Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Mar. 31, 2023 | Jun. 30, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K/A | ||
Amendment Flag | true | ||
Amendment Description | SharpLink Gaming Ltd. (“SharpLink” or the “Company”) is filing this Amendment No. 1 on Form 10-K/A (the “Amendment”) to address in its Annual Report on Form 10-K as of December 31, 2022 originally filed with the U.S. Securities and Exchange Commission (the “SEC”) on April 5, 2023 (the “Original 10-K”). The Amendment is being filed solely to: | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2022 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2022 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity File Number | 000-28950 | ||
Entity Registrant Name | SHARPLINK GAMING LTD. | ||
Entity Central Index Key | 0001025561 | ||
Entity Tax Identification Number | 98-1657258 | ||
Entity Incorporation, State or Country Code | L3 | ||
Entity Address, Address Line One | 333 Washington Avenue North | ||
Entity Address, Address Line Two | Suite 104 | ||
Entity Address, City or Town | Minneapolis | ||
Entity Address, State or Province | MN | ||
Entity Address, Postal Zip Code | 55401 | ||
City Area Code | 612 | ||
Local Phone Number | 293-0619 | ||
Title of 12(b) Security | Ordinary Shares | ||
Trading Symbol | SBET | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 21,461,158 | ||
Entity Common Stock, Shares Outstanding | 26,880,250 | ||
ICFR Auditor Attestation Flag | false | ||
Document Financial Statement Error Correction [Flag] | false | ||
Auditor Firm ID | 677 | ||
Auditor Name | RSM US LLP | ||
Auditor Location | Minneapolis, Minnesota |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Current Assets | ||
Cash | $ 39,324,529 | $ 6,065,461 |
Restricted cash | 11,132,957 | |
Accounts receivable, net of allowance | 823,530 | 956,555 |
Contract assets | 219,116 | 147,913 |
Prepaid expenses and other current asset | 1,100,433 | 217,296 |
Current assets from discontinued operations | 1,310,000 | 2,101,209 |
Total current assets | 53,910,565 | 9,488,434 |
Investment, cost | 200,000 | 200,000 |
Equipment, net | 60,218 | 55,105 |
Right-of-use asset - operating lease | 230,680 | 165,522 |
Intangibles | ||
Intangible assets, net | 3,727,933 | 5,551,540 |
Goodwill | 6,916,095 | 3,511,167 |
Non-current assets from discontinued operations | 1,588,058 | |
Total assets | 65,045,491 | 20,559,826 |
Current Liabilities | ||
Accounts payable and accrued expenses | 2,125,707 | 1,404,022 |
Contract liabilities | 2,166,451 | 308,058 |
Due to Affiliate | $ 93,954 | |
Other Liability, Current, Related and Nonrelated Party Status [Extensible Enumeration] | Affiliated Entity [Member] | Affiliated Entity [Member] |
Prize liability | $ 6,061,434 | |
Due to Seller | 691,523 | |
Customer deposits | 42,171,589 | |
Line of credit | 4,120,651 | |
Current portion of long-term debt | 1,018,918 | |
Current portion of lease liability | 31,070 | 29,265 |
Current liabilities from discontinued operations | 1,215,153 | 3,333,733 |
Total current liabilities | 58,911,033 | 5,860,555 |
Long-Term Liabilities | ||
Deferred tax liability | 6,206 | 5,581 |
Debt, less current portion | 2,931,698 | |
Lease liability, less current portion | 210,037 | 136,257 |
Non-current liabilities from discontinued operations | 365,977 | |
Total liabilities | 62,058,974 | 6,368,370 |
Commitments and Contingencies | ||
Stockholders’ Equity | ||
Ordinary shares, $0.02 par value; authorized shares 92,900,000 issued and outstanding shares: 26,880,250 and 22,360,987, respectively | 537,731 | 447,346 |
Treasury stock, 900 ordinary shares at cost | (29,000) | (29,000) |
Additional paid-in capital | 76,039,604 | 72,101,783 |
Accumulated deficit | (73,565,641) | (58,332,263) |
Total stockholders’ equity | 2,986,517 | 14,191,456 |
Total liabilities and stockholders’ equity | 65,045,491 | 20,559,826 |
Series A-1 Preferred Stock [Member] | ||
Stockholders’ Equity | ||
Preferred stock, value | 1,326 | 1,094 |
Series B One Preferred Stock [Member] | ||
Stockholders’ Equity | ||
Preferred stock, value | $ 2,496 | $ 2,496 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Common stock par value | $ 0.02 | $ 0.02 |
Common stock, shares authorized | 92,900,000 | 92,900,000 |
Common stock, shares issued | 26,880,250 | 22,360,987 |
Common stock, shares outstanding | 26,880,250 | 22,360,987 |
Series A-1 Preferred Stock [Member] | ||
Preferred stock par value | $ 0.02 | $ 0.02 |
Preferred stock, par authorized | 2,600,000 | 2,600,000 |
Preferred stock, shares issued | 66,303 | 54,737 |
Preferred stock, shares outstanding | 66,303 | 54,737 |
Liquidation preference, value | $ 138,414 | $ 118,741 |
Series B Preferred Stock [Member] | ||
Preferred stock par value | $ 0.02 | $ 0.02 |
Preferred stock, par authorized | 3,700,000 | 3,700,000 |
Preferred stock, shares issued | 124,810 | 124,810 |
Preferred stock, shares outstanding | 124,810 | 124,810 |
Liquidation preference, value | $ 595,245 | $ 274,939 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | ||
Revenues | $ 7,288,029 | $ 2,635,757 |
Cost of revenues | 6,154,434 | 2,935,119 |
Gross profit | 1,133,595 | (299,362) |
Operating expenses | ||
Selling, general, and administrative expenses | 11,884,112 | 9,894,146 |
Commitment fee expense | 23,301,206 | |
Goodwill and intangible asset impairment expenses | 4,726,000 | |
Total operating expenses | 16,610,112 | 33,195,352 |
Operating loss from continuing operations | (15,476,517) | (33,494,714) |
Other income and (expense) | ||
Interest income | 72,000 | 29,055 |
Interest expense | (137,519) | |
Other Income | 250,000 | |
Total other income and expense | 184,481 | 29,055 |
Net loss before income taxes from continuing operations | (15,292,036) | (33,465,659) |
Provision for income tax expenses | 11,366 | 4,171 |
Loss from continuing operations | (15,303,402) | (33,469,830) |
Income (loss) from discontinued operations, net of tax | 70,024 | (22,174,305) |
Net loss | (15,233,378) | (55,644,135) |
Numerator for basic and diluted net loss per share: | ||
Net loss from continuing operations available to ordinary shareholders | (15,312,264) | (34,250,214) |
Net income (loss) from discontinued operations available to ordinary shareholders | 70,024 | (22,174,305) |
Total Numerator for basic and diluted net loss per share | $ (15,242,240) | $ (56,424,519) |
Denominator for basic and diluted net loss per share: | ||
Weighted average shares outstanding | 24,879,602 | 14,300,311 |
Net loss per share - Basic and diluted | ||
Net loss from continuing operations per share | $ (0.62) | $ (2.40) |
Net income (loss) from discontinued operations per share | (1.54) | |
Net loss per share | $ (0.62) | $ (3.94) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) | Common Stock [Member] | Preferred Stock [Member] Series A-1 Preferred Stock [Member] | Preferred Stock [Member] Series B Preferred Stock [Member] | Additional Paid-in Capital [Member] | Treasury Stock, Common [Member] | Stock Subscriptions [Member] | Retained Earnings [Member] | Total | |
Balance at Dec. 31, 2020 | [1] | $ 215,014 | $ 3,833,891 | $ (5,266) | $ (2,688,128) | $ 1,355,511 | |||
Balance, shares at Dec. 31, 2020 | 10,750,768 | ||||||||
Net loss | (55,644,135) | (55,644,135) | |||||||
Stock-based compensation expense | 1,656,674 | 1,656,674 | |||||||
Stock option exercises | $ 518 | 23,745 | 24,263 | ||||||
Stock option exercises, shares | 25,917 | ||||||||
Collection of stock subscription | 5,266 | 5,266 | |||||||
Series A Preferred Stock discount accretion | (373,560) | (373,560) | |||||||
Series A Preferred Stock dividend accretion | (91,192) | (91,192) | |||||||
Dividends on Series A Preferred Stock in common stock | $ 1,165 | 93,535 | 94,700 | ||||||
Dividends on Series A Preferred Stock in common stock, shares | 51,832 | ||||||||
Issuance of Series A-1 preferred stock in exchange for Series A preferred stock | $ 24,619 | 1,704,482 | 1,729,101 | ||||||
Issuance of Series A-1 preferred stock in exchange for Series A preferred stock, shares | 1,230,956 | ||||||||
Issuance of series A-1 preferred stock in exchange for commitment fee | $ 14,020 | 4,752,707 | 4,766,727 | ||||||
Issuance of series A-1 preferred stock in exchange for commitment fee, shares | 700,989 | ||||||||
Issuance of Series B preferred stock in Series A-1 preferred stock | $ 73,857 | 25,037,622 | 25,111,479 | ||||||
Issuance of Series B preferred stock in Series A-1 preferred stock, shares | 3,692,865 | ||||||||
Vesting of warrant upon Go Public Transaction | $ 17,007 | 1,984,670 | 2,001,677 | ||||||
Vesting of warrant upon Go Public Transaction, shares | 850,330 | ||||||||
Conversion of Series A-1 preferred stock into ordinary shares | $ 38,639 | $ (38,639) | |||||||
Conversion of Series A-1 preferred stock into ordinary shares, shares | 1,931,945 | (1,931,945) | |||||||
Conversion of Series B preferred stock into ordinary shares | $ 71,361 | $ (71,361) | |||||||
Conversion of Series B preferred stock into ordinary shares, shares | 3,568,055 | (3,568,055) | |||||||
Dividends on Series B preferred stock in Series A-1 preferred stock | $ 1,094 | (1,094) | |||||||
Dividends on Series B preferred stock in Series A-1 preferred stock, shares | 54,737 | ||||||||
Issuance of ordinary shares in MTS Merger | $ 63,258 | 22,075,774 | (29,000) | 22,110,032 | |||||
Issuance of ordinary shares in MTS Merger, shares | 3,162,951 | ||||||||
Issuance of ordinary shares in SportsHub Gaming Network Acquisition | $ 12,122 | 1,594,080 | 1,606,202 | ||||||
Issuance of ordinary shares in SportsHub Gaming Network Acquisition, shares | 606,114 | ||||||||
Issuance of ordinary shares, prefunded warrants and regular warrants to institutional investor | $ 28,262 | 9,810,449 | 9,838,711 | ||||||
Issuance of ordinary shares, prefunded warrants and regular warrants to institutional investor, shares | 1,413,075 | ||||||||
Balance at Dec. 31, 2021 | $ 447,346 | $ 1,094 | $ 2,496 | 72,101,783 | (29,000) | (58,332,263) | 14,191,456 | ||
Balance, shares at Dec. 31, 2021 | 22,360,987 | 54,737 | 124,810 | ||||||
Net loss | (15,233,378) | (15,233,378) | |||||||
Stock-based compensation expense | 2,486,152 | 2,486,152 | |||||||
Dividends on Series B preferred stock in Series A-1 preferred stock | $ 232 | (232) | |||||||
Dividends on Series B preferred stock in Series A-1 preferred stock, shares | 11,566 | ||||||||
Issuance of ordinary shares in SportsHub Gaming Network Acquisition | $ 86,385 | 1,283,902 | 1,370,287 | ||||||
Issuance of ordinary shares in SportsHub Gaming Network Acquisition, shares | 4,319,263 | ||||||||
Issuance of ordinary shares for services | $ 4,000 | 168,000 | 172,000 | ||||||
Issuance of ordinary shares for services, shares | 200,000 | ||||||||
Balance at Dec. 31, 2022 | $ 537,731 | $ 1,326 | $ 2,496 | $ 76,039,605 | $ (29,000) | $ (73,565,641) | $ 2,986,517 | ||
Balance, shares at Dec. 31, 2022 | 26,880,250 | 66,303 | 124,810 | ||||||
[1]Equity structure was adjusted for all periods presented using the exchange ratio established in the Go-Public Merger Agreement with Mer Telemanagement Solutions Ltd. to reflect the number of shares of the legal parent, SharpLink, Inc. (the accounting acquiree) issued in the MTS Merger (reverse acquisition). See Note 3 for a discussion of the MTS Merger. |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss from continuing operations | $ (15,303,402) | $ (33,469,830) |
Net income (loss) from discontinued operations, net of tax | 70,024 | (22,174,305) |
Net loss | (15,233,378) | (55,644,135) |
Adjustments to reconcile net loss to net cash used for operating activities: | ||
Depreciation and amortization | 1,165,517 | 206,246 |
Amortization of loan costs | 8,073 | |
Amortization of prepaid stock issued for services | 43,000 | |
Deferred tax expense | 625 | 1,172 |
Stock-based compensation expense | 2,486,151 | 1,656,674 |
Commitment fee expense | 23,301,206 | |
Gain on disposal of equipment | 2,594 | |
Goodwill and intangible asset impairment expenses | 4,726,000 | |
Write off of amounts related to acquisition of FourCubed | (303,523) | |
Advisory expenses in exchange for warrant | 2,001,677 | |
Changes in assets and liabilities | ||
Accounts receivable | 319,737 | (175,645) |
Contract assets | (71,203) | 127,424 |
Prepaid expenses and other current assets | 1,068,832 | (203,585) |
Other long-term assets | ||
Accrued expenses and other current liabilities | 1,012,947 | 798,026 |
Other long-term liabilities | (98,360) | |
Contract liabilities | (1,715,892) | |
Net cash used for operating activities - continuing operations | (6,490,519) | (5,854,995) |
Net cash used for operating activities - discontinued operations | 553,133 | (215,879) |
Net cash used for operating activities | (5,937,386) | (6,070,874) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Capital expenditures for equipment | (25,707) | (58,807) |
Capital expenditures for internally developed software | (137,565) | (201,436) |
Investment in Quintar | (200,000) | |
Proceeds from the sale of equipment | 4,493 | |
Cash and restricted cash acquired in SportsHub Gaming Network Merger | 48,859,270 | |
Payments relating to the acquisition of FourCubed | (388,000) | (5,883,477) |
Net cash generated by/(used) for investing activities - continuing operations | 48,312,491 | (6,343,720) |
Net cash generated by (used) for investing activities - discontinued operations | (10,423) | 1,932,000 |
Net cash generated by/(used) for investing activities | 48,302,068 | (4,411,720) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Collection of stock subscription | 5,266 | |
Proceeds from debt | 3,250,000 | |
Repayments of debt | (549,225) | |
Payments of debt issue costs | (25,432) | |
Net advances to and proceeds from Affiliate | (190,155) | |
Proceeds from issuance of Series B preferred stock | 6,000,000 | |
Proceeds from issuance of ordinary shares, prefunded warrants and regular warrants, net of issuance costs | 9,838,711 | |
Proceeds from the exercise of stock options | 24,263 | |
Net cash generated by financing activities - continuing operations | 2,675,343 | 15,678,085 |
Net cash generated by financing activities - discontinued operations | ||
Net cash generated by financing activities | 2,675,343 | 15,678,085 |
Net change in cash and restricted cash | 45,040,025 | 5,195,491 |
Cash and restricted cash, beginning of year | 6,065,461 | 2,585,180 |
Less cash from discontinued operations | 648,000 | 1,715,210 |
Cash and restricted cash, end of year | 50,457,486 | 6,065,461 |
Reconciliation of Cash and Restricted Cash | ||
Cash | 39,324,529 | 6,065,461 |
Restricted cash | 11,132,957 | |
Total cash and restricted cash | 50,457,486 | 6,065,461 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Cash paid for interest | 109,165 | |
Cash paid for taxes | 19,916 | |
NON-CASH FINANCING ACTIVITIES: | ||
Issuance of ordinary shares in MTS Merger | 22,110,032 | |
Issuance of ordinary shares in FourCubed Acquisition | 1,606,602 | |
Issuance of ordinary shares in SportsHub Gaming Network Merger | 1,370,287 | |
Issuance of ordinary shares for advisory services | 172,000 | |
Consideration due for FourCubed Acquisition | 691,523 | |
Series A Preferred Stock discount accretion | 373,560 | |
Series A Preferred Stock dividend accretion | 91,192 | |
Dividends on Series A Preferred Stock in common stock | 94,700 | |
Issuance of Series A-1 preferred stock in ordinary shares | 1,729,101 | |
Issuance of Series A-1 preferred stock in exchange for commitment fee | 4,766,727 | |
Issuance of Series B preferred stock in exchange for commitment fee | 25,111,479 | |
Dividends on Series B preferred stock in Series A-1 preferred stock | 8,862 | 315,632 |
Conversion of Series A-1 preferred stock into ordinary shares | 6,495,828 | |
Conversion of Series B preferred stock into ordinary shares | 24,262,771 | |
Dividend due to forgiveness of MTS intercompany loan | $ 2,039,000 |
Net Assets And Liabilities Acqu
Net Assets And Liabilities Acquired In Acquisition Of Sportshub Games Network | Dec. 31, 2022 USD ($) |
Net Assets And Liabilities Assumed In Acquisition Of Sport hub Gaming Network [Member] | |
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |
Cash and Restricted Cash | $ 48,859,270 |
Accounts receivable | 186,712 |
Prepaids and other assets | 1,916,932 |
Operating right-of-use asset | 95,793 |
Equipment | 11,953 |
Goodwill and intangible assets | 7,358,703 |
Accounts payable and accrued liabilities | (284,345) |
Customer obligations | (42,600,997) |
Prize liabilities | (5,056,120) |
Note payable | (5,387,851) |
Other long-term liabilities | (106,703) |
Deferred revenue | (3,574,285) |
Deferred tax liability | (48,775) |
Net assets acquired | $ 1,370,287 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 1 – Summary of Significant Accounting Policies Nature of Business SharpLink Gaming Ltd. (the “Company” or “SharpLink,” formerly Mer Telemanagement Services or “MTS”), is an Israeli-based corporation. SharpLink is a leading online technology company that connects sports fans, leagues and sports websites to relevant and timely sports betting and iGaming content. SharpLink uses proprietary, intelligent, online conversion technology and direct-to-player (“D2P”) performance marketing strategies to convert sports fans into sports bettors and online casino game players for licensed, online sportsbook and casino operators. Further, SharpLink, through its SportsHub Gaming Network (“SportsHub”) reporting unit, owns and operates an online gaming business that primarily facilitates daily and seasonal peer-to-peer fantasy contests for its end users. The Company also operates a website that provides a variety of services to private fantasy league commissioners, including secure online payment options, transparent tracking and reporting of transactions, payment reminders, in-season security of league funds, and facilitation of prize payouts. On July 26, 2021, SharpLink, Inc. completed its merger with Mer Telemanagement Solutions Ltd. (the “MTS Merger”), which changed its name to SharpLink Gaming Ltd. and commenced trading on NASDAQ under the ticker symbol “SBET.” As a result of the MTS Merger, SharpLink, Inc. shareholders own 86 Principles of Consolidation The accompanying consolidated financial statements include the accounts of SharpLink Gaming Ltd. and its wholly owned subsidiaries. All intercompany accounts and transactions between consolidated subsidiaries have been eliminated in consolidation. We operate in four reportable segments. Operating segments are defined as components of an enterprise about which separate financial information is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and assessing performance. The Company’s chief operating decision maker (“CODM”), our Chief Executive Officer, allocates resources and assesses performance based upon discrete financial information at the segment level. Reclassifications Certain amounts in prior periods have been reclassified to reflect the impact of the discontinued operations treatment in order to conform to the current period presentation. See Note 16. Functional Currency The Company’s functional and reporting currency is the U.S. dollar. Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction. The resulting monetary assets and liabilities are translated into U.S. dollars at exchange rates prevailing on the subsequent balance sheet date. Revenue and expense components are translated to U.S. dollars at weighted-average exchange rates in effect during the period. Foreign currency transaction gains and losses resulting from remeasurement are recognized in other income, net within the consolidated statements of operations. Purchase Accounting The purchase price of an acquired business is allocated to the assets acquired and liabilities assumed at their estimated fair values on the date of acquisition. Any unallocated purchase price amount is recognized as goodwill on the consolidated balance sheet if it exceeds the estimated fair value and as a bargain purchase gain on the consolidated statement of operations if it is below the estimated fair value. Determining the fair value of assets acquired and liabilities assumed requires management’s judgment, and the utilization of independent valuation experts as well as the use of significant estimates and assumptions with respect to the timing and amounts of future cash inflows and outflows, discount rates, market prices and asset lives, among other items. The judgments made in the determination of the estimated fair value assigned to the assets acquired and liabilities assumed, as well as the estimated useful life of each asset and the duration of each liability, can materially impact the financial statements in periods after acquisition, such as through depreciation and amortization expense. Acquisition-related costs are expensed as incurred and changes in deferred tax asset valuation allowances and income tax uncertainties after the measurement period are recorded in Provision for Income Taxes. Discontinued Operations In June 2022, the Company’s Board of Directors approved management to enter into negotiations to sell MTS. The Company completed the sale of MTS on December 31, 2022. Accordingly, the assets and liabilities of the MTS business are separately reported as assets and liabilities from discontinued operations as of December 31, 2022 and 2021. The results of operations and cash flows of MTS for all periods are separately reported as discontinued operations. Restricted Cash Restricted cash consists of funds held for payment of prize liabilities for its various daily and seasonal peer-to-peer fantasy games, as well as private fantasy league dues from customers who utilize the services offered via the Company’s secure online payment and league dues management website. The Company maintains separate accounts to segregate users’ funds from operational funds. Concentrations of Credit Risk Cash and restricted cash are deposited with major banks in the United States, Israel and Hong Kong. Such deposits in the United States may be in excess of insured limits and are not insured in other jurisdictions. Generally, the FDIC limit per bank is $ 250,000 The following represents the cash and restricted cash on hand at December 31, 2022 by banking institution and does not include any reduction for the FDIC insured limit of $ 250,000 Schedule of Cash and Restricted Cash Bank December 31, 2022 Platinum Bank $ 46,023,871 Bank Vista 2,744,359 Silicon Valley Bank 503,103 Other 1,186,153 Total cash and restricted cash $ 50,457,486 The Company performs ongoing credit evaluations of its customers. In certain circumstances, the Company may require letters of credit, other collateral or additional guarantees. Accounts Receivable The Company’s policy for estimating the allowance for credit losses on accounts receivables considers several factors including historical loss experience, the age of delinquent receivable balances due, and economic conditions. Specific customer reserves are made during review of significant outstanding balances due, in which customer creditworthiness and current economic trends may indicate that it is probable the receivable will not be recovered. Accounts receivables are written off after collection efforts occur and the receivable is deemed uncollectible. Adjustments to the allowance for credit losses are recorded in selling, general and administrative expense. Allowance for credit losses as of December 31, 2022 and 2021 were $ 0 0 Investment, cost During the year ended December 31, 2021, the Company invested $ 200,000 280,903 1.12 Equipment Equipment is recorded at cost. Expenditures for renewals and improvements that significantly add to the productivity capacity or extend the useful life of an asset are capitalized. Expenditures for maintenance and repairs are expensed. When equipment is retired or sold, the cost and related accumulated depreciation are eliminated from the accounts and the resultant gain or loss is reflected in income. Depreciation is provided using the straight-line method, based on useful lives of the assets which ranges from three to seven years. Depreciation expense for the years ended December 31, 2022 and 2021, was $ 25,345 28,891 100,733 86,989 Leases The Company determines if an arrangement is or contains a lease at inception or modification of the arrangement. An arrangement is or contains a lease if there are identified assets and the right to control the use of an identified asset is conveyed for a period of time in exchange for consideration. Control over the use of the identified asset means the lessee has both the right to obtain substantially all of the economic benefits from the use of the asset and the right to direct the use of the asset. For a lease with terms greater than year, a right-of-use (ROU) asset and lease liability is recognized based on the present value of the future minimum lease payments over the lease term at commencement date. The initial measurement of the operating lease ROU asset also includes any prepaid lease payments and are reduced by any previously accrued deferred rent. The Company’s operating lease does not provide a readily determinable implicit rate; therefore, the Company uses its incremental borrowing rate to discount the lease payments based on the information available at commencement date. The Company’s operating lease does not include a fixed rental escalation clause. Lease terms include optional renewal periods when it is reasonably certain that such option will be exercised. Lease expense for minimum lease payments is recognized on a straight-line basis over the expected lease term. Intangible and Long-Lived Assets Intangible assets consist of internally developed software, customer relationships, trade names and acquired technology and are carried at cost less accumulated amortization. The Company amortizes the cost of identifiable intangible assets on a straight-line basis over the expected period of benefit, which ranges from three ten years Costs associated with internally developed software are expensed as incurred unless they meet generally accepted accounting criteria for deferral and subsequent amortization. Software development costs incurred prior to the application development stage are expensed as incurred. For costs that are capitalized, the subsequent amortization is the straight-line method over the remaining economic life of the product, which is estimated to be five years The Company begins amortizing the asset and subsequent enhancements once the software is ready for its intended use. The Company reassesses whether it has met the relevant criteria for deferral and amortization at each reporting date. The Company capitalized $ 137,565 201,436 The Company reviews the carrying value of its long-lived assets, including equipment and finite-lived intangible assets, for impairment whenever events and circumstances indicate that the carrying value of an asset may not be recoverable from the estimate future cash flows expected to result from its use and eventual disposition. In cases where undiscounted cash flows are less than the carrying value of an asset group, an impairment loss is recognized equal to an amount by which the asset group’s carrying value exceeds the fair value of assets. The factors considered by management in performing this assessment include current operating results, trends and prospects, the manner in which the property is used, and the effects of customer loss, obsolescence, demand, competition, and other economic factors. In accordance with the approval by the Company’s Board of Directors to sell MTS in June 2022, management concluded that the intangible assets of customer relationships and developed technology and its goodwill were impaired and recorded an impairment charge for $ 1,224,671 Goodwill and Impairment The Company evaluates the carrying amount of goodwill annually or more frequently if events or circumstances indicate that the goodwill may be impaired. Factors that could trigger an impairment review include significant underperformance relative to historical or forecasted operating results, a significant decrease in the market value of an asset or significant negative industry or economic trends. The Company completes impairment reviews for its reporting units using a fair-value method based on management’s judgments and assumptions. When performing its annual impairment assessment, the Company evaluates the recoverability of goodwill assigned to each of its reporting units by comparing the estimated fair value of the respective reporting unit to the carrying value, including goodwill. The Company estimates