Cover
Cover | 6 Months Ended |
Jun. 30, 2021 | |
Cover [Abstract] | |
Document Type | S-4 |
Amendment Flag | false |
Entity Registrant Name | SharpLink Gaming Ltd., |
Entity Central Index Key | 0001025561 |
Entity Tax Identification Number | 87-4752260 |
Entity Address, Address Line One | 333 Washington Ave. N |
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 |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | false |
Cnsolidated Balance Sheets
Cnsolidated Balance Sheets - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Current Assets | ||
Cash | $ 2,585,180 | $ 1,801,230 |
Accounts receivable | 355,912 | 913,892 |
Contract asset | 275,337 | 195,516 |
Prepaid expenses | 4,647 | 272 |
Stock subscriptions | 130,532 | |
Advance to Parent | 124,563 | |
Total current assets | 3,221,076 | 3,166,005 |
Equipment, Net | 17,189 | 31,449 |
Right-of-Use Asset - Operating Lease | 193,086 | 219,050 |
Intangibles | ||
Intangible assets, net | 608,596 | 429,066 |
Goodwill | 381,000 | 381,000 |
Total Intangibles | 989,596 | 810,066 |
Total assets | 4,420,947 | 4,226,570 |
Current Liabilities | ||
Accrued expenses | 241,299 | 89,521 |
Deferred revenue | 406,508 | 816,672 |
Due to Parent | 284,109 | |
Commitment fee | 577,000 | |
Current portion of lease liability | 27,565 | 25,963 |
Total current liabilities | 1,536,481 | 932,156 |
Long-Term Liabilities | ||
Deferred tax liability | 4,386 | 3,417 |
Lease liability | 165,522 | 193,086 |
Total liabilities | 1,706,389 | 1,128,659 |
Temporary Equity | ||
8% Redeemable convertible preferred stock, $0.01 par value, authorized 9,000 shares, 2,000 shares issued and outstanding, liquidation preference of $2,003,507 | 1,359,047 | |
Stockholders' Equity | ||
Common stock, $0.01 par value: authorized 20,000,000 shares at December 31, 2020 and 2019; issued and outstanding: 8,051,942 and 3,988,168 shares at December 31, 2020 and 2019, respectively | 80,519 | 39,882 |
Additional paid-in capital | 3,968,386 | 3,953,515 |
Accumulated deficit | (2,688,128) | (895,486) |
Stock subscription | (5,266) | |
Total stockholders' equity | 1,355,511 | 3,097,911 |
Total liabilities and stockholders' equity | $ 4,420,947 | $ 4,226,570 |
Cnsolidated Balance Sheets (Par
Cnsolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, shares issued | 8,051,942 | 3,988,168 |
Common stock, shares outstanding | 8,051,942 | 3,988,168 |
8% Redeemable convertible preferred stock [Member] | ||
Temporary equity, per share | $ 0.01 | $ 0.01 |
Temporary equity, shares authorized | 9,000 | 9,000 |
Temporary equity, shares issued | 2,000 | 2,000 |
Temporary equity, shares outstanding | 2,000 | 2,000 |
Liquidation preference | $ 2,003,507 | $ 2,003,507 |
Consolidated Sttements of Opera
Consolidated Sttements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Statement [Abstract] | ||
Revenues | $ 2,278,814 | $ 2,381,737 |
Cost of Revenues | 1,799,384 | 1,961,183 |
Gross Profit | 479,430 | 420,554 |
Operating Expenses | ||
Selling, general, and administrative expenses | 1,553,095 | 704,460 |
Depreciation and amortization | 133,030 | 97,857 |
Total operating expenses | 1,686,125 | 802,317 |
Operating Loss | (1,206,695) | (381,763) |
Other Income and Expense | ||
Loan forgiveness income | 46,500 | |
Interest income | 23,468 | 15,777 |
Interest expense | (1,375) | (20,037) |
Total other income and expense | 68,593 | (4,260) |
Loss Before Income Taxes | (1,138,102) | (386,023) |
Provision for (Benefit from) Income Taxes | 970 | (79,870) |
Net Loss | (1,139,072) | (306,153) |
Numerator for basic and diluted net loss per share: | ||
Net loss available to common shareholders | $ (1,155,900) | $ (306,153) |
Denominator for basic and diluted net loss per share: | ||
Weighted average shares outstanding | 8,048,194 | 6,587,361 |
Net Loss Per Share - Basic | ||
Net loss per share | $ (0.14) | $ (0.05) |
Net Loss Per Share - Diluted | ||
Net loss per share | $ (0.14) | $ (0.05) |
Consolidated Sttements of Stock
Consolidated Sttements of Stockholders' Equity - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Stock Subscription [Member] | Retained Earnings [Member] | Divisional Equity [Member] | Total |
Ending balance, value at Dec. 31, 2018 | $ 1,229,561 | $ 1,229,561 | ||||
Ending balance, shares at Dec. 31, 2018 | ||||||
Retrospective impact of common control merger (Note 1) | 1,229,561 | (1,229,561) | ||||
Distributions to Parent | (589,333) | (589,333) | ||||
Issuance of common stock | $ 39,464 | 2,653,332 | 2,692,796 | |||
Stock Issued During Period, Shares, Other | 3,946,398 | |||||
Proceeds for prepaid stock issuance | ||||||
Stock-based compensation expense | ||||||
Common stock issued upon conversion of convertible notes | $ 418 | 70,622 | 71,040 | |||
Common stock issued upon conversion of convertible notes, shares | 41,770 | |||||
Net loss | (306,153) | (306,153) | ||||
Ending balance, value at Dec. 31, 2019 | $ 39,882 | 3,953,515 | (895,486) | 3,097,911 | ||
Ending balance, shares at Dec. 31, 2019 | 3,988,168 | |||||
Distributions to Parent | 253,165 | 253,165 | ||||
Proceeds for prepaid stock issuance | 550,000 | 550,000 | ||||
Stock-based compensation expense | ||||||
Net loss | (235,591) | (235,591) | ||||
Ending balance, value at Jun. 30, 2020 | $ 39,882 | 4,503,515 | (1,384,242) | 3,159,155 | ||
Ending balance, shares at Jun. 30, 2020 | 3,988,168 | |||||
Beginning balance, value at Dec. 31, 2019 | $ 39,882 | 3,953,515 | (895,486) | 3,097,911 | ||
Beginning balance, shares at Dec. 31, 2019 | 3,988,168 | |||||
Distributions to Parent | (653,570) | (653,570) | ||||
Issuance of common stock | $ 26 | 5,240 | (5,266) | |||
Stock Issued During Period, Shares, Other | 2,633 | |||||
Shares issued to Parent in common control merger (Note 1) | $ 40,611 | (40,611) | ||||
Shares issued to Parent in common control merge (Note 1), shares | 4,061,141 | |||||
Proceeds for prepaid stock issuance | 750,000 | 750,000 | ||||
Repayment for prepaid stock issuance | (750,000) | (750,000) | ||||
Stock-based compensation expense | 67,070 | 67,070 | ||||
Preferred stock discount accretion | (13,321) | (13,321) | ||||
Preferred stock dividend accretion | (3,507) | (3,507) | ||||
Net loss | (1,139,072) | (1,139,072) | ||||
Ending balance, value at Dec. 31, 2020 | $ 80,519 | 3,968,386 | (5,266) | (2,688,128) | 1,355,511 | |
Ending balance, shares at Dec. 31, 2020 | 8,051,942 | |||||
Distributions to Parent | ||||||
Proceeds for prepaid stock issuance | ||||||
Stock-based compensation expense | 63,233 | 63,233 | ||||
Preferred stock dividend accretion | (326,530) | (326,530) | ||||
Net loss | (21,089,284) | (21,089,284) | ||||
Ending balance, value at Jun. 30, 2021 | $ 80,716 | $ 3,668,399 | $ (23,777,412) | $ (20,028,297) | ||
Ending balance, shares at Jun. 30, 2021 | 8,071,601 |
Cnsolidated Statements of Cash
Cnsolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Operating Activities | ||
Net loss | $ (1,139,072) | $ (306,153) |
Adjustments to reconcile net loss to net cash used for operating activities | ||
Depreciation and amortization | 133,030 | 97,857 |
Deferred tax expense (benefit) | 970 | (79,870) |
Stock-based compensation expense | 67,070 | |
Loan forgiveness income | (46,500) | |
Changes in assets and liabilities | ||
Accounts receivable | 557,980 | 27,471 |
Contract asset | (79,821) | (51,152) |
Prepaid expenses | (4,375) | |
Accrued expenses | 151,778 | 36,042 |
Deferred revenue | (410,164) | 350,627 |
Net Cash (used for) from Operating Activities | (769,104) | 74,822 |
Investing Activities | ||
Capital expenditures for equipment | (6,070) | (19,290) |
Capital expenditures for internally developed software | (292,229) | (173,710) |
Net Cash used for Investing Activities | (298,299) | (193,000) |
Financing Activities | ||
Proceeds from PPP loan | 46,500 | |
Collection of stock subscriptions | 130,532 | |
Preferred stock and commitment fee issuance | 1,919,219 | |
Net advances to and proceeds from Parent | 408,672 | (124,563) |
Distributions to Parent | (653,570) | (589,333) |
Proceeds for prepaid stock issuance | 750,000 | |
Repayment for prepaid stock issuance | (750,000) | |
Issuance of common stock | 2,562,264 | |
Proceeds from isssuance of convertible notes | 1,882,500 | |
Principal payments on convertible notes | (1,811,460) | |
Net Cash from Financing Activities | 1,851,353 | 1,919,408 |
Net Change in Cash | 783,950 | 1,801,230 |
Cash, Beginning of Year | 1,801,230 | |
Cash, End of Year | 2,585,180 | 1,801,230 |
Non-Cash Financing Activities | ||
Notes coverted to common stock | 71,040 | |
Common stock issued on subscription | 5,266 | 130,532 |
Preferred stock discount accretion | 13,321 | |
Preferred stock dividend accretion | $ 3,507 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Current Assets | ||
Cash | $ 411,614 | $ 2,585,180 |
Accounts receivable | 499,549 | 355,912 |
Contract asset | 90,592 | 275,337 |
Prepaid expenses | 13,683 | 4,647 |
Total current assets | 1,015,438 | 3,221,076 |
Equipment, net | 28,257 | 17,189 |
Right-of-use asset - operating lease | 179,510 | 193,086 |
Intangibles | ||
Intangible assets, net | 642,745 | 608,596 |
Goodwill | 381,000 | 381,000 |
Total Intangible | 1,023,745 | 989,596 |
Total assets | 2,246,950 | 4,420,947 |
Current Liabilities | ||
Accrued expenses | 578,558 | 241,299 |
Deferred revenue | 120,611 | 406,508 |
Due to Parent | 240,484 | 284,109 |
Commitment fee | 19,428,927 | 577,000 |
Current portion of lease liability | 28,402 | 27,565 |
Total current liabilities | 20,396,982 | 1,536,481 |
Long-Term Liabilities | ||
Deferred tax liability | 5,087 | 4,386 |
Lease liability | 151,108 | 165,522 |
Total liabilities | 20,553,177 | 1,706,389 |
Temporary Equity | ||
8% Redeemable convertible Series A Preferred Stock, $0.01 par value, authorized 9,000 shares, 2,000 shares issued and outstanding, liquidation preference of $2,040,000 | 1,722,070 | 1,359,047 |
Stockholders' Equity | ||
Common stock, $0.01 par value: authorized 20,000,000 shares at June 30, 2021 and December 31, 2020; issued and outstanding: 8,071,601 and 8,051,942 shares at June 30, 2021 and December 31, 2020, respectively | 80,716 | 80,519 |
Additional paid-in capital | 3,668,399 | 3,968,386 |
Accumulated deficit | (23,777,412) | (2,688,128) |
Stock subscription | (5,266) | |
Total stockholders' equity | (20,028,297) | 1,355,511 |
Total liabilities and stockholders' equity | $ 2,246,950 | $ 4,420,947 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Jun. 30, 2021 | Dec. 31, 2020 |
Common shares, par value per share | $ 0.01 | $ 0.01 |
Common shares, shares authorized | 20,000,000 | 20,000,000 |
Common shares, shares issued | 8,071,601 | 8,051,942 |
Common shares, shares outstanding | 8,071,601 | 8,051,942 |
Redeemable Convertible Series A Preferred Stock [Member] | ||
Temporary equity, per share | $ 0.01 | $ 0.01 |
Redeemable Convertible Series A Preferred Stock Of Eight Percentage [Member] | ||
Temporary equity, shares authorized | 9,000 | 9,000 |
8% Redeemable convertible preferred stock [Member] | ||
Temporary equity, per share | $ 0.01 | |
Temporary equity, shares authorized | 9,000 | |
Temporary equity, shares issued | 2,000 | 2,000 |
Temporary equity, shares outstanding | 2,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Statement [Abstract] | ||||
Revenues | $ 1,631,966 | $ 1,349,825 | $ 2,278,814 | $ 2,381,737 |
Cost of Revenues | 1,346,095 | 1,080,057 | 1,799,384 | 1,961,183 |
Gross Profit | 285,871 | 269,768 | 479,430 | 420,554 |
Operating Expenses | ||||
Selling, general, and administrative expenses | 1,549,519 | 468,875 | ||
Transaction and financing expenses | 883,990 | |||
Commitment fee expense | 18,851,927 | |||
Depreciation and amortization | 94,881 | 48,693 | 133,030 | 97,857 |
Total operating expenses | 21,380,317 | 517,568 | 1,686,125 | 802,317 |
Operating Loss | (21,094,446) | (247,800) | (1,206,695) | (381,763) |
Other Income and Expense | ||||
Interest income | 5,862 | 13,734 | ||
Interest expense | (1,375) | (1,375) | (20,037) | |
Total other income and expense | 5,862 | 12,359 | ||
Loss Before Income Taxes | (21,088,584) | (235,441) | (1,138,102) | (386,023) |
Provision for (Benefit from) Income Taxes | 700 | 150 | 970 | (79,870) |
Net Loss | (21,089,284) | (235,591) | (1,139,072) | (306,153) |
Numerator for basic and diluted net loss per share: | ||||
Net loss available to common shareholders | $ (21,494,974) | $ (235,441) | $ (1,155,900) | $ (306,153) |
Denominator for basic and diluted net loss per share: | ||||
Weighted average shares outstanding | 8,061,772 | 8,049,309 | 8,048,194 | 6,587,361 |
Net Loss Per Share - Basic | ||||
Net loss per share | $ (2.67) | $ (0.03) | $ (0.14) | $ (0.05) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Stock Subscription [Member] | Retained Earnings [Member] | Total |
Ending balance, value at Dec. 31, 2018 | $ 1,229,561 | ||||
Ending balance, shares at Dec. 31, 2018 | |||||
Distributions to Parent | 589,333 | 589,333 | |||
Proceeds for prepaid stock issuance | |||||
Net loss | (306,153) | (306,153) | |||
Stock-based compensation expense | |||||
Series A Preferred Stock dividend accretion | |||||
Ending balance, value at Dec. 31, 2019 | $ 39,882 | 3,953,515 | (895,486) | 3,097,911 | |
Ending balance, shares at Dec. 31, 2019 | 3,988,168 | ||||
Distributions to Parent | (253,165) | (253,165) | |||
Proceeds for prepaid stock issuance | 550,000 | 550,000 | |||
Net loss | (235,591) | (235,591) | |||
Stock-based compensation expense | |||||
Collection of stock subscription | 130,532 | ||||
Dividends on Series A Preferred Stock in common stock | |||||
Ending balance, value at Jun. 30, 2020 | $ 39,882 | 4,503,515 | (1,384,242) | 3,159,155 | |
Ending balance, shares at Jun. 30, 2020 | 3,988,168 | ||||
Beginning balance, value at Dec. 31, 2019 | $ 39,882 | 3,953,515 | (895,486) | 3,097,911 | |
Beginning balance, shares at Dec. 31, 2019 | 3,988,168 | ||||
Distributions to Parent | 653,570 | 653,570 | |||
Proceeds for prepaid stock issuance | 750,000 | 750,000 | |||
Net loss | (1,139,072) | (1,139,072) | |||
Stock-based compensation expense | 67,070 | 67,070 | |||
Series A Preferred Stock discount accretion | (3,507) | (3,507) | |||
Series A Preferred Stock dividend accretion | 13,321 | ||||
Ending balance, value at Dec. 31, 2020 | $ 80,519 | 3,968,386 | (5,266) | (2,688,128) | 1,355,511 |
Ending balance, shares at Dec. 31, 2020 | 8,051,942 | ||||
Distributions to Parent | |||||
Proceeds for prepaid stock issuance | |||||
Net loss | (21,089,284) | (21,089,284) | |||
Stock-based compensation expense | 63,233 | 63,233 | |||
Collection of stock subscription | 5,266 | 5,266 | |||
Series A Preferred Stock discount accretion | (326,530) | (326,530) | |||
Series A Preferred Stock dividend accretion | (79,160) | (79,160) | |||
Dividends on Series A Preferred Stock in common stock | 197 | 42,470 | $ 42,667 | ||
Dividends on Series A Preferred Stock in common stock, shares | 19,659 | ||||
Ending balance, value at Jun. 30, 2021 | $ 80,716 | $ 3,668,399 | $ (23,777,412) | $ (20,028,297) | |
Ending balance, shares at Jun. 30, 2021 | 8,071,601 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Operating Activities | ||
Net loss | $ (21,089,284) | $ (235,591) |
Adjustments to reconcile net loss to net cash used for operating activities | ||
Depreciation and amortization | 94,881 | 48,693 |
Deferred tax expense (benefit) | 700 | 150 |
