 ) $ (3,017,000 ) Basic Net Loss Per Share $ (0.12 ) $ (1.28 ) |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
May 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Lease Payments | The following is a schedule showing the future minimum lease payments under operating leases by years and the present value of the minimum payments as of May 31, 2019. 2020 $ 25,858 2021 $ 29,311 2022 $ 30,484 2023 $ 31,703 2024 $ 24,484 Total Operating Lease Obligations $ 141,840 Less: Amount representing interest $ (40,919 ) Present Value of minimum lease payments $ 100,921 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended | 12 Months Ended |
Nov. 30, 2019 | May 31, 2019 | |
Equity [Abstract] | ||
Schedule of Outstanding Stock Warrants | A summary of the status of the Company’s outstanding stock warrants for the six months ended November 30, 2019 is as follows: Number of Average Expiration Outstanding – May 31, 2019 6,424,000 10.38 Granted – November 30, 2019 - Outstanding – November 30, 2019 6,424.000 $ 10.38 May 2024 Warrants exercisable at November 30, 2019 6,424,000 | A summary of the status of the Company’s outstanding stock warrants for the years ended May 31, 2019 and 2018 is as follows: Number of Average Expiration Outstanding – May 31, 2017 - $ - Granted – August 2017 5,461,500 11.50 November 2023 Outstanding – May 31, 2018 5,461,500 11.50 Granted – May 31, 2019 962,500 4.00 May 2024 Outstanding – May 31, 2019 6,424.000 $ 10.38 Warrants exercisable at May 31, 2019 6,424,000 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
May 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Deferred Tax Assets | The components of the net deferred tax assets for the year ended May 31, 2019 and 2018 are as follows: Year ended May 31, 2019 Year ended May 31, 2018 Net Operating Loss $ 364,000 $ 2,000 Impairment of cost method investment 38,000 - Gross deferred tax asset 402,000 - Less: Valuation allowance (381,000 ) (2,000 ) Net deferred tax asset $ 21,000 $ - Deferred tax liabilities: Amortization of intangible assets (21,000 ) - Net deferred assets/liabilities - - |
Schedule of Reconciliation of Statutory Federal Income Tax Rate | The table below summarizes the reconciliation of our income tax provision computed at the federal statutory rate of 21% for the year ended May 31, 2019 and 28% for the year ended May 31, 2018 and the actual tax provisions for the year ended May 31, 2019 and 2018. 2019 2018 Expected provision (benefit) at statutory rate (21.0 )% (28.0 )% State taxes, net of federal tax benefit (4.4 )% (0 )% Change in federal rate - % 7 % Permanent differences-stock based compensation 15.0 - Increase in valuation allowance 10.4 % 21 % Total provision (benefit) for income taxes 0.0 % 0.0 % |
Trust Account and Fair Value _2
Trust Account and Fair Value Measurements (Tables) | 12 Months Ended |
May 31, 2019 | |
Trust Account And Fair Value Measurements | |
Schedule of Fair Value of Assets Measured on a Recurring Basis | The following table presents information about the Company’s assets that are measured at fair value on a recurring basis at November 30, 2018 and May 31, 2018, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value: Description Level May 31, 2019 May 31, 2018 Assets: Cash and marketable securities held in Trust Account 1 $ -0- $ 52,895,652 |
Segment and Related Informati_2
Segment and Related Information (Tables) | 6 Months Ended |
Nov. 30, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information | Summarized financial information concerning our reportable segments for the six months ended November 30, 2019 is shown in the following table: Revenues Net Depreciation Capital Goodwill Total Franchise royalties and license fees $ 247,000 $ (9,000 ) $ 2,000 $ - $ 2,226,000 $ 3,147,000 Company-owned stores 50,000 (142,000 ) 19,000 153,000 - 558,000 Esports revenue 23,000 (97,000 ) 103,000 3,000 4,456,000 5,890,000 Corporate - (607,000 ) - - - 569,000 Total $ 320,000 $ (855,000 ) $ 124,000 $ 156,000 $ 6,682,000 $ 10,164,000 |
Organization and Description _2
Organization and Description of Business (Details Narrative) (10-K) - USD ($) | Nov. 20, 2018 | Nov. 09, 2018 | Sep. 13, 2017 | Aug. 22, 2017 | Nov. 30, 2019 | Nov. 30, 2018 | May 31, 2019 | Aug. 21, 2018 | May 31, 2018 |
Proceeds from sale of private units | $ 50,000 | ||||||||
Cash held in trust account | $ 52,895,652 | ||||||||
Price per unit under Trust account | $ 0.058 | ||||||||
Deposit in trust account | $ 303,610 | ||||||||
Number of shares redeemed, value | $ (6,635,252) | ||||||||
Number of shares issued upon conversion of convertible securities | 520,000 | ||||||||
Chardan Capital Markets [Member] | Restricted Stock [Member] | |||||||||
Number of shares issued for services | 208,000 | ||||||||
Shares issued, price per share | $ 10.21 | ||||||||
Chardan Capital Markets [Member] | Restricted Stock [Member] | General and Administrative Expense [Member] | |||||||||
Number of shares issued for services, value | $ 2,125,000 | ||||||||
I-AM Capital Partners LLC (the "Sponsor") [Member] | |||||||||
Number of shares agreed to be purchased under commitment | 26,250 | ||||||||
Smaaash Entertainment Private Limited [Member] | |||||||||
Number of shares issued | 2,000,000 | ||||||||
Initial Public Offering [Member] | |||||||||
Proceeds from sale of units, net of underwriting discounts paid | $ 50,000,000 | ||||||||
Proceeds from sale of private units | 2,545,000 | ||||||||
Cash held in trust account | $ 50,750,000 | ||||||||
Number of shares purchased | 5,000,000 | 250,000 | 250,000 | ||||||
Sale of stock, price per unit | $ 10 | ||||||||
Number of common stock shares and warrants outstanding | 5,119,390 | ||||||||
Number of common stock shares eligible for outstanding warrants | 5,461,500 | 5,461,500 | |||||||
Initial Public Offering [Member] | I-AM Capital Partners LLC (the "Sponsor") [Member] | |||||||||
Sale of stock, price per unit | $ 10.2187363 | ||||||||
Number of shares redeemed | 4,448,260 | ||||||||
Number of shares redeemed, value | $ 45,455,596 | ||||||||
Initial Public Offering [Member] | Underwriters [Member] | |||||||||
Number of shares agreed to be purchased under commitment | 750,000 | ||||||||
Number of shares purchased | 200,000 | ||||||||
Proceeds from sale of equity | $ 2,000,000 | ||||||||
Over-Allotment Option [Member] | |||||||||
Price per unit under Trust account | $ 10.15 | ||||||||
Over-Allotment Option [Member] | Underwriter [Member] | |||||||||
Number of shares agreed to be purchased under commitment | 750,000 | ||||||||
Over-Allotment Option [Member] | Underwriters [Member] | |||||||||
Number of shares purchased | 200,000 | ||||||||
Sale of stock, price per unit | $ 10 | ||||||||
Proceeds from sale of equity | $ 2,000,000 | ||||||||
Private Placement [Member] | |||||||||
Proceeds from sale of private units | $ 2,545,000 | ||||||||
Number of shares purchased | 7,000 | 254,500 | |||||||
Sale of stock, price per unit | $ 10 | ||||||||
Proceeds from sale of equity | $ 70,000 | ||||||||
Number of common stock shares eligible for outstanding warrants | 962,500 | ||||||||
Private Placement [Member] | I-AM Capital Partners LLC (the "Sponsor") [Member] | |||||||||
Number of shares purchased | 7,000 | ||||||||
Sale of stock, price per unit | $ 10 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | Nov. 30, 2019 | Dec. 22, 2017 | Nov. 30, 2019 | May 31, 2019 | May 31, 2018 | Jan. 01, 2019 |
AccountingPoliciesLineItems [Line Items] | ||||||
Federal depository insurance coverage | $ 250,000 | $ 250,000 | $ 250,000 | |||