fair value utilizing the income approach and the market approach or a combination of both income and market approaches. The income approach requires management to make assumptions and estimates for each reporting unit, including projected future operating results, economic projections, anticipated future cash flows, working capital levels, income tax rates, and a weighted-average cost of capital reflecting the specific risk profile of the respective reporting unit. The key assumptions used in the income approach include revenue growth, operating income margin, discount rate and terminal growth rate. These assumptions are the most sensitive and susceptible to change as they require significant management judgment. Discount rates are determined by using market and industry data as well as Company-specific risk factors for each reporting unit. The discount rate utilized for each reporting unit is indicative of the return an investor would expect to receive for investing in such a business. The market approach estimates fair value using performance multiples of comparable publicly-traded companies. In the event the fair value of a reporting unit is less than the carrying value, including goodwill, an impairment loss is recognized for the difference between the implied fair value and the carrying value of the reporting unit. The Company recorded goodwill impairment of $ 1,515,000 During the year ended December 31, 2021, the Company recorded goodwill impairment of $ 21,722,213 858,819 Accounts Payable The composition of accounts payable and accrued expenses are as follows: Schedule of Accounts Payable and Accrued Expenses December 31, 2022 December 31, 2021 Accounts payable $ 851,031 $ 813,621 Accrued wages and payroll expenses 338,166 181,360 Accrued bonus 358,836 117,370 Accrued interest 32,017 - Other accrued expenses 545,657 291,671 Accounts payable and accrued expenses $ 2,125,707 $ 1,404,022 Prize Liability The Company’s prize liability consists of funds to be paid to participants of the various fantasy games hosted by the Company. These prizes are paid to the participants once a fantasy game has concluded and final winners have been determined. Customer Deposits The Company’s liability for customer obligations is in wallet accounts and accounts on the SportsHub platform. Cash related to these accounts may be drawn at the customer’s request. Severance Pay Certain of the Company’s employees in Israel have subscribed to Section 14 of Israel’s Severance Pay Law, 5723-1963 (“Section 14”). Pursuant to Section 14, the Company’s employees, covered by this section, are entitled to monthly deposits, at a rate of 8.33 With regards to employees in Israel that are not subject to Section 14, the Company’s liability for severance pay is calculated pursuant to the local Severance Pay Law, based on the most recent salary of the relevant employees multiplied by the number of years of employment as of the balance sheet date. These employees are entitled to one-month salary for each year of employment or a portion thereof. The Company’s liability for these employees is fully provided for via monthly deposits with severance pay funds, insurance policies and an accrual. The value of the liability of $ 342,000 366,000 279,000 284,000 The deposited funds include profits accumulated up to the balance sheet date. The deposited funds may be withdrawn only upon the fulfillment of the obligation pursuant to the Severance Pay Law or labor agreements. Transactions with SportsHub Prior to December 22, 2022 (see Note 3 – Acquisitions – SportsHub Games Network, Inc.), SportsHub owned approximately 40% of the outstanding ordinary shares of the Company. SportsHub has historically paid direct expenses incurred by the Company’s Sports Gaming Client Services business unit (“STI”), which includes salaries and related expenses for the employees of STI. SportsHub collects cash on behalf of STI’s revenue generating activities. The Company was allocated cost of revenue and selling, general, and administrative expenses totaling $ 285,673 284,625 Redeemable Preferred Stock Issued with a Commitment Fee The Company considers guidance within ASC 470-20, Debt (ASC 470), ASC 480, and ASC 815 when accounting for a redeemable equity instrument issued with a freestanding-instruments (e.g. commitment fee), such as in the issuance upon the date the SharpLink stock is listed or quoted on any trading market (Going Public Transaction). In circumstances in which redeemable convertible preferred stock is issued with a commitment fee, the proceeds from the issuance of the convertible preferred stock are first allocated to the commitment fee at its full estimated fair value. The Company accounts for the commitment fee as either equity instrument, liability, or derivative liability in accordance with ASC 480, Distinguishing Liabilities from Equity (ASC 480) and/or ASC 815, Derivatives and Hedging (ASC 815), depending on the specific terms of the agreement. The commitment fee, which required the Company to issue ordinary shares equal to 3% of the Company’s issued and outstanding capital immediately following the Going Public Transaction, required the Company to transfer a variable number of shares outside of its control, which is classified as a liability. Liability-classified instruments are recorded at their estimated fair values at each reporting period until they are exercised, terminated, reclassified, or otherwise settled. Changes in the estimated fair value of the commitment fee were recorded in Commitment Fee Expense in the consolidated statement of operations for the year ended December 31, 2021. Treasury Stock Company shares held as treasury shares are recognized at cost, and as a deduction from equity. Any gain or loss arising from a purchase, sale, issuance or cancellation of treasury shares is recognized directly in equity at the time of such event. Warrants The Company accounts for a warrant as an equity instrument, liability or share-based compensation in accordance with ASC 480, Distinguishing Liabilities from Equity, and/or ASC 718, Compensation – Stock Compensation, depending on the specific terms of the agreement. In February 2021, the Company issued a warrant in exchange for advisory services, which vested upon the completion of the Going Public Transaction. The warrant was in the scope of ASC 718 and was recognized at its grant date fair value when the performance condition became probable of occurrence, which in the Company’s case was the completion of the Going Public Transaction. The grant date fair value was determined using a Black Scholes option-pricing model. Through the MTS Merger, the Company assumed 83,334 In November 2021, the Company issued warrants concurrent with a sale of ordinary shares to an institutional investor. Based on the terms of the agreements, the warrants were freestanding, equity-linked instruments that represented separate units of account. The Company allocated the value of net proceeds from the offering to the ordinary shares and warrants based on relative fair value on the grant date. The warrants’ grant date fair values were determined using Black Scholes option-pricing models. The value allocated to the warrants was recorded in Additional Paid-In Capital in the consolidated balance sheet. Revenue The Company follows a five-step model to assess each sale to a customer; identify the legally binding contract, identify the performance obligations, determine the transaction price, allocate the transaction price, and determine whether revenue will be recognized at a point in time or over time. Revenue is recognized upon transfer of control of promised products or services (i.e., performance obligations) to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for promised goods or services. Advertising and Marketing Expenses The Company incurred $ 459,976 The Affiliate Marketing Services – United States and the Affiliate Marketing Services – International operating segments generate revenue by earning commissions from sportsbooks and casino operators when a new depositor is directed to them by our affiliate marketing websites. In addition, this segment provides sports betting data (e.g., betting lines) to sports media publishers in exchange for a fixed fee. The Sports Gaming Client Services operating segments’ performance obligations are satisfied over time (software licenses). Software license revenue is recognized when the customer has access to the license and the right to use and benefit from the license. Other items relating to charges collected from customers include reimbursable expenses. Charges collected from customers as part of the Company’s sales transactions are included in revenues and the associated costs are included in cost of revenues. The Company’s SportsHub operating segment collects fees from customers for daily and season-long online fantasy sports games in advance and recognizes the related fees over the term of the online fantasy game. It also collects various forms of fee revenue from customers using its wallet system platform. Its performance obligation is to provide these customers with an online platform to collect entry fees, provide transparency into league transactions, encourage timely payment of entry fees, safeguard funds during the season and facilitate end-of-season prize payouts. Fee revenue related to payment transactions is deferred until the end of the specific season. Other types of fee revenue are recognized on a transactional basis when users complete transactions or when a customer’s account becomes inactive under the terms of the user agreement. SportsHub also provides sports simulation software that customers pay a fee to access over a period of time. SportsHub provides and maintains the software throughout the duration of the season, which constitutes a single performance obligation and revenue is recognized over the term of the service. SportsHub also collects subscription fees from users of its Fantasy National Golf Club. Its performance obligation under these contracts is to provide subscribers with access to SportsHub’s intellectual property. Revenue is initially deferred and recognized ratably over the subscription period. Any discounts, promotional incentives or waived entry fees are treated as a reduction in revenue. Any promotions where funds are issued to a user’s wallet account are recognized as marketing expenses, included in selling, general, and administrative expenses. Stock-Based Compensation Stock-based compensation expense reflects the fair value of stock-based awards measured at the grant date and recognized over the requisite service period. The Company estimates the fair value of each stock-based award on the measurement date using the Black-Scholes option valuation model which incorporates assumptions as to stock price volatility, the expected life of the options, risk-free interest rate, and dividend yield. Income Taxes The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes, under which deferred tax liabilities and assets are recognized for the expected future tax consequences of temporary differences between financial statement carrying amounts and the tax basis of assets and liabilities, net operating losses, and tax credit carryforwards. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company uses a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. A tax position is recognized when it is more likely than not that the tax position will be sustained upon examination, including resolution of any related appeals or litigation processes. A tax position that meets the more-likely-than-not recognition threshold is measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement with a taxing authority. The standard also provides guidance on derecognition of tax benefits, classification on the balance sheet, interest and penalties, accounting in interim periods, disclosure and transition. Net Loss Per Share Basic net loss per share is calculated by dividing net loss available to ordinary shareholders, adjusted for preferred stock discount accretion and dividends accrued on preferred stock, by the weighted-average number of ordinary shares outstanding during the period excluding the effects of any potentially dilutive securities. Diluted net loss per share is computed similar to basic loss per share, except that the denominator is increased to include the number of additional ordinary shares that would have been outstanding if potential ordinary shares (also known as common) had been issued if such additional ordinary shares were dilutive. Since the Company had net losses for all the periods presented, basic and diluted loss per share are the same, and additional potential ordinary shares have been excluded, as their effect would be anti-dilutive. At December 31, 2022, dividend accrued in Preferred Series A-1 stock of 66,303 124,810 2,889,124 4,003,593 Fair Value Measurements The Company has determined the fair value of certain assets and liabilities in accordance with generally accepted accounting principles, which provides a framework for measuring fair value. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques should maximize the use of observable inputs and minimize the use of unobservable inputs. A fair value hierarchy has been established, which prioritizes the valuation inputs into three broad levels. Level 1 inputs consist of quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the related asset or liability. Level 3 inputs are unobservable inputs related to the asset or liability. Estimates The preparation of the consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Our most critical estimates include those related to purchase accounting, intangibles and long-lived assets, goodwill and impairment, stock based compensation, discontinued operations and revenue recognition. On an ongoing basis, we evaluate our estimates and assumptions. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates. Contingencies From time to time, we may become involved in lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. Although we currently maintain liability insurance coverage intended to cover professional liability and certain other claims, we cannot assure that our insurance coverage will be adequate to cover liabilities arising out of claims asserted against us in the future where the outcomes of such claims are unfavorable to us. Liabilities in excess of our insurance coverage, including coverage for professional liability and certain other claims, could have a material adverse effect on our business, financial condition and results of operations. Recently Issued Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASC 326, Financial Instruments – Credit Losses (Topic 326): Measurements of Credit Losses on Financial Instruments (“ASC 326”), which replaces the existing incurred loss model with a current expected credit loss (“CECL”) model that requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The Company would be required to use a forward looking CECL model for accounts receivables, guarantees, and other financial instruments. The Company will adopt ASC 326 on January 1, 2023 and does not expect ASC 326 to have a material impact on its consolidated financial statements. In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ASU 2022-03”), which clarifies the guidance in Accounting Standards Codification Topic 820, Fair Value Measurement (“Topic 820”), when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security and introduces new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value in accordance with Topic 820. ASU 2022-03 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, and early adoption is permitted. While the Company is continuing to assess the timing of adoption and the potential impacts of ASU 2022-03, it does not expect ASU 2022-03 to have a material effect on the Company’s consolidated financial condition, results of operations or cash flows. |
Going Concern
Going Concern | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern | Note 2 – Going Concern In the pursuit of SharpLink’s long-term growth strategy and the development of its fan activation and conversion software and related businesses, the Company has sustained continued operating losses. During the year ending December 31, 2022, the Company had a net loss from continuing operations as of December 31, 2022 and 2021 of $ 15,303,402 33,469,830 6,510,965 5,854,995 3,250,000 7,000,000 8 10 4,400,000 4,000,000 The Company is continually evaluating strategies to obtain the required additional funding for future operations. These strategies may include, but are not limited to, obtaining equity financing, issuing, or restructuring debt, entering into other financing arrangements, and restructuring of operations to grow revenues and decrease expenses. The Company may be unable to access further equity or debt financing when needed. As such, these factors, among others, raise substantial doubt about the ability of the Company to continue as a going concern for a reasonable period. The consolidated financial statements do not include any adjustments to the carrying amounts and classification of assets, liabilities, and reported expenses that may be necessary if the Company were unable to continue as a going concern. |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | Note 3 – Acquisitions Mer Telemanagement Solutions Ltd. (“MTS”) Description of the Transaction On July 26, 2021, Mer Telemanagement Solutions Ltd. (“MTS”), New SL Acquisition Corp., a wholly owned subsidiary of MTS (“Merger Sub”) and privately held SharpLink, Inc. (“SharpLink, Inc.”) entered into an Agreement and Plan of Merger (the “Merger Agreement”). Pursuant to the Merger Agreement, Merger Sub merged with and into SharpLink, Inc., with SharpLink, Inc. surviving as a wholly-owned subsidiary of legacy MTS (the “Reverse Merger” or “MTS Merger”). Following the MTS Merger, the Company changed its name from Mer Telemanagement Solutions Ltd. to SharpLink Gaming Ltd. (the “Company”). On a pro forma and fully-diluted basis for the Company, SharpLink, Inc. shareholders own approximately 86 stock option pool of 10% of the fully-diluted outstanding share capital of the Company, and legacy MTS securityholders own approximately 14% of the fully-diluted outstanding capital of the Company. As a result of the MTS Merger, each outstanding share of SharpLink, Inc. common stock was converted into the right to receive SharpLink Gaming Ltd. ordinary shares as calculated pursuant to the Exchange Ratio, as defined in the Merger Agreement. Each outstanding share of SharpLink, Inc. Series A preferred stock was converted into the right to receive SharpLink Gaming Ltd. Series A-1 preferred stock, calculated pursuant to the Exchange Ratio. Each outstanding share of SharpLink, Inc. Series A-1 preferred stock was converted into the right to receive SharpLink Gaming Ltd. Series A-1 preferred stock, calculated pursuant to the Exchange Ratio. Each outstanding share of SharpLink, Inc. Series B preferred stock was converted into the right to receive SharpLink Gaming Ltd. Series B preferred stock, calculated pursuant to the Exchange Ratio. In connection with a closing condition of the Merger Agreement, a major shareholder of both legacy MTS and SharpLink, Inc., invested $ 6,000,000 3,692,865 Identification of Accounting Acquirer As a result of the MTS Merger, SharpLink, Inc. shareholders owned 86 Purchase Price The purchase price was based on the legacy MTS closing share price of $ 6.80 2,492,162 670,789 108,334 Schedule of Purchase Consideration MTS issued and outstanding ordinary shares immediately prior to Merger 3,162,951 MTS share price on July 26, 2021 $ 6.80 MTS ordinary shares fair value 21,508,067 MTS warrants and options fair value $ 601,965 Purchase consideration for accounting acquiree $ 22,110,032 The fair values of the MTS warrants and options, which are further disclosed in Notes 10 and 12, respectively, were determined using a Black Scholes option-pricing model with the following assumptions: Schedule of Assumptions MTS Warrants - $2.642 strike price Fair value of ordinary shares $ 6.80 Exercise price $ 2.64 Expected volatility 54.7 % Expected dividends 0.0 % Expected term (in years) 3.0 Risk-free rate 0.38 % Fair value per warrant $ 4.49 Warrants 58,334 Fair value $ 261,965 MTS Warrants - $0 strike price Fair value of ordinary shares $ 6.80 Exercise price $ 0.00 Expected volatility 54.7 % Expected dividends 0.0 % Expected term (in years) 3.0 Risk-free rate 0.38 % Fair value per warrant $ 6.80 Warrants 25,000 Fair value $ 170,000 MTS Options - $0 strike price Fair value of ordinary shares $ 6.80 Exercise price $ 0.00 Expected volatility 54.7 % Expected dividends 0.0 % Expected term (in years) 3.0 Risk-free rate 0.38 % Fair value per warrant $ 6.80 Warrants 25,000 Fair value $ 170,000 Purchase Price Allocation The MTS assets and liabilities were measured at estimated fair values at July 26, 2021, primarily using Level 3 inputs. Estimates of fair value represent management’s best estimate of assumptions about future events and uncertainties, including significant judgments related to future cash flows, discount rates, competitive trends, margin and revenue growth assumptions including royalty rates and customer attrition rates and others. Inputs used were generally obtained from historical data supplemented by current and anticipated market conditions and growth rates expected as of the acquisition date. The fair value of the assets acquired and liabilities assumed as of July 26, 2021 were as follows: Schedule of Fair Value of Assets Acquired and Liabilities Assumed Assets: Cash 916,000 Restricted cash 1,016,000 Accounts receivable 356,000 Prepaid expenses and other current assets 322,000 Equipment 25,000 Other long-term assets 261,000 Intangible assets 483,000 Total Assets $ 3,379,000 Liabilities: Accrued expenses 2,129,000 Deferred revenue 914,000 Other current liabilities 495,000 Other long-term liabilities 312,000 Total liabilities $ 3,850,000 Net assets acquired, excluding goodwill $ (471,000 ) Goodwill 22,581,032 Purchase consideration for accounting acquiree $ 22,110,032 The fair value, as determined by assumptions that market participants would use in pricing the assets, and weighted average useful life of the identifiable intangible assets are as follows: Schedule of Fair Value Assumption Asset Weighted Average Fair Value Useful Life (Years) Customer relationships $ 414,000 4 Developed technology 69,000 3 Total fair value of assumption asset $ 483,000 The excess of the consideration for the acquisition over the fair value of net assets acquired was recorded as goodwill and derived from the market price of the shares at the time of the MTS Merger in the go-public transaction. During the year ended December 31, 2021, $ 21,722,213 The allocation of purchase price is subject to finalization during a period not to exceed one year from the acquisition date. Adjustments to the preliminary allocation of purchase price may occur related to finalization of income taxes. Transaction Costs SharpLink’s transaction costs incurred in connection with the MTS Merger were $ 3,084,341 Results of the Legacy MTS Business Subsequent to the Acquisition For the year ended December 31, 2021, the legacy MTS business had revenues and net loss of $ 1,517,001 22,173,554 21,722,213 FourCubed Description of the Transaction On December 31, 2021, SharpLink Gaming Ltd., through its wholly owned subsidiary FourCubed Acquisition Company, LLC, acquired certain business assets of FourCubed (“FourCubed Acquisition”) for total consideration of $ 6,886,523 606,114 1,606,202 6,195,000 130,000 311,523 250,000 587,747 Earnout” Earnout The Company accounts for an earnout as business combination consideration or compensation in accordance with ASC 805, Business Combinations, and/or ASC 718, Compensation – Stock Compensation, depending on the specific terms of the agreement. Based on the terms of the agreement, the number of ordinary shares to be paid is fixed as of the agreement date and is paid in the form of ordinary shares in multiple tranches, contingent on continued employment and the achievement of performance milestones, such as business activities, revenue targets and gross margin targets. In March 2022, the seller’s employment was terminated. No performance-based milestones were achieved prior to termination. As the earnout is contingent upon achieving specified milestones and continued employment, the Company does not expect to recognize compensation cost related to the earnout. Purchase Price The purchase price was based on the cash consideration paid and 606,114 2.65 Schedule of Purchase Consideration Ordinary shares issued to seller 606,114 Ordinary share price on December 31, 2021 $ 2.65 Consideration in ordinary shares 1,606,202 Cash paid to Seller 6,195,000 Due to Seller 691,523 Purchase consideration $ 8,492,725 Purchase Price Allocation The FourCubed assets and liabilities were measured at estimated fair values at December 31, 2021, primarily using Level 3 inputs. Estimates of fair value represent management’s best estimate of assumptions about future events and uncertainties, including significant judgments related to future cash flows, discount rates, competitive trends, margin and revenue growth assumptions including customer attrition rates, cost to recreate intellectual property and others. Inputs used were generally obtained from historical data supplemented by current and anticipated market conditions and growth rates expected as of the acquisition date. The fair value of the assets acquired and liabilities assumed as of December 31, 2021 were as follows: Schedule of Fair Value of Assets Acquired and Liabilities Assumed Assets: Cash $ 311,523 Accounts receivable 424,593 Prepaid expenses and other current assets 9,468 Intangible assets 4,928,000 Total assets $ 5,673,584 Liabilities: Accrued expenses $ 311,026 Total liabilities 311,026 Net assets acquired, excluding goodwill $ 5,362,558 Goodwill 3,130,167 Purchase consideration for accounting acquiree $ 8,492,725 The fair value, as determined by assumptions that market participants would use in pricing the assets, and weighted average useful life of the identifiable intangible assets are as follows: Schedule of Fair Value Assumption Asset Weighted Average Fair Value Useful Life (Years) Customer relationships $ 4,144,000 10 Developed technology 784,000 1 Total fair value of assumption asset $ 4,928,000 The excess of the consideration for the acquisition over the fair value of net assets acquired was recorded as goodwill, which is attributed to expected synergies and expanded market opportunities from combining the Company’s operations with FourCubed. The goodwill created in the acquisition is expected to be deductible for tax purposes. FourCubed earns advertising commissions from online gambling sites for connecting individuals to the sites. FourCubed has one performance obligation: to make the connection between the individual and the online gambling site. FourCubed is compensated for that delivery through a cost per acquisition model (CPA) or revenue share model. In February 2022, FourCubed was notified by Entain plc, a gaming operator from which FourCubed earned over 85 percent of its revenues, that it intends to exit the Russian market. FourCubed estimates that approximately 40 percent of its annual revenue, with an estimated operating income margin of 25 percent, is earned from players in the Russian market. The Company recorded $ 3,211,000 1,515,000 Transaction Costs Transaction costs incurred in connection with the FourCubed Acquisition were $ 67,130 SportsHub Games Network, Inc. (“SportsHub”) Description of the Transaction On December 22, 2022 (the “Close Date”), SharpLink, through its wholly owned subsidiary, SHGN Acquisition Corp (“Acquirer” or the “Merger Subsidiary) acquired all of the outstanding capital stock of SportsHub, via an Agreement and Plan of Merger, dated as of September 6, 2022 (“Merger Agreement”). In accordance with the terms of the Equity Purchase Agreement between the Acquirer, the Acquiree and an individual acting as the SportsHub stockholders’ representative (“the Stockholder Representative”): ● SharpLink issued an aggregate of 4,319,263 405,862 ● SportsHub has merged with and into the Merger Subsidiary, with the Merger Subsidiary remaining as the surviving corporation and wholly owned subsidiary of SharpLink. ● SportsHub, which owned 8,893,803 ● SharpLink assumed $ 5,387,850 Identification of Accounting Acquirer The transaction was accomplished