Stock-based compensation expense | 63,233 | |
Commitment fee expense | 18,851,927 | |
Changes in assets and liabilities | ||
Accounts receivable | (143,637) | 301,740 |
Contract asset | 184,745 | 136,828 |
Prepaid expenses | (9,036) | (1) |
Accrued expenses | 337,259 | (8,792) |
Deferred revenue | (285,897) | (318,675) |
Net Cash (used for) from Operating Activities | (1,995,109) | (75,648) |
Investing Activities | ||
Capital expenditures for equipment | (20,064) | (5,342) |
Capital expenditures for internally developed software | (120,034) | (167,557) |
Net Cash used for Investing Activities | (140,098) | (172,899) |
Financing Activities | ||
Collection of stock subscription | 5,266 | 130,532 |
Net advances to and proceeds from Parent | (43,625) | 91,590 |
Distributions to Parent | (253,165) | |
Proceeds from PPP loan | 46,500 | |
Proceeds for prepaid stock issuance | 550,000 | |
Net Cash from Financing Activities | (38,359) | 565,457 |
Net Change in Cash | (2,173,566) | 316,910 |
Cash, Beginning of Year | 2,585,180 | 1,801,230 |
Cash, End of Year | 411,614 | 2,118,140 |
Non-Cash Financing Activities | ||
Series A Preferred Stock discount accretion | 326,530 | |
Series A Preferred Stock dividend accretion | 79,160 | |
Dividends on Series A Preferred Stock in common stock | $ (42,667) |
Consolidated Balances Sheet
Consolidated Balances Sheet - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets | ||
Cash and cash equivalents | $ 2,585,180 | $ 1,801,230 |
Accounts receivable, net | 355,912 | 913,892 |
Total current assets | 3,221,076 | 3,166,005 |
Total assets | 4,420,947 | 4,226,570 |
Current liabilities | ||
Accrued expenses | 241,299 | 89,521 |
Total current liabilities | 1,536,481 | 932,156 |
Total liabilities | 1,706,389 | 1,128,659 |
Total liabilities and stockholders' equity | 4,420,947 | 4,226,570 |
Four Cubed Management Llc [Member] | ||
Current assets | ||
Cash and cash equivalents | 1,186,219 | 742,224 |
Accounts receivable, net | 518,931 | 440,350 |
Total current assets | 1,705,150 | 1,182,574 |
Noncurrent deferred tax asset | 5,500 | 25,500 |
Total assets | 1,710,650 | 1,208,074 |
Current liabilities | ||
Accounts payable | 703,792 | 400,103 |
Income taxes payable | 11,137 | |
Accrued expenses | 15,394 | 12,998 |
Total current liabilities | 719,186 | 424,238 |
Long-term debt | 39,184 | |
Total liabilities | 758,370 | 424,238 |
Members’ equity | 952,280 | 783,836 |
Total liabilities and stockholders' equity | $ 1,710,650 | $ 1,208,074 |
Consolidated Statement of Opera
Consolidated Statement of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Net sales | $ 2,278,814 | $ 2,381,737 |
Cost of goods sold | 1,799,384 | 1,961,183 |
Gross Profit | 479,430 | 420,554 |
Operating expenses | ||
Total operating expenses | 1,686,125 | 802,317 |
Income from operations | (1,206,695) | (381,763) |
Other income (expense) Other income | 68,593 | (4,260) |
Other expense | (18,330) | (24,357) |
Income tax expense | (970) | 79,870 |
Net income | (1,139,072) | (306,153) |
Four Cubed Management Llc [Member] | ||
Net sales | 6,586,560 | 5,618,385 |
Cost of goods sold | 5,090,760 | 4,355,719 |
Gross Profit | 1,495,800 | 1,262,666 |
Operating expenses | ||
Selling | 132,441 | 57,159 |
General and administrative | 603,765 | 737,282 |
Total operating expenses | 736,206 | 794,441 |
Income from operations | 759,594 | 468,225 |
Other income (expense) Other income | 79,900 | 169 |
Other expense | (650) | (33,108) |
Total other income (expense), net | 79,250 | (32,939) |
Net income before income taxes | 838,844 | 435,286 |
Income tax expense | 63,872 | 120,006 |
Net income | $ 774,972 | $ 315,280 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Member' Equity | Four Cubed Management Llc [Member]USD ($) |
Beginning balance, value at Dec. 31, 2017 | $ 752,342 |
Net income | 315,280 |
Member distributions | (283,786) |
Ending balance, value at Dec. 31, 2019 | 783,836 |
Beginning balance, value at Dec. 31, 2018 | 783,836 |
Net income | 774,972 |
Member distributions | (606,528) |
Ending balance, value at Dec. 31, 2020 | 952,280 |
Beginning balance, value at Dec. 31, 2019 | 783,836 |
Net income | 259,094 |
Member distributions | 74,625 |
Ending balance, value at Jun. 30, 2020 | 968,305 |
Beginning balance, value at Dec. 31, 2020 | 952,280 |
Net income | 386,698 |
Member distributions | 978,267 |
Ending balance, value at Jun. 30, 2021 | $ 360,711 |
Consolidate d Statement of Cash
Consolidate d Statement of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cash Flows - Operating Activities | ||
Net income | $ (1,139,072) | $ (306,153) |
Changes in operating assets and liabilities | ||
Accounts receivable, net | 557,980 | 27,471 |
Prepaid expenses | (4,375) | |
Accrued expenses | 151,778 | 36,042 |
Net Cash (used for) from Operating Activities | (769,104) | 74,822 |
Cash Flows - Investing Activities | ||
Net Cash used for Investing Activities | (298,299) | (193,000) |
Cash Flows - Financing Activities | ||
Net Cash from Financing Activities | 1,851,353 | 1,919,408 |
Net Change in Cash | 783,950 | 1,801,230 |
Cash and Cash Equivalents | ||
Cash, Beginning of Year | 1,801,230 | |
Cash, End of Year | 2,585,180 | 1,801,230 |
Four Cubed Management Llc [Member] | ||
Cash Flows - Operating Activities | ||
Net income | 774,972 | 315,280 |
Adjustments to reconcile net income to net cash flows - operating activities | ||
Deferred tax assets | 20,000 | (12,000) |
Changes in operating assets and liabilities | ||
Accounts receivable, net | (78,581) | 155,338 |
Prepaid expenses | 4,949 | |
Accounts payable | 303,689 | (348,861) |
Income taxes payable | (11,137) | (59,026) |
Accrued expenses | 2,396 | (2,066) |
Total adjustments | 236,367 | (261,666) |
Net Cash (used for) from Operating Activities | 1,011,339 | 53,614 |
Cash Flows - Investing Activities | ||
Proceeds from sale of digital assets | 23,082 | |
Net Cash used for Investing Activities | 23,082 | |
Cash Flows - Financing Activities | ||
Proceeds from long-term debt | 39,184 | |
Distributions | (606,528) | (283,786) |
Net Cash from Financing Activities | (567,344) | (283,786) |
Net Change in Cash | 443,995 | (207,090) |
Cash and Cash Equivalents | ||
Cash, Beginning of Year | 742,224 | 949,314 |
Cash, End of Year | 1,186,219 | 742,224 |
Supplemental disclosure of cash flow information: | ||
Cash paid for income taxes | $ 55,009 | $ 191,032 |
Consolidated Balance Shets
Consolidated Balance Shets - USD ($) | Dec. 31, 2021 | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets | ||||
Cash and cash equivalents | $ 411,614 | $ 2,585,180 | $ 1,801,230 | |
Accounts receivable, net | 499,549 | 355,912 | 913,892 | |
Total current assets | 1,015,438 | 3,221,076 | 3,166,005 | |
Total assets | 2,246,950 | 4,420,947 | 4,226,570 | |
Current liabilities | ||||
Accrued expenses | 578,558 | 241,299 | 89,521 | |
Total current liabilities | 20,396,982 | 1,536,481 | 932,156 | |
Total liabilities | 20,553,177 | 1,706,389 | 1,128,659 | |
Total liabilities and stockholders' equity | 2,246,950 | 4,420,947 | 4,226,570 | |
Four Cubed Management Llc [Member] | ||||
Current assets | ||||
Cash and cash equivalents | $ 1,186,219 | 622,919 | 1,186,219 | 742,224 |
Accounts receivable, net | 518,931 | 475,993 | 518,931 | 440,350 |
Total current assets | 1,705,150 | 1,098,912 | 1,705,150 | 1,182,574 |
Noncurrent deferred tax asset | 5,500 | 5,500 | 5,500 | 25,500 |
Total assets | 1,710,650 | 1,104,412 | 1,710,650 | 1,208,074 |
Current liabilities | ||||
Accounts payable | 703,792 | 731,347 | 703,792 | 400,103 |
Accrued expenses | 15,394 | 12,354 | 15,394 | 12,998 |
Total current liabilities | 719,186 | 743,701 | 719,186 | 424,238 |
Long-term debt | 39,184 | 39,184 | ||
Total liabilities | 758,370 | 743,701 | 758,370 | 424,238 |
Members’ equity | 952,280 | 360,711 | 952,280 | 783,836 |
Total liabilities and stockholders' equity | $ 1,710,650 | $ 1,104,412 | $ 1,710,650 | $ 1,208,074 |
Consolidated Statments of Opera
Consolidated Statments of Operation - USD ($) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Net sales | $ 1,631,966 | $ 1,349,825 | $ 2,278,814 | $ 2,381,737 |
Cost of goods sold | 1,346,095 | 1,080,057 | 1,799,384 | 1,961,183 |
Gross Profit | 285,871 | 269,768 | 479,430 | 420,554 |
Operating expenses | ||||
Total operating expenses | 21,380,317 | 517,568 | 1,686,125 | 802,317 |
Income from operations | (21,094,446) | (247,800) | (1,206,695) | (381,763) |
Other income (expense), net | 68,593 | (4,260) | ||
Income tax expense | (700) | (150) | (970) | 79,870 |
Net income | (21,089,284) | (235,591) | (1,139,072) | (306,153) |
Four Cubed Management Llc [Member] | ||||
Net sales | 3,093,969 | 3,516,533 | 6,586,560 | 5,618,385 |
Cost of goods sold | 2,182,215 | 2,780,579 | 5,090,760 | 4,355,719 |
Gross Profit | 911,754 | 735,954 | 1,495,800 | 1,262,666 |
Operating expenses | ||||
Selling | 220,360 | 31,840 | 132,441 | 57,159 |
General and administrative | 326,743 | 373,472 | 603,765 | 737,282 |
Total operating expenses | 547,103 | 405,312 | 736,206 | 794,441 |
Income from operations | 364,651 | 330,642 | 759,594 | 468,225 |
Other income (expense), net | 22,047 | (21,197) | 79,900 | 169 |
Net income before income taxes | 386,698 | 309,445 | 838,844 | 435,286 |
Income tax expense | 50,351 | 63,872 | 120,006 | |
Net income | $ 386,698 | $ 259,094 | $ 774,972 | $ 315,280 |
Consolidated Statments of Chang
Consolidated Statments of Changes in Member' Equity | Four Cubed Management Llc [Member]USD ($) |
Beginning balance, value at Dec. 31, 2017 | $ 752,342 |
Net income | 315,280 |
Member distributions | 283,786 |
Ending balance, value at Dec. 31, 2019 | 783,836 |
Beginning balance, value at Dec. 31, 2018 | 783,836 |
Net income | 774,972 |
Member distributions | 606,528 |
Ending balance, value at Dec. 31, 2020 | 952,280 |
Beginning balance, value at Dec. 31, 2019 | 783,836 |
Net income | 259,094 |
Member distributions | (74,625) |
Ending balance, value at Jun. 30, 2020 | 968,305 |
Beginning balance, value at Dec. 31, 2020 | 952,280 |
Net income | 386,698 |
Member distributions | (978,267) |
Ending balance, value at Jun. 30, 2021 | $ 360,711 |
Consolidated Statments of Cash
Consolidated Statments of Cash Flow - USD ($) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Cash Flows - Operating Activities | ||||
Net income | $ (21,089,284) | $ (235,591) | $ (1,139,072) | $ (306,153) |
Changes in operating assets and liabilities | ||||
Accounts receivable, net | (143,637) | 301,740 | 557,980 | 27,471 |
Prepaid expenses | (9,036) | (1) | (4,375) | |
Accrued expenses | 337,259 | (8,792) | 151,778 | 36,042 |
Net cash flows - operating activities | (1,995,109) | (75,648) | (769,104) | 74,822 |
Cash Flows - Financing Activities | ||||
Net cash flows - financing activities | (38,359) | 565,457 | 1,851,353 | 1,919,408 |
Net change in cash and cash equivalents | (2,173,566) | 316,910 | ||
Cash and Cash Equivalents | 783,950 | 1,801,230 | ||
Cash, Beginning of Year | 2,585,180 | 1,801,230 | 1,801,230 | |
Cash, End of Year | 411,614 | 2,118,140 | 2,585,180 | 1,801,230 |
Four Cubed Management Llc [Member] | ||||
Cash Flows - Operating Activities | ||||
Net income | 386,698 | 259,094 | 774,972 | 315,280 |
Deferred tax assets | (7,000) | 20,000 | (12,000) | |
Gain on extinguishment of debt | (39,184) | |||
Changes in operating assets and liabilities | ||||
Accounts receivable, net | 42,938 | (159,912) | (78,581) | 155,338 |
Prepaid expenses | (1,574) | 4,949 | ||
Accounts payable | 27,555 | 204,208 | 303,689 | (348,861) |
Income taxes payable | 12,491 | (11,137) | (59,026) | |
Accrued expenses | (3,040) | (1,046) | 2,396 | (2,066) |
Total adjustments | 28,269 | 47,167 | 236,367 | (261,666) |
Net cash flows - operating activities | 414,967 | 306,261 | 1,011,339 | 53,614 |
Cash Flows - Financing Activities | ||||
Proceeds from long-term debt | 39,184 | 39,184 | ||
Distributions | (978,267) | (74,625) | (606,528) | (283,786) |
Net cash flows - financing activities | (978,267) | (35,441) | (567,344) | (283,786) |
Net change in cash and cash equivalents | (563,300) | 270,820 | ||
Cash and Cash Equivalents | 443,995 | (207,090) | ||
Cash, Beginning of Year | 1,186,219 | 742,224 | 742,224 | 949,314 |
Cash, End of Year | 622,919 | 1,013,044 | 1,186,219 | 742,224 |
Supplemental disclosure of cash flow information: | ||||
Cash paid for income taxes | $ 43,500 | $ 55,009 | $ 191,032 |
CONSOLIDATEDS BALANCE SHEETS
CONSOLIDATEDS BALANCE SHEETS - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 2,585,180 | $ 1,801,230 |
Trade receivables (net of allowance for credit losses of $69 and $75, at December 31, 2019 and 2020, respectively) | 355,912 | 913,892 |
Total current assets | 3,221,076 | 3,166,005 |
NON- CURRENT ASSETS: | ||
Property and equipment, net (Note 4) | 17,189 | 31,449 |
Goodwill | 381,000 | 381,000 |
Total assets | 4,420,947 | 4,226,570 |
CURRENT LIABILITIES: | ||
Accrued expenses and other liabilities (Note 5) | 241,299 | 89,521 |
Total current liabilities | 1,536,481 | 932,156 |
SHAREHOLDERS' EQUITY (Note 9): | ||
Share capital - | 80,519 | 39,882 |
Additional paid-in capital | 3,968,386 | 3,953,515 |
Accumulated deficit | (2,688,128) | (895,486) |
Total stockholders' equity | 1,355,511 | 3,097,911 |
Total liabilities and stockholders' equity | 4,420,947 | 4,226,570 |
Mer Telemanagement Solutions Ltd [Member] | ||
CURRENT ASSETS: | ||
Cash and cash equivalents | 1,504,000 | 1,732,000 |
Restricted cash | 1,003,000 | 1,464,000 |
Trade receivables (net of allowance for credit losses of $69 and $75, at December 31, 2019 and 2020, respectively) | 407,000 | 499,000 |
Other accounts receivable and prepaid expenses (Note 3) | 399,000 | 236,000 |
Assets of discontinued operations (Note 1b) | 178,000 | 172,000 |
Total current assets | 3,491,000 | 4,103,000 |
NON- CURRENT ASSETS: | ||
Severance pay fund | 252,000 | 653,000 |
Property and equipment, net (Note 4) | 35,000 | 62,000 |
Deferred taxes (Note 7) | 171,000 | |
Goodwill | 1,502,000 | 3,225,000 |
Total non-current assets | 1,960,000 | 3,940,000 |
Total assets | 5,451,000 | 8,043,000 |
CURRENT LIABILITIES: | ||
Trade payables | 114,000 | 149,000 |
Deferred revenues | 745,000 | 962,000 |
Accrued expenses and other liabilities (Note 5) | 1,769,000 | 2,317,000 |
Liabilities of discontinued operations (Note 1b) | 496,000 | 516,000 |
Total current liabilities | 3,124,000 | 3,944,000 |
LONG-TERM LIABILITIES: | ||
Accrued severance pay | 306,000 | 831,000 |
Deferred tax liability (Note 7) | 163,000 | |
Total long-term liabilities | 306,000 | 994,000 |
SHAREHOLDERS' EQUITY (Note 9): | ||
Preferred Shares of NIS 0.03 par value: Authorized: 3,000,000 shares at December 31, 2020 and 2019; Issued and Outstanding: 1,831,579 and 2,008,772 shares at December 31, 2020 and 2019, respectively | 15,000 | 16,000 |
Additional paid-in capital | 31,360,000 | 30,635,000 |
Treasury shares at cost (1,800 Ordinary shares at December 31, 2020 and 2019) | (29,000) | (29,000) |
Accumulated deficit | (29,362,000) | (27,547,000) |
Total stockholders' equity | 2,021,000 | 3,105,000 |
Total liabilities and stockholders' equity | $ 5,451,000 | $ 8,043,000 |
CONSOLIDATEDS BALANCE SHEETS (P
CONSOLIDATEDS BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Ordinary shares, par value per share | $ 0.01 | $ 0.01 | $ 0.01 |
Ordinary shares, shares authorized | 20,000,000 | 20,000,000 | 20,000,000 |