Franchise royalties and fees, description | The pre-opening services provided to franchisees do not contain separate and distinct performance obligations from the franchise right; thus, the fees collected will be amortized on a straight-line basis beginning at the store opening date through the term of the franchise agreement, which is typically 10 years. Franchise license renewal fees, which generally occur every 10 years, are billed before the renewal date. Fees received for future license renewal periods are amortized over the life of the renewal period. Commissary sales are comprised of food and supplies sold to franchised stores and are recognized as revenue upon shipment or delivery of the related products to the franchisees. Payments are generally due within 30 days. | |||||
Operating lease right-of-use asset | 225,322 | $ 225,322 | 100,146 | |||
Operating lease liability | $ 225,321 | $ 225,321 | $ 100,921 | |||
Number of shares issuable on conversion | 6,924,000 | |||||
Statutory tax rate description | The U.S. Tax Cuts and Jobs Act of 2017 ("Tax Reform") was signed into law. As a result of Tax Reform, the U.S. statutory tax rate was lowered from 35% to 21% effective January 1, 2018 | |||||
Statutory tax rate | 35.00% | 21.00% | 21.00% | 28.00% | ||
Accounting Standards Update 2016-02 [Member] | ||||||
AccountingPoliciesLineItems [Line Items] | ||||||
Operating lease right-of-use asset | $ 110,003 | |||||
Operating lease liability | $ 107,678 | |||||
Simplicity Happy Valley, LLC and Simplicity Redmond, LLC [Member] | ||||||
AccountingPoliciesLineItems [Line Items] | ||||||
Equity method investment, ownership percentage | 79.00% | 79.00% | ||||
Minimum [Member] | ||||||
AccountingPoliciesLineItems [Line Items] | ||||||
Property, plant and equipment, useful life | 3 years | 3 years | ||||
Finite lived intangible asset, useful life | 3 years | 3 years | ||||
Maximum [Member] | ||||||
AccountingPoliciesLineItems [Line Items] | ||||||
Property, plant and equipment, useful life | 5 years | 5 years | ||||
Finite lived intangible asset, useful life | 5 years | 5 years |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) (10-K) | Dec. 20, 2018USD ($) | Dec. 22, 2017 | Nov. 30, 2019USD ($) | May 31, 2019USD ($)Integer | May 31, 2018USD ($) | Jan. 01, 2019USD ($) | Nov. 30, 2018shares |
Federal depository insurance coverage | $ 250,000 | $ 250,000 | |||||
Operating lease right-of-use asset | 225,322 | 100,146 | |||||
Operating lease liability | $ 225,321 | 100,921 | |||||
Offering costs | 3,728,000 | ||||||
Underwriter discounts | 3,250,000 | ||||||
Deferred offering costs | 1,800,000 | ||||||
Professional, printing, filing, regulatory and other costs | $ 478,000 | ||||||
Number of shares issuable on conversion | Integer | 6,942,000 | ||||||
Statutory tax rate | 35.00% | 21.00% | 21.00% | 28.00% | |||
Secured Promissory Note [Member] | |||||||
Principal amount of debt instrument | $ 1,800,000 | ||||||
Accounting Standards Update 2016-02 [Member] | |||||||
Operating lease right-of-use asset | $ 110,003 | ||||||
Operating lease liability | $ 107,678 | ||||||
Smaaash Entertainment, Inc [Member] | |||||||
Impairment expense | $ 150,000 | ||||||
Stock Purchase Agreement [Member] | |||||||
Number of buy back shares, value | $ 5,133,300 | ||||||
Polar Asset Management Partners Inc. [Member] | Stock Purchase Agreement [Member] | |||||||
Number of buy back shares | shares | 490,000 | ||||||
K2 Principal Fund L.P. [Member] | Stock Purchase Agreement [Member] | |||||||
Number of buy back shares | shares | 220,000 | ||||||
Polar, K2 And Escrow Agent [Member] | Stock Purchase Agreement [Member] | |||||||
Description of amendment of payment terms | The Company at the closing of the Stock Sales from $11.23 per share to (1) first $6.00 per share up to 20% of the original number of Shares (as defined in the respective Purchase Agreement), (2) then $5.00 per remaining share up to 20% of the original number of Shares, (3) then $4.00 per remaining share up to 20% of the original number of Shares, (4) then $3.00 per remaining Share up to 20% of the original number of Shares, and (5) then $2.00 per remaining Share up to 20% of the original number of Shares, (y) to extend the outside date of the closing of the Stock Sales until January 18, 2019, and (z) to authorize the issuance of $3,542,700 and $1,590,600 from the Escrow Account to Polar and K2, respectively, as partial payment for the Shares prior to the final closing of the Stock Sales. | ||||||
Minimum [Member] | |||||||
Property, plant and equipment, useful life | 3 years | 3 years | |||||
Finite lived intangible asset, useful life | 3 years | 3 years | |||||
Maximum [Member] | |||||||
Property, plant and equipment, useful life | 5 years | 5 years | |||||
Finite lived intangible asset, useful life | 5 years | 5 years |
Initial Public Offering and P_2
Initial Public Offering and Private Placement (Details Narrative) (10-K) | Sep. 13, 2017USD ($)$ / sharesshares | Aug. 22, 2017USD ($)$ / sharesshares | Nov. 30, 2019USD ($)shares | Nov. 30, 2018USD ($) | May 31, 2019USD ($)Integer$ / sharesshares | Nov. 20, 2018USD ($)shares | May 31, 2018$ / shares |
Offering costs | $ 3,728,000 | ||||||
Deferred underwriting fees | 1,820,000 | ||||||
Amount of estimated fair value | $ 743,600 | ||||||
Fair value, per unit | $ / shares | $ 2.86 | ||||||
Proceeds from sale of private units | $ 50,000 | ||||||
Volatility rate [Member] | |||||||
Fair value measurement input | Integer | 35 | ||||||
Risk Free Interest Rate [Member] | |||||||
Fair value measurement input | Integer | 1.73 | ||||||
Expected Life [Member] | |||||||
Maturity term | 5 years | ||||||
Maxim Group LLC [Member] | Settlement Agreement [Member] | |||||||
Cash payment | $ 20,000 | ||||||
Maxim Group LLC [Member] | Settlement Agreement [Member] | Restricted Stock [Member] | |||||||
Number of shares removed | shares | 52,000 | ||||||
Initial Public Offering [Member] | |||||||
Number of shares purchased | shares | 5,000,000 | 250,000 | 250,000 | ||||
Sale of stock, price per unit | $ / shares | $ 10 | ||||||
Proceeds from sale of units, net of underwriting discounts paid | $ 50,000,000 | ||||||
Offering costs | 3,700,000 | ||||||
Underwriter fees | $ 3,200,000 | $ 1,000,000 | |||||
Issuance of shares to underwriter, shares | shares | 50,000 | ||||||
Securities included in one unit, description | Each Unit consisted of one share of the Company's common stock, one right to receive one-tenth of one share of the Company's common stock upon consummation of the Company's initial Business Combination ("Right"), and one redeemable warrant ("Warrant") | ||||||
Description of warrants rights | Each Warrant entitles the holder to purchase one share of common stock at an exercise price of $11.50 per share, subject to adjustment. No fractional shares will be issued upon exercise of the Warrants. The Warrants became exercisable 30 days after the completion of the initial Business Combination and will expire five years after the completion of the initial Business Combination or earlier upon redemption or liquidation | ||||||
Exercise price of warrants per share | $ / shares | $ 0.01 | $ 11.50 | $ 11.50 | ||||
Warrants term | 5 years | ||||||
Sale price per share | $ / shares | $ 21 | ||||||
Exchange of rights, description | Each holder of a Right received one-tenth (1/10) of one share of common stock upon consummation of the Business Combination. No fractional shares were issued upon exchange of the Rights. | ||||||
Number of units issued under purchase option | shares | 250,000 | ||||||
Sale of stock, consideration received | $ 100 | $ 100 | |||||
Proceeds from sale of private units | $ 2,545,000 | ||||||
Demand registration rights term | 5 years | ||||||
Piggy back registration rights term | 7 years | ||||||
Initial Public Offering [Member] | Maxim Group LLC [Member] | |||||||
Number of shares purchased | shares | 52,000 | ||||||
Initial Public Offering [Member] | Underwriters [Member] | |||||||
Number of shares purchased | shares | 200,000 | ||||||
Underwriter fees | $ 110,000 | ||||||
Deferred underwriting fees | 70,000 | ||||||
Number of shares agreed to be purchased under commitment | shares | 750,000 | ||||||
Proceeds from sale of equity | $ 2,000,000 | ||||||
Initial Public Offering [Member] | Common Stock [Member] | |||||||