through a direct acquisition, whereby SHGN Acquisition Corp effectively acquired all of the outstanding capital stock of SportsHub, as a result of which SHGN Acquisition Corp obtained control over SportsHub. Therefore, SHGN Acquisition Corp has been determined to be the acquirer in the transaction, and SportsHub the acquiree. Determining the Acquisition Date The Acquirer obtained control of Acquiree following the exchange of consideration on December 22, 2022. Thus, the closing date of December 22, 2022 was the acquisition date. Purchase Price The purchase price is based on SharpLink’s closing share price of $ 0.29 4,725,125 1,267,199 4,120,651 Schedule of Purchase Consideration Description Amount Fair Value of Equity Consideration $ 1,370,287 Fair Value of Seller Platinum Line of Credit and Loan 5,387,850 Total Purchase Price $ 6,758,137 Purchase Price Allocation The SportsHub Acquisition assets and liabilities were measured at fair values as of December 22, 2022, primarily based on the valuation determined by an independent valuation, which were based on income-based method and relief from royalty method. Estimates of fair value represent management’s best estimate of assumptions about future events and uncertainties, including significant judgments related to future cash flows, discount rates, competitive trends, margin and revenue growth assumptions, including royalty rates and customer attrition rates and others. Inputs used were generally obtained from historical data supplemented by current and anticipated market conditions and growth rates expected as of the acquisition date. The fair value of the assets acquired and liabilities assumed as of December 22, 2022 were as follows: Schedule of Fair Value of Assets Acquired and Liabilities Assumed Assets: Cash $ 38,255,266 Restricted cash 10,604,004 Accounts receivable 186,712 Prepaid expenses and other current assets 1,916,932 Equipment 11,953 Other long-term assets 95,793 Intangible assets 2,390,000 Total Assets $ 53,460,660 Liabilities: Accrued expenses $ 284,345 Deferred tax liabilities 48,775 Deferred revenue 3,574,285 Other current liabilities 47,657,117 Other long-term liabilities 106,705 Total liabilities $ 51,671,227 Net assets acquired, excluding goodwill $ 1,789,433 Goodwill 4,968,703 Purchase consideration for accounting acquiree $ 6,758,137 The fair value, as determined by assumptions that market participants would use in pricing the assets, and weighted average useful life of the identifiable intangible assets are as follows: Schedule of Fair Value Assumption Asset Weighted Average Fair Value Useful Life (Years) Customer relationships $ 1,550,000 5 Trade names 640,000 6 Acquired technology 200,000 5 $ 2,390,000 The excess of consideration for the acquisition over the fair value of net assets acquired was recorded as goodwill and derived from the market price of the shares at the time of the SportsHub Acquisition. The goodwill created in the acquisition is not expected to be deductible for tax purposes. As of December 31, 2022, the calculation and allocation of the purchase price to tangible and intangible assets and liabilities is preliminary, as the Company is still in the process of accumulating all of the required information to finalize the opening balance sheet and calculations of intangible assets. Transaction Costs SharpLink’s transaction costs incurred in connection with the SportsHub Acquisition were $ 83,866 Results of the SportsHub Subsequent to the Acquisition The SportsHub Acquisition had revenues and net income of $ 951,194 42,908 Unaudited Pro Forma Information The following unaudited supplemental pro forma financial information presents the financial results for the years ended December 31, 2022 and 2021 as if the MTS Merger, FourCubed and SportsHub Acquisition had occurred on January 1, 2021. The pro forma financial information includes, where applicable, adjustments for: (i) additional amortization expense of $ 486,141 1,324,900 5,468,201 94,685 119,095 The pro forma financial information excludes adjustments for estimated cost synergies or other effects of the integration of MTS, FourCubed and SportsHub: Schedule of Business Acquisition Pro Forma Information 2022 2021 Revenues $ 12,108,434 $ 19,695,782 Loss from continuing operations (28,420,775 ) (90,132,215 ) Less: dividends accrued on series B preferred stock — (782,887 ) Net loss from continuing operations available to ordinary shareholders (28,420,775 ) (90,915,102 ) Net income (loss) from discontinued operations, net of tax, available to ordinary shareholders 70,024 (49,000 ) Net loss available to ordinary shareholders (28,350,751 ) (90,964,102 ) Basic and diluted: Net loss from continuing operations per share $ (1.14 ) $ (6.36 ) Net loss from discontinued operations per share — — Net loss per share $ (1.14 ) $ (6.36 ) The pro forma financial information is presented for illustrative purposes only and is not necessarily indicative of the operating results that would have been achieved had the SportsHub, MTS Merger and FourCubed Acquisition been completed as of the date indicated or the results that may be obtained in the future. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Leases | Note 4 – Leases The Company leases certain office space under a long-term, non-cancelable operating lease agreement. The contract provides the Company the right to substantially all of the economic benefits from the use of the office space and the right to direct the use of the office space, thus it is considered to be or contain a lease. An operating right-of-use (“ROU”) asset and lease liability were recognized based on the present value of the future lease payments over the expected lease term. The lease has an original term that expires in December 2023 with an option to extend the term for three years . The Company has included the optional renewal period in the lease term because the Company determined after considering all economic factors that the Company is reasonably certain to exercise the option to extend the lease. The agreement requires the Company to pay real estate taxes, insurance, and repairs. There was no allocation of consideration to any non-lease component as the amounts were not material. The weighted-average discount rate is based on the discount rate implicit in the lease, or if the implicit rate is not readily determinable from the lease, then the Company estimates an applicable incremental borrowing rate. The Company determined the incremental borrowing rate based on the Company’s applicable borrowing rates under its current financing agreements as of the commencement date of the standard adoption. Operating lease costs are recognized in the results of operations as a single lease cost in selling, general and administrative expenses. Total lease costs for the years ended December 31, 2022 and 2021 was $ 38,400 and the operating cashflows from operations leases for December 31, 2022 and 2021, was $ 38,400 The following summarizes the weighted-average remaining lease term and weighted-average discount rate: Schedule of weighted average remaining lease term and weighted-average discount rate 2022 2021 Weighted-average remaining lease term Operating leases 30 months 60 months Weighted-average discount rate Operating leases 5.67 % 6.00 % Maturity of noncancelable operating leases with terms greater than one year as of December 31, 2022 are as follows: Schedule of future minimum lease payment Year Ending December 31, Operating leases 2023 $ 31,070 2024 72,720 2025 67,736 2026 94,675 Total lease payments $ 266,201 Less: interest 25,094 Present value of lease liability $ 241,107 |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Note 5 – Intangible Assets Intangible assets as of December 31, 2022 and 2021 consist of the following: Schedule of Intangible assets Weighted-average amortization period Accumulated (years) Cost Amortization Net Balance, December 31, 2022 Customer relationships 5 10 $ 2,643,000 $ 280,636 $ 2,362,364 Acquired technology 3 5 1,437,050 1,201,739 235,311 Internally developed software 5 749,147 288,530 460,617 Trade names 6 640,000 3,405 636,595 Software in development N/A 33,046 — 33,046 $ 5,502,243 $ 1,774,310 $ 3,727,933 Balance, December 31, 2021 Customer relationships 9 $ 4,304,000 $ 131,429 $ 4,172,571 Acquired technology 3 1,214,000 360,357 853,643 Internally developed software 5 654,022 142,050 511,972 Software in development N/A 13,354 — 13,354 $ 6,185,376 $ 633,936 $ 5,551,440 The change in the gross carrying amount of intangible assets as of December 31, 2022 compared to December 31, 2021 was due to acquisition of intangible assets of $ 2,390,000 137,867 3,211,000 1,140,472 241,253 Schedule of Future Amortization Expenses of Intangible Assets Amount 2023 $ 724,564 2024 704,922 2025 673,281 2026 596,306 2027 526,949 Thereafter 465,665 Total $ 3,691,686 |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Note 6 – Goodwill Changes in the carrying amount of goodwill for the years ended December 31, 2022 and 2021 were as follows: Schedule of goodwill SportsHub Sports Affiliate Total Balance as of December 31, 2021 $ — $ 381,000 $ 3,130,167 $ 3,511,167 Goodwill 4,919,928 — — 4,919,928 Less: Impairment charges — — (1,515,000 ) (1,515,000 ) Balance as of December 31, 2022 $ 4,919,928 $ 381,000 $ 1,615,167 $ 6,916,095 Cumulative goodwill impairment charges $ — $ — $ 1,515,000 $ 1,515,000 For the year ending December 31, 2022, the Company recorded goodwill impairment of $ 1,515,000 |
Line of Credit
Line of Credit | 12 Months Ended |
Dec. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Line of Credit | Note 7 – Line of Credit The Company, through the SportsHub Acquisition, has available a variable rate ( 8.25 5,000,000 June 15, 2023 4,120,651 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Note 8 – Debt On January 31, 2022, FourCubed Acquisition Company, LLC (“FCAC”), a wholly owned subsidiary of the Company, entered into a $ 3,250,000 4.0 59,854 January 31, 2027 25,431 For the year ended December 31, 2022, FCAC paid $ 549,225 109,165 2,700,775 620,173 Included in the SportsHub liabilities was a $ 2,000,000 5.50 38,202 December 9, 2025 29,975 A summary of the term loan agreements is noted below: Schedule of Term Loan Agreements 2022 Note Payable – Bank, $ 2,000,000 $ 1,267,200 Note Payable – Bank, $ 3,250,000 2,700,775 Note Payable – Bank 2,700,775 Total 3,967,975 Less unamortized debt issuance costs 17,359 Less current portion 1,018,918 Long-term debt $ 2,931,698 The outstanding amount of debt as of December 31, 2022 matures by year as follows: Schedule of Outstanding amount of debt Year Amount 2023 $ 1,018,918 2024 1,066,808 2025 1,119,689 2026 700,256 2027 62,304 Total $ 3,967,975 The term loan contains a parent company guaranty, which states that the Company will enter into a guaranty agreement in favor of FCAC, pursuant to which the Company will guarantee the repayment of the loan, not later than 30 days following the Company’s redomicile to the United States. |
Convertible Preferred Stock
Convertible Preferred Stock | 12 Months Ended |
Dec. 31, 2022 | |
Convertible Preferred Stock | |
Convertible Preferred Stock | Note 9 – Convertible Preferred Stock On December 23, 2020, the SharpLink, Inc. board authorized the establishment and designation of 9,000 8 0.01 4,150,000 2,000 2,000,000 Terms of the Series A preferred stock are as follows: Voting Dividends 8 Liquidation 1,000 Conversion 2.1693 9.99 Second Tranche 5,000,000 Commitment Fee shall issue preferred stock equal to the greater of either 15% of the aggregate of the First and Second Tranche or 3% of the Company’s issued and outstanding capital. Redemption 12 On June 15, 2021, SharpLink, Inc. entered into the first amendment to the securities purchase agreement, which amended the following terms: Second Tranche 6,000,000 Commitment Fee 3 On July 23, 2021, SharpLink, Inc. entered into the second amendment to the securities purchase agreement, which amended the following terms: Second Tranche 2,765,824 6,000,000 On July 26, 2021, the Company’s board authorized the establishment and designation of 525,016 0.01 Terms of the Series A-1 preferred stock are as follows: Voting Liquidation 2.1693 Conversion 2.1693 9.99 Redemption 12 On July 26, 2021, the Company’s board authorized the establishment and designation of 2,765,824 0.01 Terms of the Series B preferred stock are as follows: Voting Dividends 8 66,303 324,495 Liquidation 2.1693 Conversion 9.99 Redemption 12 On July 26, 2021, SharpLink, Inc. completed its merger with Mer Telemanagement Solutions Ltd. (“MTS”) (the “MTS Merger”) and changed its name to SharpLink Gaming Ltd. and commenced trading on NASDAQ under the ticker symbol “SBET.” The MTS Merger was effectuated by a share exchange in which MTS issued shares to SharpLink, Inc. shareholders, resulting in SharpLink, Inc. shareholders owning approximately 86% of the capital stock of SharpLink Gaming Ltd., on a fully-diluted, as-converted basis. The exchange ratio used to determine the number of shares issued to SharpLink, Inc. shareholders was 1.3352 At the Company’s Extraordinary General Meeting of Shareholders held on July 21, 2021, the Company’s shareholders approved an Amended and Restated Articles of Association, which was effected upon consummation of the MTS Merger. The Amended and Restated Articles of Association increased the registered share capital to 92,900,000 800,000 2,600,000 3,700,000 0.02 The terms of the Series A preferred stock, Series A-1 preferred stock and Series B preferred stock authorized by the Company are consistent with the terms of the SharpLink, Inc. Series A preferred stock, Series A-1 preferred stock and Series B preferred stock. The Company’s equity structure was adjusted for all periods presented in the consolidated statements of shareholders’ equity using the exchange ratio established in the Merger Agreement to reflect the number of shares of the legal parent (the accounting acquiree) issued in the reverse acquisition. Ordinary share par value and additional paid-in capital was adjusted for all periods presented in the consolidated statements of shareholders’ equity to reflect the new par value of ordinary shares after the 1-to-2 reverse stock split. The MTS Merger represented a Going Public Transaction. Immediately prior to the MTS Merger, the outstanding shares of the SharpLink, Inc. Series A preferred stock were exchanged for 1,230,956 700,989 3,692,862 6,000,000 Subsequent to the July 2021 MTS Merger, the holder of the Series A-1 preferred stock and Series B preferred stock converted 1,931,945 3,568,055 124,810 54,737 11,566 66,303 124,810 |
Warrants
Warrants | 12 Months Ended |
Dec. 31, 2022 | |
Warrants | |
Warrants | Note 10 – Warrants Warrant – Advisory Services On February 1, 2021, SharpLink, Inc. issued a common stock purchase warrant (“warrant”) in exchange for advisory services, which gave the holder the right to purchase up to 636,867 The terms of the warrant are as follows: Voting and Dividends Exercisability and Termination Dates Exercise Price 0.01 The warrant is in the scope of ASC 718, Compensation – Stock Compensation, as a share-based payment issued to nonemployees in exchange for services. Compensation costs for a nonemployee share-based payment award with a performance condition, such as the Going Public Transaction, is recognized when the performance condition becomes probable of occurrence, which in SharpLink, Inc.’s case is when the Going Public Transaction is completed. On July 26, 2021, SharpLink, Inc. completed its merger with Mer Telemanagement Solutions Ltd. The warrant vested and became fully exercisable into 850,330 2,001,677 Schedule of Warrant Assumptions Fair value of ordinary shares on grant date $ 2.36 Exercise price $ 0.01 Expected volatility 58.2 % Expected dividends 0.0 % Expected term (in years) 5.00 Risk-free rate 0.42 % SharpLink, Inc.’s underlying stock was not publicly traded on the issuance date of the warrant but its fair value was estimated using a straight-line calculation, with the benefit of hindsight, between the fair values determined as of December 31, 2021 and July 26, 2021 of $ 0.63 6.80 The Company estimates the volatility of its underlying stock by using an average of the calculated historical volatility of a group of comparable publicly traded stock. The expected dividend yield is calculated using historical dividend amounts and the stock price at the warrant issuance date. The risk-free rate is based on the United States Treasury yield curve in effect at the time of the grant. The expected term is estimated based on contractual terms. Warrants - MTS Prior to the MTS Merger, the MTS shareholders approved the issuance of a warrant to the former MTS CEO to acquire 58,334 2.642 Prior to the MTS Merger, the MTS shareholders approved the issuance of a warrant to the former MTS CEO to acquire 25,000 0 Prefunded Warrants and Regular Warrants On November 16, 2021, the Company entered into a Securities Purchase Agreement with an existing institutional investor pursuant to which the Company agreed to issue and sell, in a registered direct offering, an aggregate of 1,413,075 3.75 1,253,592 3.74 0.01 4.50 2,666,667 The terms of the Prefunded Warrants are as follows: Voting and Dividends Vesting Date Termination Date The terms of the Regular Warrants are as follows: Voting and Dividends Vesting Date Termination Date The Prefunded Warrants and Regular Warrants do not require a cash settlement for the warrants. Based on the terms of the agreements, the warrants were freestanding, equity-linked instruments that represented separate units of account. The Company allocated the value of net proceeds from the offering to the ordinary shares and warrants based on relative fair value. The value allocated to the warrants was recorded in Additional Paid-In Capital in the consolidated balance sheets. The fair value of the Prefunded Warrants and Regular Warrants was determined using a Black Scholes option-pricing model with the following assumptions: Schedule of Warrants Assumptions Prefunded Warrants Fair value of ordinary shares $ 3.25 Exercise price $ 0.01 Expected volatility 50.5 % Expected dividends 0.0 % Expected term (in years) 4.00 Risk-free rate 1.03 % Schedule of assumptions Regular Warrants Fair value of ordinary shares $ 3.25 Exercise price $ 4.50 Expected volatility 50.5 % Expected dividends 0.0 % Expected term (in years) 4.00 Risk-free rate 1.03 % The fair value of ordinary shares was based on the Company’s publicly traded ordinary share price. The Company estimates the volatility of its underlying stock by using an average of the calculated historical volatility of a group of comparable publicly traded stock and the Company’s publicly traded ordinary shares. The expected dividend yield is calculated using historical dividend amounts and the stock price at the warrant issuance date. The risk-free rate is based on the United States Treasury yield curve in effect at the time of the grant. The expected term is estimated based on contractual terms. For the year ended December 31, 2022, there have been no issuances of new warrants, no conversion of outstanding warrants, and all warrants outstanding are fully vested: Schedule of Warrant Outstanding Warrant - advisory services Warrants - MTS Prefunded warrants Regular warrants Outstanding Vested Outstanding Vested Outstanding Vested Outstanding Vested Beginning balance, December 31, 2021 — — 83,334 83,334 1,253,592 1,253,592 2,666,667 — Issued and vested — — — — — — — — Acquired — — — — — — — — Converted to ordinary shares — — — — — — — — Ending balance, December 31, 2022 — — 83,334 83,334 1,253,592 1,253,592 2,666,667 — Beginning balance, December 31, 2020 — — — — — — — — Issued and vested 1 1 — — 1,253,592 1,253,592 2,666,667 — Acquired — — 83,334 83,334 — — — — Converted to ordinary shares (1 ) (1 ) — — — — — — Ending balance, December 31, 2021 — — 83,334 83,334 1,253,592 1,253,592 2,666,667 — |
Fair Value
Fair Value | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Note 11 – Fair Value In accordance with fair value accounting guidance, the Company determines fair value based on the exchange price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The inputs used to measure fair value are classified into the following hierarchy: Level 1 Level 2 Level 3 Assumptions Used in Determining Fair Value of the Commitment Fee at December 31, 2021 The commitment fee, which required the Company to sell to the Series A preferred stock shareholder 3,692,862 6,000,000 3 700,989 23,301,206 6.80 Significant inputs and assumptions used in the valuation model as of December 31, 2021, were as follows: Schedule of Inputs and Assumptions of Valuation Model Probability of a Going Public Transaction 50.0 % Volatility 58.5 % Stock price of public company at the time of measurement $ 0.63 Date of a Going Public Transaction April 30, 2021 Pro-forma common shares outstanding at Going Public Transaction date 52,077,000 The change in the commitment fee between December 31, 2020 and 2021 consisted of the following: Schedule of Commitment Fee Schedule of commitment fee Beginning balance, December 31, 2020 $ 577,000 Commitment fee expense 23,301,206 Issuance of Series A-1 and B preferred stock in exchange for commitment fee (23,878,206 ) Ending balance, December 31, 2021 $ — |
Stock Compensation
Stock Compensation | 12 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
Stock Compensation | Note 12 – Stock Compensation During 2020, SharpLink, Inc. approved and adopted the 2020 Stock Incentive Plan (the “2020 plan”), which permits the grant of stock options to its employees, directors and consultants for up to 400,000 2,336,632 The Company granted 360,000 1.3352 2,493,500 1,312,000 1,140,000 360,000 780,000 360,000 1,655,506 5,436,632 2,486,151 1,656,674 The fair value of each option award is estimated on the date of grant using a Black Scholes option-pricing model. The Company uses historical option exercise and termination data to estimate the expected term the options are expected to be outstanding. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant. The expected dividend yield is calculated using historical dividend amounts and the stock price at the option issue date. The expected volatility is determined using the volatility of peer companies. The Company’s underlying stock has been publicly traded since the date of the MTS Merger. All option grants during the year ended December 31, 2022 and 2021 were granted under the 2021 plan subsequent to the MTS Merger. All option grants made under the SharpLink, Inc. 2020 plan were prior to the MTS Merger. SharpLink, Inc.’s underlying stock was not publicly traded, but was estimated on the date of the grants using valuation methods that consider valuations from recent equity financings as well as future planned transactions. Schedule of Fair Values of Stock Options Granted Using Black-scholes Valuation Model Assumptions Schedule of estimates the volatility 2022 2021 Expected volatility 51.1 53.7 % 51.0 51.8 % Expected dividends 0.0 % 0.0 % Expected term (years) 5.5 6.0 5.5 6.0 Risk-free rate 1.44 4.24 % 0.79 1.24 % Fair value of Ordinary Shares on grant date $ 0.31 1.33 $ 1.05 3.29 The summary of activity under the plans as of December 31, 2022, and change during the year ended December 31, 2022 is as follows: Schedule of Stock Option Activity Options Shares Weighted average exercise price Weighted average grant date fair value Weighted average remaining contractual term Aggregate intrinsic value Outstanding as of December 31, 2021 1 1,783,567 $ 4.96 $ - - $ 830,250 Granted 2 2,496,500 $ 1.00 $ 0.52 - $ - Exercised - $ - $ - - $ - Forfeited (1,007,796 ) $ 5.46 $ 2.56 - $ - Expired (383,147 ) $ 6.37 $ - - $ - Outstanding as of December 31, 2022 2,889,124 $ 1.14 $ - 9.3 $ 7,750 Exercisable as of December 31, 2022 866,727 $ 1.46 $ - 8.7 $ 7,750 1 Equity structure was adjusted for all periods presented using the exchange ratio, 1.3352, established in the Go-Public Merger Agreement with Mer Telemanagement Solutions Ltd. to reflect the number of shares of SharpLink, Inc. (the accounting acquiree) issued in the reverse acquisition. See Note 3 in the consolidated financial statements accompanying this Annual Report on Form 10-K for a discussion of the MTS Merger. Unamortized stock compensation expense of $ 1,009,269 2,375,624 2,022,403 The summary of activity under the plans as of December 31, 2021, and change during the year ended December 31, 2021 is as follows: Options Shares Weighted average exercise price Weighted average remaining contractual term Aggregate intrinsic value Outstanding as of December 31, 2020 480,664 $ 0.94 - $ - Granted 1,337,000 $ 6.21 - $ - Exercised (25,917 ) $ 0.94 - $ - Forfeited (8,180 ) $ 2.04 - $ - Outstanding as of December 31, 2021 1,783,567 $ 4.96 9.4 $ 830,250 Exercisable as of December 31, 2021 658,290 $ 3.78 9.3 $ 571,099 |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Note 13 – Revenue Recognition During the year ended December 31, 2022, the Company combined its revenue into the following categories: Schedule of Revenue Recognition Affiliate Marketing Services - U.S. Affiliate Marketing Services - International Sports Gaming Client Services SportsHub Gaming Network Total Software-as-a-service $ 353,200 $ - $ 2,493,685 $ - $ 2,493,685 Fee revenue - - - 951,196 951,196 Services and other 62,250 3,427,698 - - 3,843,148 Total $ 415,450 $ 3,427,698 $ 2,493,685 $ 951,196 $ 7,288,029 During the twelve months ended December 31, 2021, the Company combined its revenue into the following categories: Affiliate Marketing Services - U.S. Affiliate Marketing Services -International Sports Gaming Client Services SportsHub Gaming Network Total Software-as-a-service $ 211,528 $ - $ 2,424,229 $ - $ 2,625,737 Services and other - - - - - Total $ 211,528 $ - $ 2,424,229 $ - $ 2,635,757 Revenue $ 211,528 $ - $ 2,424,229 $ - $ 2,635,757 The Company’s license contracts contain promises to transfer multiple products to the customer. Judgment is required to determine whether each product is considered to be a distinct performance obligation that should be accounted for separately under the contract. We have elected to utilize the “Right to invoice” practical expedient under ASC 606 which allows us to recognize revenue for our performance under the contract for the value which we have provided to the customer during a period of time in our contract with them. Determining whether licenses are distinct performance obligations that should be accounted for separately, or not distinct and thus accounted for together, requires significant judgment. In some arrangements, such as the Company’s license arrangements, the Company has concluded that the individual licenses are distinct from each other. In others, like the Company’s SaaS arrangements, the software development and final product are not distinct from each other because they are highly integrated and therefore the Company has concluded that these promised goods are a single, combined performance obligation. The Company is required to estimate the total consideration expected to be received from contracts with customers. In certain circumstances, the consideration expected to be received is fixed based on the specific terms of the contract or based on the Company’s expectations of the term of the contract. Generally, the Company has not experienced significant returns from or refunds to customers. These estimates require significant judgment and the change in these estimates could have an effect on its results of operations during the periods involved. The Company follows a five-step model to assess each sale to a customer; identify the legally binding contract, identify the performance obligations, determine the transaction price, allocate the transaction price, and determine whether revenue will be recognized at a point in time or over time. Revenue recognized point in time and over time is presented by period below: For the year ended December 31, 2022: Schedule of Revenue Recognized point in Time and over Time Affiliate Marketing Services - U.S. Affiliate Marketing Services - International Sports Gaming Client Services SportsHub Gaming Network Total Point in time $ 62,250 $ 3,427,698 $ - $ 808,418 $ 4,298,366 Over time 353,200 - 2,493,685 142,778 2,989,663 Total $ 415,450 $ 3,427,698 $ 2,493,685 $ 951,196 $ 7,288,029 For the year ended December 31, 2021: Affiliate Marketing Services - U.S. Affiliate Marketing Services - International Sports Gaming Client Services SportsHub Gaming Network Total Over time 211,528 - 2,424,229 - $ 2,635,757 Total $ 211,528 $ - $ 