Ordinary shares, shares issued | 8,071,601 | 8,051,942 | 3,988,168 |
Ordinary shares, shares outstanding | 8,071,601 | 8,051,942 | 3,988,168 |
Mer Telemanagement Solutions Ltd [Member] | |||
Trade receivables, allowance for credit losses | $ 73 | $ 75 | $ 69 |
Ordinary shares, par value per share | $ 0.06 | $ 0.03 | $ 0.03 |
Ordinary shares, shares authorized | 8,500,000,000 | 17,000,000 | 17,000,000 |
Ordinary shares, shares issued | 2,368,062 | 4,426,791 | 3,614,208 |
Ordinary shares, shares outstanding | 2,367,162 | 4,424,991 | 3,612,408 |
Preferred Stock, par value per share | $ 0.06 | $ 0.03 | $ 0.03 |
Preferred Stock, shares authorized | 1,500,000,000 | 3,000,000 | 3,000,000 |
Preferred Stock, shares issued | 785,790 | 1,831,579 | 2,008,772 |
Preferred Stock, shares outstanding | 785,790 | 1,831,579 | 2,008,772 |
Treasury shares, shares | 900,000 | 1,800 | 1,800 |
CONSOLIDATEDS STATEMENTS OF OPE
CONSOLIDATEDS STATEMENTS OF OPERATION - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenues | |||
Revenues | $ 2,278,814 | $ 2,381,737 | |
Cost of revenues | |||
Total cost of revenues | 1,799,384 | 1,961,183 | |
Gross Profit | 479,430 | 420,554 | |
Operating expenses | |||
Total operating expenses | 1,686,125 | 802,317 | |
Operating Loss | (1,206,695) | (381,763) | |
Loss Before Income Taxes | (1,138,102) | (386,023) | |
Taxes on income (tax benefit), net (Note 7) | 970 | (79,870) | |
Net Loss | $ (1,139,072) | $ (306,153) | |
Net loss per share: | |||
Basic and diluted net loss per share | $ (0.14) | $ (0.05) | |
Weighted average number of shares used in computing basic and diluted net loss per share | 8,048,194 | 6,587,361 | |
Mer Telemanagement Solutions Ltd [Member] | |||
Revenues | |||
Revenues | $ 4,018,000 | $ 5,193,000 | $ 5,861,000 |
Cost of revenues | |||
Total cost of revenues | 1,795,000 | 1,857,000 | 2,149,000 |
Gross Profit | 2,223,000 | 3,336,000 | 3,712,000 |
Operating expenses | |||
Research and development | 545,000 | 825,000 | |
Selling and marketing | 752,000 | 817,000 | 1,471,000 |
General and administrative | 1,867,000 | 1,890,000 | 2,239,000 |
Goodwill impairment | 1,723,000 | 254,000 | |
Total operating expenses | 4,342,000 | 3,506,000 | 4,535,000 |
Operating Loss | (2,119,000) | (170,000) | (823,000) |
Financial income (expense), net | 16,000 | (18,000) | (17,000) |
Loss Before Income Taxes | (2,103,000) | (188,000) | (840,000) |
Taxes on income (tax benefit), net (Note 7) | (325,000) | 4,000 | 46,000 |
Net loss from continuing operations | (1,778,000) | (192,000) | (886,000) |
Income (loss) from discontinued operations | (37,000) | 57,000 | (284,000) |
Net Loss | $ (1,815,000) | $ (135,000) | $ (1,170,000) |
Net loss per share: | |||
Basic and diluted net loss per share from continuing operations | $ (0.29) | $ (0.04) | $ (0.26) |
Basic and diluted net earnings per share from discontinued operations | (0.01) | 0.01 | (0.08) |
Basic and diluted net loss per share | $ (0.30) | $ (0.03) | $ (0.34) |
Weighted average number of shares used in computing basic and diluted net loss per share | 5,954,795,000 | 5,013,374,000 | 3,435,161,000 |
Mer Telemanagement Solutions Ltd [Member] | Service [Member] | |||
Revenues | |||
Revenues | $ 3,383,000 | $ 4,273,000 | $ 4,843,000 |
Cost of revenues | |||
Total cost of revenues | 1,511,000 | 1,486,000 | 1,719,000 |
Mer Telemanagement Solutions Ltd [Member] | Product [Member] | |||
Revenues | |||
Revenues | 635,000 | 920,000 | 1,018,000 |
Cost of revenues | |||
Total cost of revenues | $ 284,000 | $ 371,000 | $ 430,000 |
CONSOLIDATEDS STATEMENTS OF CHA
CONSOLIDATEDS STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY - Mer Telemanagement Solutions Ltd [Member] - USD ($) $ in Thousands | Common Stock [Member] | Preferred Stock [Member] | Additional Paid-in Capital [Member] | Treasury Stock [Member] | Retained Earnings [Member] | Total [Member] |
Beginning balance, value at Dec. 31, 2017 | $ 25 | $ 28,188 | $ (29) | $ (26,472) | $ 1,712 | |
Beginning balance, shares at Dec. 31, 2017 | 3,118,884,000 | |||||
Stock-based compensation | 90 | 90 | ||||
Issuance of ordinary shares | $ 2 | 186 | 188 | |||
Issuance of ordinary shares, shares | 175,439,000 | |||||
Issuance of preferred shares | $ 10 | 1,343 | 1,353 | |||
Issuance of preferred shares, shares | 1,315,789,000 | |||||
Effect of adoption of ASC 606 | 230 | 230 | ||||
Net loss | (1,170) | (1,170) | ||||
Ending balance, value at Dec. 31, 2018 | $ 27 | $ 10 | 29,807 | (29) | (27,412) | 2,403 |
Ending balance, shares at Dec. 31, 2018 | 3,294,323,000 | 1,315,789,000 | ||||
Stock-based compensation | 47 | 47 | ||||
Issuance of ordinary shares to Vexigo's former shareholders-warrants exercise. | $ 3 | (3) | ||||
Issuance of ordinary shares to Vexigo's former shareholders-warrants exercise. shares | 318,085,000 | |||||
Issuance of preferred shares | $ 6 | 784 | 790 | |||
Issuance of preferred shares, shares | 692,983 | |||||
Net loss | (135) | (135) | ||||
Ending balance, value at Dec. 31, 2019 | $ 30 | $ 16 | 30,635 | (29) | (27,547) | 3,105 |
Ending balance, shares at Dec. 31, 2019 | 3,612,408,000 | 2,008,772,000 | ||||
Stock-based compensation | 14 | 14 | ||||
Conversion of preferred shares into ordinary shares | $ 6 | $ (6) | ||||
Conversion of preferred shares into ordinary shares, shares | 400,000,000 | (400,000,000) | ||||
Issuance of preferred shares | $ 5 | 705 | 710 | |||
Issuance of preferred shares, shares | 311,404,000 | |||||
Net loss | (661) | (661) | ||||
Ending balance, value at Jun. 30, 2020 | 36 | 15 | 31,354 | (29) | (28,208) | 3,168 |
Beginning balance, value at Dec. 31, 2019 | $ 30 | $ 16 | 30,635 | (29) | (27,547) | 3,105 |
Beginning balance, shares at Dec. 31, 2019 | 3,612,408,000 | 2,008,772,000 | ||||
Stock-based compensation | 21 | 21 | ||||
Conversion of preferred shares into ordinary shares | $ 6 | $ (6) | ||||
Conversion of preferred shares into ordinary shares, shares | 800,000,000 | (800,000,000) | ||||
Issuance of ordinary shares to Vexigo's former shareholders-warrants exercise. shares | 12,583,000 | |||||
Issuance of preferred shares | $ 5 | 705 | 710 | |||
Issuance of preferred shares, shares | 622,807,000 | |||||
Net loss | (1,815) | (1,815) | ||||
Issuance of ordinary shares to Vexigo’s former shareholders- warrants exercise | 1 | (1) | 0 | |||
Ending balance, value at Dec. 31, 2020 | $ 37 | $ 15 | 31,360 | (29) | (29,362) | 2,021 |
Ending balance, shares at Dec. 31, 2020 | 4,424,991,000 | 1,831,579,000 | ||||
Conversion of preferred shares into ordinary shares | $ 2 | $ (2) | ||||
Conversion of preferred shares into ordinary shares, shares | 120,000,000 | (120,000,000) | ||||
Issuance of ordinary shares | $ 1 | (1) | ||||
Issuance of ordinary shares, shares | 34,666,000 | |||||
Net loss | (994) | (994) | ||||
Ending balance, value at Jun. 30, 2021 | $ 40 | $ 13 | $ 31,359 | $ (29) | $ (30,356) | $ 1,027 |
CONSOLIDATEDS STATEMENT OF CASH
CONSOLIDATEDS STATEMENT OF CASH FLOW - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities | |||
Net loss | $ (1,139,072) | $ (306,153) | |
Adjustments required to reconcile net loss from continuing operations to net cash used in operating activities: | |||
Increase (decrease) in deferred tax, net | 970 | (79,870) | |
Stock-based compensation | 67,070 | ||
Accounts receivable, net | 557,980 | 27,471 | |
Decrease in deferred revenues | (410,164) | 350,627 | |
Net Cash (used for) from Operating Activities | (769,104) | 74,822 | |
Cash flows from investing activities | |||
Net Cash used for Investing Activities | (298,299) | (193,000) | |
Cash flows from financing activities | |||
Proceeds from issuance of shares | 2,562,264 | ||
Net Cash from Financing Activities | 1,851,353 | 1,919,408 | |
Mer Telemanagement Solutions Ltd [Member] | |||
Cash flows from operating activities | |||
Net loss | (1,815,000) | (135,000) | $ (1,170,000) |
Income (loss) from discontinued operations | (37,000) | 57,000 | (284,000) |
Net loss from continuing operations | (1,778,000) | (192,000) | (886,000) |
Adjustments required to reconcile net loss from continuing operations to net cash used in operating activities: | |||
Depreciation and amortization | 32,000 | 79,000 | 82,000 |
Impairment of goodwill | 1,723,000 | 254,000 | |
Increase (decrease) in deferred tax, net | (334,000) | (18,000) | 35,000 |
Stock-based compensation | 21,000 | 47,000 | 90,000 |
Decrease in accrued severance pay, net | (124,000) | (3,000) | (36,000) |
Accounts receivable, net | 92,000 | 105,000 | (40,000) |
Increase in other accounts receivable and prepaid expenses | (163,000) | (135,000) | (27,000) |
Decrease in trade payables | (35,000) | (15,000) | (144,000) |
Increase (decrease) in accrued expenses and other liabilities | (548,000) | (77,000) | 111,000 |
Decrease in deferred revenues | (217,000) | (91,000) | (461,000) |
Net cash used in operating activities from continuing operations | (1,331,000) | (46,000) | (1,276,000) |
Net cash provided by (used in) operating activities from discontinued operations | (63,000) | (18,000) | 57,000 |
Net Cash (used for) from Operating Activities | (1,394,000) | (64,000) | (1,219,000) |
Cash flows from investing activities | |||
Purchase of property and equipment | (5,000) | (60,000) | (14,000) |
Net cash used in investing activities from continuing operations | (5,000) | (60,000) | (14,000) |
Net cash used in investing activities from discontinued operations | (1,000) | ||
Net Cash used for Investing Activities | (5,000) | (60,000) | (15,000) |
Cash flows from financing activities | |||
Proceeds from issuance of shares | 710,000 | 790,000 | 1,541,000 |
Net Cash from Financing Activities | 710,000 | 790,000 | 1,541,000 |
Increase (decrease) in cash, cash equivalents and restricted cash | (689,000) | 666,000 | 307,000 |
Cash, cash equivalents and restricted cash at the beginning of the year | 3,196,000 | 2,530,000 | 2,223,000 |
Cash, cash equivalents and restricted cash at the end of the year | 2,507,000 | 3,196,000 | 2,530,000 |
Supplemental disclosure of cash flows activities | |||
Cash paid during the year for income taxes | $ 4,000 | $ 1,000 | $ 1,000 |
CONSOLIDATED BALANCEs SHEETS
CONSOLIDATED BALANCEs SHEETS - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
CURRENT ASSETS: | |||
Cash and cash equivalents | $ 411,614 | $ 2,585,180 | $ 1,801,230 |
Accounts receivable | 499,549 | 355,912 | 913,892 |
Total current assets | 1,015,438 | 3,221,076 | 3,166,005 |
NON- CURRENT ASSETS: | |||
Equipment, Net | 28,257 | 17,189 | 31,449 |
Goodwill | 381,000 | 381,000 | 381,000 |
Total assets | 2,246,950 | 4,420,947 | 4,226,570 |
CURRENT LIABILITIES: | |||
Accrued expenses and other liabilities | 578,558 | 241,299 | 89,521 |
Total current liabilities | 20,396,982 | 1,536,481 | 932,156 |
SHAREHOLDERS' EQUITY (Note 5): | |||
Additional paid-in capital | 3,668,399 | 3,968,386 | 3,953,515 |
Accumulated deficit | (23,777,412) | (2,688,128) | (895,486) |
Total stockholders' equity | (20,028,297) | 1,355,511 | 3,097,911 |
Total liabilities and stockholders' equity | 2,246,950 | 4,420,947 | 4,226,570 |
Mer Telemanagement Solutions Ltd [Member] | |||
CURRENT ASSETS: | |||
Cash and cash equivalents | 1,136,000 | 1,504,000 | 1,732,000 |
Restricted cash | 739,000 | 1,003,000 | 1,464,000 |
Accounts receivable | 340,000 | 407,000 | 499,000 |
Other accounts receivable and prepaid expenses | 288,000 | 399,000 | 236,000 |
Assets of discontinued operations (Note 1b) | 180,000 | 178,000 | 172,000 |
Total current assets | 2,683,000 | 3,491,000 | 4,103,000 |
NON- CURRENT ASSETS: | |||
Severance pay fund | 259,000 | 252,000 | 653,000 |
Equipment, Net | 26,000 | 35,000 | 62,000 |
Deferred taxes | 171,000 | 171,000 | |
Goodwill | 1,502,000 | 1,502,000 | 3,225,000 |
Total non-current assets | 1,958,000 | 1,960,000 | 3,940,000 |
Total assets | 4,641,000 | 5,451,000 | 8,043,000 |
CURRENT LIABILITIES: | |||
Trade payables | 246,000 | 114,000 | 149,000 |
Deferred revenues | 927,000 | 745,000 | 962,000 |
Accrued expenses and other liabilities | 1,631,000 | 1,769,000 | 2,317,000 |
Liabilities of discontinued operations (Note 1b) | 499,000 | 496,000 | 516,000 |
Total current liabilities | 3,303,000 | 3,124,000 | 3,944,000 |
ACCRUED SEVERANCE PAY | 311,000 | 306,000 | 831,000 |
SHAREHOLDERS' EQUITY (Note 5): | |||
Preferred Shares of NIS 0.06 par value: Authorized: 1,500,000 shares at June 30, 2021 and December 31, 2020; Issued and Outstanding: 785,790 and 915,790 shares at June 30, 2021 and December 31, 2020, respectively | 13,000 | 15,000 | 16,000 |
Additional paid-in capital | 31,359,000 | 31,360,000 | 30,635,000 |
Treasury shares at cost (900 Ordinary shares at June 30, 2021 and December 31, 2020. | (29,000) | (29,000) | (29,000) |
Accumulated deficit | (30,356,000) | (29,362,000) | (27,547,000) |
Total stockholders' equity | 1,027,000 | 2,021,000 | 3,105,000 |
Total liabilities and stockholders' equity | $ 4,641,000 | $ 5,451,000 | $ 8,043,000 |
CONSOLIDATED BALANCEs SHEETS (P
CONSOLIDATED BALANCEs SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Ordinary shares, par value per share | $ 0.01 | $ 0.01 | $ 0.01 |
Ordinary shares, shares authorized | 20,000,000 | 20,000,000 | 20,000,000 |
Ordinary shares, shares issued | 8,071,601 | 8,051,942 | 3,988,168 |
Ordinary shares, shares outstanding | 8,071,601 | 8,051,942 | 3,988,168 |
Mer Telemanagement Solutions Ltd [Member] | |||
Trade receivables, allowance for credit losses | $ 73 | $ 75 | $ 69 |
Ordinary shares, par value per share | $ 0.06 | $ 0.03 | $ 0.03 |
Ordinary shares, shares authorized | 8,500,000,000 | 17,000,000 | 17,000,000 |
Ordinary shares, shares issued | 2,368,062 | 4,426,791 | 3,614,208 |
Ordinary shares, shares outstanding | 2,367,162 | 4,424,991 | 3,612,408 |
Preferred Stock, par value per share | $ 0.06 | $ 0.03 | $ 0.03 |
Preferred Stock, shares authorized | 1,500,000,000 | 3,000,000 | 3,000,000 |
Preferred Stock, shares issued | 785,790 | 1,831,579 | 2,008,772 |
Preferred Stock, shares outstanding | 785,790 | 1,831,579 | 2,008,772 |
Treasury shares, shares | 900,000 | 1,800 | 1,800 |
CONSOLIDATED STATEMENT OF OPE_2
CONSOLIDATED STATEMENT OF OPERATIONS - USD ($) | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenues | |||||
Revenues | $ 1,631,966 | $ 1,349,825 | $ 2,278,814 | $ 2,381,737 | |
Cost of revenues | |||||
Total cost of revenues | 1,346,095 | 1,080,057 | 1,799,384 | 1,961,183 | |
Gross Profit | 285,871 | 269,768 | 479,430 | 420,554 | |
Operating expenses | |||||
Selling and marketing | 1,549,519 | 468,875 | |||
Total operating expenses | 21,380,317 | 517,568 | 1,686,125 | 802,317 | |
Operating Loss | (21,094,446) | (247,800) | (1,206,695) | (381,763) | |
Financial income (expense), net | 5,862 | 13,734 | |||
Loss Before Income Taxes | (21,088,584) | (235,441) | (1,138,102) | (386,023) | |
Tax benefit (taxes on income), net | (700) | (150) | (970) | 79,870 | |
Net Loss | $ (21,089,284) | $ (235,591) | $ (1,139,072) | $ (306,153) | |
Net loss per share:* | |||||
Basic and diluted net loss per share | $ (2.67) | $ (0.03) | $ (0.14) | $ (0.05) | |
Weighted average number of shares used in computing basic and diluted net loss per share | 8,061,772 | 8,049,309 | 8,048,194 | 6,587,361 | |
Mer Telemanagement Solutions Ltd [Member] | |||||
Revenues | |||||
Revenues | $ 1,742,000 | $ 2,103,000 | $ 4,018,000 | $ 5,193,000 | $ 5,861,000 |