Number of securities eligible for each warrant | shares | 1 | ||||||
Exercise price of warrants per share | $ / shares | $ 11.50 | ||||||
Warrants term | 5 years | ||||||
Over-Allotment Option [Member] | Maxim Group LLC [Member] | |||||||
Number of shares purchased | shares | 2,000 | ||||||
Over-Allotment Option [Member] | Underwriters [Member] | |||||||
Number of shares purchased | shares | 200,000 | ||||||
Sale of stock, price per unit | $ / shares | $ 10 | ||||||
Proceeds from sale of equity | $ 2,000,000 | ||||||
Number of units issued under purchase option | shares | 260,000 | ||||||
Sale of stock, consideration received | $ 2,990,000 | $ 2,990,000 | |||||
Private Placement [Member] | |||||||
Number of shares purchased | shares | 7,000 | 254,500 | |||||
Sale of stock, price per unit | $ / shares | $ 10 | ||||||
Exercise price of warrants per share | $ / shares | $ 4 | ||||||
Warrants term | 5 years | ||||||
Proceeds from sale of equity | $ 70,000 | ||||||
Proceeds from sale of private units | $ 2,545,000 |
Property, Plant and Equipment_2
Property, Plant and Equipment (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Nov. 30, 2019 | Nov. 30, 2018 | May 31, 2019 | May 31, 2018 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 21,148 | $ 5,298 |
Property, Plant and Equipment_3
Property, Plant and Equipment (Details Narrative) (10-K) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Nov. 30, 2019 | Nov. 30, 2018 | May 31, 2019 | May 31, 2018 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 21,148 | $ 5,298 |
Property, Plant and Equipment -
Property, Plant and Equipment - Schedule of Property, Plant and Equipment (Details) - USD ($) | Nov. 30, 2019 | May 31, 2019 | May 31, 2018 |
Property, Plant and Equipment [Line Items] | |||
Total cost | $ 288,336 | $ 122,529 | |
Less accumulated depreciation | (26,431) | (5,298) | |
Net, property plant and equipment | 261,905 | $ 117,231 | |
Leasehold Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total cost | 52,189 | ||
Property and Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total cost | $ 236,147 |
Property, Plant and Equipment_4
Property, Plant and Equipment - Schedule of Property, Plant and Equipment (Details) (10-K) - USD ($) | Nov. 30, 2019 | May 31, 2019 | May 31, 2018 |
Property, Plant and Equipment [Abstract] | |||
Leasehold improvements | $ 14,818 | ||
Property and equipment | 107,711 | ||
Total cost | $ 288,336 | 122,529 | |
Less accumulated depreciation | (26,431) | (5,298) | |
Net, property plant and equipment | $ 261,905 | $ 117,231 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Nov. 30, 2019 | Nov. 30, 2018 | May 31, 2019 | May 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 102,812 | $ 85,677 |
Intangible Assets (Details Na_2
Intangible Assets (Details Narrative) (10-K) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Nov. 30, 2019 | Nov. 30, 2018 | May 31, 2019 | May 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 102,812 | $ 85,677 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) | 6 Months Ended | 12 Months Ended | |
Nov. 30, 2019 | May 31, 2019 | May 31, 2018 | |
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, Cost | $ 1,614,118 | $ 1,614,118 | |
Accumulated amortization | 188,489 | 85,677 | |
Intangible assets, Net Carrying Value | $ 1,425,629 | $ 1,528,441 | |
Non-Competes [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, useful life | 4 years | 4 years 6 months | |
Finite lived intangible assets, Cost | $ 1,023,118 | $ 1,023,118 | |
Accumulated amortization | 187,572 | 85,260 | |
Intangible assets, Net Carrying Value | $ 835,546 | $ 937,858 | |
Trademarks [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, useful life, description | Indefinite | Indefinite | |
Indefinite lived intangible assets, Cost | $ 588,000 | $ 588,000 | |
Accumulated amortization | |||
Intangible assets, Net Carrying Value | $ 588,000 | $ 588,000 | |
Internet Domain [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, useful life | 2 years | 2 years 6 months | |
Finite lived intangible assets, Cost | $ 3,000 | $ 3,000 | |
Accumulated amortization | 917 | 417 | |
Intangible assets, Net Carrying Value | $ 2,083 | $ 2,583 |
Intangible Assets - Schedule _2
Intangible Assets - Schedule of Intangible Assets (Details) (10-K) - USD ($) | 6 Months Ended | 12 Months Ended | |
Nov. 30, 2019 | May 31, 2019 | May 31, 2018 | |
Intangible assets, Cost | $ 1,614,118 | $ 1,614,118 | |
Accumulated amortization | 188,489 | 85,677 | |
Intangible assets, Net Carrying Value | $ 1,425,629 | $ 1,528,441 | |
Non-Competes [Member] | |||
Intangible assets, useful life | 4 years | 4 years 6 months | |
Finite lived intangible assets, Cost | $ 1,023,118 | $ 1,023,118 | |
Accumulated amortization | 187,572 | 85,260 | |
Intangible assets, Net Carrying Value | $ 835,546 | $ 937,858 | |
Trademarks [Member] | |||
Intangible assets, useful life, description | Indefinite | Indefinite | |
Indefinite lived intangible assets, Cost | $ 588,000 | $ 588,000 | |
Accumulated amortization | |||
Intangible assets, Net Carrying Value | $ 588,000 | $ 588,000 | |
Internet Domain [Member] | |||
Intangible assets, useful life | 2 years | 2 years 6 months | |
Finite lived intangible assets, Cost | $ 3,000 | $ 3,000 | |
Accumulated amortization | 917 | 417 | |
Intangible assets, Net Carrying Value | $ 2,083 | $ 2,583 |
Intangible Assets - Schedule _3
Intangible Assets - Schedule of Future Amortization of Intangible Assets (Details) (10-K) | May 31, 2019USD ($) |
2020 | $ 205,624 |
2021 | 205,624 |
2022 | 205,207 |
2023 | 204,624 |
2024 | 119,362 |
Thereafter | |
Total | 940,441 |
Non-Competes [Member] | |
2020 | 204,624 |
2021 | 204,624 |
2022 | 204,624 |
2023 | 204,624 |
2024 | 119,362 |
Thereafter | |
Total | 937,858 |
Internet Domain [Member] | |
2020 | 1,000 |
2021 | 1,000 |
2022 | 583 |
2023 | |
2024 | |
Thereafter | |
Total | $ 2,583 |
Acquisitions (Details Narrative
Acquisitions (Details Narrative) | Jul. 29, 2019shares | Jan. 07, 2019shares | Jan. 04, 2019shares | Mar. 31, 2019shares | Nov. 30, 2019USD ($)Integershares | May 31, 2019USD ($)shares |
The Simplicity Esports, LLC [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Number of share issued | shares | 700,000 | 300,000 | 2,000,000 | 2,000,000 | ||
Business combination, consideration | $ 6,090,000 | $ 6,090,000 | ||||
Revenue | 67,000 | 38,000 | ||||
Net income (loss) | 413,000 | $ 400,000 | ||||
PLAYLive Nation, Inc [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Number of share issued | shares | 750,000 | |||||
Business combination, consideration | $ 1,440,000 | |||||
Number of unique gamers | Integer | 150,000 | |||||
Revenue | $ 220,000 | |||||
Net income (loss) | $ 18,000 | |||||
Restricted Stock [Member] | The Simplicity Esports, LLC [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Number of share issued | shares | 3,000,000 | 3,000,000 | ||||
Business combination, consideration | $ 6,090,000 | $ 6,090,000 | ||||
Restricted Stock [Member] | PLAYLive Nation, Inc [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Number of share issued | shares | 750,000 | |||||
Business combination, consideration | $ 1,440,000 |
Acquisitions (Details Narrati_2
Acquisitions (Details Narrative) (10-K) - The Simplicity Esports, LLC [Member] - USD ($) | Jan. 07, 2019 | Jan. 04, 2019 | Mar. 31, 2019 | Nov. 30, 2019 | May 31, 2019 |
Number of share issued | 700,000 | 300,000 | 2,000,000 | 2,000,000 | |
Business combination, consideration | $ 6,090,000 | $ 6,090,000 | |||
Revenue | 67,000 | 38,000 | |||
Net loss | $ 413,000 | $ 400,000 | |||
Restricted Stock [Member] | |||||
Number of share issued | 3,000,000 | 3,000,000 | |||
Business combination, consideration | $ 6,090,000 | $ 6,090,000 |
Acquisitions - Schedule of Aggr
Acquisitions - Schedule of Aggregate Purchase Price (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Nov. 30, 2019 | May 31, 2019 | |