2,424,229 $ - $ 2,635,757 The timing of revenue recognition may differ from the timing of invoicing to customers and these timing differences result in contract advanced billings on the Company’s consolidated balance sheet. The Company has an enforceable right to payment upon invoicing and records contract liabilities when revenue is recognized subsequent to invoicing. The Company recognized unbilled revenue when revenue is recognized prior to invoicing. The Company recognized contract assets related to direct costs incurred to fulfill the contracts. These costs are primarily labor costs associated with the development of the software. The Company defers these costs and amortizes them into cost of revenues over the period revenues are recognized. The activity in the contract assets for the years ending December 31, 2022 and 2021 are as follows: Schedule of Contract Assets Amount Balance as of December 31, 2021 $ 147,913 Labor costs expensed (483,524 ) Labor costs deferred 554,727 Balance as of December 31, 2022 $ 219,116 The Company’s assets and liabilities related to its contracts with customers were as follows: Schedule of Contract Assets and Liabilities 2022 2021 Accounts receivable $ 776,530 $ 793,795 Unbilled revenue (reported in accounts receivable) 47,000 162,760 Contract assets 219,116 147,913 Contract liabilities (2,166,451 ) (308,058 ) The activity in the contract liabilities for the years ending December 31, 2022 and 2021 are as follows: Schedule of Contract Liabilities Amount Balance as of December 31, 2021 $ (308,058 ) SportsHub acquired balance (3,574,285 ) Revenue recognized or reclassified 2,846,755 Deferred revenue (1,130,863 ) Balance as of December 31, 2022 $ (2,166,451 ) All contract liabilities at December 31, 2022 and 2021 were recognized as revenue or expected to be recognized within the next fiscal year. All other activity in contract liabilities is due to the timing of invoice in relation to the timing of revenue as described above. Contracted but unsatisfied performance obligations were approximately $ 850,000 3,246,000 Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 days. In instances where the timing of revenue recognition differs from the timing of invoicing, the Company has determined that its contracts generally do not include a significant financing component. The primary purpose of invoicing terms is to provide customers with simplified and predictable ways of purchasing the Company’s products and services, and not to facilitate financing arrangements. The Company had two customers that accounted for approximately 45 572,621 The Company had four customers that accounted for approximately 49 456,460 |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Segment Information | Note 14 – Segment Information The Company has four operating segments: Affiliate Marketing Services – United States, Affiliate Marketing Services – International, Sports Gaming Client Services and SportsHub Games Network. Each operating segment is also a reportable segment. The Enterprise Telecom Expense Management (“Enterprise TEM”) business unit is reflected in discontinued operations (see Note 16). The Enterprise TEM and Affiliate Marketing Services – International segments are a result of the MTS Merger and FourCubed Acquisition, respectively, in 2021. The Enterprise TEM segment will not be presented going forward due to its sale on December 31, 2022. The Affiliate Marketing Services – United States segment operates a performance marketing platform which owns and operates state-specific web domains designed to attract, acquire and drive local sports betting and casino traffic directly to the Company’s sportsbook and casino partners which are licensed to operate in each respective state. The Company earns a commission from sportsbooks and casino operators on new depositors directed to them via our proprietary D2P websites in America. In addition, this segment provides sports betting data (e.g., betting lines) to sports media publishers in exchange for a fixed fee. The Affiliate Marketing Services – International segment is an iGaming and affiliate marketing network, focused on delivering quality traffic and player acquisitions, retention and conversions to global iGaming operator partners worldwide in exchange for a commission (cost per acquisition or portion of net gaming revenues) paid to the Company by the partners for the new players referred to them. The Sports Gaming Client Services segment provides its clients with development, hosting, operations, maintenance, and service of free-to-play games and contests. These relationships can be either software-as-service (“SaaS”) arrangements that are hosted by SharpLink and accessed through its clients’ websites or other electronic media; or software licenses that allow the client to take the software on premise. The SportsHub Games Network segment owns and operates a variety of real-money fantasy sports and sports simulation games and mobile apps on its platform; and is licensed or authorized to operate in every state in the United States where fantasy sports play is legal and in which SportsHub has elected to operate based on the financial viability of operating there. The Enterprise TEM segment is a global provider of solutions for telecommunications expense management, enterprise mobility management, call usage and accounting software. The segment’s TEM solutions allow enterprises and organizations to make smarter choices with their telecommunications spending at each stage of the service lifecycle, including allocation of cost, proactive budget control, fraud detection, processing of payments and spending forecasting. The Enterprise TEM segment is reflected as discontinued operations in 2022 and 2021 and was sold in December 2022. (See Note 16.) Any intercompany revenues or expenses are eliminated in consolidation. All of the Company’s operating revenues and expenses, other than those excluded from Adjusted EBITDA as detailed below, are allocated to the Company’s reportable segments. The Company defines and calculates Adjusted EBITDA as net loss before the impact of interest income or expense, income tax provision, and depreciation and amortization, and further adjusted for stock compensation expense, transaction expenses, commitment fee expense and impairment expense, as described in the reconciliation below. A measure of segment assets and liabilities has not been currently provided to the Company’s chief operating decision maker and is therefore not presented below. Summarized financial information for the Company’s reportable segments as of and for the years ended December 31, 2022 and 2021 is shown below: Schedule of Summarized Financial Information for the Company’s Reportable Segments 2022 Affiliate Marketing Services - United States Affiliate Marketing Services - International Sports Gaming Client Services SportsHub Gaming Network Enterprise TEM Total Revenue $ 415,450 $ 3,427,698 $ 2,493,685 $ 951,196 $ - $ 7,288,029 Cost of revenues 141,736 2,127,555 3,119,178 765,965 - 6,154,434 Income (loss) from operations (9,471,593 ) (5,026,352 ) (1,027,484 ) 48,912 - (15,476,517 ) Income from discontinued operations - - - - 70,024 70,024 Net income (loss) $ (9,183,309 ) $ (5,135,517 ) $ (1,027,484 ) $ 42,908 $ 70,024 $ (15,303,402 ) 2021 Affiliate Marketing Services - United States Affiliate Marketing Services - International Sports Gaming Client Services SportsHub Gaming Network Enterprise TEM Total Revenue $ 211,528 $ - $ 2,424,229 $ - $ - $ 2,635,757 Cost of revenues 64,070 - 2,871,049 - - 2,935,191 Income (loss) from operations (32,773,402 ) - (696,428 ) - - (33,469,830 ) Loss from discontinued operations - - - - (22,174,305 ) (22,174,305 ) Net income (loss) $ (32,774,152 ) $ - $ (696,427 ) $ - $ (22,174,305 ) $ (55,644,135 ) Summarized revenues by country in which the Company operated for the years ended December 31, 2022 and 2021 is shown below: Schedule of Revenue by Country December 31, 2022 Affiliate Marketing Services - United States Affiliate Marketing Services - International Sports Gaming Client Services SportsHub Gaming Network Enterprise TEM Total United States $ 415,450 $ - $ 2,493,685 $ 951,196 $ - $ 3,860,331 Rest of World - 3,427,698 - - - 3,427,698 Revenues $ 415,450 $ 3,427,698 $ 2,493,685 $ 951,196 $ - $ 7,288,029 December 31, 2021 United States $ 211,528 $ - $ 2,424,229 $ - $ - $ 2,635,757 Rest of World - - - - - - Revenues $ 211,528 $ - $ 2,424,229 $ - $ - $ 263,577 The Company does not have material tangible long-lived assets in foreign jurisdictions. The Company’s Affiliate Marketing Services International and Sports Gaming Client Services segment derives a significant portion of its revenues from several large customers. The table below presents the percentage of consolidated revenues derived from the two segments: Schedule of Percentage of Consolidated Revenues Derived From Large Customers Schedule of consolidated revenues 2022 2021 Customer A 35 % 15 % Customer B 10 % 10 % Customer C * - % 10 % Customer D * - % 14 % * Revenue from customer was less than 10% for the years ended December 31, 2022 and 2021. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 15 – Income Taxes Deferred tax assets and liabilities from continuing operations as of December 31, 2022 and 2021 consist of the following: Schedule of Deferred Tax Assets and Liabilities 2022 2021 Deferred tax assets Net operating losses $ 4,891,195 $ 8,927,213 Research and development tax credit 95,597 30,429 Nonqualified stock options 100,373 334,519 Equipment 8,885 1,256 Goodwill 285,511 14,088 Bad debts — 120,608 Intangible Assets 713,206 — Accrued expenses and other 117,511 425,327 Business interest expense — — Gross deferred tax assets 6,212,278 9,853,440 Valuation allowance (6,218,484 ) (9,728,975 ) Net deferred tax assets $ (6,206 ) $ 124,465 Deferred tax liabilities Intangible assets — (130,046 ) Goodwill — — Deferred tax liabilities — (130,046 ) Net deferred tax liability $ (6,206 ) $ (5,558 ) As of December 31, 2022, the Company maintained a valuation allowance against certain deferred tax assets to reduce the total to an amount management believed was appropriate. Realization of deferred tax assets is dependent upon sufficient future taxable income during the periods when deductible temporary differences and carryforwards are expected to be available to reduce taxable income. As of December 31, 2022, the Company has a federal tax net operating loss carryforward of $ 21,500,845 376,018 The state net operating loss carryforwards will begin to expire in 2035 and are available to offset future taxable income or reduce taxes payable through 2040. 30,000,000 The foreign net operating losses related to operations in Israel and Hong Kong that can be carried forward indefinitely. The Company has US federal and state research and development tax credits of $ 95,597 6,683 The provision for (benefit from) income taxes charged to income for the years ended December 31, 2022 and 2021 consist of the following: Schedule of Income Tax Expenses Benefits 2022 2021 US current tax expense $ 10,718 $ 2,999 Foreign current tax expense — — US deferred tax expense (benefit) 648 1,172 Provision for income tax expenses (benefit) $ 11,366 $ 4,171 A reconciliation between the effective tax rate on income from continuing operations and the statutory tax rate is as follows: Schedule of Effective Tax Rate 2022 2021 Income tax benefit at federal statutory rate $ (3,288,865 ) 21.0 % $ (11,678,252 ) 21.0 % State and local income taxes net of federal tax benefit (83,610 ) 0.5 % (267,103 ) 0.5 % Rate differentials — 0.0 % (4,020 ) 0.0 % Meals and entertainment, non-deductible expenses and tax-exempt income (44,073 ) -0.1 % 72,503 -0.1 % Incentive stock option expense 61,851 -0.1 % 59,055 -0.1 % Nondeductible goodwill impairment 167,130 -8.2 % 4,551,259 -8.2 % Nondeductible commitment fee — -8.8 % 4,893,253 -8.8 % PPP loan forgiveness income — 0.0 % — 0.0 % NQO Cancellations 680,002 0.0 % — 0.0 % Financial Statement True Up (5,919 ) 0.0 % — 0.0 % Change in provision for uncertain tax positions — 0.0 % 1,177 0.0 % Change in valuation allowance 2,524,850 -4.3 % 2,376,299 -4.3 % Provision for income tax expenses (benefit) $ 11,366 0.0 % $ 4,171 0.0 % The Company has not provided any additional U.S. federal or state income taxes or foreign withholding taxes on the undistributed foreign earnings or basis differences as such differences have been considered indefinitely reinvested in the business. The determination of the amount of the unrecognized deferred tax liability related to the undistributed earnings is not practicable because of the complexities associated with its hypothetical calculation. The Company files income tax returns in the U.S. federal jurisdiction, Minnesota, and various other states. The Company is not subject to U.S. federal, state and local income tax examinations by tax authorities for years before 2018. The Company also files in Israel, Hong Kong and other foreign jurisdictions. The Company is not subject to audit in periods prior to 2018 in Israel and 2016, in Hong Kong The other foreign jurisdictions have various tax examination periods. It is difficult to predict the final timing and resolution of any particular uncertain tax position. Based on the Company’s assessment of many factors, including past experience and complex judgements about future events, the Company does not currently anticipate significant changes in its uncertain tax positions over the next 12 months. The following presents the change in accrued uncertain tax positions: Schedule of Accrued Uncertain Tax Positions Beginning balance, December 31, 2021 $ 131,100 Uncertain tax position additions 0 Removal for amount related to discontinued operations (131,100 ) Ending balance, December 31, 2022 $ 0 The Company recognizes interest and penalties accrued related to unrecognized tax benefits as additional income tax expense. During the years ended December 31, 2022 and 2021, the Company did not recognize material income tax expense related to interest and penalties. The Company’s uncertain tax position balance from continuing operations was $ 0 |
Discontinued Operation
Discontinued Operation | 12 Months Ended |
Dec. 31, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operation | Note 16 – Discontinued Operation In accordance with ASC 205-20 Presentation of Financial Statements: Discontinued Operations, a disposal of a component of an entity or a group of components of an entity is required to be reported as discontinued operations if the disposal represents a strategic shift that has (or will have) a major impact on an entity’s operations and financial results when the components of an entity meets the criteria in ASC paragraph 205-20-45-10. In the period in which the component meets the held for sale or discontinued operations criteria the major assets, other assets, current liabilities and non-current liabilities shall be reported as a component of total assets and liabilities separate from those balances of the continuing operations. At the same time, the results of all discontinued operations, less applicable income taxes (benefit), shall be reported as components of net income (loss) separate from the income (loss) of continuing operations. In June 2022, the Company’s Board of Directors approved management to enter into negotiations to sell MTS. The Company negotiated a Share and Asset Purchase Agreement with the transaction completed on December 31, 2022. The majority of the assets of the primary reporting unit within MTS were sold. The assets and liabilities remaining post transaction are in the process of winding down subsequent to the year ended December 31, 2022. Accordingly, the assets and liabilities of the MTS business are separately reported as assets and liabilities from discontinued operations as of December 31, 2022 and December 31, 2021. The results of operations and cash flows of MTS for all periods are separately reported as discontinued operations. The Company’s Enterprise TEM operating segment entered into contracts with customers to license the rights to use its software products and to provide maintenance, hosting and managed services, support and training to customers. Certain software licenses require customization. The Company sells its products directly to end-users and indirectly through resellers and operating equipment managers, who are considered end users. In June 2022, the Company’s Board of Directors approved management to enter into negotiations to sell MTS. The Company negotiated a Share and Asset Purchase Agreement with the transaction completed on December 31, 2022. The Enterprise TEM operating segment’s performance obligations are satisfied either overtime (managed services and maintenance) or at a point in time (software licenses). Professional services rendered after implementation are recognized as performed. Software license revenue is recognized when the customer has access to the license and the right to use and benefit from the license. Many of the Enterprise TEM operating segment’s agreements include software license bundled with maintenance and supports. The Company allocates the transaction price for each contract to each performance obligation identified in the contract based on the relative standalone selling price (SSP). The Company determines SSP for the purposes of allocating the transaction price to each performance obligation by considering several external and internal factors including, but not limited to, transactions where the specific element sold separately, historical actual pricing practices in accordance with ASC 606, Revenues from Contracts with Customers. The determination of SSP requires the exercise of judgement. For maintenance and support, the Company determines the SSP based on the price at which the Company sells a renewal contract. In accordance with the approval by the Company’s Board of Directors to sell MTS, management undertook an impairment assessment of MTS’ intangible assets and goodwill. Management concluded that the intangible assets of customer relationships and developed technology and its goodwill were impaired and recorded an impairment charge of $ 1,224,671 A reconciliation of the major classes of line items constituting the loss from discontinued operations, net of income taxes as presented in the consolidated statements of operations for the twelve months ended December 31, 2022 and 2021 is summarized in the table below. Summary Reconciliation of Discontinued Operations 2022 2021 Revenues $ 3,734,000 $ 1,515,848 Cost of Revenues 1,900,000 933,986 Gross Profit 1,834,000 581,862 Operating Expenses Selling, general, and administrative expenses 1,515,000 1,032,042 Goodwill and intangible asset impairment expenses 1,224,000 21,722,213 Total operating expenses 2,739,000 22,754,255 Operating Loss from Discontinued Operations (905,000 ) (22,172,393 ) Other Income and Expense Interest income 6,000 - Gain on disposal of subsidiary 997,000 - Total other income and expense 1,003,000 - Net Income Before Income Taxes from discontinued operations 98,000 (22,172,393 ) Provision for income tax expenses for discontinued operations 27,976 1,912 Net Income (Loss) $ 70,024 $ (22,174,305 ) The following table presents a reconciliation of the carrying amounts of major classes of assets and liabilities of the Company classified as discontinued operations as of December 31, 2022 and December 31, 2021. Included in total assets as of December 31, 2022 and 2021 is a deferred tax asset of $ 6,683 7,474 Schedule of Major Classes of Assets and Liabilities December 31, 2022 December 31, 2021 Carrying amounts of major classes of assets included as part of discontinued operations: December 31, 2022 December 31, 2021 Current Assets Cash $ 648,000 $ 690,181 Restricted cash - 1,025,029 Accounts receivable, net of allowance 191,000 137,405 Prepaid expenses and other current assets 187,000 248,594 Equipment, net 5,000 Other assets 279,000 Total current assets $ 1,310,000 $ 2,101,209 Non-current assets Equipment, net - $ 16,505 Other assets - 283,632 Intangibles and goodwill - 1,287,921 Total non-current assets $ - $ 1,588,058 December 31, 2022 December 31, 2021 Carrying amounts of major classes of liability included as part of discontinued operations December 31, 2022 December 31, 2021 Current liabilities Accrued expenses $ 374,879 $ 1,902,477 Contract liabilities 2,000 896,933 Other current liabilities 838,274 534,323 Total current liabilities $ 1,215,153 $ 3,333,733 Non-current liabilities Other long-term liabilities - 365,977 Total liabilities $ 1,215,213 $ 3,699,710 Total assets and liabilities of discontinued operations are presented as current assets from discontinued operations and current liabilities from discontinued operations as of December 31, 2022 on the consolidated balance sheets. Included in the consolidated statement of cash flows for the years ended December 31, 2022 and 2021 were the following, respectively: net cash generated by (used for) operating activities – discontinued operations of $ 533,133 215,879 10,423 1,932,000 |
Loss Per Share
Loss Per Share | 12 Months Ended |
Dec. 31, 2022 | |
Net loss per share - Basic and diluted | |
Loss Per Share | Note 17 – Loss Per Share The calculation of loss per share and weighted-average shares of the Company’s ordinary shares outstanding for the periods presented are as follows: Schedule of Loss Per Share and Weighted-average December 31, 2022 December 31, 2021 Net loss from continuing operations $ (15,303,402 ) $ (33,469,830 ) Less: discount accretion on series A preferred stock — (373,560 ) Less: dividend accretion on series A preferred stock — (91,192 ) Less: dividends on series B preferred stock (8,862 ) (315,632 ) Net loss from continuing operations available to ordinary shareholders (15,312,264 ) (34,250,214 ) Net income (loss) from discontinued operations, net of tax, available to ordinary shareholders 70,024 (22,174,305 ) Net loss available to ordinary shareholders $ (15,242,240 ) $ (56,424,519 ) Basic and diluted weighted-average shares outstanding 24,879,602 14,300,311 Basic and diluted: Net loss from continuing operations per share $ (0.62 ) $ (2.40 ) Net income (loss) from discontinued operations per share — (1.54 ) Net loss per share $ (0.62 ) $ (3.94 ) The MTS Merger was accounted for as a reverse acquisition. In accordance with ASC 805, Business Combinations The redeemable convertible preferred stock is a participating security, whereby if a dividend is declared to the holders of ordinary shares, the holders of preferred stock would participate to the same extent as if they had converted the preferred stock to ordinary shares. For the periods presented, the following securities were not required to be included in the computation of diluted shares outstanding: Schedule of Computation of Diluted Shares Outstanding 2022 2021 Stock options 2,889,124 1,783,567 Series A-1 preferred stock 66,303 54,737 Series B preferred stock 124,810 124,810 Earnout — 587,747 MTS warrants 83,334 83,334 Prefunded warrants 1,253,592 1,253,592 Regular warrants 2,666,667 2,666,667 Total 7,083,830 6,554,454 Diluted shares outstanding 7,083,830 6,554,454 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 18 – Related Party Transactions Through December 21, 2022, SportsHub Games Network (“Affiliate”) owned approximately 40% Alpha Capital Anstalt (“Alpha”) is an investor in the Company, which owns ordinary shares, Series A-1 preferred stock, Series B preferred stock, regular warrants and prefunded warrants. Alpha has a voting interest in the Company of less than 10%, but has an ownership interest in the Company that exceeds 10% 4.4 The Company uses Hays Companies (“Hays”) as an insurance broker. Hays is considered a related party as an executive of Hays serves on the board of directors for the Company. The Company paid $ 1,198,710 728,986 The Company leases office space in Canton, Connecticut from CJEM, LLC (CJEM), which is owned by an executive of the Company. The Company paid rent expense of $ 38,400 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 19 – Subsequent Events On January 20, 2023, the Company held an Extraordinary General Meeting of Shareholders and approved a reverse share split of the Company’s ordinary shares, par value NIS 0.06 per share, by a ratio of up to and including 20:1, to be effective at the ratio and on a date to be determined by the Company’s Board of Directors; and amendments to the Company’s Amended and Restated Articles and Memorandum of Association to effect such reverse share split On February 13, 2023, SharpLink, Inc. (the “Borrower”), a Minnesota corporation and wholly owned subsidiary of the Company, entered into a Revolving Credit Agreement (the “2023 Revolving Credit Agreement”) with Platinum Bank, a Minnesota banking corporation (the “Lender”) and executed a revolving promissory note of $ 7,000,000 The 2023 Revolving Credit Agreement provides for a two-year revolving line of credit (the “2023 Credit Line”) in the original principal amount of $ 7,000,000 As previously disclosed, on December 22, 2022, the Company consummated a transaction with SHGN Acquisition Corp., a Delaware corporation and wholly owned subsidiary of the Company, and SportsHub Games Network, Inc., a Delaware corporation. As a result, SportsHub Games Network, Inc. merged with and into SHGN Acquisition Corp., with SHGN Acquisition Corp. remaining as the surviving corporation and wholly owned subsidiary of the Company. After the merger, SHGN Acquisition Corp. (“New Borrower”) entered the following agreements with the Lender to assume the loans of SportsHub Games Network, Inc. (“Existing Borrower”). ● On February 13, 2023, the New Borrower as successor by merger to Existing Borrower, LeagueSafe Management, LLC, a Minnesota limited liability company (“LeagueSafe”), Virtual Fantasy Games Acquisition, LLC, a Minnesota limited liability company (“Virtual Fantasy,” and together with LeagueSafe, collectively, the “Guarantors”) entered into a consent, assumption and second amendment agreement with the Lender. LeagueSafe and Virtual Fantasy were the Existing Borrower’s subsidiaries, and as a result of the merger, became the New Borrower’s subsidiaries. ● On February 13, 2023, the New Borrower also executed an amended and restated term promissory note payable to the Lender in the principal amount of $ 1,267,199 2,000,000 ● On February 13, 2023, the New Borrower, LeagueSafe and Virtual Fantasy (together with LeagueSafe, the “Pledgors”) entered into a consent, assumption and third amendment agreement with the Lender. ● On February 13, 2023, the New Borrower also executed an amended and restated revolving promissory note payable to the Lender in the principal amount of $ 5,000,000 5,000,000 On February 15, 2023, the Company also issued to Alpha the Warrant to purchase 8,800,000 0.875 0.875 9.99% On March 10, 2023, Silicon Valley Bank (“SVB”) was placed into the hands of receivers at the FDIC. On this date, SharpLink had approximately $ 336,000 250,000 140,000 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Nature of Business | Nature of Business SharpLink Gaming Ltd. (the “Company” or “SharpLink,” formerly Mer Telemanagement Services or “MTS”), is an Israeli-based corporation. SharpLink is a leading online technology company that connects sports fans, leagues and sports websites to relevant and timely sports betting and iGaming content. SharpLink uses proprietary, intelligent, online conversion technology and direct-to-player (“D2P”) performance marketing strategies to convert sports fans into sports bettors and online casino game players for licensed, online sportsbook and casino operators. Further, SharpLink, through its SportsHub Gaming Network (“SportsHub”) reporting unit, owns and operates an online gaming business that primarily facilitates daily and seasonal peer-to-peer fantasy contests for its end users. The Company also operates a website that provides a variety of services to private fantasy league commissioners, including secure online payment options, transparent tracking and reporting of transactions, payment reminders, in-season security of league funds, and facilitation of prize payouts. On July 26, 2021, SharpLink, Inc. completed its merger with Mer Telemanagement Solutions Ltd. (the “MTS Merger”), which changed its name to SharpLink Gaming Ltd. and commenced trading on NASDAQ under the ticker symbol “SBET.” As a result of the MTS Merger, SharpLink, Inc. shareholders own 86 |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of SharpLink Gaming Ltd. and its wholly owned subsidiaries. All intercompany accounts and transactions between consolidated subsidiaries have been eliminated in consolidation. We operate in four reportable segments. Operating segments are defined as components of an enterprise about which separate financial information is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and assessing performance. The Company’s chief operating decision maker (“CODM”), our Chief Executive Officer, allocates resources and assesses performance based upon discrete financial information at the segment level. |