Cost of revenues | |||||
Total cost of revenues | 932,000 | 866,000 | 1,795,000 | 1,857,000 | 2,149,000 |
Gross Profit | 810,000 | 1,237,000 | 2,223,000 | 3,336,000 | 3,712,000 |
Operating expenses | |||||
Selling and marketing | 306,000 | 459,000 | 752,000 | 817,000 | 1,471,000 |
General and administrative | 1,466,000 | 937,000 | 1,867,000 | 1,890,000 | 2,239,000 |
Goodwill impairment | 617,000 | 1,723,000 | 254,000 | ||
Total operating expenses | 1,772,000 | 2,013,000 | 4,342,000 | 3,506,000 | 4,535,000 |
Operating Loss | (962,000) | (776,000) | (2,119,000) | (170,000) | (823,000) |
Financial income (expense), net | (2,000) | 8,000 | 16,000 | (18,000) | (17,000) |
Loss Before Income Taxes | (964,000) | (768,000) | (2,103,000) | (188,000) | (840,000) |
Tax benefit (taxes on income), net | (1,000) | 108,000 | 325,000 | (4,000) | (46,000) |
Net loss from continuing operations | (965,000) | (660,000) | (1,778,000) | (192,000) | (886,000) |
Loss from discontinued operations | (29,000) | (1,000) | (37,000) | 57,000 | (284,000) |
Net Loss | $ (994,000) | $ (661,000) | $ (1,815,000) | $ (135,000) | $ (1,170,000) |
Net loss per share:* | |||||
Basic and diluted net loss per share from continuing operations | $ (0.30) | $ (0.23) | $ (0.29) | $ (0.04) | $ (0.26) |
Basic and diluted net earnings per share from discontinued operations | (0.01) | 0 | (0.01) | 0.01 | (0.08) |
Basic and diluted net loss per share | $ (0.31) | $ (0.23) | $ (0.30) | $ (0.03) | $ (0.34) |
Weighted average number of shares used in computing basic and diluted net loss per share | 3,161,025 | 2,822,700 | 5,954,795,000 | 5,013,374,000 | 3,435,161,000 |
Mer Telemanagement Solutions Ltd [Member] | Service [Member] | |||||
Revenues | |||||
Revenues | $ 1,513,000 | $ 1,815,000 | $ 3,383,000 | $ 4,273,000 | $ 4,843,000 |
Cost of revenues | |||||
Total cost of revenues | 811,000 | 693,000 | 1,511,000 | 1,486,000 | 1,719,000 |
Mer Telemanagement Solutions Ltd [Member] | Product [Member] | |||||
Revenues | |||||
Revenues | 229,000 | 288,000 | 635,000 | 920,000 | 1,018,000 |
Cost of revenues | |||||
Total cost of revenues | $ 121,000 | $ 173,000 | $ 284,000 | $ 371,000 | $ 430,000 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER' EQUITY - Mer Telemanagement Solutions Ltd [Member] - USD ($) $ in Thousands | Common Stock [Member] | Preferred Stock [Member] | Additional Paid-in Capital [Member] | Treasury Stock [Member] | Retained Earnings [Member] | Total [Member] |
Beginning balance, value at Dec. 31, 2017 | $ 25 | $ 28,188 | $ (29) | $ (26,472) | $ 1,712 | |
Stock-based compensation | 90 | 90 | ||||
Issuance of preferred shares | $ 10 | 1,343 | 1,353 | |||
Issuance of preferred shares, shares | 1,315,789,000 | |||||
Net loss | (1,170) | (1,170) | ||||
Issuance of ordinary shares to Vexigo's former shareholders- warrants exercise | $ 2 | 186 | 188 | |||
Issuance of ordinary shares to Vexigo?s former shareholders- warrants exercise, Shares | 175,439,000 | |||||
Ending balance, value at Dec. 31, 2018 | $ 27 | 10 | 29,807 | (29) | (27,412) | 2,403 |
Stock-based compensation | 47 | 47 | ||||
Issuance of preferred shares | $ 6 | 784 | 790 | |||
Issuance of preferred shares, shares | 692,983 | |||||
Net loss | (135) | (135) | ||||
Ending balance, value at Dec. 31, 2019 | $ 30 | $ 16 | 30,635 | (29) | (27,547) | 3,105 |
Ending balance, shares at Dec. 31, 2019 | 1,806,204,000 | 1,004,386,000 | ||||
Stock-based compensation | 14 | 14 | ||||
Conversion of preferred shares into ordinary shares | $ 6 | $ (6) | ||||
Conversion of preferred shares into ordinary shares, shares | 400,000,000 | (400,000,000) | ||||
Issuance of preferred shares | $ 5 | 705 | 710 | |||
Issuance of preferred shares, shares | 311,404,000 | |||||
Net loss | (661) | (661) | ||||
Ending balance, value at Jun. 30, 2020 | $ 36 | $ 15 | 31,354 | (29) | (28,208) | 3,168 |
Ending balance, shares at Jun. 30, 2020 | 2,206,204,000 | 915,790,000 | ||||
Beginning balance, value at Dec. 31, 2019 | $ 30 | $ 16 | 30,635 | (29) | (27,547) | 3,105 |
Beginning balance, shares at Dec. 31, 2019 | 1,806,204,000 | 1,004,386,000 | ||||
Stock-based compensation | 21 | 21 | ||||
Conversion of preferred shares into ordinary shares | $ 6 | $ (6) | ||||
Conversion of preferred shares into ordinary shares, shares | 800,000,000 | (800,000,000) | ||||
Issuance of preferred shares | $ 5 | 705 | 710 | |||
Issuance of preferred shares, shares | 622,807,000 | |||||
Net loss | (1,815) | (1,815) | ||||
Ending balance, value at Dec. 31, 2020 | $ 37 | $ 15 | 31,360 | (29) | (29,362) | 2,021 |
Ending balance, shares at Dec. 31, 2020 | 2,212,496,000 | 915,790,000 | ||||
Conversion of preferred shares into ordinary shares | $ 2 | $ (2) | ||||
Conversion of preferred shares into ordinary shares, shares | 120,000,000 | (120,000,000) | ||||
Net loss | (994) | (994) | ||||
Issuance of ordinary shares to Vexigo's former shareholders- warrants exercise | $ 1 | (1) | ||||
Issuance of ordinary shares to Vexigo?s former shareholders- warrants exercise, Shares | 34,666,000 | |||||
Ending balance, value at Jun. 30, 2021 | $ 40 | $ 13 | $ 31,359 | $ (29) | $ (30,356) | $ 1,027 |
Ending balance, shares at Jun. 30, 2021 | 2,367,162,000 | 795,790,000 |
CONSOLIDATED STATEMENT OF CASH
CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities | |||||
Net loss | $ (21,089,284) | $ (235,591) | $ (1,139,072) | $ (306,153) | |
Adjustments required to reconcile net loss from continuing operations to net cash used in operating activities: | |||||
Depreciation and amortization | 94,881 | 48,693 | |||
Decrease in deferred tax, net | 700 | 150 | 970 | (79,870) | |
Accounts receivable, net | (143,637) | 301,740 | 557,980 | 27,471 | |
Increase in deferred revenues | (285,897) | (318,675) | (410,164) | 350,627 | |
Net Cash (used for) from Operating Activities | (1,995,109) | (75,648) | (769,104) | 74,822 | |
Cash flows from financing activities | |||||
Proceeds from issuance of shares | 2,562,264 | ||||
Net Cash from Financing Activities | (38,359) | 565,457 | 1,851,353 | 1,919,408 | |
Net Change in Cash | 783,950 | 1,801,230 | |||
Mer Telemanagement Solutions Ltd [Member] | |||||
Cash flows from operating activities | |||||
Net loss | (994,000) | (661,000) | (1,815,000) | (135,000) | $ (1,170,000) |
Loss from discontinued operations | (29,000) | (1,000) | (37,000) | 57,000 | (284,000) |
Net loss from continuing operations | (965,000) | (660,000) | (1,778,000) | (192,000) | (886,000) |
Adjustments required to reconcile net loss from continuing operations to net cash used in operating activities: | |||||
Depreciation and amortization | 12,000 | 19,000 | 32,000 | 79,000 | 82,000 |
Impairment of goodwill | 617,000 | 1,723,000 | 254,000 | ||
Decrease in deferred tax, net | (108,000) | (334,000) | (18,000) | 35,000 | |
Stock-based compensation | 15,000 | ||||
Decrease in accrued severance pay, net | (2,000) | (111,000) | (124,000) | (3,000) | (36,000) |
Accounts receivable, net | 67,000 | 85,000 | 92,000 | 105,000 | (40,000) |
Decrease in other accounts receivable and prepaid expenses | 111,000 | 15,000 | (163,000) | (135,000) | (27,000) |
Increase (decrease) in trade payables | 132,000 | (39,000) | (35,000) | (15,000) | (144,000) |
Decrease in accrued expenses and other liabilities | (132,000) | (1,115,000) | (548,000) | (77,000) | 111,000 |
Increase in deferred revenues | 182,000 | 58,000 | (217,000) | (91,000) | (461,000) |
Net cash used in operating activities from continuing operations | (595,000) | (1,224,000) | (1,331,000) | (46,000) | (1,276,000) |
Net cash used in operating activities from discontinued operations | (34,000) | (35,000) | (63,000) | (18,000) | 57,000 |
Net Cash (used for) from Operating Activities | (629,000) | (1,259,000) | (1,394,000) | (64,000) | (1,219,000) |
Investing Activities | |||||
Purchase of property and equipment | (3,000) | (6,000) | (5,000) | (60,000) | (14,000) |
Net cash used in investing activities from continuing operations | (3,000) | (6,000) | (5,000) | (60,000) | (14,000) |
Cash flows from financing activities | |||||
Proceeds from issuance of shares | 710,000 | 710,000 | 790,000 | 1,541,000 | |
Net Cash from Financing Activities | 710,000 | 710,000 | 790,000 | 1,541,000 | |
Net Change in Cash | (632,000) | (555,000) | |||
Cash, cash equivalents and restricted cash at the beginning of the year | 2,507,000 | 3,196,000 | 3,196,000 | 2,530,000 | 2,223,000 |
Cash, cash equivalents and restricted cash at the end of the year | 1,875,000 | 2,641,000 | 2,507,000 | 3,196,000 | 2,530,000 |
Supplemental disclosure of cash flows activities | |||||
Cash paid during the year for income taxes | $ 3,000 | $ 4,000 | $ 4,000 | $ 1,000 | $ 1,000 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 1 - Summary of Significant Accounting Policies Nature of Business SharpLink, Inc. (SharpLink or the Company) was incorporated in February 2019 in Minnesota. The Company develops software to engage the end users of sports media content in a variety of different ways, including providing games and contests primarily on a software-as-a-service (SaaS) basis, with the occasional licensing agreement to develop software. SharpLink is also developing lead generation software that connects sports media consumers to legal sports wagering operators in the United States. The Company is majority owned by SportsHub Games Network (Parent). The Parent owns 83 Merger On November 1, 2020, the Company entered into a Contribution Agreement with the Parent that contributed certain assets and liabilities to the Parent's newly formed, wholly owned subsidiary, Sports Technologies, LLC (STI). Following this contribution, STI merged into the Company's wholly owned subsidiary, ST Acquisitions, LLC, in a reverse triangular merger under which STI remains as the surviving subsidiary to the Company. As consideration in exchange for the merger, the Company issued 4,061,141 The assets and liabilities contributed to STI previously operated as a division of the Parent. Divisional equity represents the net assets of this division prior to merger. The Company has accounted for the operations of STI beginning January 1, 2019, due to the common control nature of the merger. Principles of Consolidation The accompanying consolidated financial statements include the accounts of SharpLink, which is developing the lead generation software for online sports gambling sites, and its wholly owned subsidiary, STI, which operates the SaaS and software licensing business. All significant inter-company balances and transactions have been eliminated in consolidation. Concentrations of Credit Risk The Company maintains its cash accounts in financial institutions, the balances of which are periodically in excess of federally insured limits. Receivables and Credit Policy Accounts receivable are recorded at their estimated net realizable value, net of an allowance for doubtful accounts. The Company has determined, based upon historical experience, its evaluation of the current status of receivables, and unusual circumstances, there is no need for an allowance for doubtful accounts. Credit terms are extended to customers in the normal course of business. The Company performs ongoing credit evaluations of its customers' financial conditions and generally requires no collateral. 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, 2020 and 2019, was $ 20,331 15,952 Intangible Assets Intangible assets consist of internally developed software, customer relationships, 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 to seven 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 $ 292,229 173,710 Long-Lived Assets The Company reviews the carrying value of its equipment and 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, an impairment loss is recognized equal to an amount by which the 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 obsolescence, demand, competition, and other economic factors. Based on this assessment there was no triggering events to assess for impairment for the years ended December 31, 2020 and 2019. Goodwill The Company records goodwill when consideration paid in an acquisition exceeds the fair value of the net tangible assets and the identified intangible assets acquired. Goodwill is not amortized, but rather is tested for impairment annually or more frequently if facts and circumstances warrant a review. The Company has determined that there are two reporting units for the purpose of goodwill impairment tests, though only one reporting unit contains goodwill. For purposes of assessing the impairment of goodwill, the Company annually, at its fiscal year end, estimates the fair value of the reporting unit and compares this amount to the carrying value of the reporting unit. The Company determines the fair value of its reporting units by utilizing market multiples from guideline public companies and other factors that it believes marketplace participants would utilize. If the Company determines that the carrying value of the reporting unit exceeds its fair value, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds its fair value. As of December 31, 2020 and 2019, the Company completed its annual impairment test of goodwill. Based upon that evaluation, the Company determined that its goodwill was not impaired. 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 leases with terms greater than 12 months, the right-of-use (ROU) assets and lease liabilities are 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 assets also includes any prepaid lease payments and are reduced by any previously accrued deferred rent. The Company's 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 lease does not include a fixed rental escalation clause. Lease terms include an option to extend or terminate the lease 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. Income Taxes The Company accounts for income taxes in accordance with ASC Topic, Income Taxes, 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. In December 2019, the FASB issued ASU 2019-12, Income Taxes Simplifying the Accounting for Income Taxes Income Taxes Revenue Recognition The Company enters into contracts for the development, hosting, operations, maintenance, and service of games and contests that are hosted by the Company and accessed through the customer's website or other electronic media. This generally results in revenue from developing, hosting, and maintaining software for customers (cloud-hosted SaaS) or licensing revenue for the development of software. 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. The Company's performance obligations are satisfied either over time (for cloud-hosted SaaS) or at a point in time (for software licenses), see Note 2. 