The Simplicity Esports, LLC [Member] | ||
Business Acquisition [Line Items] | ||
Total | $ 6,090,000 | $ 6,090,000 |
PLAYLive Nation, Inc [Member] | ||
Business Acquisition [Line Items] | ||
Total | 1,440,000 | |
Restricted Stock [Member] | The Simplicity Esports, LLC [Member] | ||
Business Acquisition [Line Items] | ||
Total | 6,090,000 | $ 6,090,000 |
Restricted Stock [Member] | PLAYLive Nation, Inc [Member] | ||
Business Acquisition [Line Items] | ||
Total | $ 1,440,000 |
Acquisitions - Schedule of Ag_2
Acquisitions - Schedule of Aggregate Purchase Price (Details) (10-K) - The Simplicity Esports, LLC [Member] - USD ($) | 6 Months Ended | 12 Months Ended |
Nov. 30, 2019 | May 31, 2019 | |
Total | $ 6,090,000 | $ 6,090,000 |
Restricted Stock [Member] | ||
Total | $ 6,090,000 | $ 6,090,000 |
Acquisitions - Schedule of Esti
Acquisitions - Schedule of Estimated Fair Value of Assets Acquired and Liabilities (Details) - USD ($) | Nov. 30, 2019 | May 31, 2019 | May 31, 2018 |
Business Acquisition [Line Items] | |||
Goodwill (provisional) | $ 6,682,416 | $ 4,456,250 | |
The Simplicity Esports, LLC [Member] | |||
Business Acquisition [Line Items] | |||
Cash | 76,000 | ||
Trade names and trademarks | 588,000 | ||
Accounts payable and accrued liabilities | (56,000) | ||
Goodwill (provisional) | 4,455,882 | ||
Total | 6,090,000 | ||
The Simplicity Esports, LLC [Member] | Internet Domain [Member] | |||
Business Acquisition [Line Items] | |||
Finite lived intangible assets | 3,000 | ||
The Simplicity Esports, LLC [Member] | Non-Competes [Member] | |||
Business Acquisition [Line Items] | |||
Finite lived intangible assets | 1,023,118 | ||
PLAYLive Nation, Inc [Member] | |||
Business Acquisition [Line Items] | |||
Cash | 26,000 | ||
Property, plant and equipment (provisional) | 9,000 | ||
Net deferred revenue (provisional) | (818,000) | ||
Customer relationships (provisional) | |||
Accounts payable and accrued liabilities | (4,000) | ||
Goodwill (provisional) | 2,227,000 | ||
Total | $ 1,440,000 |
Acquisitions - Schedule of Es_2
Acquisitions - Schedule of Estimated Fair Value of Assets Acquired and Liabilities (Details) (10-K) - USD ($) | Nov. 30, 2019 | May 31, 2019 | May 31, 2018 |
Goodwill (provisional) | $ 6,682,416 | $ 4,456,250 | |
The Simplicity Esports, LLC [Member] | |||
Cash | 76,000 | ||
Trade names and trademarks | 588,000 | ||
Accounts payable and accrued liabilities | (56,000) | ||
Goodwill (provisional) | 4,455,882 | ||
Total | 6,090,000 | ||
The Simplicity Esports, LLC [Member] | Internet Domain [Member] | |||
Finite lived intangible assets | 3,000 | ||
The Simplicity Esports, LLC [Member] | Non-Competes [Member] | |||
Finite lived intangible assets | $ 1,023,118 | ||
The Simplicity Esports, LLC [Member] | Nonrecurring [Member] | Level 3 [Member] | |||
Cash | 76,000 | ||
Trade names and trademarks | 588,000 | ||
Accounts payable and accrued liabilities | (56,000) | ||
Goodwill (provisional) | 4,455,882 | ||
Total | 6,090,000 | ||
The Simplicity Esports, LLC [Member] | Nonrecurring [Member] | Level 3 [Member] | Internet Domain [Member] | |||
Finite lived intangible assets | 3,000 | ||
The Simplicity Esports, LLC [Member] | Nonrecurring [Member] | Level 3 [Member] | Non-Competes [Member] | |||
Finite lived intangible assets | $ 1,023,118 |
Acquisitions - Schedule of Unau
Acquisitions - Schedule of Unaudited Pro Forma Information Below Presents the Consolidated Results Operations (Details) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Nov. 30, 2019 | Nov. 30, 2018 | May 31, 2019 | May 31, 2018 | |
The Simplicity Esports, LLC [Member] | ||||
Business Acquisition [Line Items] | ||||
Total Revenue | $ 16,000 | $ 53,932 | ||
Net Loss | $ (3,180,000) | $ (3,767,067) | $ (210,657) | |
Basic Net Loss Per Share | $ (1.35) | $ (1.06) | $ 0 | |
PLAYLive Nation, Inc [Member] | ||||
Business Acquisition [Line Items] | ||||
Total Revenue | $ 437,000 | $ 350,000 | ||
Net Loss | $ (890,000) | $ (3,017,000) | ||
Basic Net Loss Per Share | $ (0.12) | $ (1.28) |
Acquisitions - Schedule of Un_2
Acquisitions - Schedule of Unaudited Pro Forma Information Below Presents the Consolidated Results Operations (Details) (10-K) - The Simplicity Esports, LLC [Member] - USD ($) | 6 Months Ended | 12 Months Ended | |
Nov. 30, 2018 | May 31, 2019 | May 31, 2018 | |
Total Revenue | $ 16,000 | $ 53,932 | |
Net (Loss) | $ (3,180,000) | $ (3,767,067) | $ (210,657) |
Basic Net Loss Per Share | $ (1.35) | $ (1.06) | $ 0 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Nov. 30, 2019 | Nov. 30, 2018 | May 31, 2019 | May 31, 2018 | |
Related Party Transaction [Line Items] | ||||
Repayment of loan | $ 120,089 | |||
Loan payable - Related party | 93,761 | $ 81,618 | ||
Imputed interest | 8,523 | |||
Company owed | 13,342 | |||
Sponsor [Member] | ||||
Related Party Transaction [Line Items] | ||||
Amount of loan for Initial Public Offering and working capital purposes | $ 201,707 | |||
Debt maturity date | Dec. 31, 2017 | |||
Repayment of loan | $ 120,089 | |||
Former PLAYlive Owners [Member] | ||||
Related Party Transaction [Line Items] | ||||
Company owed | $ 13,342 |
Related Party Transactions (D_2
Related Party Transactions (Details Narrative) (10-K) - USD ($) | Sep. 13, 2017 | Nov. 30, 2019 | Nov. 30, 2018 | Nov. 30, 2019 | Nov. 30, 2018 | May 31, 2019 | May 31, 2018 | Aug. 31, 2018 | May 31, 2017 |
Proceeds from sale of Private Units | $ 50,000 | ||||||||
General and administrative expense | $ 819,305 | $ 3,139,567 | 1,258,257 | $ 3,381,602 | $ 4,353,189 | $ 530,564 | |||
Repayment of loan | 120,089 | ||||||||
Loan payable - Related party | $ 93,761 | $ 81,618 | |||||||
Private Placement [Member] | |||||||||
Sale of stock, price per share | $ 10 | ||||||||
Number of shares purchased | 7,000 | 254,500 | |||||||
Proceeds from sale of Private Units | $ 2,545,000 | ||||||||
Common Stock [Member] | |||||||||
Shares issued | 7,858,975 | 5,119,390 | 7,858,975 | 5,119,390 | 7,003,975 | 2,252,743 | 2,253,168 | 1,437,500 | |
Number of shares forfeiture | (4,560,757) | ||||||||
I-AM Capital Partners LLC (the "Sponsor") [Member] | |||||||||
Number of shares forfeiture | 137,500 | ||||||||
Description of exception on shares | (i) the Founder Shares and the shares of common stock underlying the Private Units are subject to certain transfer restrictions, and (ii) the Sponsor has entered into a letter agreement, pursuant to which it has agreed (A) to waive its redemption rights with respect to the Founder Shares, and the shares of common stock underlying the Private Units and the Public Units in connection with the completion of a Business Combination and (B) to waive its rights to liquidating distributions from the Trust Account with respect to the Founder Shares and the shares of common stock underlying the Private Units if the Company fails to complete a Business Combination within 12 months from the closing of the Initial Public Offering (or up to 21 months from the closing of the Initial Public Offering if the Company extends the period of time to consummate a Business Combination). | ||||||||
Number of shares agreed to be purchased under commitment | 26,250 | ||||||||
Monthly fees for office space, utilities and secretarial and administrative support | $ 10,000 | ||||||||
General and administrative expense | $ 30,080 | ||||||||
Amount of loan for Initial Public Offering and working capital purposes | $ 201,707 | ||||||||
Debt maturity date | Dec. 31, 2017 | ||||||||
Repayment of loan | $ 120,089 | ||||||||
I-AM Capital Partners LLC (the "Sponsor") [Member] | Private Placement [Member] | |||||||||
Sale of stock, price per share | $ 10 | ||||||||
Number of shares purchased | 7,000 | ||||||||
I-AM Capital Partners LLC (the "Sponsor") [Member] | Common Stock [Member] | |||||||||
Shares issued | 1,437,500 | ||||||||
Stock issued for capital contribution | $ 25,000 | ||||||||
Sale of stock, price per share | $ 12 |