Reclassifications | Reclassifications Certain amounts in prior periods have been reclassified to reflect the impact of the discontinued operations treatment in order to conform to the current period presentation. See Note 16. |
Functional Currency | Functional Currency The Company’s functional and reporting currency is the U.S. dollar. Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction. The resulting monetary assets and liabilities are translated into U.S. dollars at exchange rates prevailing on the subsequent balance sheet date. Revenue and expense components are translated to U.S. dollars at weighted-average exchange rates in effect during the period. Foreign currency transaction gains and losses resulting from remeasurement are recognized in other income, net within the consolidated statements of operations. |
Purchase Accounting | Purchase Accounting The purchase price of an acquired business is allocated to the assets acquired and liabilities assumed at their estimated fair values on the date of acquisition. Any unallocated purchase price amount is recognized as goodwill on the consolidated balance sheet if it exceeds the estimated fair value and as a bargain purchase gain on the consolidated statement of operations if it is below the estimated fair value. Determining the fair value of assets acquired and liabilities assumed requires management’s judgment, and the utilization of independent valuation experts as well as the use of significant estimates and assumptions with respect to the timing and amounts of future cash inflows and outflows, discount rates, market prices and asset lives, among other items. The judgments made in the determination of the estimated fair value assigned to the assets acquired and liabilities assumed, as well as the estimated useful life of each asset and the duration of each liability, can materially impact the financial statements in periods after acquisition, such as through depreciation and amortization expense. Acquisition-related costs are expensed as incurred and changes in deferred tax asset valuation allowances and income tax uncertainties after the measurement period are recorded in Provision for Income Taxes. |
Discontinued Operations | Discontinued Operations In June 2022, the Company’s Board of Directors approved management to enter into negotiations to sell MTS. The Company completed the sale of MTS on December 31, 2022. Accordingly, the assets and liabilities of the MTS business are separately reported as assets and liabilities from discontinued operations as of December 31, 2022 and 2021. The results of operations and cash flows of MTS for all periods are separately reported as discontinued operations. |
Restricted Cash | Restricted Cash Restricted cash consists of funds held for payment of prize liabilities for its various daily and seasonal peer-to-peer fantasy games, as well as private fantasy league dues from customers who utilize the services offered via the Company’s secure online payment and league dues management website. The Company maintains separate accounts to segregate users’ funds from operational funds. |
Concentrations of Credit Risk | Concentrations of Credit Risk Cash and restricted cash are deposited with major banks in the United States, Israel and Hong Kong. Such deposits in the United States may be in excess of insured limits and are not insured in other jurisdictions. Generally, the FDIC limit per bank is $ 250,000 The following represents the cash and restricted cash on hand at December 31, 2022 by banking institution and does not include any reduction for the FDIC insured limit of $ 250,000 Schedule of Cash and Restricted Cash Bank December 31, 2022 Platinum Bank $ 46,023,871 Bank Vista 2,744,359 Silicon Valley Bank 503,103 Other 1,186,153 Total cash and restricted cash $ 50,457,486 The Company performs ongoing credit evaluations of its customers. In certain circumstances, the Company may require letters of credit, other collateral or additional guarantees. |
Accounts Receivable | Accounts Receivable The Company’s policy for estimating the allowance for credit losses on accounts receivables considers several factors including historical loss experience, the age of delinquent receivable balances due, and economic conditions. Specific customer reserves are made during review of significant outstanding balances due, in which customer creditworthiness and current economic trends may indicate that it is probable the receivable will not be recovered. Accounts receivables are written off after collection efforts occur and the receivable is deemed uncollectible. Adjustments to the allowance for credit losses are recorded in selling, general and administrative expense. Allowance for credit losses as of December 31, 2022 and 2021 were $ 0 0 |
Investment, cost | Investment, cost During the year ended December 31, 2021, the Company invested $ 200,000 280,903 1.12 |
Equipment | Equipment Equipment is recorded at cost. Expenditures for renewals and improvements that significantly add to the productivity capacity or extend the useful life of an asset are capitalized. Expenditures for maintenance and repairs are expensed. When equipment is retired or sold, the cost and related accumulated depreciation are eliminated from the accounts and the resultant gain or loss is reflected in income. Depreciation is provided using the straight-line method, based on useful lives of the assets which ranges from three to seven years. Depreciation expense for the years ended December 31, 2022 and 2021, was $ 25,345 28,891 100,733 86,989 |
Leases | Leases The Company determines if an arrangement is or contains a lease at inception or modification of the arrangement. An arrangement is or contains a lease if there are identified assets and the right to control the use of an identified asset is conveyed for a period of time in exchange for consideration. Control over the use of the identified asset means the lessee has both the right to obtain substantially all of the economic benefits from the use of the asset and the right to direct the use of the asset. For a lease with terms greater than year, a right-of-use (ROU) asset and lease liability is recognized based on the present value of the future minimum lease payments over the lease term at commencement date. The initial measurement of the operating lease ROU asset also includes any prepaid lease payments and are reduced by any previously accrued deferred rent. The Company’s operating lease does not provide a readily determinable implicit rate; therefore, the Company uses its incremental borrowing rate to discount the lease payments based on the information available at commencement date. The Company’s operating lease does not include a fixed rental escalation clause. Lease terms include optional renewal periods when it is reasonably certain that such option will be exercised. Lease expense for minimum lease payments is recognized on a straight-line basis over the expected lease term. |
Intangible and Long-Lived Assets | Intangible and Long-Lived Assets Intangible assets consist of internally developed software, customer relationships, trade names and acquired technology and are carried at cost less accumulated amortization. The Company amortizes the cost of identifiable intangible assets on a straight-line basis over the expected period of benefit, which ranges from three ten years Costs associated with internally developed software are expensed as incurred unless they meet generally accepted accounting criteria for deferral and subsequent amortization. Software development costs incurred prior to the application development stage are expensed as incurred. For costs that are capitalized, the subsequent amortization is the straight-line method over the remaining economic life of the product, which is estimated to be five years The Company begins amortizing the asset and subsequent enhancements once the software is ready for its intended use. The Company reassesses whether it has met the relevant criteria for deferral and amortization at each reporting date. The Company capitalized $ 137,565 201,436 The Company reviews the carrying value of its long-lived assets, including equipment and finite-lived intangible assets, for impairment whenever events and circumstances indicate that the carrying value of an asset may not be recoverable from the estimate future cash flows expected to result from its use and eventual disposition. In cases where undiscounted cash flows are less than the carrying value of an asset group, an impairment loss is recognized equal to an amount by which the asset group’s carrying value exceeds the fair value of assets. The factors considered by management in performing this assessment include current operating results, trends and prospects, the manner in which the property is used, and the effects of customer loss, obsolescence, demand, competition, and other economic factors. In accordance with the approval by the Company’s Board of Directors to sell MTS in June 2022, management concluded that the intangible assets of customer relationships and developed technology and its goodwill were impaired and recorded an impairment charge for $ 1,224,671 |
Goodwill and Impairment | Goodwill and Impairment The Company evaluates the carrying amount of goodwill annually or more frequently if events or circumstances indicate that the goodwill may be impaired. Factors that could trigger an impairment review include significant underperformance relative to historical or forecasted operating results, a significant decrease in the market value of an asset or significant negative industry or economic trends. The Company completes impairment reviews for its reporting units using a fair-value method based on management’s judgments and assumptions. When performing its annual impairment assessment, the Company evaluates the recoverability of goodwill assigned to each of its reporting units by comparing the estimated fair value of the respective reporting unit to the carrying value, including goodwill. The Company estimates fair value utilizing the income approach and the market approach or a combination of both income and market approaches. The income approach requires management to make assumptions and estimates for each reporting unit, including projected future operating results, economic projections, anticipated future cash flows, working capital levels, income tax rates, and a weighted-average cost of capital reflecting the specific risk profile of the respective reporting unit. The key assumptions used in the income approach include revenue growth, operating income margin, discount rate and terminal growth rate. These assumptions are the most sensitive and susceptible to change as they require significant management judgment. Discount rates are determined by using market and industry data as well as Company-specific risk factors for each reporting unit. The discount rate utilized for each reporting unit is indicative of the return an investor would expect to receive for investing in such a business. The market approach estimates fair value using performance multiples of comparable publicly-traded companies. In the event the fair value of a reporting unit is less than the carrying value, including goodwill, an impairment loss is recognized for the difference between the implied fair value and the carrying value of the reporting unit. The Company recorded goodwill impairment of $ 1,515,000 During the year ended December 31, 2021, the Company recorded goodwill impairment of $ 21,722,213 858,819 |
Accounts Payable | Accounts Payable The composition of accounts payable and accrued expenses are as follows: Schedule of Accounts Payable and Accrued Expenses December 31, 2022 December 31, 2021 Accounts payable $ 851,031 $ 813,621 Accrued wages and payroll expenses 338,166 181,360 Accrued bonus 358,836 117,370 Accrued interest 32,017 - Other accrued expenses 545,657 291,671 Accounts payable and accrued expenses $ 2,125,707 $ 1,404,022 |
Prize Liability | Prize Liability The Company’s prize liability consists of funds to be paid to participants of the various fantasy games hosted by the Company. These prizes are paid to the participants once a fantasy game has concluded and final winners have been determined. |
Customer Deposits | Customer Deposits The Company’s liability for customer obligations is in wallet accounts and accounts on the SportsHub platform. Cash related to these accounts may be drawn at the customer’s request. |
Severance Pay | Severance Pay Certain of the Company’s employees in Israel have subscribed to Section 14 of Israel’s Severance Pay Law, 5723-1963 (“Section 14”). Pursuant to Section 14, the Company’s employees, covered by this section, are entitled to monthly deposits, at a rate of 8.33 With regards to employees in Israel that are not subject to Section 14, the Company’s liability for severance pay is calculated pursuant to the local Severance Pay Law, based on the most recent salary of the relevant employees multiplied by the number of years of employment as of the balance sheet date. These employees are entitled to one-month salary for each year of employment or a portion thereof. The Company’s liability for these employees is fully provided for via monthly deposits with severance pay funds, insurance policies and an accrual. The value of the liability of $ 342,000 366,000 279,000 284,000 The deposited funds include profits accumulated up to the balance sheet date. The deposited funds may be withdrawn only upon the fulfillment of the obligation pursuant to the Severance Pay Law or labor agreements. |
Transactions with SportsHub | Transactions with SportsHub Prior to December 22, 2022 (see Note 3 – Acquisitions – SportsHub Games Network, Inc.), SportsHub owned approximately 40% of the outstanding ordinary shares of the Company. SportsHub has historically paid direct expenses incurred by the Company’s Sports Gaming Client Services business unit (“STI”), which includes salaries and related expenses for the employees of STI. SportsHub collects cash on behalf of STI’s revenue generating activities. The Company was allocated cost of revenue and selling, general, and administrative expenses totaling $ 285,673 284,625 |
Redeemable Preferred Stock Issued with a Commitment Fee | Redeemable Preferred Stock Issued with a Commitment Fee The Company considers guidance within ASC 470-20, Debt (ASC 470), ASC 480, and ASC 815 when accounting for a redeemable equity instrument issued with a freestanding-instruments (e.g. commitment fee), such as in the issuance upon the date the SharpLink stock is listed or quoted on any trading market (Going Public Transaction). In circumstances in which redeemable convertible preferred stock is issued with a commitment fee, the proceeds from the issuance of the convertible preferred stock are first allocated to the commitment fee at its full estimated fair value. The Company accounts for the commitment fee as either equity instrument, liability, or derivative liability in accordance with ASC 480, Distinguishing Liabilities from Equity (ASC 480) and/or ASC 815, Derivatives and Hedging (ASC 815), depending on the specific terms of the agreement. The commitment fee, which required the Company to issue ordinary shares equal to 3% of the Company’s issued and outstanding capital immediately following the Going Public Transaction, required the Company to transfer a variable number of shares outside of its control, which is classified as a liability. Liability-classified instruments are recorded at their estimated fair values at each reporting period until they are exercised, terminated, reclassified, or otherwise settled. Changes in the estimated fair value of the commitment fee were recorded in Commitment Fee Expense in the consolidated statement of operations for the year ended December 31, 2021. |
Treasury Stock | Treasury Stock Company shares held as treasury shares are recognized at cost, and as a deduction from equity. Any gain or loss arising from a purchase, sale, issuance or cancellation of treasury shares is recognized directly in equity at the time of such event. |
Warrants | Warrants The Company accounts for a warrant as an equity instrument, liability or share-based compensation in accordance with ASC 480, Distinguishing Liabilities from Equity, and/or ASC 718, Compensation – Stock Compensation, depending on the specific terms of the agreement. In February 2021, the Company issued a warrant in exchange for advisory services, which vested upon the completion of the Going Public Transaction. The warrant was in the scope of ASC 718 and was recognized at its grant date fair value when the performance condition became probable of occurrence, which in the Company’s case was the completion of the Going Public Transaction. The grant date fair value was determined using a Black Scholes option-pricing model. Through the MTS Merger, the Company assumed 83,334 In November 2021, the Company issued warrants concurrent with a sale of ordinary shares to an institutional investor. Based on the terms of the agreements, the warrants were freestanding, equity-linked instruments that represented separate units of account. The Company allocated the value of net proceeds from the offering to the ordinary shares and warrants based on relative fair value on the grant date. The warrants’ grant date fair values were determined using Black Scholes option-pricing models. The value allocated to the warrants was recorded in Additional Paid-In Capital in the consolidated balance sheet. |
Revenue | Revenue The Company follows a five-step model to assess each sale to a customer; identify the legally binding contract, identify the performance obligations, determine the transaction price, allocate the transaction price, and determine whether revenue will be recognized at a point in time or over time. Revenue is recognized upon transfer of control of promised products or services (i.e., performance obligations) to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for promised goods or services. |
Advertising and Marketing Expenses | Advertising and Marketing Expenses The Company incurred $ 459,976 The Affiliate Marketing Services – United States and the Affiliate Marketing Services – International operating segments generate revenue by earning commissions from sportsbooks and casino operators when a new depositor is directed to them by our affiliate marketing websites. In addition, this segment provides sports betting data (e.g., betting lines) to sports media publishers in exchange for a fixed fee. The Sports Gaming Client Services operating segments’ performance obligations are satisfied over time (software licenses). Software license revenue is recognized when the customer has access to the license and the right to use and benefit from the license. Other items relating to charges collected from customers include reimbursable expenses. Charges collected from customers as part of the Company’s sales transactions are included in revenues and the associated costs are included in cost of revenues. The Company’s SportsHub operating segment collects fees from customers for daily and season-long online fantasy sports games in advance and recognizes the related fees over the term of the online fantasy game. It also collects various forms of fee revenue from customers using its wallet system platform. Its performance obligation is to provide these customers with an online platform to collect entry fees, provide transparency into league transactions, encourage timely payment of entry fees, safeguard funds during the season and facilitate end-of-season prize payouts. Fee revenue related to payment transactions is deferred until the end of the specific season. Other types of fee revenue are recognized on a transactional basis when users complete transactions or when a customer’s account becomes inactive under the terms of the user agreement. SportsHub also provides sports simulation software that customers pay a fee to access over a period of time. SportsHub provides and maintains the software throughout the duration of the season, which constitutes a single performance obligation and revenue is recognized over the term of the service. SportsHub also collects subscription fees from users of its Fantasy National Golf Club. Its performance obligation under these contracts is to provide subscribers with access to SportsHub’s intellectual property. Revenue is initially deferred and recognized ratably over the subscription period. Any discounts, promotional incentives or waived entry fees are treated as a reduction in revenue. Any promotions where funds are issued to a user’s wallet account are recognized as marketing expenses, included in selling, general, and administrative expenses. |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation expense reflects the fair value of stock-based awards measured at the grant date and recognized over the requisite service period. The Company estimates the fair value of each stock-based award on the measurement date using the Black-Scholes option valuation model which incorporates assumptions as to stock price volatility, the expected life of the options, risk-free interest rate, and dividend yield. |
Income Taxes | Income Taxes The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes, under which deferred tax liabilities and assets are recognized for the expected future tax consequences of temporary differences between financial statement carrying amounts and the tax basis of assets and liabilities, net operating losses, and tax credit carryforwards. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company uses a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. A tax position is recognized when it is more likely than not that the tax position will be sustained upon examination, including resolution of any related appeals or litigation processes. A tax position that meets the more-likely-than-not recognition threshold is measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement with a taxing authority. The standard also provides guidance on derecognition of tax benefits, classification on the balance sheet, interest and penalties, accounting in interim periods, disclosure and transition. |
Net Loss Per Share | Net Loss Per Share Basic net loss per share is calculated by dividing net loss available to ordinary shareholders, adjusted for preferred stock discount accretion and dividends accrued on preferred stock, by the weighted-average number of ordinary shares outstanding during the period excluding the effects of any potentially dilutive securities. Diluted net loss per share is computed similar to basic loss per share, except that the denominator is increased to include the number of additional ordinary shares that would have been outstanding if potential ordinary shares (also known as common) had been issued if such additional ordinary shares were dilutive. Since the Company had net losses for all the periods presented, basic and diluted loss per share are the same, and additional potential ordinary shares have been excluded, as their effect would be anti-dilutive. At December 31, 2022, dividend accrued in Preferred Series A-1 stock of 66,303 124,810 2,889,124 4,003,593 |
Fair Value Measurements | Fair Value Measurements The Company has determined the fair value of certain assets and liabilities in accordance with generally accepted accounting principles, which provides a framework for measuring fair value. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques should maximize the use of observable inputs and minimize the use of unobservable inputs. A fair value hierarchy has been established, which prioritizes the valuation inputs into three broad levels. Level 1 inputs consist of quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the related asset or liability. Level 3 inputs are unobservable inputs related to the asset or liability. |
Estimates | Estimates The preparation of the consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Our most critical estimates include those related to purchase accounting, intangibles and long-lived assets, goodwill and impairment, stock based compensation, discontinued operations and revenue recognition. On an ongoing basis, we evaluate our estimates and assumptions. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates. |
Contingencies | Contingencies From time to time, we may become involved in lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. Although we currently maintain liability insurance coverage intended to cover professional liability and certain other claims, we cannot assure that our insurance coverage will be adequate to cover liabilities arising out of claims asserted against us in the future where the outcomes of such claims are unfavorable to us. Liabilities in excess of our insurance coverage, including coverage for professional liability and certain other claims, could have a material adverse effect on our business, financial condition and results of operations. |
Recently Issued Accounting Pronouncements Not Yet Adopted | Recently Issued Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASC 326, Financial Instruments – Credit Losses (Topic 326): Measurements of Credit Losses on Financial Instruments (“ASC 326”), which replaces the existing incurred loss model with a current expected credit loss (“CECL”) model that requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The Company would be required to use a forward looking CECL model for accounts receivables, guarantees, and other financial instruments. The Company will adopt ASC 326 on January 1, 2023 and does not expect ASC 326 to have a material impact on its consolidated financial statements. In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ASU 2022-03”), which clarifies the guidance in Accounting Standards Codification Topic 820, Fair Value Measurement (“Topic 820”), when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security and introduces new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value in accordance with Topic 820. ASU 2022-03 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, and early adoption is permitted. While the Company is continuing to assess the timing of adoption and the potential impacts of ASU 2022-03, it does not expect ASU 2022-03 to have a material effect on the Company’s consolidated financial condition, results of operations or cash flows. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Cash and Restricted Cash | The following represents the cash and restricted cash on hand at December 31, 2022 by banking institution and does not include any reduction for the FDIC insured limit of $ 250,000 Schedule of Cash and Restricted Cash Bank December 31, 2022 Platinum Bank $ 46,023,871 Bank Vista 2,744,359 Silicon Valley Bank 503,103 Other 1,186,153 Total cash and restricted cash $ 50,457,486 |
Schedule of Accounts Payable and Accrued Expenses | The composition of accounts payable and accrued expenses are as follows: Schedule of Accounts Payable and Accrued Expenses December 31, 2022 December 31, 2021 Accounts payable $ 851,031 $ 813,621 Accrued wages and payroll expenses 338,166 181,360 Accrued bonus 358,836 117,370 Accrued interest 32,017 - Other accrued expenses 545,657 291,671 Accounts payable and accrued expenses $ 2,125,707 $ 1,404,022 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Business Acquisition [Line Items] | |
Schedule of Purchase Consideration | Schedule of Purchase Consideration MTS issued and outstanding ordinary shares immediately prior to Merger 3,162,951 MTS share price on July 26, 2021 $ 6.80 MTS ordinary shares fair value 21,508,067 MTS warrants and options fair value $ 601,965 Purchase consideration for accounting acquiree $ 22,110,032 |