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. Transactions with Parent Distributions The Parent has historically paid direct expenses incurred by STI, which includes salaries and related expense for the employees of STI. The Parent collects cash on behalf of STI's revenue generating activities. The excess of revenue collected by the Parent over the expenses paid by the Parent is recorded as a distribution to the Parent. Distribution per share has been excluded from disclosure within the Consolidated Statement of Stockholders' Equity as only the Parent received the distribution. Due to Parent Since the merger of STI and SharpLink on November 1, 2020, the Company has generated a payable to the Parent for expenses paid on behalf of STI in excess of cash collected by the Parent on behalf of STI's revenue generating activities. Advance to Parent In October 2019, SharpLink advanced $ 227,807 0 124,563 Allocation of Expenses The Company was allocated cost of revenue, selling, general, and administrative expenses totaling $ 2,211,303 2,297,723 Stock-Based Compensation Stock-based compensation expense reflects the fair value of stock-based awards measured at the grant date and recognized over the relevant vesting 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. Stock Subscriptions The Company issued stock subscriptions in December 2019 for 65,266 130,532 50,000 2,633 5,266 Convertible Notes The Company issued $ 1,882,500 4 2 Redeemable Preferred Stock Issued with a Commitment Fee The Company considers guidance within ASC 470-20, Debt Commitment Fee The Company accounts for the commitment fee as either equity instrument, liability, or derivative liability in accordance with ASC 480, Distinguishing Liabilities from Equity Derivatives and Hedging Net loss per share Basic net loss per share is calculated by dividing net loss available to common stockholders adjusted for preferred stock discount accretion and dividends accrued on preferred stock by the weighted-average number of common 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 common shares that would have been outstanding if potential common shares had been issued if such additional common 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 common shares have been excluded, as their effect would be anti-dilutive. 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 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. Paycheck Protection Program (PPP) Loan The Company was granted a $ 46,500 1 46,500 Recently Issued Accounting Pronouncements Not Yet Adopted Financial Instruments – Credit Losses In June 2016, the FASB issued ASC 326, Financial Instruments – Credit Losses Measurements of Credit Losses on Financial Instruments Revision of Prior Consolidated Statements of Shareholders' Equity and Cash Flows The Company identified an omission of a prepaid stock issuance transaction between the Company and a related party investor during the year ended December 31, 2020. The Company evaluated the materiality of the omission and concluded it was not material to previously issued consolidated financial statements. The Company revised its Statement of Shareholders' Equity and Statement of Cash Flows for the year ended December 31, 2020 by increasing additional paid-in capital and net cash from financing activities by $ 750,000 |
Revenue Recognition
Revenue Recognition | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Revenue Recognition | ||
Revenue Recognition | Note 8 - Revenue Recognition Revenue Recognition The Company enters into contracts for the development, hosting, operations, maintenance, and service of games and contests that are hosted by the Company and accessed through the customer’s website or other electronic media. This generally results in revenue from developing, hosting, and maintaining software for customers (cloud-hosted SaaS) or licensing revenue for the development of software. 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. The Company’s performance obligations are satisfied either over time (for cloud-hosted SaaS) or at a point in time (for software licenses). 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. Nature of Products and Services Software License The Company’s software license allows the customer to take the software on premise. Electronic transfer of software licenses are recognized upon transfer of control, which is considered to occur when it is provided to the customer, resulting in revenue being recognized after the software has been delivered. Payments are due 30 days after being invoiced. Software as-a-Service (“Saas”) SaaS arrangements are highly integrated services of development and hosting that grant customers the right to access the software. Updates are generally made available throughout the entire term of the arrangement, which is generally the length of a league season or a single event period. The Company provides a stand-ready obligation that includes an online library and technical support resources in these SaaS arrangements, which constitute a single, combined performance obligation, and revenue is recognized over the term of the service. Invoicing generally reflects two milestone payment terms. Revenues by Category The Company combines its revenue into two categories, as follows: Schedule Of Revenue Category Six months ended June 30 2021 2020 Software license $ — $ 90,600 Software-as-a-service and other 1,631,966 1,259,225 $ 1,631,966 $ 1,349,825 Contract Balances 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 deferred revenue when revenue is recognized subsequent to invoicing. The Company recognizes unbilled revenue when revenue is recognized prior to invoicing. The Company recognizes 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 labor costs into cost of revenue over the period revenue is recognized. The activity in contract assets as of June 30, 2021 and December 31, 2020 are as follows: Schedule Of Contract With Customer Asset Balance as of December 31, 2020 $ 275,337 Labor costs expensed (392,321 ) Labor costs deferred 207,576 Balance as of June 30, 2021 $ 90,592 The Company’s assets and liabilities related to its contracts with customers were as follows: Schedule Of Customers Assets And Liabilities June 30 December 31 2021 2020 Accounts receivable $ 368,371 $ 324,302 Unbilled revenue (reported in accounts receivable) 131,178 31,610 Contract assets 90,592 275,337 Deferred revenue (120,611 ) (406,508 ) During the six months ended June 30, 2021, the Company recognized all revenue that was included in deferred revenue at the beginning of the period. All other activity in deferred revenue is due to the timing of invoices in relation to the timing of revenue. Contracted but unsatisfied performance obligations were approximately $ 2,371,619 no | Note 2 - Revenue Recognition Nature of Products and Services Software License The Company's software license allows the customer to take the software on premise. Electronic transfer of software licenses are recognized upon transfer of control, which is considered to occur when it is provided to the customer, resulting in revenue being recognized after the software has been delivered. Payments are due 30 days after being invoiced. Software as-a-Service SaaS arrangements are highly integrated services of development and hosting that grant customers the right to access the software. Updates are generally made available throughout the entire term of the arrangement, which is generally the length of a league season or single event period. The Company provides a stand-ready obligation that includes an online library and technical support resources in these SaaS arrangements, which constitute a single, combined performance obligation, and revenue is recognized over the term of the service. Invoicing generally reflects two milestone payment terms. Other revenues related to the lead generation software the Company is developing are immaterial. Revenues by Category The Company combines its revenue into two categories, as follows: Schedule of revenue 2020 2019 Software license $ 142,600 $ 587,750 Software-as-a-service and other 2,136,214 1,793,987 Total $ 2,278,814 $ 2,381,737 Significant Judgments The Company's lone license contract contains 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. The Company allocates the transaction price to the distinct performance obligations based on relative standalone selling price (SSP) such as the prices charged to customers on a standalone basis, contractually stated prices, and other entity specific factors or by using information such as market conditions and other observable inputs. The Company estimates SSP by maximizing use of observable prices such as contractually stated prices. 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. If a group of agreements are so closely related that they are, in effect, part of a single arrangement, such agreements are deemed to be one arrangement for revenue recognition purposes. The Company exercises significant judgment to evaluate the relevant facts and circumstances in determining whether the separate agreements should be accounted for separately or as, in substance, a single arrangement. The Company's judgments about whether a group of contracts comprise a single arrangement can affect the allocation of consideration to the distinct performance obligations, which could have an effect on results of operations for the periods involved. The Company is required to estimate the total consideration expected to be received from contracts with customers. In limited 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. Contract Balances 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 deferred revenue when revenue is recognized subsequent to invoicing. The Company recognizes unbilled revenue when revenue is recognized prior to invoicing. The Company recognizes 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 revenue over the period revenue is recognized. The activity in the contract assets for the years ending December 31, 2020 and 2019, are as follows: Schedule of contract assets Amount Balance as of January 1, 2019 $ 144,364 Labor costs expensed (298,866 ) Labor costs deferred 350,018 Balance as of December 31, 2019 195,516 Labor costs expensed (391,423 ) Labor costs deferred 471,244 Balance as of December 31, 2020 $ 275,337 The Company's assets and liabilities related to its contracts with customers were as follows: Schedule of assets and liabilities December 31, December 31, January 1, 2020 2019 2019 Accounts receivable $ 324,302 $ 730,890 $ 685,111 Unbilled revenue (reported in accounts receivable) 31,610 183,002 256,252 Contract assets 275,337 195,516 144,364 Deferred revenue (406,508 ) (816,672 ) (466,045 ) During the years ended December 31, 2020 and 2019, the Company recognized all of the revenue that was included in deferred revenue at the beginning of the period. All other activity in contract advanced billing is due to the timing of invoices in relation to the timing of revenue as described above. Contracted but unsatisfied performance obligations were approximately $ 1,610,473 December 31, 2020 and 2019, no revenue was recognized from performance obligations satisfied in previous periods. 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. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Note 3 - Intangible Assets Intangible assets as of December 31, 2020 and 2019, consist of the following: Schedule of Intangible assets Accumulated Cost Amortization Net Balance, December 31, 2020 Customer relationships $ 160,000 $ 108,571 $ 51,429 Acquired technology 430,000 304,645 125,355 Internally developed software 341,267 34,127 307,140 Software in development 124,672 — 124,672 $ 1,055,939 $ 447,343 $ 608,596 Balance, December 31, 2019 Customer relationships $ 160,000 $ 85,714 $ 74,286 Acquired technology 430,000 248,930 181,070 Software in development 173,710 — 173,710 $ 763,710 $ 334,644 $ 429,066 Amortization expense for the years ended December 31, 2020 and 2019, was $ 112,699 81,905 Schedule of future amortization expense Years Ending December 31, Amount 2021 $ 146,824 2022 146,824 2023 87,896 2024 68,253 2025 34,127 Total $ 483,924 |
Related Party Transactions
Related Party Transactions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Related Party Transactions [Abstract] | ||
Related Party Transactions | Note 11 - Related Party Transactions The Company has a banking relationship with Platinum Bank (Platinum), which is considered a related party due to a board member of Platinum also serving on the board of directors for the Parent and owns common stock in both the Parent and the Company. As of June 30, 2021 and December 31, 2020, the Company had related party cash balances of $ 411,614 2,585,180 The Company uses Hays Companies (“Hays”) for all of its insurance brokerage needs. Hays is considered a related party as an executive of Hays own common stock in the Company and serves on the board of directors for the Company. The Company paid $ 12,603 9,165 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 $ 19,200 The Company is majority owned by SportsHub Games Network (“Parent”). The Parent has historically paid direct expenses incurred by the Company’s subsidiary, STI, which includes salaries and related expense for the employees of STI. The Parent collects cash on behalf of the STI’s revenue generating activities. The excess of revenue collected by the Parent over the expenses paid by the Parent is recorded as a distribution to the Parent. Distribution per share has been excluded from disclosure within the condensed consolidated statement of stockholders’ equity as only the Parent received the distribution. The Company has generated a payable to the Parent for expenses paid on behalf of STI in excess of cash collected by the Parent on behalf of STI’s revenue generating activities, which is recorded in Due to Parent in the condensed consolidated balance sheet. In June 2020, an investor contributed $ 550,000 June 30, 2021 2.00 200,000 750,000 | Note 4 - Related Party Transactions The Company has a banking relationship with Platinum Bank (Platinum), which is considered a related party due to a board member of Platinum also serving on the board of directors for the Parent and owns common stock in both the Parent and Company. As of December 31, 2020 and 2019, the Company had related party cash balances of $ 2,585,180 1,801,230 The Company uses Hays Companies (Hays) for all of its insurance brokerage needs. Hays is considered a related party as executives in Hays own common stock in the Company, a Hays employee serves on the board of directors for the Parent, and another Hays employee serves on the board of directors for both the Parent and the Company. The Company paid $ 18,330 24,357 The Company leases office space in Canton, Connecticut from CJEM, LLC (CJEM), which is owned by an executive of the Company. Management had evaluated CJEM as a variable interest entity until July, 2020 (see Note 9). The Company paid rent expense of $ 38,400 In June 2020, an investor contributed $ 550,000 June 30, 2021 2.00 200,000 750,000 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Leases | Note 5- Leases Effective January 1, 2019, the Company adopted the new lease accounting guidance in Accounting Standards Update No. 2016-02, Leases 243,505 Operating lease costs are recognized in the income statement as a single lease cost and finance lease costs are recognized in two components, interest expense and amortization expense. The Company has elected the package of practical expedients permitted in ASC 842. Accordingly, the Company accounted for its existing leases as either finance or operating lease under the new guidance, without reassessing (a) whether the contract contains a lease under ASC 842, (b) whether classification of the operating lease would be different in accordance with ASC 842, or (c) whether the unamortized initial direct costs before transition adjustments would have met the definition of initial direct costs in ASC 842 at lease commencement. In addition, the Company elected to utilize the practical expedient to use hindsight in determining the lease term when considering options to extend the term of leases. The Company leases certain office space under a long-term, non-cancelable operating lease agreement. 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 this option to extend the lease because the Company determined after considering all economic factors that the Company is reasonably certain to exercise this 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 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. Total lease costs for the years ended December 31, 2020 and 2019 were as follows: Schedule of lease costs 2020 2019 Operating lease cost $ 38,400 $ 38,400 The following table summarizes the supplemental cash flow information for the years ended December 31, 2020 and 2019: Schedule of supplemental cash flow 2020 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 38,400 $ 38,400 The following summarizes the weighted-average remaining lease term and weight-average discount rate: Schedule of weighted average 2020 2019 Weighted-average remaining lease term Operating leases 72 84 Weighted-average discount rate Operating leases 6.00 % 6.00 % The future minimum lease payments under noncancelable operating leases with terms greater than one year are listed below as of December 31, 2020: Schedule of future minimum lease payment Operating Years Ending December 31, Leases 2021 $ 38,400 2022 38,400 2023 38,400 2024 38,400 2025 38,400 Thereafter 38,400 Total lease payments 230,400 Less interest 37,313 Present value of lease liability $ 193,087 |