Commitments and Contingencies_2
Commitments and Contingencies (Details Narrative) | Dec. 31, 2018shares | Dec. 20, 2018USD ($)Integer$ / shares | Nov. 20, 2018USD ($) | Nov. 09, 2018shares | Sep. 13, 2017USD ($)$ / sharesshares | Aug. 22, 2017USD ($)$ / sharesshares | Feb. 28, 2019USD ($) | Nov. 30, 2019USD ($)$ / sharesshares | May 31, 2019USD ($)$ / sharesshares | Aug. 31, 2019 | May 31, 2018USD ($) |
Other Commitments [Line Items] | |||||||||||
Description of debt instrument priority terms | The Note was secured by a first priority security interest in all personal property and assets of the Company excluding the assets held in escrow with respect to (i) that certain stock purchase agreement with Polar, pursuant to which Polar agreed to sell up to 490,000 shares of the Company's common stock to the Company thirty days after the consummation of the Business Combination and (ii) that certain stock purchase agreement with K2, pursuant to which K2 agreed to sell up to 220,000 shares of the Company's common stock to the Company thirty days after the consummation of the Business Combination. | The Note was secured by a first priority security interest in all personal property and assets of the Company excluding the assets held in escrow with respect to (i) that certain stock purchase agreement with Polar, pursuant to which Polar agreed to sell up to 490,000 shares of the Company's common stock to the Company thirty days after the consummation of the Business Combination and (ii) that certain stock purchase agreement with K2, pursuant to which K2 agreed to sell up to 220,000 shares of the Company's common stock to the Company thirty days after the consummation of the Business Combination. | |||||||||
Number of shares agreed to sell | shares | 490,000 | ||||||||||
Number of conversion of shares | shares | 520,000 | ||||||||||
Weighted average discount rate | 10.00% | 12.00% | 12.00% | ||||||||
Weighted average remaining lease term | 56 months | 56 months | |||||||||
Operating lease right-of-use assets | $ 225,322 | $ 100,146 | |||||||||
Operating lease liabilities | 225,321 | 100,921 | |||||||||
Cash paid for measurement of lease liabilities | 16,000 | 7,000 | |||||||||
Operating lease expense | $ 32,000 | $ 10,000 | |||||||||
Polar Asset Management Partners Inc. [Member] | |||||||||||
Other Commitments [Line Items] | |||||||||||
Number of shares agreed to sell | shares | 490,000 | ||||||||||
K2 Principal Fund L.P. [Member] | |||||||||||
Other Commitments [Line Items] | |||||||||||
Number of shares agreed to sell | shares | 220,000 | 220,000 | |||||||||
Maxim Group LLC [Member] | Securities Exchange Agreement [Member] | |||||||||||
Other Commitments [Line Items] | |||||||||||
Debt forgiveness income | $ 300,000 | $ 300,000 | |||||||||
Secured Demand Promissory Note [Member] | |||||||||||
Other Commitments [Line Items] | |||||||||||
Underwriter fees | $ 20,000 | ||||||||||
Principal amount of debt instrument | $ 1,800,000 | ||||||||||
Accrued interest rate of debt instrument | 125.00% | ||||||||||
Secured Demand Promissory Note [Member] | May 20, 2019 [Member] | |||||||||||
Other Commitments [Line Items] | |||||||||||
Accrued interest rate of debt instrument | 8.00% | ||||||||||
Secured Demand Promissory Note [Member] | May 21, 2019 Through August 20, 2019 [Member] | |||||||||||
Other Commitments [Line Items] | |||||||||||
Accrued interest rate of debt instrument | 12.00% | ||||||||||
Secured Demand Promissory Note [Member] | August 21, 2019, through November 20, 2019 [Member] | |||||||||||
Other Commitments [Line Items] | |||||||||||
Accrued interest rate of debt instrument | 15.00% | ||||||||||
Secured Demand Promissory Note [Member] | August 20, 2019 [Member] | |||||||||||
Other Commitments [Line Items] | |||||||||||
Interest rate for debt default | 12.00% | ||||||||||
Secured Demand Promissory Note [Member] | After August 21, 2019 [Member] | |||||||||||
Other Commitments [Line Items] | |||||||||||
Accrued interest rate of debt instrument | 18.00% | ||||||||||
Series A-1 Exchange Convertible Note [Member] | |||||||||||
Other Commitments [Line Items] | |||||||||||
Number of conversion of shares | shares | 193,648 | ||||||||||
Series A-1 Exchange Convertible Note [Member] | Maxim Group LLC [Member] | Securities Exchange Agreement [Member] | |||||||||||
Other Commitments [Line Items] | |||||||||||
Principal amount of convertible securities | $ 500,000 | ||||||||||
Interest rate of convertible securities | 2.67% | ||||||||||
Maturity date of convertible securities | Jun. 20, 2020 | ||||||||||
Frequency of periodic payment | Payable quarterly | ||||||||||
Description of payment terms | The Company may pay the interest in cash or at its sole discretion, in shares of its common stock or a combination of cash and common stock. However, the Company may only pay the interest in shares of its common stock if (i) all the equity conditions specified in the note ("Equity Conditions") have been met (unless waived by the Holder in writing) during the 20 trading days immediately prior to the interest payment date ("Interest Notice Period"), (ii) the Company has provided proper notice pursuant to the terms of the note and (iii) the Company has delivered to the Holder's account certain number of shares of its common stock to be applied against such interest payment prior to (but no more than five trading days before) the Interest Notice Period. | ||||||||||
Threshold trading days | Integer | 20 | ||||||||||
Conversion price | $ / shares | $ 1.93 | ||||||||||
Description of restrictive conversion terms | The Company is not permitted to convert any portion of the Series A-1 Note if doing so results in the Holder beneficially owning more than 4.99% of the outstanding common stock of the Company after giving effect to such conversion, provided that on 61 days' prior written notice from the Holder to the Company, that percentage may increase to 9.99%. | ||||||||||
Series A-2 Exchange Convertible Note [Member] | Maxim Group LLC [Member] | Securities Exchange Agreement [Member] | |||||||||||
Other Commitments [Line Items] | |||||||||||
Principal amount of convertible securities | $ 1,000,000 | ||||||||||
Maturity date of convertible securities | Jun. 20, 2020 | ||||||||||
Threshold trading days | Integer | 5 | ||||||||||
Conversion price | $ / shares | $ 1.93 | ||||||||||
Description of conversion terms | Automatically adjusted to the lower of (i) the conversion price then in effect and (ii) the greater of the arithmetic average of the VWAP of the Company's common stock in the five trading days prior to the notice of conversion and $0.50. | ||||||||||
Promissory Note [Member] | Maxim Group LLC [Member] | Securities Exchange Agreement [Member] | |||||||||||
Other Commitments [Line Items] | |||||||||||
Principal amount of debt instrument | $ 1,800,000 | 1,800,000 | |||||||||
Two Exchange Notes [Member] | Maxim Group LLC [Member] | Securities Exchange Agreement [Member] | |||||||||||
Other Commitments [Line Items] | |||||||||||
Debt forgiveness income | $ 1,500,000 | $ 1,500,000 | |||||||||
Underwriter [Member] | |||||||||||
Other Commitments [Line Items] | |||||||||||
Sale of stock, price per share | $ / shares | $ 13 | $ 13 | |||||||||
Initial Public Offering [Member] | |||||||||||
Other Commitments [Line Items] | |||||||||||
Market value of shares held | $ 15,000,000 | $ 15,000,000 | |||||||||
Number of shares purchased | shares | 5,000,000 | 250,000 | 250,000 | ||||||||
Aggregate exercise price of unit sold to underwriters | $ 100 | $ 100 | |||||||||
Options exercisable, per unit | 11.50 | ||||||||||
Sale of stock, price per share | $ / shares | $ 10 | ||||||||||
Underwriter fees | $ 3,200,000 | $ 1,000,000 | |||||||||
Weighted average discount rate | 12.00% | ||||||||||
Initial Public Offering [Member] | Maxim Group LLC [Member] | |||||||||||
Other Commitments [Line Items] | |||||||||||
Number of shares purchased | shares | 52,000 | ||||||||||