Schedule of Assumptions | Schedule of Assumptions MTS Warrants - $2.642 strike price Fair value of ordinary shares $ 6.80 Exercise price $ 2.64 Expected volatility 54.7 % Expected dividends 0.0 % Expected term (in years) 3.0 Risk-free rate 0.38 % Fair value per warrant $ 4.49 Warrants 58,334 Fair value $ 261,965 MTS Warrants - $0 strike price Fair value of ordinary shares $ 6.80 Exercise price $ 0.00 Expected volatility 54.7 % Expected dividends 0.0 % Expected term (in years) 3.0 Risk-free rate 0.38 % Fair value per warrant $ 6.80 Warrants 25,000 Fair value $ 170,000 MTS Options - $0 strike price Fair value of ordinary shares $ 6.80 Exercise price $ 0.00 Expected volatility 54.7 % Expected dividends 0.0 % Expected term (in years) 3.0 Risk-free rate 0.38 % Fair value per warrant $ 6.80 Warrants 25,000 Fair value $ 170,000 |
Schedule of Fair Value Assumption Asset | Schedule of Fair Value Assumption Asset Weighted Average Fair Value Useful Life (Years) Customer relationships $ 414,000 4 Developed technology 69,000 3 Total fair value of assumption asset $ 483,000 |
Schedule of Business Acquisition Pro Forma Information | The pro forma financial information excludes adjustments for estimated cost synergies or other effects of the integration of MTS, FourCubed and SportsHub: Schedule of Business Acquisition Pro Forma Information 2022 2021 Revenues $ 12,108,434 $ 19,695,782 Loss from continuing operations (28,420,775 ) (90,132,215 ) Less: dividends accrued on series B preferred stock — (782,887 ) Net loss from continuing operations available to ordinary shareholders (28,420,775 ) (90,915,102 ) Net income (loss) from discontinued operations, net of tax, available to ordinary shareholders 70,024 (49,000 ) Net loss available to ordinary shareholders (28,350,751 ) (90,964,102 ) Basic and diluted: Net loss from continuing operations per share $ (1.14 ) $ (6.36 ) Net loss from discontinued operations per share — — Net loss per share $ (1.14 ) $ (6.36 ) |
M T S Assets And Liabilities [Member] | |
Business Acquisition [Line Items] | |
Schedule of Fair Value of Assets Acquired and Liabilities Assumed | The fair value of the assets acquired and liabilities assumed as of July 26, 2021 were as follows: Schedule of Fair Value of Assets Acquired and Liabilities Assumed Assets: Cash 916,000 Restricted cash 1,016,000 Accounts receivable 356,000 Prepaid expenses and other current assets 322,000 Equipment 25,000 Other long-term assets 261,000 Intangible assets 483,000 Total Assets $ 3,379,000 Liabilities: Accrued expenses 2,129,000 Deferred revenue 914,000 Other current liabilities 495,000 Other long-term liabilities 312,000 Total liabilities $ 3,850,000 Net assets acquired, excluding goodwill $ (471,000 ) Goodwill 22,581,032 Purchase consideration for accounting acquiree $ 22,110,032 |
Four Cubed Acquisition LLC Company [Member] | |
Business Acquisition [Line Items] | |
Schedule of Purchase Consideration | Schedule of Purchase Consideration Ordinary shares issued to seller 606,114 Ordinary share price on December 31, 2021 $ 2.65 Consideration in ordinary shares 1,606,202 Cash paid to Seller 6,195,000 Due to Seller 691,523 Purchase consideration $ 8,492,725 |
Schedule of Fair Value of Assets Acquired and Liabilities Assumed | The fair value of the assets acquired and liabilities assumed as of December 31, 2021 were as follows: Schedule of Fair Value of Assets Acquired and Liabilities Assumed Assets: Cash $ 311,523 Accounts receivable 424,593 Prepaid expenses and other current assets 9,468 Intangible assets 4,928,000 Total assets $ 5,673,584 Liabilities: Accrued expenses $ 311,026 Total liabilities 311,026 Net assets acquired, excluding goodwill $ 5,362,558 Goodwill 3,130,167 Purchase consideration for accounting acquiree $ 8,492,725 |
Schedule of Fair Value Assumption Asset | Schedule of Fair Value Assumption Asset Weighted Average Fair Value Useful Life (Years) Customer relationships $ 4,144,000 10 Developed technology 784,000 1 Total fair value of assumption asset $ 4,928,000 |
SportsHub Acquisition [Member] | |
Business Acquisition [Line Items] | |
Schedule of Purchase Consideration | Schedule of Purchase Consideration Description Amount Fair Value of Equity Consideration $ 1,370,287 Fair Value of Seller Platinum Line of Credit and Loan 5,387,850 Total Purchase Price $ 6,758,137 |
Schedule of Fair Value of Assets Acquired and Liabilities Assumed | The fair value of the assets acquired and liabilities assumed as of December 22, 2022 were as follows: Schedule of Fair Value of Assets Acquired and Liabilities Assumed Assets: Cash $ 38,255,266 Restricted cash 10,604,004 Accounts receivable 186,712 Prepaid expenses and other current assets 1,916,932 Equipment 11,953 Other long-term assets 95,793 Intangible assets 2,390,000 Total Assets $ 53,460,660 Liabilities: Accrued expenses $ 284,345 Deferred tax liabilities 48,775 Deferred revenue 3,574,285 Other current liabilities 47,657,117 Other long-term liabilities 106,705 Total liabilities $ 51,671,227 Net assets acquired, excluding goodwill $ 1,789,433 Goodwill 4,968,703 Purchase consideration for accounting acquiree $ 6,758,137 |
Schedule of Fair Value Assumption Asset | The fair value, as determined by assumptions that market participants would use in pricing the assets, and weighted average useful life of the identifiable intangible assets are as follows: Schedule of Fair Value Assumption Asset Weighted Average Fair Value Useful Life (Years) Customer relationships $ 1,550,000 5 Trade names 640,000 6 Acquired technology 200,000 5 $ 2,390,000 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Schedule of weighted average remaining lease term and weighted-average discount rate | The following summarizes the weighted-average remaining lease term and weighted-average discount rate: Schedule of weighted average remaining lease term and weighted-average discount rate 2022 2021 Weighted-average remaining lease term Operating leases 30 months 60 months Weighted-average discount rate Operating leases 5.67 % 6.00 % |
Schedule of future minimum lease payment | Maturity of noncancelable operating leases with terms greater than one year as of December 31, 2022 are as follows: Schedule of future minimum lease payment Year Ending December 31, Operating leases 2023 $ 31,070 2024 72,720 2025 67,736 2026 94,675 Total lease payments $ 266,201 Less: interest 25,094 Present value of lease liability $ 241,107 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible assets | Schedule of Intangible assets Weighted-average amortization period Accumulated (years) Cost Amortization Net Balance, December 31, 2022 Customer relationships 5 10 $ 2,643,000 $ 280,636 $ 2,362,364 Acquired technology 3 5 1,437,050 1,201,739 235,311 Internally developed software 5 749,147 288,530 460,617 Trade names 6 640,000 3,405 636,595 Software in development N/A 33,046 — 33,046 $ 5,502,243 $ 1,774,310 $ 3,727,933 Balance, December 31, 2021 Customer relationships 9 $ 4,304,000 $ 131,429 $ 4,172,571 Acquired technology 3 1,214,000 360,357 853,643 Internally developed software 5 654,022 142,050 511,972 Software in development N/A 13,354 — 13,354 $ 6,185,376 $ 633,936 $ 5,551,440 |
Schedule of Future Amortization Expenses of Intangible Assets | Schedule of Future Amortization Expenses of Intangible Assets Amount 2023 $ 724,564 2024 704,922 2025 673,281 2026 596,306 2027 526,949 Thereafter 465,665 Total $ 3,691,686 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill | Schedule of goodwill SportsHub Sports Affiliate Total Balance as of December 31, 2021 $ — $ 381,000 $ 3,130,167 $ 3,511,167 Goodwill 4,919,928 — — 4,919,928 Less: Impairment charges — — (1,515,000 ) (1,515,000 ) Balance as of December 31, 2022 $ 4,919,928 $ 381,000 $ 1,615,167 $ 6,916,095 Cumulative goodwill impairment charges $ — $ — $ 1,515,000 $ 1,515,000 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Term Loan Agreements | A summary of the term loan agreements is noted below: Schedule of Term Loan Agreements 2022 Note Payable – Bank, $ 2,000,000 $ 1,267,200 Note Payable – Bank, $ 3,250,000 2,700,775 Note Payable – Bank 2,700,775 Total 3,967,975 Less unamortized debt issuance costs 17,359 Less current portion 1,018,918 Long-term debt $ 2,931,698 |
Schedule of Outstanding amount of debt | The outstanding amount of debt as of December 31, 2022 matures by year as follows: Schedule of Outstanding amount of debt Year Amount 2023 $ 1,018,918 2024 1,066,808 2025 1,119,689 2026 700,256 2027 62,304 Total $ 3,967,975 |
Warrants (Tables)
Warrants (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Schedule of Warrant Outstanding | Schedule of Warrant Outstanding Warrant - advisory services Warrants - MTS Prefunded warrants Regular warrants Outstanding Vested Outstanding Vested Outstanding Vested Outstanding Vested Beginning balance, December 31, 2021 — — 83,334 83,334 1,253,592 1,253,592 2,666,667 — Issued and vested — — — — — — — — Acquired — — — — — — — — Converted to ordinary shares — — — — — — — — Ending balance, December 31, 2022 — — 83,334 83,334 1,253,592 1,253,592 2,666,667 — Beginning balance, December 31, 2020 — — — — — — — — Issued and vested 1 1 — — 1,253,592 1,253,592 2,666,667 — Acquired — — 83,334 83,334 — — — — Converted to ordinary shares (1 ) (1 ) — — — — — — Ending balance, December 31, 2021 — — 83,334 83,334 1,253,592 1,253,592 2,666,667 — |
Warrant Advisory Services [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Schedule of Warrants Assumptions | Schedule of Warrant Assumptions Fair value of ordinary shares on grant date $ 2.36 Exercise price $ 0.01 Expected volatility 58.2 % Expected dividends 0.0 % Expected term (in years) 5.00 Risk-free rate 0.42 % |
Prefunded Warrants [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Schedule of Warrants Assumptions | Schedule of Warrants Assumptions Prefunded Warrants Fair value of ordinary shares $ 3.25 Exercise price $ 0.01 Expected volatility 50.5 % Expected dividends 0.0 % Expected term (in years) 4.00 Risk-free rate 1.03 % Schedule of assumptions Regular Warrants Fair value of ordinary shares $ 3.25 Exercise price $ 4.50 Expected volatility 50.5 % Expected dividends 0.0 % Expected term (in years) 4.00 Risk-free rate 1.03 % |
Fair Value (Tables)
Fair Value (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Inputs and Assumptions of Valuation Model | Schedule of Inputs and Assumptions of Valuation Model Probability of a Going Public Transaction 50.0 % Volatility 58.5 % Stock price of public company at the time of measurement $ 0.63 Date of a Going Public Transaction April 30, 2021 Pro-forma common shares outstanding at Going Public Transaction date 52,077,000 |
Schedule of Commitment Fee | Schedule of Commitment Fee Schedule of commitment fee Beginning balance, December 31, 2020 $ 577,000 Commitment fee expense 23,301,206 Issuance of Series A-1 and B preferred stock in exchange for commitment fee (23,878,206 ) Ending balance, December 31, 2021 $ — |
Stock Compensation (Tables)
Stock Compensation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
Schedule of Fair Values of Stock Options Granted Using Black-scholes Valuation Model Assumptions | Schedule of Fair Values of Stock Options Granted Using Black-scholes Valuation Model Assumptions Schedule of estimates the volatility 2022 2021 Expected volatility 51.1 53.7 % 51.0 51.8 % Expected dividends 0.0 % 0.0 % Expected term (years) 5.5 6.0 5.5 6.0 Risk-free rate 1.44 4.24 % 0.79 1.24 % Fair value of Ordinary Shares on grant date $ 0.31 1.33 $ 1.05 3.29 |
Schedule of Stock Option Activity | The summary of activity under the plans as of December 31, 2022, and change during the year ended December 31, 2022 is as follows: Schedule of Stock Option Activity Options Shares Weighted average exercise price Weighted average grant date fair value Weighted average remaining contractual term Aggregate intrinsic value Outstanding as of December 31, 2021 1 1,783,567 $ 4.96 $ - - $ 830,250 Granted 2 2,496,500 $ 1.00 $ 0.52 - $ - Exercised - $ - $ - - $ - Forfeited (1,007,796 ) $ 5.46 $ 2.56 - $ - Expired (383,147 ) $ 6.37 $ - - $ - Outstanding as of December 31, 2022 2,889,124 $ 1.14 $ - 9.3 $ 7,750 Exercisable as of December 31, 2022 866,727 $ 1.46 $ - 8.7 $ 7,750 1 Equity structure was adjusted for all periods presented using the exchange ratio, 1.3352, established in the Go-Public Merger Agreement with Mer Telemanagement Solutions Ltd. to reflect the number of shares of SharpLink, Inc. (the accounting acquiree) issued in the reverse acquisition. See Note 3 in the consolidated financial statements accompanying this Annual Report on Form 10-K for a discussion of the MTS Merger. The summary of activity under the plans as of December 31, 2021, and change during the year ended December 31, 2021 is as follows: Options Shares Weighted average exercise price Weighted average remaining contractual term Aggregate intrinsic value Outstanding as of December 31, 2020 480,664 $ 0.94 - $ - Granted 1,337,000 $ 6.21 - $ - Exercised (25,917 ) $ 0.94 - $ - Forfeited (8,180 ) $ 2.04 - $ - Outstanding as of December 31, 2021 1,783,567 $ 4.96 9.4 $ 830,250 Exercisable as of December 31, 2021 658,290 $ 3.78 9.3 $ 571,099 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue Recognition | During the year ended December 31, 2022, the Company combined its revenue into the following categories: Schedule of Revenue Recognition Affiliate Marketing Services - U.S. Affiliate Marketing Services - International Sports Gaming Client Services SportsHub Gaming Network Total Software-as-a-service $ 353,200 $ - $ 2,493,685 $ - $ 2,493,685 Fee revenue - - - 951,196 951,196 Services and other 62,250 3,427,698 - - 3,843,148 Total $ 415,450 $ 3,427,698 $ 2,493,685 $ 951,196 $ 7,288,029 During the twelve months ended December 31, 2021, the Company combined its revenue into the following categories: Affiliate Marketing Services - U.S. Affiliate Marketing Services -International Sports Gaming Client Services SportsHub Gaming Network Total Software-as-a-service $ 211,528 $ - $ 2,424,229 $ - $ 2,625,737 Services and other - - - - - Total $ 211,528 $ - $ 2,424,229 $ - $ 2,635,757 Revenue $ 211,528 $ - $ 2,424,229 $ - $ 2,635,757 |
Schedule of Revenue Recognized point in Time and over Time | For the year ended December 31, 2022: Schedule of Revenue Recognized point in Time and over Time Affiliate Marketing Services - U.S. Affiliate Marketing Services - International Sports Gaming Client Services SportsHub Gaming Network Total Point in time $ 62,250 $ 3,427,698 $ - $ 808,418 $ 4,298,366 Over time 353,200 - 2,493,685 142,778 2,989,663 Total $ 415,450 $ 3,427,698 $ 2,493,685 $ 951,196 $ 7,288,029 For the year ended December 31, 2021: Affiliate Marketing Services - U.S. Affiliate Marketing Services - International Sports Gaming Client Services SportsHub Gaming Network Total Over time 211,528 - 2,424,229 - $ 2,635,757 Total $ 211,528 $ - $ 2,424,229 $ - $ 2,635,757 |
Schedule of Contract Assets | The activity in the contract assets for the years ending December 31, 2022 and 2021 are as follows: Schedule of Contract Assets Amount Balance as of December 31, 2021 $ 147,913 Labor costs expensed (483,524 ) Labor costs deferred 554,727 Balance as of December 31, 2022 $ 219,116 |
Schedule of Contract Assets and Liabilities | The Company’s assets and liabilities related to its contracts with customers were as follows: Schedule of Contract Assets and Liabilities 2022 2021 Accounts receivable $ 776,530 $ 793,795 Unbilled revenue (reported in accounts receivable) 47,000 162,760 Contract assets 219,116 147,913 Contract liabilities (2,166,451 ) (308,058 ) |
Schedule of Contract Liabilities | The activity in the contract liabilities for the years ending December 31, 2022 and 2021 are as follows: Schedule of Contract Liabilities Amount Balance as of December 31, 2021 $ (308,058 ) SportsHub acquired balance (3,574,285 ) Revenue recognized or reclassified 2,846,755 Deferred revenue (1,130,863 ) Balance as of December 31, 2022 $ (2,166,451 ) |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Summarized Financial Information for the Company’s Reportable Segments | Summarized financial information for the Company’s reportable segments as of and for the years ended December 31, 2022 and 2021 is shown below: Schedule of Summarized Financial Information for the Company’s Reportable Segments 2022 Affiliate Marketing Services - United States Affiliate Marketing Services - International Sports Gaming Client Services SportsHub Gaming Network Enterprise TEM Total Revenue $ 415,450 $ 3,427,698 $ 2,493,685 $ 951,196 $ - $ 7,288,029 Cost of revenues 141,736 2,127,555 3,119,178 765,965 - 6,154,434 Income (loss) from operations (9,471,593 ) (5,026,352 ) (1,027,484 ) 48,912 - (15,476,517 ) Income from discontinued operations - - - - 70,024 70,024 Net income (loss) $ (9,183,309 ) $ (5,135,517 ) $ (1,027,484 ) $ 42,908 $ 70,024 $ (15,303,402 ) 2021 Affiliate Marketing Services - United States Affiliate Marketing Services - International Sports Gaming Client Services SportsHub Gaming Network Enterprise TEM Total Revenue $ 211,528 $ - $ 2,424,229 $ - $ - $ 2,635,757 Cost of revenues 64,070 - 2,871,049 - - 2,935,191 Income (loss) from operations (32,773,402 ) - (696,428 ) - - (33,469,830 ) Loss from discontinued operations - - - - (22,174,305 ) (22,174,305 ) Net income (loss) $ (32,774,152 ) $ - $ (696,427 ) $ - $ (22,174,305 ) $ (55,644,135 ) |
Schedule of Revenue by Country | Summarized revenues by country in which the Company operated for the years ended December 31, 2022 and 2021 is shown below: Schedule of Revenue by Country December 31, 2022 Affiliate Marketing Services - United States Affiliate Marketing Services - International Sports Gaming Client Services SportsHub Gaming Network Enterprise TEM Total United States $ 415,450 $ - $ 2,493,685 $ 951,196 $ - $ 3,860,331 Rest of World - 3,427,698 - - - 3,427,698 Revenues $ 415,450 $ 3,427,698 $ 2,493,685 $ 951,196 $ - $ 7,288,029 December 31, 2021 United States $ 211,528 $ - $ 2,424,229 $ - $ - $ 2,635,757 Rest of World - - - - - - Revenues $ 211,528 $ - $ 2,424,229 $ - $ - $ 263,577 |
Schedule of Percentage of Consolidated Revenues Derived From Large Customers | The Company’s Affiliate Marketing Services International and Sports Gaming Client Services segment derives a significant portion of its revenues from several large customers. The table below presents the percentage of consolidated revenues derived from the two segments: Schedule of Percentage of Consolidated Revenues Derived From Large Customers Schedule of consolidated revenues 2022 2021 Customer A 35 % 15 % Customer B 10 % 10 % Customer C * - % 10 % Customer D * - % 14 % * Revenue from customer was less than 10% for the years ended December 31, 2022 and 2021. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Deferred Tax Assets and Liabilities | Deferred tax assets and liabilities from continuing operations as of December 31, 2022 and 2021 consist of the following: Schedule of Deferred Tax Assets and Liabilities 2022 2021 Deferred tax assets Net operating losses $ 4,891,195 $ 8,927,213 Research and development tax credit 95,597 30,429 Nonqualified stock options 100,373 334,519 Equipment 8,885 1,256 Goodwill 285,511 14,088 Bad debts — 120,608 Intangible Assets 713,206 — Accrued expenses and other 117,511 425,327 Business interest expense — — Gross deferred tax assets 6,212,278 9,853,440 Valuation allowance (6,218,484 ) (9,728,975 ) Net deferred tax assets $ (6,206 ) $ 124,465 Deferred tax liabilities Intangible assets — (130,046 ) Goodwill — — Deferred tax liabilities — (130,046 ) Net deferred tax liability $ (6,206 ) $ (5,558 ) |
Schedule of Income Tax Expenses Benefits | The provision for (benefit from) income taxes charged to income for the years ended December 31, 2022 and 2021 consist of the following: Schedule of Income Tax Expenses Benefits 2022 2021 US current tax expense $ 10,718 $ 2,999 Foreign current tax expense — — US deferred tax expense (benefit) 648 1,172 Provision for income tax expenses (benefit) $ 11,366 $ 4,171 |
Schedule of Effective Tax Rate | A reconciliation between the effective tax rate on income from continuing operations and the statutory tax rate is as follows: Schedule of Effective Tax Rate 2022 2021 Income tax benefit at federal statutory rate $ (3,288,865 ) 21.0 % $ (11,678,252 ) 21.0 % State and local income taxes net of federal tax benefit (83,610 ) 0.5 % (267,103 ) 0.5 % Rate differentials — 0.0 % (4,020 ) 0.0 % Meals and entertainment, non-deductible expenses and tax-exempt income (44,073 ) -0.1 % 72,503 -0.1 % Incentive stock option expense 61,851 -0.1 % 59,055 -0.1 % Nondeductible goodwill impairment 167,130 -8.2 % 4,551,259 -8.2 % Nondeductible commitment fee — -8.8 % 4,893,253 -8.8 % PPP loan forgiveness income — 0.0 % — 0.0 % NQO Cancellations 680,002 0.0 % — 0.0 % Financial Statement True Up (5,919 ) 0.0 % — 0.0 % Change in provision for uncertain tax positions — 0.0 % 1,177 0.0 % Change in valuation allowance 2,524,850 -4.3 % 2,376,299 -4.3 % Provision for income tax expenses (benefit) $ 11,366 0.0 % $ 4,171 0.0 % |
Schedule of Accrued Uncertain Tax Positions | The following presents the change in accrued uncertain tax positions: Schedule of Accrued Uncertain Tax Positions Beginning balance, December 31, 2021 $ 131,100 Uncertain tax position additions 0 Removal for amount related to discontinued operations (131,100 ) Ending balance, December 31, 2022 $ 0 |
Discontinued Operation (Tables)
Discontinued Operation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Summary Reconciliation of Discontinued Operations | A reconciliation of the major classes of line items constituting the loss from discontinued operations, net of income taxes as presented in the consolidated statements of operations for the twelve months ended December 31, 2022 and 2021 is summarized in the table below. Summary Reconciliation of Discontinued Operations 2022 2021 Revenues $ 3,734,000 $ 1,515,848 Cost of Revenues 1,900,000 933,986 Gross Profit 1,834,000 581,862 Operating Expenses Selling, general, and administrative expenses 1,515,000 1,032,042 Goodwill and intangible asset impairment expenses 1,224,000 21,722,213 Total operating expenses 2,739,000 22,754,255 Operating Loss from Discontinued Operations (905,000 ) (22,172,393 ) Other Income and Expense Interest income 6,000 - Gain on disposal of subsidiary 997,000 - Total other income and expense 1,003,000 - Net Income Before Income Taxes from discontinued operations 98,000 (22,172,393 ) Provision for income tax expenses for discontinued operations 27,976 1,912 Net Income (Loss) $ 70,024 $ (22,174,305 ) |
Schedule of Major Classes of Assets and Liabilities | Schedule of Major Classes of Assets and Liabilities December 31, 2022 December 31, 2021 Carrying amounts of major classes of assets included as part of discontinued operations: December 31, 2022 December 31, 2021 Current Assets Cash $ 648,000 $ 690,181 Restricted cash - 1,025,029 Accounts receivable, net of allowance 191,000 137,405 Prepaid expenses and other current assets 187,000 248,594 Equipment, net 5,000 Other assets 279,000 Total current assets $ 1,310,000 $ 2,101,209 Non-current assets Equipment, net - $ 16,505 Other assets - 283,632 Intangibles and goodwill - 1,287,921 Total non-current assets $ - $ 1,588,058 December 31, 2022 December 31, 2021 Carrying amounts of major classes of liability included as part of discontinued operations December 31, 2022 December 31, 2021 Current liabilities Accrued expenses $ 374,879 $ 1,902,477 Contract liabilities 2,000 896,933 Other current liabilities 838,274 534,323 Total current liabilities $ 1,215,153 $ 3,333,733 Non-current liabilities Other long-term liabilities - 365,977 Total liabilities $ 1,215,213 $ 3,699,710 |
Loss Per Share (Tables)
Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Net loss per share - Basic and diluted | |
Schedule of Loss Per Share and Weighted-average | The calculation of loss per share and weighted-average shares of the Company’s ordinary shares outstanding for the periods presented are as follows: Schedule of Loss Per Share and Weighted-average December 31, 2022 December 31, 2021 Net loss from continuing operations $ (15,303,402 ) $ (33,469,830 ) Less: discount accretion on series A preferred stock — (373,560 ) Less: dividend accretion on series A preferred stock — (91,192 ) Less: dividends on series B preferred stock (8,862 ) (315,632 ) Net loss from continuing operations available to ordinary shareholders (15,312,264 ) (34,250,214 ) Net income (loss) from discontinued operations, net of tax, available to ordinary shareholders 70,024 (22,174,305 ) Net loss available to ordinary shareholders $ (15,242,240 ) $ (56,424,519 ) Basic and diluted weighted-average shares outstanding 24,879,602 14,300,311 Basic and diluted: Net loss from continuing operations per share $ (0.62 ) $ (2.40 ) Net income (loss) from discontinued operations per share — (1.54 ) Net loss per share $ (0.62 ) $ (3.94 ) |
Schedule of Computation of Diluted Shares Outstanding | For the periods presented, the following securities were not required to be included in the computation of diluted shares outstanding: Schedule of Computation of Diluted Shares Outstanding 2022 2021 Stock options 2,889,124 1,783,567 Series A-1 preferred stock 66,303 54,737 Series B preferred stock 124,810 124,810 Earnout — 587,747 MTS warrants 83,334 83,334 Prefunded warrants 1,253,592 1,253,592 Regular warrants 2,666,667 2,666,667 Total 7,083,830 6,554,454 Diluted shares outstanding 7,083,830 6,554,454 |
Schedule of Cash and Restricted
Schedule of Cash and Restricted Cash (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Restricted Cash and Cash Equivalents Items [Line Items] | ||
FDIC insured limit | $ 250,000 | |
Total cash and restricted cash | 50,457,486 | $ 6,065,461 |
Platinum Bank [Member] | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Total cash and restricted cash | 46,023,871 | |
Bank Vista [Member] | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Total cash and restricted cash | 2,744,359 | |
Silicon Valley Bank [Member] | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Total cash and restricted cash | 503,103 | |
Other [Member] | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Total cash and restricted cash | $ 1,186,153 |
Schedule of Accounts Payable an
Schedule of Accounts Payable and Accrued Expenses (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Accounting Policies [Abstract] | ||
Accounts payable | $ 851,031 | $ 813,621 |
Accrued wages and payroll expenses | 338,166 | 181,360 |
Accrued bonus | 358,836 | 117,370 |
Accrued interest | 32,017 | |
Other accrued expenses | 545,657 | 291,671 |
Accounts payable and accrued expenses | $ 2,125,707 | $ 1,404,022 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | |||
Jul. 26, 2021 | Dec. 31, 2022 | Dec. 22, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | ||||
Variable interest rate | 8.25% | |||
FDIC insured limit | $ 250,000 | |||
Allowance for credit loss | 0 | $ 0 | ||
Investments | $ 200,000 | |||
Investment of company shares | 280,903 | |||
Depreciation | 25,345 | $ 28,891 | ||
Accumulated depreciation | $ 100,733 | 86,989 | ||
Finite lived intangible asset, useful life | 5 years | |||
Capitalized cost | $ 137,565 | 201,436 | ||
Impairment charge | 1,515,000 | 1,224,671 | ||
Goodwill impairment | $ 1,515,000 | 21,722,213 | ||
Negative carrying amount of allocated goodwill. | 858,819 | |||
Monthly salary percentage | 8.33% | |||
Other current liabilities from discontinued operations | $ 342,000 | 366,000 | ||
Deposits | $ 279,000 | 284,000 | ||
General, and administrative expenses | $ 285,673 | $ 284,625 | ||
Shares of warrants | 83,334 | |||
Advertising and marketing expenses | $ 459,976 | |||
Stock options | 2,889,124 | |||
Series A One [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Dividend paid in shares | 66,303 | |||
Series B Preferred Stock [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Shares of warrants | 4,003,593 | |||
Dividend paid in shares | 124,810 | |||
Minimum [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Finite lived intangible asset, useful life | 3 years | |||
Maximum [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Finite lived intangible asset, useful life | 10 years | |||
QuintarInc [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Ownership percentage | 1.12% | |||
Mer Telemanagement Solutions Ltd [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Variable interest rate | 86% |
Going Concern (Details Narrativ
Going Concern (Details Narrative) - USD ($) | 12 Months Ended | ||||
Jan. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Feb. 14, 2023 | Feb. 13, 2023 | |
Subsequent Event [Line Items] | |||||
Net loss from continuing operations | $ 15,303,402 | $ 33,469,830 | |||
Net cash used in operating activities | 6,510,965 | $ 5,854,995 | |||
Payments for loans | $ 3,250,000 | ||||
Revolving promissory note | $ 7,000,000 | ||||