Convertible Preferred Stock
Convertible Preferred Stock | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Convertible Preferred Stock | ||
Convertible Preferred Stock | Note 4 - Convertible Preferred Stock and Subsequent Events On December 23, 2020, the Company’s board authorized the establishment and designation of 9,000 0.01 4,150,000 2,000 2,000,000 Voting Dividends 8 Liquidation Conversion Second Tranche 5,000,000 Commitment Fee Redemption 12 On June 15, 2021, the Company entered into the first amendment to the securities purchase agreement, which amended the following terms: Second Tranche 6,000,000 Commitment Fee On July 23, 2021, the Company 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 Terms of the Series A-1 Preferred Stock are as follows: Voting Liquidation 2.1693 Conversion Redemption On July 26, 2021, the Company’s board authorized the establishment and designation of 2,765,824 Terms of the Series B Preferred Stock are as follows: Voting Dividends Liquidation 2.1693 Conversion Redemption damages. Interest shall accrue at the lesser of 12% per annum or the maximum rate permitted by applicable law until the amount is paid in full. | Note 6 - Convertible Preferred Stock During December 2020, the Company's board authorized the establishment and designation of 9,000 0.01 4,150,000 December 23, 2020, the Company entered into a securities purchase agreement with an investor to issue 2,000 2,000,000 Terms of the Preferred Stock are as follows: Voting Dividends 8 Liquidation 1,000 Conversion 21,693 Second Tranche 5,000,000 Redemption 12 |
Fair Value
Fair Value | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | ||
Fair Value | Note 6 - 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 The liability below was measured at fair value during the period ended using the market approach. Schedule Of Fair Value Market June 30, 2021 December 31, 2020 Fair Value Hierarchy Commitment Fee $ 19,428,927 $ 577,000 Level 3 Assumptions Used in Determining Fair Value of the Commitment Fee The commitment fee, which requires the Company to sell to the current Series A Preferred Stock shareholder 2,765,824 6,000,000 18,851,927 Significant inputs and assumptions used in the valuation model as of June 30, 2021 are as follows: Schedule Of Inputs And Assumptions Probability of a Going Public Transaction 90.0 % Volatility 50.6 % Stock price of public company at the time of measurement $ 6.14 Date of a Going Public Transaction July 31, 2021 Pro-forma common shares outstanding at Going Public Transaction date 23,366,319 Significant inputs and assumptions used in the valuation model as of December 31, 2020 are as follows: 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 | Note 7- Fair Value There are three general valuation techniques that may be used to measure fair value, as described below: 1. Market approach – Uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. Prices may be indicated by pricing guides, sale transactions, market trades, or other sources. 2. Cost approach – Based on the amount that currently would be required to replace the service capacity of an asset (replacement cost). 3. Income approach – Uses valuation techniques to convert future amounts to a single present amount based on current market expectations about the future amounts (includes present value techniques and option-pricing models). Net present value is an income approach where a stream of expected cash flows is discounted at an appropriate market interest rate. The liability below was measured at fair value during the year ended using the market approach. Schedule of liability measured at fair value Carrying Amount Fair Value Measurement Fair Value (Level 1) (Level 2) (Level 3) December 31, 2020 Commitment Fee $ 577,000 $ — $ — $ 577,000 There were no assets or liabilities measured at fair value as of December 31, 2019. Assumption Used in Determining Fair Value of the Commitment Fee The Company utilizes a Monte Carlo simulation to value the Commitment Fee. The Company selected this model as it believes they are reflective of all significant assumptions that market participants would likely consider in negotiating the transfer of the Commitment Fee. Such assumptions include, among other inputs, stock price volatility, risk-free rate, probability of completing a Going Public Transaction, conversion price of the preferred stock. Significant inputs and assumptions used in the valuation model is as follows: Schedule of Assumptions Probability of a Going Public Transaction 50.0 % Volatility 58.5 % Stock price of public company at the time of measurement $ 0.627 Date of a Going Public Transaction April 30, 2021 Pro-forma common shares outstanding at Going Public Transaction date 52,077,000 |
Income Taxes
Income Taxes | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Income Taxes | Note 9 - Income Taxes On a quarterly basis, we estimate our annual effective tax rate and record a quarterly income tax provision based on the anticipated rate. As the year progresses, we refine our estimate based on the facts and circumstances, including discrete events, by each tax jurisdiction. The effective tax rate for the six months ended June 30, 2021 and 2020 was ( 0.0 0.1 | Note 8 - Income Taxes Deferred tax assets and liabilities as of December 31, 2020 and 2019, consist of the following: Schedule of Deferred tax assets and liabilities 2020 2019 Deferred tax assets Net operating losses $ 445,673 $ 155,178 Research and development tax credit 22,086 8,234 Nonqualified stock options 2,351 — Business interest expense 983 970 Equipment 668 — Gross deferred tax assets 471,761 164,382 Valuation allowance (418,227 ) (99,179 ) Total deferred tax assets 53,534 65,203 Deferred tax liabilities Equipment — (1,447 ) Intangible assets (35,985 ) (50,088 ) Goodwill (21,935 ) (17,085 ) Deferred tax liabilities (57,920 ) (68,620 ) Net deferred tax liability $ (4,386 ) $ (3,417 ) As of December 31, 2020, the Company established 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, 2020, the Company has a federal tax net operating loss carryforward of $ 1,798,433 1,200,258 22,086 8,234 A company's ability to utilize a portion of its net operating loss carryforwards to offset future taxable income may be subject to certain limitations under Section 382 of the Internal Revenue Code due to changes in the equity ownership of the Company. The Company has determined that all net operating losses are fully available as of December 31, 2020. In addition, future changes in ownership as defined in Section 382 of the Internal Revenue Code could put limitations on the availability of the net operating loss carryforwards. The provision for (benefit from) income taxes charged to income for the years ended December 31, 2020 and 2019 consist of the following: Schedule of income tax expenses benefits 2020 2019 Current tax expense $ — $ — Deferred tax expense (benefit) Federal 883 (73,661 ) State 87 (6,209 ) Total $ 970 $ (79,870 ) 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 2020 2019 Income tax benefit at federal statutory rate $ (239,001 ) $ (81,064 ) State and local income taxes net of federal tax benefit (27,523 ) (10,786 ) STI taxable income prior to merger (41,843 ) (48,417 ) Meals and entertainment 1,042 1,682 Incentive stock option expense 11,945 — PPP loan forgiveness income (9,765 ) — Rate differentials 919 (32,230 ) Research and development credits (13,852 ) (8,234 ) Change in valuation allowance 319,048 99,179 Income tax expense (benefit) $ 970 $ (79,870 ) 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 2019, when the Company was incorporated. 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 Company recognizes interest and penalties accrued related to unrecognized tax benefits as additional income tax expense. During the years ended December 31, 2020, and 2019, the Company did not recognize material income tax expense related to interest and penalties. |
INCOME TAXES | Note 9 - Income Taxes On a quarterly basis, we estimate our annual effective tax rate and record a quarterly income tax provision based on the anticipated rate. As the year progresses, we refine our estimate based on the facts and circumstances, including discrete events, by each tax jurisdiction. The effective tax rate for the six months ended June 30, 2021 and 2020 was ( 0.0 0.1 | Note 8 - Income Taxes Deferred tax assets and liabilities as of December 31, 2020 and 2019, consist of the following: Schedule of Deferred tax assets and liabilities 2020 2019 Deferred tax assets Net operating losses $ 445,673 $ 155,178 Research and development tax credit 22,086 8,234 Nonqualified stock options 2,351 — Business interest expense 983 970 Equipment 668 — Gross deferred tax assets 471,761 164,382 Valuation allowance (418,227 ) (99,179 ) Total deferred tax assets 53,534 65,203 Deferred tax liabilities Equipment — (1,447 ) Intangible assets (35,985 ) (50,088 ) Goodwill (21,935 ) (17,085 ) Deferred tax liabilities (57,920 ) (68,620 ) Net deferred tax liability $ (4,386 ) $ (3,417 ) As of December 31, 2020, the Company established 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, 2020, the Company has a federal tax net operating loss carryforward of $ 1,798,433 1,200,258 22,086 8,234 A company's ability to utilize a portion of its net operating loss carryforwards to offset future taxable income may be subject to certain limitations under Section 382 of the Internal Revenue Code due to changes in the equity ownership of the Company. The Company has determined that all net operating losses are fully available as of December 31, 2020. In addition, future changes in ownership as defined in Section 382 of the Internal Revenue Code could put limitations on the availability of the net operating loss carryforwards. The provision for (benefit from) income taxes charged to income for the years ended December 31, 2020 and 2019 consist of the following: Schedule of income tax expenses benefits 2020 2019 Current tax expense $ — $ — Deferred tax expense (benefit) Federal 883 (73,661 ) State 87 (6,209 ) Total $ 970 $ (79,870 ) 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 2020 2019 Income tax benefit at federal statutory rate $ (239,001 ) $ (81,064 ) State and local income taxes net of federal tax benefit (27,523 ) (10,786 ) STI taxable income prior to merger (41,843 ) (48,417 ) Meals and entertainment 1,042 1,682 Incentive stock option expense 11,945 — PPP loan forgiveness income (9,765 ) — Rate differentials 919 (32,230 ) Research and development credits (13,852 ) (8,234 ) Change in valuation allowance 319,048 99,179 Income tax expense (benefit) $ 970 $ (79,870 ) 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 2019, when the Company was incorporated. 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 Company recognizes interest and penalties accrued related to unrecognized tax benefits as additional income tax expense. During the years ended December 31, 2020, and 2019, the Company did not recognize material income tax expense related to interest and penalties. |
Four Cubed Management Llc [Member] | ||
Income Tax Disclosure [Abstract] | ||
Income Taxes | NOTE INCOME TAXES The provision for income taxes consists state Schedule Of Federal Tax Six Months Ended June 30, 2021 2020 Federal benefit at statutory rate $ — $ 36,000 State taxes, net of federal benefit — 21,351 Deferred income taxes — (7,000 ) Total provision for income taxes $ — $ 50,351 Deferred tax assets consist of the following as of: Schedule Of Deferred Tax Assets June 30, 2021 December 31, 2020 Deferred tax asset Accrued liabilities $ 5,500 $ 5,500 Deferred tax asset $ 5,500 $ 5,500 | NOTE 4 – INCOME TAXES The provision for income taxes consists state currently due, and differs expected federal corporate tax as Schedule Of Components Of Income Tax Expense Benefit 2020 2019 Federal benefit at statutory rate $ 28,488 $ 86,551 State taxes, net of federal benefit 15,384 45,455 Deferred income taxes 20,000 (12,000 ) Total provision for income taxes $ 63,872 $ 120,006 Deferred tax assets consist of the following as of December 31, 2020 and 2019: 2020 2019 Deferred tax asset Accrued liabilities $ 5,500 $ 25,500 Deferred tax asset $ 5,500 $ 25,500 |
INCOME TAXES | NOTE INCOME TAXES The provision for income taxes consists state Schedule Of Federal Tax Six Months Ended June 30, 2021 2020 Federal benefit at statutory rate $ — $ 36,000 State taxes, net of federal benefit — 21,351 Deferred income taxes — (7,000 ) Total provision for income taxes $ — $ 50,351 Deferred tax assets consist of the following as of: Schedule Of Deferred Tax Assets June 30, 2021 December 31, 2020 Deferred tax asset Accrued liabilities $ 5,500 $ 5,500 Deferred tax asset $ 5,500 $ 5,500 | NOTE 4 – INCOME TAXES The provision for income taxes consists state currently due, and differs expected federal corporate tax as Schedule Of Components Of Income Tax Expense Benefit 2020 2019 Federal benefit at statutory rate $ 28,488 $ 86,551 State taxes, net of federal benefit 15,384 45,455 Deferred income taxes 20,000 (12,000 ) Total provision for income taxes $ 63,872 $ 120,006 Deferred tax assets consist of the following as of December 31, 2020 and 2019: 2020 2019 Deferred tax asset Accrued liabilities $ 5,500 $ 25,500 Deferred tax asset $ 5,500 $ 25,500 |
Variable Interest Entity