Initial Public Offering [Member] | Underwriters [Member] | |||||||||||
Other Commitments [Line Items] | |||||||||||
Number of shares purchased | shares | 200,000 | ||||||||||
Underwriter fees | $ 110,000 | ||||||||||
Over-Allotment Option [Member] | Maxim Group LLC [Member] | |||||||||||
Other Commitments [Line Items] | |||||||||||
Number of shares purchased | shares | 2,000 | ||||||||||
Over-Allotment Option [Member] | Underwriters [Member] | |||||||||||
Other Commitments [Line Items] | |||||||||||
Number of shares purchased | shares | 200,000 | ||||||||||
Aggregate exercise price of unit sold to underwriters | $ 2,990,000 | $ 2,990,000 | |||||||||
Sale of stock, price per share | $ / shares | $ 10 |
Commitments and Contingencies_3
Commitments and Contingencies (Details Narrative) (10-K) | Dec. 31, 2018shares | Dec. 20, 2018USD ($)Integer$ / shares | Nov. 20, 2018USD ($) | Nov. 09, 2018shares | Sep. 13, 2017USD ($)$ / sharesshares | Aug. 22, 2017USD ($)$ / sharesshares | Feb. 28, 2019USD ($) | Nov. 30, 2019USD ($)$ / sharesshares | May 31, 2019USD ($)$ / sharesshares | Aug. 31, 2019 | May 31, 2018USD ($)$ / shares |
Description of debt instrument priority terms | The Note was secured by a first priority security interest in all personal property and assets of the Company excluding the assets held in escrow with respect to (i) that certain stock purchase agreement with Polar, pursuant to which Polar agreed to sell up to 490,000 shares of the Company's common stock to the Company thirty days after the consummation of the Business Combination and (ii) that certain stock purchase agreement with K2, pursuant to which K2 agreed to sell up to 220,000 shares of the Company's common stock to the Company thirty days after the consummation of the Business Combination. | The Note was secured by a first priority security interest in all personal property and assets of the Company excluding the assets held in escrow with respect to (i) that certain stock purchase agreement with Polar, pursuant to which Polar agreed to sell up to 490,000 shares of the Company's common stock to the Company thirty days after the consummation of the Business Combination and (ii) that certain stock purchase agreement with K2, pursuant to which K2 agreed to sell up to 220,000 shares of the Company's common stock to the Company thirty days after the consummation of the Business Combination. | |||||||||
Number of shares agreed to sell | shares | 490,000 | ||||||||||
Number of conversion of shares | shares | 520,000 | ||||||||||
Weighted average discount rate | 10.00% | 12.00% | 12.00% | ||||||||
Weighted average remaining lease term | 56 months | 56 months | |||||||||
Operating lease right-of-use assets | $ 225,322 | $ 100,146 | |||||||||
Operating lease liabilities | 225,321 | 100,921 | |||||||||
Cash paid for measurement of lease liabilities | 16,000 | 7,000 | |||||||||
Operating lease expense | $ 32,000 | $ 10,000 | |||||||||
K2 Principal Fund L.P. [Member] | |||||||||||
Number of shares agreed to sell | shares | 220,000 | 220,000 | |||||||||
Maxim Group LLC [Member] | Securities Exchange Agreement [Member] | |||||||||||
Debt forgiveness income | $ 300,000 | $ 300,000 | |||||||||
Secured Demand Promissory Note [Member] | |||||||||||
Underwriter fees | $ 20,000 | ||||||||||
Principal amount of debt instrument | $ 1,800,000 | ||||||||||
Accrued interest rate of debt instrument | 125.00% | ||||||||||
Secured Demand Promissory Note [Member] | May 20, 2019 [Member] | |||||||||||
Accrued interest rate of debt instrument | 8.00% | ||||||||||
Secured Demand Promissory Note [Member] | May 21, 2019 Through August 20, 2019 [Member] | |||||||||||
Accrued interest rate of debt instrument | 12.00% | ||||||||||
Secured Demand Promissory Note [Member] | August 21, 2019, through November 20, 2019 [Member] | |||||||||||
Accrued interest rate of debt instrument | 15.00% | ||||||||||
Secured Demand Promissory Note [Member] | August 20, 2019 [Member] | |||||||||||
Interest rate for debt default | 12.00% | ||||||||||
Secured Demand Promissory Note [Member] | After August 21, 2019 [Member] | |||||||||||
Accrued interest rate of debt instrument | 18.00% | ||||||||||
Series A-1 Exchange Convertible Note [Member] | |||||||||||
Number of conversion of shares | shares | 193,648 | ||||||||||
Series A-1 Exchange Convertible Note [Member] | Maxim Group LLC [Member] | Securities Exchange Agreement [Member] | |||||||||||
Principal amount of convertible securities | $ 500,000 | ||||||||||
Interest rate of convertible securities | 2.67% | ||||||||||
Maturity date of convertible securities | Jun. 20, 2020 | ||||||||||
Frequency of periodic payment | Payable quarterly | ||||||||||
Description of payment terms | The Company may pay the interest in cash or at its sole discretion, in shares of its common stock or a combination of cash and common stock. However, the Company may only pay the interest in shares of its common stock if (i) all the equity conditions specified in the note ("Equity Conditions") have been met (unless waived by the Holder in writing) during the 20 trading days immediately prior to the interest payment date ("Interest Notice Period"), (ii) the Company has provided proper notice pursuant to the terms of the note and (iii) the Company has delivered to the Holder's account certain number of shares of its common stock to be applied against such interest payment prior to (but no more than five trading days before) the Interest Notice Period. | ||||||||||
Threshold trading days | Integer | 20 | ||||||||||
Conversion price | $ / shares | $ 1.93 | ||||||||||
Description of restrictive conversion terms | The Company is not permitted to convert any portion of the Series A-1 Note if doing so results in the Holder beneficially owning more than 4.99% of the outstanding common stock of the Company after giving effect to such conversion, provided that on 61 days' prior written notice from the Holder to the Company, that percentage may increase to 9.99%. | ||||||||||
Series A-2 Exchange Convertible Note [Member] | Maxim Group LLC [Member] | Securities Exchange Agreement [Member] | |||||||||||
Principal amount of convertible securities | $ 1,000,000 | ||||||||||
Maturity date of convertible securities | Jun. 20, 2020 | ||||||||||
Threshold trading days | Integer | 5 | ||||||||||
Conversion price | $ / shares | $ 1.93 | ||||||||||
Description of conversion terms | Automatically adjusted to the lower of (i) the conversion price then in effect and (ii) the greater of the arithmetic average of the VWAP of the Company's common stock in the five trading days prior to the notice of conversion and $0.50. | ||||||||||
Promissory Note [Member] | Maxim Group LLC [Member] | Securities Exchange Agreement [Member] | |||||||||||
Principal amount of debt instrument | $ 1,800,000 | 1,800,000 | |||||||||
Two Exchange Notes [Member] | Maxim Group LLC [Member] | Securities Exchange Agreement [Member] | |||||||||||
Debt forgiveness income | $ 1,500,000 | $ 1,500,000 | |||||||||
Underwriter [Member] | |||||||||||
Sale of stock, price per share | $ / shares | $ 13 | $ 13 | |||||||||
Initial Public Offering [Member] | |||||||||||
Market value of shares held | $ 15,000,000 | $ 15,000,000 | |||||||||
Number of shares purchased | shares | 5,000,000 | 250,000 | 250,000 | ||||||||
Aggregate exercise price of unit sold to underwriters | $ 100 | $ 100 | |||||||||
Exercise price of warrants | $ / shares | $ 0.01 | $ 11.50 | $ 11.50 | ||||||||
Sale of stock, price per share | $ / shares | $ 10 | ||||||||||
Underwriter fees | $ 3,200,000 | $ 1,000,000 | |||||||||
Weighted average discount rate | 12.00% | ||||||||||
Initial Public Offering [Member] | Maxim Group LLC [Member] | |||||||||||
Number of shares purchased | shares | 52,000 | ||||||||||
Initial Public Offering [Member] | Underwriters [Member] | |||||||||||
Number of shares purchased | shares | 200,000 | ||||||||||