Principal amount | $ 109,165 | ||||
Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
Debt interest rate | 8% | ||||
Debt discount rate | 10% | ||||
Principal amount | $ 4,400,000 | ||||
Purchase price | $ 4,000,000 |
Schedule of Purchase Considerat
Schedule of Purchase Consideration (Details) - USD ($) | 12 Months Ended | |||
Dec. 22, 2022 | Jul. 26, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Asset Acquisition [Line Items] | ||||
Ordinary share price | $ 2.65 | |||
Ordinary shares issued to seller | $ 606,114 | |||
Cash paid to Seller | $ 388,000 | $ 5,883,477 | ||
MTS Mergers [Member] | ||||
Asset Acquisition [Line Items] | ||||
Consideration in ordinary shares | $ 21,508,067 | |||
Total Purchase Price | 22,110,032 | |||
Four Cubed Acquisition LLC Company [Member] | ||||
Asset Acquisition [Line Items] | ||||
Consideration in ordinary shares | 1,606,202 | |||
Total Purchase Price | 8,492,725 | |||
Cash paid to Seller | 6,195,000 | |||
Due to Seller | $ 691,523 | |||
SportsHub Acquisition [Member] | ||||
Asset Acquisition [Line Items] | ||||
Total Purchase Price | $ 6,758,137 | |||
Fair Value of Equity Consideration | 1,370,287 | |||
Fair Value of Seller Platinum Line of Credit and Loan | $ 5,387,850 | |||
MTS Mergers [Member] | ||||
Asset Acquisition [Line Items] | ||||
MTS issued and outstanding ordinary shares immediately prior to Merger | $ 3,162,951 | |||
Ordinary share price | $ 6.80 | |||
MTS warrants and options fair value | $ 601,965 |
Schedule of Assumptions (Detail
Schedule of Assumptions (Details) - USD ($) | 12 Months Ended | ||
Jul. 26, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Expected volatility | 58.50% | ||
Expected dividends | 0% | 0% | |
MTS Warrants $0 Strike Price [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Fair value of ordinary shares | $ 6.80 | ||
Exercise price | $ 0 | ||
Expected volatility | 54.70% | ||
Expected dividends | 0% | ||
Expected term (in years) | 3 years | ||
Risk-free rate | 0.38% | ||
Fair value per warrant | $ 6.80 | ||
Fair value of warrants | 25,000 | ||
Fair value of ordinary shares | $ 170,000 | ||
MTS Options $0 Strike Price [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Fair value of ordinary shares | $ 6.80 | ||
Exercise price | $ 0 | ||
Expected volatility | 54.70% | ||
Expected dividends | 0% | ||
Expected term (in years) | 3 years | ||
Risk-free rate | 0.38% | ||
Fair value per warrant | $ 6.80 | ||
Fair value of warrants | 25,000 | ||
Fair value of ordinary shares | $ 170,000 | ||
2.642 Strike Price [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Fair value of ordinary shares | $ 6.80 | ||
Exercise price | $ 2.64 | ||
Expected volatility | 54.70% | ||
Expected dividends | 0% | ||
Expected term (in years) | 3 years | ||
Risk-free rate | 0.38% | ||
Fair value per warrant | $ 4.49 | ||
Fair value of warrants | 58,334 | ||
Fair value of ordinary shares | $ 261,965 |
Schedule of Fair Value of Asset
Schedule of Fair Value of Assets Acquired and Liabilities Assumed (Details) - USD ($) | 12 Months Ended | |||
Dec. 22, 2022 | Jul. 26, 2021 | Dec. 31, 2021 | Dec. 31, 2022 | |
Business Acquisition [Line Items] | ||||
Intangible assets | $ 483,000 | |||
Goodwill | $ 3,511,167 | $ 6,916,095 | ||
MTS Mergers [Member] | ||||
Business Acquisition [Line Items] | ||||
Cash | 916,000 | |||
Restricted cash | 1,016,000 | |||
Accounts receivable | 356,000 | |||
Prepaid expenses and other current assets | 322,000 | |||
Equipment | 25,000 | |||
Other long-term assets | 261,000 | |||
Intangible assets | 483,000 | |||
Total Assets | 3,379,000 | |||
Accrued expenses | 2,129,000 | |||
Deferred revenue | 914,000 | |||
Other current liabilities | 495,000 | |||
Other long-term liabilities | 312,000 | |||
Total liabilities | 3,850,000 | |||
Net assets acquired, excluding goodwill | (471,000) | |||
Goodwill | 22,581,032 | |||
Purchase consideration for accounting acquiree | $ 22,110,032 | |||
Four Cubed Acquisition LLC Company [Member] | ||||
Business Acquisition [Line Items] | ||||
Cash | 311,523 | |||
Accounts receivable | 424,593 | |||
Prepaid expenses and other current assets | 9,468 | |||
Intangible assets | 4,928,000 | |||
Total Assets | 5,673,584 | |||
Accrued expenses | 311,026 | |||
Total liabilities | 311,026 | |||
Net assets acquired, excluding goodwill | 5,362,558 | |||
Goodwill | 3,130,167 | |||
Purchase consideration for accounting acquiree | 8,492,725 | |||
Intangible assets | $ 4,928,000 | |||
SportsHub Acquisition [Member] | ||||
Business Acquisition [Line Items] | ||||
Cash | $ 38,255,266 | |||
Restricted cash | 10,604,004 | |||
Accounts receivable | 186,712 | |||
Prepaid expenses and other current assets | 1,916,932 | |||
Equipment | 11,953 | |||
Other long-term assets | 95,793 | |||
Intangible assets | 2,390,000 | |||
Total Assets | 53,460,660 | |||
Accrued expenses | 284,345 | |||
Deferred revenue | 3,574,285 | |||
Other current liabilities | 47,657,117 | |||
Other long-term liabilities | 106,705 | |||
Total liabilities | 51,671,227 | |||
Net assets acquired, excluding goodwill | 1,789,433 | |||
Goodwill | 4,968,703 | |||
Purchase consideration for accounting acquiree | 6,758,137 | |||
Deferred tax liabilities | $ 48,775 |
Schedule of Fair Value Assumpti
Schedule of Fair Value Assumption Asset (Details) - USD ($) | Dec. 31, 2022 | Dec. 22, 2022 | Dec. 31, 2021 | Jul. 26, 2021 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Intangible assets | $ 483,000 | |||
Weighted average useful life years | 5 years | |||
Four Cubed Acquisition LLC Company [Member] | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Intangible assets | $ 4,928,000 | |||
SportsHub Acquisition [Member] | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Intangible assets | $ 2,390,000 | |||
Customer Relationships [Member] | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Intangible assets | $ 414,000 | |||
Weighted average useful life years | 4 years | |||
Customer Relationships [Member] | Four Cubed Acquisition LLC Company [Member] | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Intangible assets | $ 4,144,000 | |||
Weighted average useful life years | 10 years | |||
Customer Relationships [Member] | SportsHub Acquisition [Member] | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Intangible assets | $ 1,550,000 | |||
Weighted average useful life years | 5 years | |||
Developed Technology [Member] | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Intangible assets | $ 69,000 | |||
Weighted average useful life years | 3 years | |||
Developed Technology [Member] | Four Cubed Acquisition LLC Company [Member] | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Intangible assets | $ 784,000 | |||
Weighted average useful life years | 1 year | |||
Trade Names [Member] | SportsHub Acquisition [Member] | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Intangible assets | $ 640,000 | |||
Weighted average useful life years | 6 years | |||
Technology-Based Intangible Assets [Member] | SportsHub Acquisition [Member] | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Intangible assets | $ 200,000 | |||
Weighted average useful life years | 5 years |
Schedule of Business Acquisitio
Schedule of Business Acquisition Pro Forma Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | ||
Revenues | $ 12,108,434 | $ 19,695,782 |
Loss from continuing operations | (28,420,775) | (90,132,215) |
Less: dividends accrued on series B preferred stock | (782,887) | |
Net loss from continuing operations available to ordinary shareholders | (28,420,775) | (90,915,102) |
Net income (loss) from discontinued operations, net of tax, available to ordinary shareholders | 70,024 | (49,000) |
Net loss available to ordinary shareholders | $ (28,350,751) | $ (90,964,102) |
Net loss from continuing operations per share | $ (1.14) | $ (6.36) |
Net loss from discontinued operations per share | ||
Net loss per share | $ (1.14) | $ (6.36) |
Acquisitions (Details Narrative
Acquisitions (Details Narrative) - USD ($) | 12 Months Ended | |||
Dec. 22, 2022 | Jul. 26, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | ||||
Ownership interest | 8.25% | |||
Invested amount | $ 200,000 | $ 200,000 | ||
Stockholders equity other shares | 8,893,803 | |||
Business acquistion, share price | $ 2.65 | |||
Common stock, shares outstanding | 26,880,250 | 22,360,987 | ||
Goodwill impairment | $ 1,515,000 | $ 21,722,213 | ||
Transaction costs | 5,468,201 | |||
Net income loss | $ (15,233,378) | (55,644,135) | ||
Total consideration | $ 6,886,523 | |||
Common stock, shares authorized | 92,900,000 | 92,900,000 | ||
Repayment of cash consideration | $ 130,000 | |||
Common stock, shares issued | 26,880,250 | 22,360,987 | ||
Impairment of the customer relationship | $ 3,211,000 | |||
Debt purchase consideration | $ 5,387,850 | |||
Share price | $ 0.29 | |||
Term loan | $ 1,267,199 | 3,967,975 | ||
Line of credit | $ 4,120,651 | 4,120,651 | ||
Amortization expense | 486,141 | 1,324,900 | ||
Additional interest expense | 94,685 | $ 119,095 | ||
SportsHub Acquisition [Member] | ||||
Business Acquisition [Line Items] | ||||
Revenues | 951,194 | |||
Net income loss | 42,908 | |||
Common Stock [Member] | ||||
Business Acquisition [Line Items] | ||||
Common stock, shares outstanding | 587,747 | |||
Net income loss | ||||
Common stock, shares authorized | 606,114 | |||
Common stock, shares issued | 606,114 | |||
Number of shares issued | 4,319,263 | |||
Shares issued | 405,862 | |||
Mer Telemanagement Solutions Ltd [Member] | ||||
Business Acquisition [Line Items] | ||||
Business acquistion, share price | $ 6.80 | |||
Common stock, shares outstanding | 2,492,162 | |||
Preferred stock, shares outstanding | 670,789 | |||
Options and warrants outstanding | 108,334 | |||
Mer Telemanagement Solutions Ltd [Member] | ||||
Business Acquisition [Line Items] | ||||
Ownership interest | 86% | |||
Business combination description | stock option pool of 10% of the fully-diluted outstanding share capital of the Company, and legacy MTS securityholders own approximately 14% of the fully-diluted outstanding capital of the Company. | |||
Invested amount | $ 6,000,000 | |||
Stockholders equity other shares | 3,692,865 | |||
MTS Merger [Member] | ||||
Business Acquisition [Line Items] | ||||
Transaction costs | $ 3,084,341 | |||
MTS [Member] | ||||
Business Acquisition [Line Items] | ||||
Revenues | 1,517,001 | |||
Net income loss | 22,173,554 | |||
Four Cubed Acquisition LLC Company [Member] | ||||
Business Acquisition [Line Items] | ||||
Transaction costs | 67,130 | |||
Fair value of acquisition | 1,606,202 | |||
Payment of consideration | 6,195,000 | |||
Repayment of cash acquired | 311,523 | |||
Four Cubed Acquisition Company LLC [Member] | ||||
Business Acquisition [Line Items] | ||||
Paymeny to acquire consideration | $ 250,000 | |||
SportsHub [Member] | Common Stock [Member] | ||||
Business Acquisition [Line Items] | ||||
Business acquisition, equity interest issued or issuable, number of shares | 4,725,125 | |||
SportsHub Acquisition [Member] | ||||
Business Acquisition [Line Items] | ||||
Transaction costs | $ 83,866 | |||
Repayment of cash acquired | $ 38,255,266 |
Schedule of weighted average re
Schedule of weighted average remaining lease term and weighted-average discount rate (Details) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | ||
Weighted-average remaining lease term | 30 months | 60 months |
Weighted-average discount rate | 5.67% | 6% |
Schedule of future minimum leas
Schedule of future minimum lease payment (Details) | Dec. 31, 2022 USD ($) |
Leases [Abstract] | |
2023 | $ 31,070 |
2024 | 72,720 |
2025 | 67,736 |
2026 | 94,675 |
Total lease payments | 266,201 |
Less: interest | 25,094 |
Present value of lease liability | $ 241,107 |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | ||
Lease description | The lease has an original term that expires in December 2023 with an option to extend the term for three years | |
Operating lease cost | $ 38,400 | $ 38,400 |
Operating cash flows from operating leases | $ 38,400 | $ 38,400 |
Schedule of Intangible assets (
Schedule of Intangible assets (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average amortization period | 30 months | 60 months |
Cost net of impairment | $ 5,502,243 | $ 6,185,376 |
Accumulated amortization | 1,774,310 | 633,936 |
Intangible assets net | 3,727,933 | 5,551,440 |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost net of impairment | 2,643,000 | 4,304,000 |
Accumulated amortization | 280,636 | 131,429 |
Intangible assets net | 2,362,364 | 4,172,571 |
Technology-Based Intangible Assets [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost net of impairment | 1,437,050 | 1,214,000 |
Accumulated amortization | 1,201,739 | 360,357 |
Intangible assets net | 235,311 | 853,643 |
Software and Software Development Costs [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost net of impairment | 749,147 | 654,022 |
Accumulated amortization | 288,530 | 142,050 |
Intangible assets net | 460,617 | 511,972 |
Trade Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost net of impairment | 640,000 | |
Accumulated amortization | 3,405 | |
Intangible assets net | 636,595 | |
Software Development [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost net of impairment | 33,046 | 13,354 |
Accumulated amortization | ||
Intangible assets net | $ 33,046 | $ 13,354 |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average amortization period | 9 years | |
Customer Relationships [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average amortization period | 5 years | |
Customer Relationships [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average amortization period | 10 years | |
Technology-Based Intangible Assets [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average amortization period | 3 years | |
Technology-Based Intangible Assets [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average amortization period | 3 years | |
Acquired Technology [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average amortization period | 5 years | |
Software and Software Development Costs [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average amortization period | 5 years | 5 years |
Trade Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average amortization period | 6 years |
Schedule of Future Amortization
Schedule of Future Amortization Expenses of Intangible Assets (Details) | Dec. 31, 2022 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2023 | $ 724,564 |
2024 | 704,922 |
2025 | 673,281 |
2026 | 596,306 |
2027 | 526,949 |
Thereafter | 465,665 |
Total | $ 3,691,686 |
Schedule of goodwill (Details)
Schedule of goodwill (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Balance as of December 31, 2021 | $ 3,511,167 | |
Goodwill | 4,919,928 | |
Less: Impairment charges | (1,515,000) | $ (1,224,671) |
Balance as of December 31, 2022 | 6,916,095 | 3,511,167 |
Cumulative goodwill impairment charges | 1,515,000 | |
SportsHub Gaming [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Balance as of December 31, 2021 | ||
Goodwill | 4,919,928 | |
Less: Impairment charges | ||
Balance as of December 31, 2022 | 4,919,928 | |
Cumulative goodwill impairment charges | ||
Sports Gaming Client Services [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Balance as of December 31, 2021 | 381,000 | |
Goodwill | ||
Less: Impairment charges | ||
Balance as of December 31, 2022 | 381,000 | 381,000 |
Cumulative goodwill impairment charges | ||
Affiliate Marketing Services International [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Balance as of December 31, 2021 | 3,130,167 | |
Goodwill | ||
Less: Impairment charges | (1,515,000) | |
Balance as of December 31, 2022 | 1,615,167 | $ 3,130,167 |
Cumulative goodwill impairment charges | $ 1,515,000 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Impairment charges | $ 3,211,000 | |
Amortization expense | 1,140,472 | $ 241,253 |
Software Development [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Additional costs | 137,867 | |
SportsHub Acquisition [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Acquisition of intangible assets | $ 2,390,000 |
Goodwill (Details Narrative)
Goodwill (Details Narrative) | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Cumulative goodwill impairment charges | $ 1,515,000 |
Line of Credit (Details Narrati
Line of Credit (Details Narrative) | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Variable rate | 8.25% |
Line of credit | $ 5,000,000 |
Line of credit expiring date | Jun. 15, 2023 |
Outstanding amount | $ 4,120,651 |
Schedule of Term Loan Agreement
Schedule of Term Loan Agreements (Details) - USD ($) | Feb. 13, 2023 | Dec. 31, 2022 | Dec. 22, 2022 |
Note Payable – Bank | $ 7,000,000 | ||
Total | $ 3,967,975 | $ 1,267,199 | |
Less unamortized debt issuance costs | 17,359 | ||
Less current portion | 1,018,918 | ||
Long-term debt | 2,931,698 | ||
SportsHub Acquisition [Member] | |||
Note Payable – Bank | 1,267,200 | ||
Four Cubed Acquisition Company LLC [Member] | |||
Note Payable – Bank | $ 2,700,775 |
Schedule of Debt (Details) (Par
Schedule of Debt (Details) (Paranthetical) | Dec. 31, 2022 USD ($) |
Debt face amount | $ 109,165 |
SportsHub Acquition [Member] | |
Debt face amount | 2,000,000 |
Four Cubed Acquisition Company LLC [Member] | |
Debt face amount | $ 3,250,000 |
Schedule of Outstanding amount
Schedule of Outstanding amount of debt (Details) - USD ($) | Dec. 31, 2022 | Dec. 22, 2022 |
Debt Disclosure [Abstract] | ||
2023 | $ 1,018,918 | |
2024 | 1,066,808 | |
2025 | 1,119,689 | |
2026 | 700,256 | |
2027 | 62,304 | |
Long term debt | $ 3,967,975 | $ 1,267,199 |
Debt (Details Narrative)
Debt (Details Narrative) - USD ($) | 12 Months Ended | ||||
Jan. 31, 2022 | Jan. 31, 2022 | Dec. 23, 2021 | Dec. 31, 2022 | Dec. 22, 2022 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Payments for loans | $ 3,250,000 | ||||
Debt face amount | $ 109,165 | ||||
Debt face amount | 549,225 | ||||
Debt term loan | 2,700,775 | ||||
Debt instrument periodic payment | 620,173 | ||||
Term loan | $ 3,967,975 | $ 1,267,199 | |||
Debt interest rate | 12% | ||||
Term Loan Agreement [Member] | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Payments for loans | $ 3,250,000 | ||||
Debt interest rate | 4% | 4% | |||
Debt face amount | $ 59,854 | $ 59,854 | |||
Maturity date | Jan. 31, 2027 | Dec. 09, 2025 | |||
Loan initiation fees | $ 25,431 | $ 25,431 | $ 29,975 | ||
Term loan | $ 2,000,000 | ||||
Debt interest rate | 5.50% | ||||
Fixed monthly payment, consisting of principal and interest | $ 38,202 |
Convertible Preferred Stock (De
Convertible Preferred Stock (Details Narrative) | 12 Months Ended | |||||||
Jul. 27, 2022 | Dec. 23, 2021 | Jul. 26, 2021 USD ($) $ / shares shares | Jul. 23, 2021 shares | Jun. 15, 2021 USD ($) | Dec. 23, 2020 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | |
Interest rate | 12% | |||||||
Shares capital increased | 92,900,000 | |||||||
SharpLink Inc [Member] | ||||||||
Exchange ratio | 1.3352 | |||||||
Additional Paid-in Capital [Member] | ||||||||
Shares issued | 66,303 | |||||||
Accrued in additional paid in capital | $ | $ 324,495 | |||||||
Series A1 Preferred Stock [Member] | ||||||||
Sale of stock, number of shares issued in transaction | 700,989 | |||||||
Preferred stock, shares authorized | 54,737 | |||||||
Shares capital increased | 66,303 | |||||||
Number of shares exchanged | 1,230,956 | |||||||
Number of share exchange value | $ | $ 700,989 | |||||||
Number of shares converted | 124,810 | |||||||
Series A1 Preferred Stock [Member] | MTS Merger [Member] | ||||||||
Number of shares converted | 1,931,945 | |||||||
8% Redeemable Convertible Preferred Stock [Member] | ||||||||
Temporary equity, par value per share | $ / shares | $ 1,000 | |||||||
Series A Preferred Stock [Member] | ||||||||
Preferred stock, dividend rate, percentage | 9.99% | |||||||
Debt instrument, convertible, conversion price | $ / shares | $ 2.1693 | |||||||
Shares capital increased | 800,000 | |||||||
Series A-1 Preferred Stock [Member] | ||||||||
Preferred stock, dividend rate, percentage | 9.99% | |||||||
Preferred stock par value | $ / shares | $ 0.02 | $ 0.02 | ||||||
Preferred stock, shares authorized | 2,600,000 | 2,600,000 | ||||||
Series B Preferred Stock [Member] | ||||||||
Preferred stock, dividend rate, percentage | 9.99% | |||||||
Preferred stock par value | $ / shares | $ 0.02 | $ 0.02 | ||||||
Sale of stock, consideration received on transaction | $ | $ 6,000,000 | |||||||
Sale of stock, number of shares issued in transaction | 3,692,862 | |||||||
Preferred stock, shares authorized | 3,700,000 | 3,700,000 | ||||||
Shares capital increased | 3,700,000 | 11,566 | ||||||
Number of share exchange value | $ | $ 3,692,862 | |||||||
Series B Preferred Stock [Member] | MTS Merger [Member] | ||||||||
Number of shares converted | 3,568,055 | |||||||
Series B Preferred Stock [Member] | Stock Holder [Member] | ||||||||
Liquidation preference per share | $ / shares | $ 2.1693 | |||||||
SeriesB Convertible Preferred Stock [Member] | ||||||||
Preferred stock par value | $ / shares | $ 0.01 | |||||||
Preferred stock, shares authorized | 2,765,824 | 124,810 | ||||||
Series A1 Preferred Stock [Member] | ||||||||
Preferred stock par value | $ / shares | $ 0.02 | |||||||
Shares capital increased | 2,600,000 | |||||||
First Tranche [Member] | ||||||||
Establishment and designation of shares | 9,000 | |||||||
Preferred stock, dividend rate, percentage | 8% | |||||||
Preferred stock par value | $ / shares | $ 0.01 | |||||||
Preferred stock, convertible, shares issuable | 4,150,000 | |||||||
First Tranche [Member] | 8% Redeemable Convertible Preferred Stock [Member] | ||||||||
Stock issued during period, shares, new issues | 2,000 | |||||||
Interest rate | 12% | |||||||
First Tranche [Member] | Series A Preferred Stock [Member] | ||||||||
Stock issued during period, value, new issues | $ | $ 2,000,000 | |||||||
First Tranche [Member] | Convertible Preferred Stock [Member] | ||||||||
Preferred stock, dividend rate, percentage | 8% | |||||||
First Tranche [Member] | Series B Preferred Stock [Member] | ||||||||
Preferred stock, dividend rate, percentage | 8% | |||||||
Second Tranche [Member] | Series A Preferred Stock [Member] | ||||||||
Sale of stock, consideration received on transaction | $ | $ 6,000,000 | $ 5,000,000 | ||||||
Sale of stock, number of shares issued in transaction | 2,765,824 | |||||||
Second Tranche [Member] | Series A-1 Preferred Stock [Member] | ||||||||
Preferred stock par value | $ / shares | $ 0.01 | |||||||
Debt instrument, convertible, conversion price | $ / shares | $ 2.1693 | |||||||
Interest rate | 12% | |||||||
Line of credit facility, commitment fee percentage | 3% | |||||||
Preferred stock, shares authorized | 525,016 | |||||||
Liquidation preference per share | $ / shares | $ 2.1693 | |||||||
Second Tranche [Member] | Series B Preferred Stock [Member] | ||||||||
Establishment and designation of shares | 6,000,000 | |||||||
Sale of stock, number of shares issued in transaction | 6,000,000 | |||||||
First and Second Tranche [Member] | ||||||||
Commitment fee | shall issue preferred stock equal to the greater of either 15% of the aggregate of the First and Second Tranche or 3% of the Company’s issued and outstanding capital. |
Schedule of Warrant Assumptions
Schedule of Warrant Assumptions (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Expected volatility | 58.50% | |
Expected dividends | 0% | 0% |
Warrant Advisory Services [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Fair value of ordinary shares on grant date | $ 2.36 | |
Exercise price | $ 0.01 | |
Expected volatility | 58.20% | |
Expected dividends | 0% | |
Expected term (in years) | 5 years | |
Risk-free rate | 0.42% |
Schedule of Warrants Assumption
Schedule of Warrants Assumptions (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Expected volatility | 58.50% | |
Expected dividends | 0% | 0% |
Prefunded Warrants [Member] | ||
Fair value of ordinary shares on grant date | $ 3.25 | |
Exercise price | $ 0.01 | |
Expected volatility | 50.50% | |
Expected dividends | 0% | |
Expected term (in years) | 4 years | |
Risk-free rate | 1.03% | |
Regular Warrants [Member] | ||
Fair value of ordinary shares on grant date | $ 3.25 | |
Exercise price | $ 4.50 | |
Expected volatility | 50.50% | |
Expected dividends | 0% | |
Expected term (in years) | 4 years | |
Risk-free rate | 1.03% |
Schedule of Warrant Outstanding
Schedule of Warrant Outstanding (Details) - shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Warrant Advisory Services [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Beginning outstanding, shares | ||
Beginning vested, shares | ||
Issued and vested, outstanding | 1 | |
Issued and vested, vested | 1 | |
Acquired, outstanding | ||
Acquired, vested | ||
Converted to ordinary shares, outstanding | (1) | |
Converted to ordinary shares, vested | (1) | |
Ending outstanding, shares | ||
Ending vested, shares | ||
Warrants MTS [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Beginning outstanding, shares | 83,334 | |
Beginning vested, shares | 83,334 | |
Issued and vested, outstanding | ||
Issued and vested, vested | ||
Acquired, outstanding | 83,334 | |
Acquired, vested | 83,334 | |
Converted to ordinary shares, outstanding | ||
Converted to ordinary shares, vested | ||
Ending outstanding, shares | 83,334 | 83,334 |
Ending vested, shares | 83,334 | 83,334 |
Prefunded Warrants [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Beginning outstanding, shares | 1,253,592 | |
Beginning vested, shares | 1,253,592 | |
Issued and vested, outstanding | 1,253,592 | |
Issued and vested, vested | 1,253,592 | |
Acquired, outstanding | ||
Acquired, vested | ||
Converted to ordinary shares, outstanding | ||
Converted to ordinary shares, vested | ||
Ending outstanding, shares | 1,253,592 | 1,253,592 |
Ending vested, shares | 1,253,592 | 1,253,592 |
Regular Warrants [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Beginning outstanding, shares | 2,666,667 | |
Beginning vested, shares | ||
Issued and vested, outstanding | 2,666,667 | |
Issued and vested, vested | ||
Acquired, outstanding | ||
Acquired, vested | ||
Converted to ordinary shares, outstanding | ||
Converted to ordinary shares, vested | ||
Ending outstanding, shares | 2,666,667 | 2,666,667 |
Ending vested, shares |
Warrants (Details Narrative)
Warrants (Details Narrative) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 | Nov. 16, 2021 | Jul. 26, 2021 | Feb. 01, 2021 |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Exercise price | $ 0.63 | $ 6.80 | |||
Ordinary shares exercisable | 1,413,075 | ||||
Offering price per warrant | $ 3.75 | ||||
MTS [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Exercise price | $ 2.642 | ||||
Ordinary shares exercisable | 58,334 | ||||
Warrant Advisory Services [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Purchase of warrants | 636,867 | ||||
Exercise price | $ 0.01 | ||||
Ordinary shares exercisable | 850,330 | ||||
Warrant's grant date fair value | $ 2,001,677 | ||||
Warrants MTS [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Exercise price | $ 0 | ||||
Ordinary shares exercisable | 25,000 | ||||
Prefunded Warrants [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Purchase of warrants | 1,253,592 | ||||
Exercise price | $ 0.01 | ||||
Offering price per warrant | $ 3.74 | ||||
Regular Warrants [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Purchase of warrants | 2,666,667 | ||||
Exercise price | $ 4.50 |
Schedule of Inputs and Assumpti
Schedule of Inputs and Assumptions of Valuation Model (Details) | 12 Months Ended |
Dec. 31, 2021 $ / shares shares | |
Fair Value Disclosures [Abstract] | |
Probability of a Going Public Transaction | 50% |
Expected volatility | 58.50% |
Stock price of public company at the time of measurement | $ / shares | $ 0.63 |
Date of a Going Public Transaction | Apr. 30, 2021 |
Pro-forma common shares outstanding at Going Public Transaction date | shares | 52,077,000 |
Schedule of Commitment Fee (Det
Schedule of Commitment Fee (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | ||
Commitment fee, beginning | $ 577,000 | |
Commitment fee expense | 23,301,206 | |
Issuance of Series A-1 and B preferred stock in exchange for commitment fee | (23,878,206) | |
Commitment fee, beginning |
Fair Value (Details Narrative)
Fair Value (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 22, 2022 | |
Interest rate | 3% | |
Ordinary share | $ 0.29 | |
Series A1 Preferred Stock [Member] | ||
Number of share exchange | 700,989 | |