Variable Interest Entity | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entity | Note 9 - Variable Interest Entity A variable interest entity (VIE) is an entity that either (1) has insufficient equity to permit the entity to finance its activities without additional subordinated financial support or (2) has equity investors who lack the characteristics of a controlling financial interest. A VIE is consolidated by its primary beneficiary. The primary beneficiary has both the power to direct the activities that most significantly impact the entity's economic performance (Power Criterion) and the obligation to absorb losses or the right to receive benefits from the entity that could potentially be significant to the VIE (Economics Criterion). If the Company determines that it meets the Power Criterion and the Economics Criterion, it consolidates the VIE. Significant estimates made in evaluating whether or not an entity should be consolidated as a VIE include determining whether or not the Company has a variable interest in the an entity, determining the activities that most significantly impact the economic performance of the entity , determining whether or not the Company has the power to direct those activities, and whether or not the Company's variable interest in an entity is significant to that entity. The determination of whether or not an entity is a VIE also requires significant judgment. The Company leases office space from CJEM, LLC (CJEM) in Canton, Connecticut, an entity that is owned by a significant shareholder and executive of the Company through an operating lease. At December 31, 2019, the underlying property subject to the operating lease, which had a cancellable original term of five years with an optional five year renewal term, is encumbered by a mortgage loan with a principal balance of approximately $ 282,000 In August 2020, the owner of CJEM repaid the outstanding balance of the mortgage note that encumbered the property subject to the lease, and in December 2020, the Company renegotiated the operating lease with CJEM. Under the new operating lease, the original term is three years with one three-year renewal option. The lease agreement is cancellable by either party at any time. At December 31, 2020, based upon changes in facts and circumstance, including but not limited to CJEM's repayment of the mortgage on the property under lease, the Company reconsidered its involvement with CJEM and concluded that the Company no longer had an implicit variable interest in CJEM as of December 31, 2020. See Note 5 for additional information the Company's lease with CJEM. |
Concentrations
Concentrations | 12 Months Ended |
Dec. 31, 2020 | |
Risks and Uncertainties [Abstract] | |
Concentrations | Note 10 - Concentrations The Company had four customers that accounted for approximately 72 316,302 84 605,640 |
Stock Option Plan
Stock Option Plan | 12 Months Ended |
Dec. 31, 2020 | |
Stock Option Plan | |
Stock Option Plan | Note 11 - Stock Option Plan The Company has approved and adopted the 2020 stock option plan, which permits the grant of stock options to its employees, directors and consultants for up to 400,000 shares of common stock. The Company believes that such awards better align the interests of its employees with those of its stockholders. Option awards are generally granted with an exercise price equal to the market price of the Company's stock at the date of grant; those options generally vest based on three years of continuous service and have ten-year contractual terms. Certain option and share awards provide for accelerated vesting if there is a change in control, as defined in the plan. The Company granted 360,000 67,070 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 over the last ten years. The Company's underlying stock is not publicly traded but is estimated using valuation methods that consider the valuations in recent equity financings as well as future planned transactions. The Company estimates the volatility of its underlying stock by using an average of the calculated historical volatility of a group of comparable company publicly traded stock. Schedule of estimates the volatility 2020 Expected volatility 52.4 70.0 % Expected dividends 0.0 % Expected term (in years) 5.17 10 Risk-free rate 0.11 0.48 % Fair value of common stock on grant date $ 1.25 The summary of activity under the plan as of December 31, 2020, and changes during the year then ended is as follows: Schedule of weighted average Weighted-Average Aggregate Weighted-Average Remaining Intrinsic Options Shares Exercise Price Contractual Term Value Outstanding at January 1, 2020 — $ — Granted 360,000 1.28 Exercised — — Forfeited or expired — — Outstanding at December 31, 2020 360,000 $ 1.28 9.949 $ — Exercisable at December 31, 2020 131,250 $ 1.28 9.881 $ — Unamortized stock option expense of $ 132,722 |
Liquidity
Liquidity | 12 Months Ended |
Dec. 31, 2020 | |
Liquidity | |
Liquidity | Note 12 - Liquidity In pursuit of its long-term growth strategy and the development of the lead generation software and related business, the Company has sustained continued planned operating losses over the last two years. The operating losses were generated primarily due to the decision to continue to invest significant resources in the Lead Generation software. To fund these planned losses from operations, the Company has raised capital from outside investors in the form of common and preferred stock. As discussed in Note 6, there are certain provisions within the preferred stock terms that would require the Company to redeem the investor should the Company not complete a Going Public Transaction. While sustaining this pattern of losses and having to redeem the preferred stock would raise substantial doubt about the Company's ability to continue as a going concern, management has plans to alleviate this uncertainty, including raising capital from existing and new investors. Additionally, the Company has the ability to reduce salaries by eliminating or delaying the hiring of new employees, reallocating employees to the Parent, and eliminating staff positions, while still maintaining its long-term growth strategy. |
Operating Segments
Operating Segments | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Segment Reporting [Abstract] | ||
Operating Segments | Note 7 - Operating Segments The Company has two reportable segments: Sports Gaming Client Services and Affiliate Marketing Services. The Sports Gaming Client Services segment collects information on potential sports bettors, connects them with contextual sports betting content, and converts them to paying sports betting customers in exchange for either a pre-negotiated share of a sportsbook operators’ revenue, or a fixed fee from such operators. In addition, the Company provides sports betting data (e.g., betting lines) to sports media publishers in exchange for a fixed fee. The Affiliate Marketing 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-a-service, or 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. 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 expense (benefit), and depreciation and amortization, and further adjusted for stock compensation expense, commitment fee expense and transaction and financing expenses, as described in the reconciliation below. A measure of segment assets and liabilities has not been currently provided to the Company’s CODMs and is therefore not presented below. Summarized financial information for the Company’s reportable segments for the six months ended June 30, 2021 is shown below: Schedule Of Company’s reportable segments Sports Gaming Affiliate Client Services Marketing Services Total Revenue $ 1,528,425 $ 103,541 $ 1,631,966 Adjusted EBITDA 124,389 (1,324,804 ) (1,200,415 ) Adjusted for Stock compensation expense 17,073 46,160 63,233 Transaction and financing expenses — 883,990 883,990 Commitment fee expense — 18,851,927 18,851,927 Depreciation and amortization 46,734 48,147 94,881 Interest income — (5,862 ) (5,862 ) Interest expense — — — Income tax provision — 700 700 Net income (loss) attributable to common shareholders $ 60,582 $ (21,149,866 ) $ (21,089,284 ) Summarized financial information for the Company’s reportable segments for the six months ended June 30, 2020 is shown below: Sports Gaming Affiliate Client Services Marketing Services Total Revenue $ 1,349,825 $ — $ 1,349,825 Adjusted EBITDA 203,897 (403,004 ) (199,107 ) Adjusted for Stock compensation expense — — — Transaction and financing expenses — — — Commitment fee expense — — — Depreciation and amortization 47,357 1,336 48,693 Interest income — (13,734 ) (13,734 ) Interest expense — 1,375 1,375 Income tax provision — 150 150 Net income (loss) attributable to common shareholders $ 156,540 $ (392,131 ) $ (235,591 ) The Company’s 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 Sports Gaming Client Services segment: Schedule Of Reconciliation Of Revenue From Segments To Consolidated Six months ended June 30 2021 2020 Customer A 37 % 30 % Customer B 24 % 19 % Customer C 12 % 11 % Customer D * 11 % * Revenue from customer was less than 10% for the six months ended June 30, 2021 There was $ 440,780 316,302 | Note 13 - Operating Segments ASC 280, Segment Reporting, establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (CODM), or decision-making group, in deciding how to allocate resources and in assessing performance. We are organized by line of business. While our CODMs evaluate results in a number of different ways, the line of business management structure is the primary basis for which the allocation of resources and financial results are assessed. The tabular information below presents the financial information provided to our CODMs for their review and assists our CODMs with evaluating the Company's performance and allocating company resources. The Company has two reportable segments: Sports Gaming Client Services and Affiliate Marketing Services. The Sports Gaming Client Services segment collects information on potential sports bettors, connects them with contextual sports betting content, and converts them to paying sports betting customers in exchange for either a pre-negotiated share of a sportsbook operators' revenue, or a fixed fee from such operators. In addition, the Company provides sports betting data (e.g., betting lines) to sports media publishers in exchange for a fixed fee. The Affiliate Marketing 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-a-service, or 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. 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 expense (benefit), and depreciation and amortization, and further adjusted for loan forgiveness income, as described in the reconciliation below. A measure of segment assets and liabilities has not been currently provided to the Company's CODMs and is therefore not presented below. Summarized financial information for the Company's reportable segments for the year ended December 31, 2020, is shown below: Schedule of reportable segments Sports Gaming Affiliate Marketing Client Services Services Total Revenue $ 2,278,814 $ — $ 2,278,814 Adjusted EBITDA 356,032 (1,429,697 ) Adjusted for Depreciation and amortization 96,116 36,914 133,030 Interest income — (23,468 ) (23,468 ) Interest expense — 1,375 1,375 Income tax provision — 970 970 Loan forgiveness — (46,500 ) (46,500 ) Net income (loss) attributable to common shareholders $ 259,916 $ (1,398,988 ) $ (1,139,072 ) Summarized financial information for the Company's reportable segments for the year ended December 31, 2019, is shown below: Sports Gaming Affiliate Marketing Client Services Services Total Revenue $ 2,381,737 $ — $ 2,381,737 Adjusted EBITDA 259,531 (543,438 ) Adjusted for Depreciation and amortization 96,373 1,483 97,857 Interest income — (15,777 ) (15,777 ) Interest expense — 20,037 20,037 Income tax provision — (79,870 ) (79,870 ) Loan forgiveness — — — Net income (loss) attributable to common shareholders $ 163,158 $ (469,311 ) $ (306,153 ) The Company's 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 Sports Gaming Client Services segment: Schedule of consolidated revenues 2020 2019 Customer A 18 % 13 % Customer B 13 % 11 % Customer C 13 % 17 % Customer D 28 % 18 % Customer E * 25 % * Revenue from customer was less than 10% for the year ended December 31, 2020. |
Loss Per Share
Loss Per Share | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Loss Per Share | ||
Loss Per Share | Note 10 - Net Loss Per Share Basic net loss per share is calculated by dividing net loss available to common stockholders adjusted for preferred stock discount accretion and dividends accrued on preferred stock by the weighted-average number of common 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 common shares that would have been outstanding if potential common shares had been issued if such additional common 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 common shares have been excluded, as their effect would be anti-dilutive. The calculation of loss per share and weighted-average shares of the Company’s common stock outstanding for the periods presented are as follows: Schedule Of Weighted Average Number Of Shares Six months ended June 30 2021 2020 Net loss $ (21,089,284 ) $ (235,441 ) Less: discount accretion on preferred stock (326,530 ) — Less: dividends accrued on preferred stock (79,160 ) — Net loss available to common shareholders $ (21,494,974 ) $ (235,441 ) Basic and diluted weighted-average shares outstanding 8,061,772 8,049,309 Basic and diluted net loss per share $ (2.67 ) $ (0.03 ) The 4,061,141 shares issued at the time of the common control merger on November 1, 2020 have been treated as outstanding for all of 2020. The redeemable convertible preferred stock is a participating security, whereby if a dividend is declared to the holders of shares of common stock, the holders of preferred stock would participate to the same extent as if they had converted the preferred stock to common stock. For the periods presented, the following securities were not required to be included in the computation of diluted shares outstanding: Schedule Of Weighted Average Number Of Shares Diluted June 30, 2021 June 30, 2020 Stock options 360,000 15,000 Preferred stock 940,405 — Warrant 636,867 — Prepaid stock issuance — 275,000 Total 1,937,272 290,000 | Note 14 - Loss Per Share The calculation of loss per share and weighted-average shares of the Company's common stock outstanding for the periods presented are as follows: Schedule of loss per share and weighted-average 2020 2019 Net loss $ (1,139,072 ) $ (306,153 ) Less: dividends accrued on preferred stock (3,507 ) — Less: discount accretion on preferred stock (13,321 ) — Net loss available to common shareholders $ (1,155,900 ) $ (306,153 ) Basic and diluted weighted-average shares outstanding 8,048,194 6,587,361 Basic and diluted net loss per share $ (0.14 ) $ (0.05 ) The 4,061,141 shares issued at the time of the common control merger as described in Note 1 have been treated as outstanding for all of 2020 and 2019. The redeemable convertible preferred stock is a participating security, whereby if a dividend is declared to the holders of shares of common stock, the holders of preferred stock would participate to the same extent as if they had converted the preferred stock to common stock as described in Note 6. 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 2020 2019 Stock options 360,000 — Preferred stock 921,941 — Stock subscriptions 2,633 65,266 Convertible debt — 941,250 Total 1,284,574 1,006,516 |