Underwriter fees | $ 110,000 | ||||||||||
Over-Allotment Option [Member] | Maxim Group LLC [Member] | |||||||||||
Number of shares purchased | shares | 2,000 | ||||||||||
Over-Allotment Option [Member] | Underwriters [Member] | |||||||||||
Number of shares purchased | shares | 200,000 | ||||||||||
Aggregate exercise price of unit sold to underwriters | $ 2,990,000 | $ 2,990,000 | |||||||||
Sale of stock, price per share | $ / shares | $ 10 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Future Minimum Lease Payments (Details) (10-K) - USD ($) | Nov. 30, 2019 | May 31, 2019 |
Commitments and Contingencies Disclosure [Abstract] | ||
2020 | $ 25,858 | |
2021 | 29,311 | |
2022 | 30,484 | |
2023 | 31,703 | |
2024 | 24,484 | |
Total Operating Lease Obligations | 141,840 | |
Less: Amount representing interest | (40,919) | |
Present Value of minimum lease payments | $ 225,321 | $ 100,921 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | Mar. 27, 2019 | Sep. 13, 2017 | Aug. 22, 2017 | May 31, 2019 | Nov. 30, 2019 | Nov. 30, 2019 | May 31, 2019 | Aug. 31, 2019 | Nov. 09, 2018 | May 31, 2018 |
Class of Stock [Line Items] | ||||||||||
Common stock, authorized | 20,000,000 | 20,000,000 | 20,000,000 | 20,000,000 | 20,000,000 | |||||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||
Common stock holders rights | One vote for each share. | One vote for each share. | ||||||||
Common stock, issued | 7,003,975 | 7,858,975 | 7,858,975 | 7,003,975 | 7,753,975 | 2,252,743 | ||||
Common stock, outstanding | 7,003,975 | 7,858,975 | 7,858,975 | 7,003,975 | 7,753,975 | 2,252,743 | ||||
Preferred stock, authorized | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | |||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||
Preferred stock, issued | ||||||||||
Preferred stock, outstanding | ||||||||||
Number of common stock not issued yet | $ 50,000 | $ 50,000 | ||||||||
Stock issued during period, value, acquisitions | 1,440,000 | |||||||||
Stock-based compensation | $ 90,000 | |||||||||
Employment Agreements [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Share price | $ 0.60 | |||||||||
Vesting maturity date | Dec. 31, 2019 | |||||||||
Number of shares vested | 180,000 | 75,000 | ||||||||
Stock-based compensation | $ 45,000 | $ 63,000 | $ 27,000 | |||||||
Unrecognized compensation cost | $ 63,000 | $ 63,000 | ||||||||
Three Employees [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Number of common stock shares issued | 180,000 | |||||||||
Officer [Member] | For Past Service Provided [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Stock-based compensation | $ 90,000 | |||||||||
PLAYLive Nation, Inc [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Stock issued during period, shares, acquisitions | 750,000 | |||||||||
Stock issued during period, value, acquisitions | $ 1,440,000 | |||||||||
Private Placement [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Number of units sold | 7,000 | 254,500 | ||||||||
Warrants exercise price per share | $ 4 | $ 4 | ||||||||
Warrant term | 5 years | 5 years | ||||||||
Warrants issued | 962,500 | 962,500 | ||||||||
Private Placement [Member] | Accredited Investors [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||
Value of units sold | $ 50,000 | $ 1,925,000 | ||||||||
Number of units sold | 25,000 | 962,500 | ||||||||
Number of common stock not issued yet | $ 50,000 | $ 50,000 | ||||||||
Common stock exchanged for warrants description | (i) one share of common stock, par value $0.0001 per share of the Company (the "Common Stock") and (ii) a warrant to purchase one share of Common Stock, exercisable at a price of $4.00 per share, exercisable at any time within five years of issuance (each, a "Warrant") as provided for in the Company's Term Sheet for Unit Offering dated February 6, 2019 (the "Term Sheet"). | (i) one share of common stock, par value $0.0001 per share of the Company (the "Common Stock") and (ii) a warrant to purchase one share of Common Stock, exercisable at a price of $4.00 per share, exercisable at any time within five years of issuance (each, a "Warrant") as provided for in the Company's Term Sheet for Unit Offering dated February 6, 2019 (the "Term Sheet"). | ||||||||
Warrants exercise price per share | $ 4 | $ 4 | $ 4 | $ 4 | ||||||
Warrant term | 5 years | 5 years | 5 years | 5 years | ||||||
Private Placement [Member] | Maximum [Member] | Accredited Investors [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Value of units sold | $ 2,000,000 | $ 2,000,000 | ||||||||
Number of units sold | 1,000,000 | 1,000,000 | ||||||||
Share price | $ 2 | $ 2 | $ 2 | $ 2 | ||||||
Initial Public Offering [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Value of units sold | $ 100 | $ 100 | ||||||||
Number of units sold | 5,000,000 | 250,000 | 250,000 | |||||||
Warrants exercise price per share | $ 0.01 | $ 11.50 | $ 11.50 | $ 11.50 | ||||||
Warrant term | 5 years | |||||||||
Warrants issued | 5,461,500 | 5,461,500 |
Stockholders' Equity (Details_2
Stockholders' Equity (Details Narrative) (10-K) - USD ($) | Mar. 27, 2019 | Sep. 13, 2017 | Aug. 22, 2017 | May 31, 2019 | Nov. 30, 2019 | Nov. 30, 2019 | May 31, 2019 | Aug. 31, 2019 | Nov. 09, 2018 | May 31, 2018 |
Common stock, authorized | 20,000,000 | 20,000,000 | 20,000,000 | 20,000,000 | 20,000,000 | |||||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||
Common stock holders rights | One vote for each share. | One vote for each share. | ||||||||
Common stock, issued | 7,003,975 | 7,858,975 | 7,858,975 | 7,003,975 | 7,753,975 | 2,252,743 | ||||
Common stock, outstanding | 7,003,975 | 7,858,975 | 7,858,975 | 7,003,975 | 7,753,975 | 2,252,743 | ||||
Preferred stock, authorized | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | |||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||
Preferred stock, issued | ||||||||||
Preferred stock, outstanding | ||||||||||
Stock-based compensation | $ 90,000 | |||||||||
Employment Agreements [Member] | ||||||||||
Share price | $ 0.60 | |||||||||
Vesting maturity date | Dec. 31, 2019 | |||||||||
Number of shares vested | 180,000 | 75,000 | ||||||||
Stock-based compensation | $ 45,000 | $ 63,000 | $ 27,000 | |||||||
Unrecognized compensation cost | $ 63,000 | $ 63,000 | ||||||||
Three Employees [Member] | ||||||||||
Number of common stock shares issued | 180,000 | |||||||||
Private Placement [Member] | ||||||||||
Number of units sold to raise working capital | 7,000 | 254,500 | ||||||||
Warrants exercise price per share | $ 4 | $ 4 | ||||||||
Warrant term | 5 years | 5 years | ||||||||
Warrants issued | 962,500 | 962,500 | ||||||||
Private Placement [Member] | Accredited Investors [Member] | ||||||||||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||
Value of units sold | $ 50,000 | $ 1,925,000 | ||||||||
Number of units sold to raise working capital | 25,000 | 962,500 | ||||||||
Common stock exchanged for warrants description | (i) one share of common stock, par value $0.0001 per share of the Company (the "Common Stock") and (ii) a warrant to purchase one share of Common Stock, exercisable at a price of $4.00 per share, exercisable at any time within five years of issuance (each, a "Warrant") as provided for in the Company's Term Sheet for Unit Offering dated February 6, 2019 (the "Term Sheet"). | (i) one share of common stock, par value $0.0001 per share of the Company (the "Common Stock") and (ii) a warrant to purchase one share of Common Stock, exercisable at a price of $4.00 per share, exercisable at any time within five years of issuance (each, a "Warrant") as provided for in the Company's Term Sheet for Unit Offering dated February 6, 2019 (the "Term Sheet"). | ||||||||
Warrants exercise price per share | $ 4 | $ 4 | $ 4 | $ 4 | ||||||
Warrant term | 5 years | 5 years | 5 years | 5 years | ||||||
Private Placement [Member] | Maximum [Member] | Accredited Investors [Member] | ||||||||||