Commitment fee | $ 23,301,206 | |
Ordinary share | $ 6.80 | |
Series B Preferred Stock [Member] | ||
Number of share exchange | 3,692,862 | |
Preferred stock, shares authorized | $ 6,000,000 |
Schedule of Fair Values of Stoc
Schedule of Fair Values of Stock Options Granted Using Black-scholes Valuation Model Assumptions (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Expected volatility | 58.50% | |
Expected dividends | 0% | 0% |
Minimum [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Expected volatility | 51.10% | 51% |
Expected term (in years) | 5 years 6 months | 5 years 6 months |
Risk-free rate | 1.44% | 0.79% |
Fair value of ordinary shares on grant date | $ 0.31 | $ 1.05 |
Maximum [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Expected volatility | 53.70% | 51.80% |
Expected term (in years) | 6 years | 6 years |
Risk-free rate | 4.24% | 1.24% |
Fair value of ordinary shares on grant date | $ 1.33 | $ 3.29 |
Schedule of Stock Option Activi
Schedule of Stock Option Activity (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | |||
Multiemployer Plan [Line Items] | ||||
Option outstanding, beginning | 1,783,567 | 480,664 | ||
Weighted average exercise price, beginning | $ 4.96 | $ 0.94 | ||
Granted | 1,337,000 | |||
Exercised | 25,917 | |||
Weighted average exercise price, exercised | $ 2.04 | |||
Forfeited | (8,180) | |||
Weighted average exercise price, expired | $ 0.94 | |||
Option outstanding, ending | 1,783,567 | |||
Weighted average remaining contractual term | 9 years 4 months 24 days | |||
Aggregate intrinsic value, ending | $ 830,250 | |||
Exercisable | 658,290 | |||
MTS Merger [Member] | ||||
Multiemployer Plan [Line Items] | ||||
Option outstanding, beginning | [1] | 1,783,567 | ||
Weighted average exercise price, beginning | [1] | $ 4.96 | ||
Weighted average grant date fair value, beginning | [1] | |||
Aggregate intrinsic value, beginning | [1] | $ 830,250 | ||
Granted | 2,496,500 | |||
Weighted average exercise price, granted | $ 1 | |||
Weighted average grant date fair value, granted | $ 0.52 | |||
Exercised | ||||
Weighted average exercise price, exercised | ||||
Forfeited | (1,007,796) | |||
Weighted average exercise price, forfeited | $ 5.46 | |||
Weighted average grant date fair value, forfeited | $ 2.56 | |||
Expired | (383,147) | |||
Weighted average exercise price, expired | $ 6.37 | |||
Option outstanding, ending | 2,889,124 | 1,783,567 | [1] | |
Weighted average exercise price, ending | $ 1.14 | |||
Weighted average grant date fair value, ending | [1] | |||
Weighted average remaining contractual term | 9 years 3 months 18 days | |||
Aggregate intrinsic value, ending | $ 7,750 | |||
Exercisable | 866,727 | |||
Weighted average exercise price, exercisable | $ 1.46 | |||
Weighted average grant date fair value, exercisable | ||||
Weighted average remaining contractual term, exercisable | 8 years 8 months 12 days | |||
Aggregate intrinsic value, exercisable | $ 7,750 | |||
[1]Equity structure was adjusted for all periods presented using the exchange ratio, 1.3352, established in the Go-Public Merger Agreement with Mer Telemanagement Solutions Ltd. to reflect the number of shares of SharpLink, Inc. (the accounting acquiree) issued in the reverse acquisition. See Note 3 in the consolidated financial statements accompanying this Annual Report on Form 10-K for a discussion of the MTS Merger. |
Stock Compensation (Details Nar
Stock Compensation (Details Narrative) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2022 | Dec. 31, 2021 | Jun. 30, 2022 | Jul. 26, 2021 | Dec. 31, 2020 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Number of shares, granted | 1,337,000 | ||||
Warrant exercise price | $ 0.63 | $ 6.80 | |||
Stock based compensation expense | $ 2,486,151 | $ 1,656,674 | |||
Unamortized stock compensation expense | 1,009,269 | $ 2,375,624 | |||
Unvested stock options | $ 2,022,403 | ||||
Option outstanding, beginning | 1,783,567 | 480,664 | |||
Weighted average exercise price, beginning | $ 4.96 | $ 0.94 | |||
Weighted average exercise price, granted | $ 6.21 | ||||
Number of shares, exercised | (25,917) | ||||
Weighted average exercise price, exercised | $ 0.94 | ||||
Number of shares, forfeited | (8,180) | ||||
Weighted average exercise price, forfeited | $ 2.04 | ||||
Option outstanding, ending | 1,783,567 | ||||
Weighted average exercise price, Ending Balance | $ 4.96 | ||||
Weighted average remaining contractual term | 9 years 4 months 24 days | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Intrinsic Value | $ 830,250 | ||||
Exercisable | 658,290 | ||||
Weighted average exercise price, exercisable | $ 3.78 | ||||
Weighted average remaining contractual term, exercisable | 9 years 3 months 18 days | ||||
Aggregate intrinsic value exercisable | $ 571,099 | ||||
2020 Stock Incentive Plan [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Amount of debt converted into shares to warrants, shares | 400,000 | ||||
Number of shares, granted | 360,000 | ||||
Warrant exercise price | $ 1.3352 | ||||
2021 Stock Incentive Plan [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Number of ordinary shares authorized for issuance | 5,436,632 | 2,336,632 | |||
Number of shares, granted | 2,493,500 | 1,312,000 | |||
Number of ordinary shares with respect to which options may be granted thereunder to any eligible employee | 1,140,000 | ||||
Number of ordinary shares with respect to which options may be granted thereunder to any eligible employee vested | 360,000 | ||||
Option deemed | 780,000 | ||||
Number of ordinary shares with respect to which options may be granted thereunder to any eligible employee deemed dividend expired | 360,000 | ||||
Expenses | $ 1,655,506 |
Schedule of Revenue Recognition
Schedule of Revenue Recognition (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 7,288,029 | $ 2,635,757 |
Software-as-a-Service [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 2,493,685 | 2,625,737 |
Fee Revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 951,196 | |
Services and Other [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 3,843,148 | |
Affiliate Marketing Services US [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 415,450 | 211,528 |
Affiliate Marketing Services US [Member] | Software-as-a-Service [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 353,200 | 211,528 |
Affiliate Marketing Services US [Member] | Fee Revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | ||
Affiliate Marketing Services US [Member] | Services and Other [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 62,250 | |
Affiliate Marketing Services International [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 3,427,698 | |
Affiliate Marketing Services International [Member] | Software-as-a-Service [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | ||
Affiliate Marketing Services International [Member] | Fee Revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | ||
Affiliate Marketing Services International [Member] | Services and Other [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 3,427,698 | |
Sports Gaming Client Services [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 2,493,685 | 2,424,229 |
Sports Gaming Client Services [Member] | Software-as-a-Service [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 2,493,685 | 2,424,229 |
Sports Gaming Client Services [Member] | Fee Revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | ||
Sports Gaming Client Services [Member] | Services and Other [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | ||
SportsHub Gaming Network [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 951,196 | |
SportsHub Gaming Network [Member] | Software-as-a-Service [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | ||
SportsHub Gaming Network [Member] | Fee Revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 951,196 | |
SportsHub Gaming Network [Member] | Services and Other [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue |
Schedule of Revenue Recognized
Schedule of Revenue Recognized point in Time and over Time (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Total | $ 7,288,029 | $ 2,635,757 |
Transferred at Point in Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total | 4,298,366 | |
Transferred over Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total | 2,989,663 | 2,635,757 |
Affiliate Marketing Services US [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total | 415,450 | 211,528 |
Affiliate Marketing Services US [Member] | Transferred at Point in Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total | 62,250 | |
Affiliate Marketing Services US [Member] | Transferred over Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total | 353,200 | 211,528 |
Affiliate Marketing Services International [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total | 3,427,698 | |
Affiliate Marketing Services International [Member] | Transferred at Point in Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total | 3,427,698 | |
Affiliate Marketing Services International [Member] | Transferred over Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total | ||
Sports Gaming Client Services [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total | 2,493,685 | 2,424,229 |
Sports Gaming Client Services [Member] | Transferred at Point in Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total | ||
Sports Gaming Client Services [Member] | Transferred over Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total | 2,493,685 | 2,424,229 |
SportsHub Gaming Network [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total | 951,196 | |
SportsHub Gaming Network [Member] | Transferred at Point in Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total | 808,418 | |
SportsHub Gaming Network [Member] | Transferred over Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total | $ 142,778 |
Schedule of Contract Assets (De
Schedule of Contract Assets (Details) | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Balance as of December 31, 2021 | $ 147,913 |
Labor costs expensed | (483,524) |
Labor costs deferred | 554,727 |
Balance as of December 31, 2022 | $ 219,116 |
Schedule of Contract Assets and
Schedule of Contract Assets and Liabilities (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Revenue from Contract with Customer [Abstract] | ||
Accounts receivable | $ 776,530 | $ 793,795 |
Unbilled revenue (reported in accounts receivable) | 47,000 | 162,760 |
Contract assets | 219,116 | 147,913 |
Contract liabilities | $ (2,166,451) | $ (308,058) |
Schedule of Contract Liabilitie
Schedule of Contract Liabilities (Details) | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Beginning balance | $ (308,058) |
SportsHub acquired balance | (3,574,285) |
Revenue recognized or reclassified | 2,846,755 |
Deferred revenue | (1,130,863) |
Ending balance | $ (2,166,451) |
Revenue Recognition (Details Na
Revenue Recognition (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Unsatisfied performance obligations | $ 850,000 | $ 3,246,000 |
Revenue Benchmark [Member] | Two Customer [Member] | Customer Concentration Risk [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk, percentage | 45% | |
Revenues | $ 572,621 | |
Revenue Benchmark [Member] | Three Customer [Member] | Customer Concentration Risk [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk, percentage | 49% | |
Revenues | $ 456,460 |
Schedule of Summarized Financia
Schedule of Summarized Financial Information for the Company’s Reportable Segments (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Revenue | $ 7,288,029 | $ 2,635,757 |
Cost of revenues | 6,154,434 | 2,935,191 |
Income (loss) from operations | (15,476,517) | (33,469,830) |
Loss from discontinued operations | 70,024 | (22,174,305) |
Net income (loss) | (15,303,402) | (55,644,135) |
Affiliate Marketing Services US [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Revenue | 415,450 | 211,528 |
Cost of revenues | 141,736 | 64,070 |
Income (loss) from operations | (9,471,593) | (32,773,402) |
Loss from discontinued operations | ||
Net income (loss) | (9,183,309) | (32,774,152) |
Affiliate Marketing Services International [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Revenue | 3,427,698 | |
Cost of revenues | 2,127,555 | |
Income (loss) from operations | (5,026,352) | |
Loss from discontinued operations | ||
Net income (loss) | (5,135,517) | |
Sports Gaming Client Services [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Revenue | 2,493,685 | 2,424,229 |
Cost of revenues | 3,119,178 | 2,871,049 |
Income (loss) from operations | (1,027,484) | (696,428) |
Loss from discontinued operations | ||
Net income (loss) | (1,027,484) | (696,427) |
SportsHub Gaming Network [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Revenue | 951,196 | |
Cost of revenues | 765,965 | |
Income (loss) from operations | 48,912 | |
Loss from discontinued operations | ||
Net income (loss) | 42,908 | |
Enterprise TEM [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Revenue | ||
Cost of revenues | ||
Income (loss) from operations | ||
Loss from discontinued operations | 70,024 | (22,174,305) |
Net income (loss) | $ 70,024 | $ (22,174,305) |
Schedule of Revenue by Country
Schedule of Revenue by Country (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | $ 7,288,029 | $ 2,635,757 |
Affiliate Marketing Services United States [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 7,288,029 | 263,577 |
Affiliate Marketing Services United States [Member] | Affiliate Marketing Services United States [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 415,450 | 211,528 |
Affiliate Marketing Services International [Member] | Affiliate Marketing Services United States [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 3,427,698 | |
Sports Gaming Client Services [Member] | Affiliate Marketing Services United States [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 2,493,685 | 2,424,229 |
SportsHub Gaming Network [Member] | Affiliate Marketing Services United States [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 951,196 | |
Enterprise TEM [Member] | Affiliate Marketing Services United States [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | ||
UNITED STATES | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 3,860,331 | 2,635,757 |
UNITED STATES | Affiliate Marketing Services United States [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 415,450 | 211,528 |
UNITED STATES | Affiliate Marketing Services International [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | ||
UNITED STATES | Sports Gaming Client Services [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 2,493,685 | 2,424,229 |
UNITED STATES | SportsHub Gaming Network [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 951,196 | |
UNITED STATES | Enterprise TEM [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | ||
Rest Of World [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 3,427,698 | |
Rest Of World [Member] | Affiliate Marketing Services United States [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | ||
Rest Of World [Member] | Affiliate Marketing Services International [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 3,427,698 | |
Rest Of World [Member] | Sports Gaming Client Services [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | ||
Rest Of World [Member] | SportsHub Gaming Network [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | ||
Rest Of World [Member] | Enterprise TEM [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues |
Schedule of Percentage of Conso
Schedule of Percentage of Consolidated Revenues Derived From Large Customers (Details) - Customer Concentration Risk [Member] - Revenue Benchmark [Member] | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | ||
Customerr A [Member] | |||
Revenue, Major Customer [Line Items] | |||
Revenue | 35% | 15% | |
Customer B [Member] | |||
Revenue, Major Customer [Line Items] | |||
Revenue | 10% | 10% | |
Customer C [Member] | |||
Revenue, Major Customer [Line Items] | |||
Revenue | [1] | 10% | |
Customer D [Member] | |||
Revenue, Major Customer [Line Items] | |||
Revenue | [1] | 14% | |
[1]Revenue from customer was less than 10% for the years ended December 31, 2022 and 2021. |
Schedule of Deferred Tax Assets
Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Income Tax Disclosure [Abstract] | ||
Net operating losses | $ 4,891,195 | $ 8,927,213 |
Research and development tax credit | 95,597 | 30,429 |
Nonqualified stock options | 100,373 | 334,519 |
Equipment | 8,885 | 1,256 |
Goodwill | 285,511 | 14,088 |
Bad debts | 120,608 | |
Intangible Assets | 713,206 | |
Accrued expenses and other | 117,511 | 425,327 |
Business interest expense | ||
Gross deferred tax assets | 6,212,278 | 9,853,440 |
Valuation allowance | (6,218,484) | (9,728,975) |
Net deferred tax assets | (6,206) | 124,465 |
Intangible assets | (130,046) | |
Goodwill | ||
Deferred tax liabilities | (130,046) | |
Net deferred tax liability | $ (6,206) | $ (5,558) |
Schedule of Income Tax Expenses
Schedule of Income Tax Expenses Benefits (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
US current tax expense | $ 10,718 | $ 2,999 |
Foreign current tax expense | ||
US deferred tax expense (benefit) | 648 | 1,172 |
Provision for income tax expenses (benefit) | $ 11,366 | $ 4,171 |
Schedule of Effective Tax Rate
Schedule of Effective Tax Rate (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Income tax benefit at federal statutory rate | $ (3,288,865) | $ (11,678,252) |
Income tax benefit at federal statutory rate, percentage | 21% | 21% |
State and local income taxes net of federal tax benefit | $ (83,610) | $ (267,103) |
State and local income taxes net of federal tax benefit, percentage | 0.50% | 0.50% |
Rate differentials | $ (4,020) | |
Rate differentials, percentage | 0% | 0% |
Meals and entertainment, non-deductible expenses and tax-exempt income | $ (44,073) | $ (72,503) |
Meals and entertainment, non-deductible expenses and tax-exempt income, percentage | (0.10%) | (0.10%) |
Meals and entertainment, non-deductible expenses and tax-exempt income | $ 44,073 | $ 72,503 |
Incentive stock option expense | $ 61,851 | $ 59,055 |
Incentive stock option expense, percentage | (0.10%) | (0.10%) |
Nondeductible goodwill impairment | $ 167,130 | $ 4,551,259 |
Nondeductible goodwill impairment, percentage | (8.20%) | (8.20%) |
Nondeductible commitment fee | $ 4,893,253 | |
Nondeductible commitment fee, percentage | (8.80%) | (8.80%) |
PPP loan forgiveness income | ||
PPP loan forgiveness income, percentage | 0% | 0% |
NQO Cancellations | $ 680,002 | |
NQO Cancellations, percentage | 0% | 0% |
Financial Statement True Up | $ (5,919) | |
Financial Statement True Up, percentage | 0% | 0% |
Change in provision for uncertain tax positions | $ 1,177 | |
Provision for income tax expenses (benefit), percentage | 0% | 0% |
Change in valuation allowance | $ 2,524,850 | $ 2,376,299 |
Change in valuation allowance, percentage | (4.30%) | (4.30%) |
Provision for income tax expenses (benefit) | $ 11,366 | $ 4,171 |
Schedule of Accrued Uncertain T
Schedule of Accrued Uncertain Tax Positions (Details) | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Income Tax Disclosure [Abstract] | |
Beginning balance, December 31, 2021 | $ 131,100 |
Uncertain tax position additions | 0 |
Removal for amount related to discontinued operations | (131,100) |
Ending balance, December 31, 2022 | $ 0 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards, description | The state net operating loss carryforwards will begin to expire in 2035 and are available to offset future taxable income or reduce taxes payable through 2040. | |
Research and development tax credit | $ 95,597 | $ 30,429 |
Deferred assets of related to discontinued operations | 6,683 | |
Liability for uncertain tax positions current | 0 | $ 131,100 |
Federal [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | 21,500,845 | |
Research and development tax credit | 95,597 | |
State [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | 376,018 | |
Foreign Tax Authority [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | 30,000,000 | |
Vexigo [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Liability for uncertain tax positions current | $ 0 |
Summary Reconciliation of Disco
Summary Reconciliation of Discontinued Operations (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | ||
Revenues | $ 3,734,000 | $ 1,515,848 |
Cost of Revenues | 1,900,000 | 933,986 |
Gross Profit | 1,834,000 | 581,862 |
Selling, general, and administrative expenses | 1,515,000 | 1,032,042 |
Goodwill and intangible asset impairment expenses | 1,224,000 | 21,722,213 |
Total operating expenses | 2,739,000 | 22,754,255 |
Operating Loss from Discontinued Operations | (905,000) | (22,172,393) |
Interest income | 6,000 | |
Gain on disposal of subsidiary | 997,000 | |
Total other income and expense | 1,003,000 | |
Net Income Before Income Taxes from discontinued operations | 98,000 | (22,172,393) |
Provision for income tax expenses for discontinued operations | 27,976 | 1,912 |
Net Income (Loss) | $ 70,024 | $ (22,174,305) |
Schedule of Major Classes of As
Schedule of Major Classes of Assets and Liabilities (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Current Assets | ||
Cash | $ 39,324,529 | $ 6,065,461 |
Restricted cash | 11,132,957 | |
Accounts receivable, net of allowance | 823,530 | 956,555 |
Prepaid expenses and other current assets | 1,100,433 | 217,296 |
Equipment, net | 60,218 | 55,105 |
Total current assets | 53,910,565 | 9,488,434 |
Non-current assets | ||
Intangibles and goodwill | 3,727,933 | 5,551,540 |
Current liabilities | ||
Contract liabilities | 2,166,451 | 308,058 |
Total current liabilities | 58,911,033 | 5,860,555 |
Discontinued Operations [Member] | ||
Current Assets | ||
Cash | 648,000 | 690,181 |
Restricted cash | 1,025,029 | |
Accounts receivable, net of allowance | 191,000 | 137,405 |
Prepaid expenses and other current assets | 187,000 | 248,594 |
Equipment, net | 5,000 | |
Other assets | 279,000 | |
Total current assets | 1,310,000 | 2,101,209 |
Non-current assets | ||
Equipment, net | 16,505 | |
Other assets | 283,632 | |
Intangibles and goodwill | 1,287,921 | |
Total non-current assets | 1,588,058 | |
Current liabilities | ||
Accrued expenses | 374,879 | 1,902,477 |
Contract liabilities | 2,000 | 896,933 |
Other current liabilities | 838,274 | 534,323 |
Total current liabilities | 1,215,153 | 3,333,733 |
Non-current liabilities | ||
Other long-term liabilities | 365,977 | |
Total liabilities | $ 1,215,213 | $ 3,699,710 |
Discontinued Operation (Details
Discontinued Operation (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | ||
Impairment charges | $ 1,224,671 | |
Deferred tax asset | 6,683 | $ 7,474 |
Operating activities discontinued operations | 533,133 | (215,879) |
Operating activities discontinued operations | (533,133) | 215,879 |
Investing activities discontinued operations | 10,423 | (1,932,000) |
Investing activities discontinued operations | $ (10,423) | $ 1,932,000 |
Schedule of Loss Per Share and
Schedule of Loss Per Share and Weighted-average (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Net loss from continuing operations | $ (15,303,402) | $ (33,469,830) |
Net loss from continuing operations available to ordinary shareholders | (15,312,264) | (34,250,214) |
Net income (loss) from discontinued operations, net of tax, available to ordinary shareholders | 70,024 | (22,174,305) |
Total Numerator for basic and diluted net loss per share | $ (15,242,240) | $ (56,424,519) |
Basic and diluted weighted-average shares outstanding | 24,879,602 | 14,300,311 |
Basic and diluted: | ||
Net loss from continuing operations per share | $ (0.62) | $ (2.40) |
Net income (loss) from discontinued operations per share | (1.54) | |
Net loss per share | $ (0.62) | $ (3.94) |
Preferred Stock [Member] | Series A Preferred Stock [Member] | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Less: dividend accretion on series A preferred stock | $ (373,560) | |
Preferred Stock [Member] | Series A Preferred Stock One [Member] | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Less: dividend accretion on series A preferred stock | (91,192) | |
Preferred Stock [Member] | Series B Preferred Stock [Member] | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Less: dividends on series B preferred stock | $ (8,862) | $ (315,632) |
Schedule of Computation of Dilu
Schedule of Computation of Diluted Shares Outstanding (Details) - shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Diluted shares outstanding | 7,083,830 | 6,554,454 |
Stock Options [Member] | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Diluted shares outstanding | 2,889,124 | 1,783,567 |
Preferred Stock [Member] | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Diluted shares outstanding | 587,747 | |
Preferred Stock [Member] | Series A-1 Preferred Stock [Member] | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Diluted shares outstanding | 66,303 | 54,737 |
Preferred Stock [Member] | Series B Preferred Stock [Member] | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Diluted shares outstanding | 124,810 | 124,810 |
M T S Warrants [Member] | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Diluted shares outstanding | 83,334 | 83,334 |
Predunded Warrants [Member] | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Diluted shares outstanding | 1,253,592 | 1,253,592 |
Regular Warrants [Member] | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Diluted shares outstanding | 2,666,667 | 2,666,667 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 12 Months Ended | |||
Dec. 21, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Feb. 28, 2023 | |
Related party transactions, description | Alpha has a voting interest in the Company of less than 10%, but has an ownership interest in the Company that exceeds 10% | |||
Related party costs | $ 6,154,434 | $ 2,935,119 | ||
Rent expenses | 38,400 | 38,400 | ||
Board of Directors Chairman [Member] | ||||
Related party costs | $ 1,198,710 | $ 728,986 | ||
Subsequent Event [Member] | ||||
Convertible note | $ 4,400,000 | |||
SportsHub Games Network [Member] | ||||
Ordinary shares percentage | 40% |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Feb. 15, 2023 | Jan. 20, 2023 | Apr. 03, 2023 | Mar. 10, 2023 | Feb. 14, 2023 | Feb. 13, 2023 | Dec. 31, 2022 | Dec. 22, 2022 | Dec. 31, 2021 | Jul. 26, 2021 |
Subsequent Event [Line Items] | ||||||||||
Term loan | $ 3,967,975 | $ 1,267,199 | ||||||||
Aggregate principal amount | 109,165 | |||||||||
Warrant exercise price | $ 0.63 | $ 6.80 | ||||||||
FDIC insured limit | $ 250,000 | |||||||||
Subsequent Event [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Reverse stock split | the Company held an Extraordinary General Meeting of Shareholders and approved a reverse share split of the Company’s ordinary shares, par value NIS 0.06 per share, by a ratio of up to and including 20:1, to be effective at the ratio and on a date to be determined by the Company’s Board of Directors; and amendments to the Company’s Amended and Restated Articles and Memorandum of Association to effect such reverse share split | |||||||||
Aggregate principal amount | $ 4,400,000 | |||||||||
Purchase of warrant | 8,800,000 | |||||||||
Warrant exercise price | $ 0.875 | |||||||||
Original issue underlying excess rate | 9.99% | |||||||||
Subsequent Event [Member] | Promissory Note [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Aggregate principal amount | $ 7,000,000 | |||||||||
Principal amount of promissory note | 5,000,000 | |||||||||
Subsequent Event [Member] | Promissory Note [Member] | Lendor [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Aggregate principal amount | 1,267,199 | |||||||||
Subsequent Event [Member] | Senior Convertible Debenture [Member] | Lendor [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Aggregate principal amount | 2,000,000 | |||||||||
Subsequent Event [Member] | Promissory Note One [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Original principal amount | 5,000,000 | |||||||||
Subsequent Event [Member] | Platinum Bank [Member] | Two Thousend Twenty Three Revolving Credit Agreement [Member] | Promissory Note [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Term loan | $ 7,000,000 | |||||||||
Subsequent Event [Member] | Silicon Valley Bank [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
FDIC time deposits limit | $ 336,000 | |||||||||
FDIC insured limit | $ 250,000 | |||||||||
Purchase price | $ 140,000 |