Value of units sold | $ 2,000,000 | $ 2,000,000 | ||||||||
Number of units sold to raise working capital | 1,000,000 | 1,000,000 | ||||||||
Share price | $ 2 | $ 2 | $ 2 | $ 2 | ||||||
Initial Public Offering [Member] | ||||||||||
Value of units sold | $ 100 | $ 100 | ||||||||
Number of units sold to raise working capital | 5,000,000 | 250,000 | 250,000 | |||||||
Warrants exercise price per share | $ 0.01 | $ 11.50 | $ 11.50 | $ 11.50 | ||||||
Warrant term | 5 years | |||||||||
Warrants issued | 5,461,500 | 5,461,500 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Outstanding Stock Warrants (Details) - Warrant [Member] | 6 Months Ended |
Nov. 30, 2019$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares stock warrants outstanding, Beginning balance | 6,424,000 |
Number of shares stock warrants, Granted | |
Number of shares stock warrants outstanding, Ending balance | 6,424,000 |
Warrants exercisable, Ending | 6,424,000 |
Average exercise price stock warrants, Beginning balance | $ / shares | $ 10.38 |
Average exercise price stock warrants, Ending balance | $ / shares | $ 10.38 |
Stock warrants granted shares, Expiration Date | May 2024 |
Stockholders' Equity - Schedu_2
Stockholders' Equity - Schedule of Outstanding Stock Warrants (Details) (10-K) - Warrant [Member] - $ / shares | 12 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Number of shares stock warrants outstanding, Beginning balance | 5,461,500 | |
Number of shares stock warrants, Granted | 962,500 | 5,461,500 |
Number of shares stock warrants outstanding, Ending balance | 6,424,000 | 5,461,500 |
Warrants exercisable, Ending | 6,424,000 | |
Average exercise price stock warrants, Beginning balance | $ 11.50 | |
Average exercise price stock warrants, Granted | 4 | 11.50 |
Average exercise price stock warrants, Ending balance | $ 10.38 | $ 11.50 |
Stock warrants granted shares, Expiration Date | May 2024 | November 2023 |
Segment and Related Informati_3
Segment and Related Information (Details Narrative) | 6 Months Ended |
Nov. 30, 2019Integer | |
Segment Reporting [Abstract] | |
Number of operating segments | 1 |
Segment and Related Informati_4
Segment and Related Information - Schedule of Segment Reporting Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Nov. 30, 2019 | Nov. 30, 2018 | Nov. 30, 2019 | Nov. 30, 2018 | May 31, 2019 | May 31, 2018 | |
Segment Reporting Information [Line Items] | ||||||
Revenues | $ 245,498 | $ 319,991 | $ 37,995 | |||
Net Loss | (571,502) | $ (2,975,873) | (854,894) | (2,980,184) | (3,565,272) | (8,862) |
Depreciation and amortization | 21,148 | 5,298 | ||||
Capital expenditures | 156,000 | |||||
Goodwill | 6,682,416 | 6,682,416 | 4,456,250 | |||
Total assets | 10,164,505 | 10,164,505 | $ 7,754,543 | $ 53,356,883 | ||
Franchise Royalties and License Fees [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues | 247,000 | |||||
Net Loss | (9,000) | |||||
Depreciation and amortization | 2,000 | |||||
Capital expenditures | ||||||
Goodwill | 2,226,000 | 2,226,000 | ||||
Total assets | 3,147,000 | 3,147,000 | ||||
Company Owned Stores [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues | 50,000 | |||||
Net Loss | (142,000) | |||||
Depreciation and amortization | 19,000 | |||||
Capital expenditures | 153,000 | |||||
Goodwill | ||||||
Total assets | 558,000 | 558,000 | ||||
Esports Revenue [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues | 23,000 | |||||
Net Loss | (97,000) | |||||
Depreciation and amortization | 103,000 | |||||
Capital expenditures | 3,000 | |||||
Goodwill | 4,456,000 | 4,456,000 | ||||
Total assets | 5,890,000 | 5,890,000 | ||||
Corporate [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues | ||||||
Net Loss | (607,000) | |||||
Depreciation and amortization | ||||||
Capital expenditures | ||||||
Goodwill | ||||||
Total assets | $ 569,000 | $ 569,000 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) (10-K) - USD ($) | Dec. 22, 2017 | Nov. 30, 2019 | Nov. 30, 2018 | Nov. 30, 2019 | Nov. 30, 2018 | May 31, 2019 | May 31, 2018 |
Income Tax Disclosure [Abstract] | |||||||
Income tax provisions | |||||||
Change in valuation allowance | $ 379,000 | ||||||
Corporate income tax rate | 35.00% | 21.00% | 21.00% | 28.00% | |||
Federal net operating loss carry forwards | $ 1,434,000 | $ 9,500 |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Deferred Tax Assets (Details) (10-K) - USD ($) | May 31, 2019 | May 31, 2018 |
Income Tax Disclosure [Abstract] | ||
Net Operating Loss | $ 364,000 | $ 2,000 |
Impairment of cost method investment | 38,000 | |
Gross deferred tax asset | 402,000 | |
Less: Valuation allowance | (381,000) | (2,000) |
Net deferred tax asset | 21,000 | |
Amortization of intangible assets | (21,000) | |
Net deferred assets/liabilities |
Income Taxes - Schedule of Reco
Income Taxes - Schedule of Reconciliation of Statutory Federal Income Tax Rate (Details) (10-K) | Dec. 22, 2017 | Nov. 30, 2019 | May 31, 2019 | May 31, 2018 |
Income Tax Disclosure [Abstract] | ||||
Expected provision (benefit) at statutory rate | (35.00%) | (21.00%) | (21.00%) | (28.00%) |
State taxes, net of federal tax benefit | (4.40%) | 0.00% | ||
Change in federal rate | 7.00% | |||
Permanent differences-stock based compensation | 15.00% | |||
Increase in valuation allowance | 10.40% | 21.00% | ||
Total provision (benefit) for income taxes | 0.00% | 0.00% |
Trust Account and Fair Value _3
Trust Account and Fair Value Measurements (Details Narrative) (10-K) | 12 Months Ended |
May 31, 2019USD ($) | |
Trust Account And Fair Value Measurements | |
Interest to pay working capital expenses | $ 600,000 |
Description of restriction on withdrawal from trust account | The Company's amended and restated certificate of incorporation provided that, other than the withdrawal of interest to pay income taxes and up to $600,000 of interest to pay working capital expenses if any, none of the funds held in the Trust Account would be released until the earlier of: (i) the completion of the Business Combination; (ii) the redemption of 100% of the shares of common stock included in the Public Units sold in the Initial Public Offering if the Company was unable to complete its initial Business Combination within 12 months (or 21 months if extended) from the closing of the Initial Public Offering (subject to the requirements of law). The funds were released from the Trust Account on November 20, 2018 upon the Closing of the initial Business Combination. |
Trust Account and Fair Value _4
Trust Account and Fair Value Measurements - Schedule of Fair Value of Assets Measured on a Recurring Basis (Details) (10-K) - USD ($) | Nov. 30, 2019 | May 31, 2019 | May 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and marketable securities held in Trust Account | $ 52,895,652 | ||
Fair Value, Inputs, Level 1 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and marketable securities held in Trust Account | $ 0 | $ 52,895,652 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) (10-K) | Jul. 29, 2019Integershares | Aug. 31, 2019USD ($) | Jun. 30, 2019USD ($) | Nov. 30, 2019USD ($) | May 31, 2019USD ($) | May 31, 2018USD ($) |
Loan payable - related party | $ 93,761 | $ 81,618 | ||||
PLAYLive Nation, Inc [Member] | ||||||
Business acquisition, shares issued in consideration | shares | 750,000 | |||||
Subsequent Event [Member] | ||||||
Operating lease, term | 5 years | |||||
Rent expenses per month | $ 700 | |||||
Loan payable - related party | $ 93,761 | |||||
Subsequent Event [Member] | Second Gaming Center [Member] | ||||||
Operating lease, term | 5 years | |||||
Rent expenses per month | $ 2,500 | |||||
Subsequent Event [Member] | PLAYLive Nation, Inc [Member] | ||||||
Business acquisition, shares issued in consideration | shares | 750,000 | |||||
Number of franchised gaming centers | Integer | 44 | |||||
Number of states of gaming centers | Integer | 11 | |||||
Number of unique gamers served | Integer | 150,000 |