Subsequent Events
Subsequent Events | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Subsequent Events [Abstract] | |||
Subsequent Events | Note 12 - Subsequent Event On July 26, 2021, the Company completed its merger with Mer Telemanagement Solutions Ltd. (the “merger”), which changed its name to SharpLink Gaming Ltd. (the “combined company”) and commenced trading on NASDAQ under the ticker symbol “SBET”. As of the date of the merger, the SharpLink, Inc. and Subsidiary shareholders own approximately 86 10 Immediately prior to the merger, the outstanding shares of the Company’s Series A Preferred Stock were exchanged for 1,230,956 shares of Series A-1 Preferred Stock in the combined company and the warrant vested and became fully exercisable into 850,330 ordinary shares of the combined company. Additionally, the holder of the Series A Preferred Stock received 700,989 Series A-1 Preferred Stock in the combined company to settle the commitment fee and 3,692,862 shares of Series B Preferred Stock in the combined company in exchange for $6,000,000 to settle the second tranche commitment. Subsequent to the merger, the holder of the Series A-1 Preferred Stock and Series B Preferred Stock converted 1,931,945 and 3,568,055 shares, respectively, to ordinary shares of the combined company, each at a 1:1 ratio. In connection with the merger, the combined company adopted the 2021 Equity Incentive Plan (the “2021 plan”) and reserved 2,336,632 1,329,500 3,275,470 On November 16, 2021, the combined company entered into a securities purchase agreement with an existing institutional investor pursuant to which the combined company agreed to issue and sell, in a registered direct offering (the “offering”), an aggregate of 1,413,075 price of $ 3.75 1,253,592 3.74 0.01 In a concurrent private placement, the combined company agreed to issue to the same institutional investor, for each ordinary share and prefunded warrant purchased in the offering, an additional ordinary share purchase warrant (“regular warrants”), each to purchase one ordinary share of the combined company. The regular warrants are initially exercisable six months following issuance and terminate four years following issuance. The regular warrants have an exercise price of $ 4.50 2,666,667 On December 31, 2021, the combined company entered into an Asset Purchase Agreement with FourCubed Acquisition Company, LLC, FourCubed Management, LLC (collectively, “FourCubed”) and its principal shareholder (“Seller”). The combined company acquired the intellectual property and other specified assets of FourCubed. In consideration for the purchase of the acquired assets, the combined company agreed to deliver: (i) at closing, a cash payment of $5,950,000; (ii) effective as of the closing, 606,114 ordinary shares of the combined company; (iii) within 45 days subsequent to closing, a cash payment of $300,000; and (iv) an amount of $250,000 that will be retained by the combined company for indemnity purposes and will be released 180 days after closing if no indemnity claims are made within that period. Additionally, subsequent to closing, the combined company agreed to issue and deliver up to an additional 587,747 ordinary shares of the combined company (“Earnout Shares”). The combined company’s obligation to issue and deliver the Earnout Shares is subject to the achievement of certain milestones relating to the development of the Seller’s technologies and revenue and gross margin targets, as described in the Asset Purchase Agreement. | Note 15 - Subsequent Events The Company has evaluated subsequent events through March 19, 2021, the date which the consolidated financial statements were issued. | |
SUBSEQUENT EVENTS | Note 12 - Subsequent Event On July 26, 2021, the Company completed its merger with Mer Telemanagement Solutions Ltd. (the “merger”), which changed its name to SharpLink Gaming Ltd. (the “combined company”) and commenced trading on NASDAQ under the ticker symbol “SBET”. As of the date of the merger, the SharpLink, Inc. and Subsidiary shareholders own approximately 86 10 Immediately prior to the merger, the outstanding shares of the Company’s Series A Preferred Stock were exchanged for 1,230,956 shares of Series A-1 Preferred Stock in the combined company and the warrant vested and became fully exercisable into 850,330 ordinary shares of the combined company. Additionally, the holder of the Series A Preferred Stock received 700,989 Series A-1 Preferred Stock in the combined company to settle the commitment fee and 3,692,862 shares of Series B Preferred Stock in the combined company in exchange for $6,000,000 to settle the second tranche commitment. Subsequent to the merger, the holder of the Series A-1 Preferred Stock and Series B Preferred Stock converted 1,931,945 and 3,568,055 shares, respectively, to ordinary shares of the combined company, each at a 1:1 ratio. In connection with the merger, the combined company adopted the 2021 Equity Incentive Plan (the “2021 plan”) and reserved 2,336,632 1,329,500 3,275,470 On November 16, 2021, the combined company entered into a securities purchase agreement with an existing institutional investor pursuant to which the combined company agreed to issue and sell, in a registered direct offering (the “offering”), an aggregate of 1,413,075 price of $ 3.75 1,253,592 3.74 0.01 In a concurrent private placement, the combined company agreed to issue to the same institutional investor, for each ordinary share and prefunded warrant purchased in the offering, an additional ordinary share purchase warrant (“regular warrants”), each to purchase one ordinary share of the combined company. The regular warrants are initially exercisable six months following issuance and terminate four years following issuance. The regular warrants have an exercise price of $ 4.50 2,666,667 On December 31, 2021, the combined company entered into an Asset Purchase Agreement with FourCubed Acquisition Company, LLC, FourCubed Management, LLC (collectively, “FourCubed”) and its principal shareholder (“Seller”). The combined company acquired the intellectual property and other specified assets of FourCubed. In consideration for the purchase of the acquired assets, the combined company agreed to deliver: (i) at closing, a cash payment of $5,950,000; (ii) effective as of the closing, 606,114 ordinary shares of the combined company; (iii) within 45 days subsequent to closing, a cash payment of $300,000; and (iv) an amount of $250,000 that will be retained by the combined company for indemnity purposes and will be released 180 days after closing if no indemnity claims are made within that period. Additionally, subsequent to closing, the combined company agreed to issue and deliver up to an additional 587,747 ordinary shares of the combined company (“Earnout Shares”). The combined company’s obligation to issue and deliver the Earnout Shares is subject to the achievement of certain milestones relating to the development of the Seller’s technologies and revenue and gross margin targets, as described in the Asset Purchase Agreement. | Note 15 - Subsequent Events The Company has evaluated subsequent events through March 19, 2021, the date which the consolidated financial statements were issued. | |
Four Cubed Management Llc [Member] | |||
Subsequent Events [Abstract] | |||
Subsequent Events | NOTE 6 – SUBSEQUENT EVENTS Management subsequent through January which financial statements were available Subsequent June Marketing Limited was | NOTE 6 – SUBSEQUENT EVENTS Management has evaluated subsequent through December date which consolidated financial statements were available The obtained forgiveness Refer information. | |
SUBSEQUENT EVENTS | NOTE 6 – SUBSEQUENT EVENTS Management subsequent through January which financial statements were available Subsequent June Marketing Limited was | NOTE 6 – SUBSEQUENT EVENTS Management has evaluated subsequent through December date which consolidated financial statements were available The obtained forgiveness Refer information. | |
Mer Telemanagement Solutions Ltd [Member] | |||
Subsequent Events [Abstract] | |||
Subsequent Events | NOTE 6: SUBSEQUENT EVENTS a. On July 21, 2021 the Company's shareholders approved the Merger Agreement between the Company and SharpLink. In addition, the Company's shareholders approved the equity compensation to the Company's CEO and CFO as describe in Note 5(b) above. b. On July 22, 2021 Alpha Capital converted 125,000 preferred shares into Ordinary shares, at a 1:1 ratio. c. The closing of the Merger between the Company and SharpLink occurred on July 26, 2021. In connection with the closing of the Merger, the Company completed a 1-for-2 reverse stock split of its Ordinary shares. Accordingly, all Ordinary shares, Preferred shares, options, warrants, per share data and exercise prices included in these financial statements have been adjusted retroactively for all periods presented to reflect the 1-for-2 reverse stock split. Subsequent to the closing of the Merger and the effectiveness of the reverse split, the former SharpLink shareholders collectively own approximately 86% of the combined company (inclusive of a stock option pool of 10% of the fully-diluted outstanding share capital of the Company) and the Company's prior shareholders collectively own 14% of the combined company (including ordinary shares underlying existing warrants and options issued to the Company's then officers as described in Note 5(b) above). d. On July 26, 2021 Alpha Capital converted 670,789 preferred shares into Ordinary shares, at a 1:1 ratio. e. In connection with the consummation of the Merger, the Company changed its name from Mer Telemanagement Solutions Ltd. to SharpLink Gaming Ltd. and commenced trading under the ticker symbol "SBET" on a post-reverse split basis on July 28, 2021. f. On July 28, 2021, the Company received formal notice from Nasdaq that, as a result of the merger, the Company satisfies all applicable rules for continued listing on The Nasdaq Capital Market. | NOTE 10: SUBSEQUENT EVENTS a. On April 15, 2021, the Company entered into a definitive agreement and Plan of Merger (the “Merger Agreement”) with SharpLink, Inc. (“SharpLink”), a leading online technology company that works with sports leagues, fantasy sports sites and media companies to connect fans to relevant and timely betting content sourced from its sportsbook partners, and New SL Acquisition Corp., a company incorporated under the laws of the State of Delaware and a wholly-owned subsidiary of the Company (“Merger Sub”). Upon the terms and subject to the satisfaction of the conditions described in the Merger Agreement, including approval of the transaction by the Company’s shareholders, Merger Sub will be merged with and into SharpLink (the “Merger”), with SharpLink surviving the Merger as a wholly-owned subsidiary of the Company. As a result of the transaction, the securityholders of SharpLink will own 86 10 b. The compensation committee in a meeting held on April 6, 2021 and the board of directors in a meeting held on April 8, 2021, approved, subject to the approval of the Company’s shareholders, the following equity compensation: (1) to the Company’s CEO: (a) a warrant to acquire 116,667 1.321 50,000 50,000 | |
SUBSEQUENT EVENTS | NOTE 6: SUBSEQUENT EVENTS a. On July 21, 2021 the Company's shareholders approved the Merger Agreement between the Company and SharpLink. In addition, the Company's shareholders approved the equity compensation to the Company's CEO and CFO as describe in Note 5(b) above. b. On July 22, 2021 Alpha Capital converted 125,000 preferred shares into Ordinary shares, at a 1:1 ratio. c. The closing of the Merger between the Company and SharpLink occurred on July 26, 2021. In connection with the closing of the Merger, the Company completed a 1-for-2 reverse stock split of its Ordinary shares. Accordingly, all Ordinary shares, Preferred shares, options, warrants, per share data and exercise prices included in these financial statements have been adjusted retroactively for all periods presented to reflect the 1-for-2 reverse stock split. Subsequent to the closing of the Merger and the effectiveness of the reverse split, the former SharpLink shareholders collectively own approximately 86% of the combined company (inclusive of a stock option pool of 10% of the fully-diluted outstanding share capital of the Company) and the Company's prior shareholders collectively own 14% of the combined company (including ordinary shares underlying existing warrants and options issued to the Company's then officers as described in Note 5(b) above). d. On July 26, 2021 Alpha Capital converted 670,789 preferred shares into Ordinary shares, at a 1:1 ratio. e. In connection with the consummation of the Merger, the Company changed its name from Mer Telemanagement Solutions Ltd. to SharpLink Gaming Ltd. and commenced trading under the ticker symbol "SBET" on a post-reverse split basis on July 28, 2021. f. On July 28, 2021, the Company received formal notice from Nasdaq that, as a result of the merger, the Company satisfies all applicable rules for continued listing on The Nasdaq Capital Market. | NOTE 10: SUBSEQUENT EVENTS a. On April 15, 2021, the Company entered into a definitive agreement and Plan of Merger (the “Merger Agreement”) with SharpLink, Inc. (“SharpLink”), a leading online technology company that works with sports leagues, fantasy sports sites and media companies to connect fans to relevant and timely betting content sourced from its sportsbook partners, and New SL Acquisition Corp., a company incorporated under the laws of the State of Delaware and a wholly-owned subsidiary of the Company (“Merger Sub”). Upon the terms and subject to the satisfaction of the conditions described in the Merger Agreement, including approval of the transaction by the Company’s shareholders, Merger Sub will be merged with and into SharpLink (the “Merger”), with SharpLink surviving the Merger as a wholly-owned subsidiary of the Company. As a result of the transaction, the securityholders of SharpLink will own 86 10 b. The compensation committee in a meeting held on April 6, 2021 and the board of directors in a meeting held on April 8, 2021, approved, subject to the approval of the Company’s shareholders, the following equity compensation: (1) to the Company’s CEO: (a) a warrant to acquire 116,667 1.321 50,000 50,000 |
Basis of Presentati
Basis of Presentati | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentati | Note 1 - Basis of Presentati The condensed consolidated financial statements included herein have been prepared by SharpLink, Inc. and Subsidiary (the “Company,” “SharpLink,” “we,” or “our”), pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of the Company, the foregoing statements contain all adjustments, consisting only of normal recurring adjustments necessary to present fairly the financial position of the Company as of June 30, 2021 and December 31, 2020, its results of operations for the six months ended June 30, 2021 and 2020, and cash flows for the six months ended June 30, 2021 and 2020. The condensed consolidated balance sheet as of December 31, 2020, has been derived from the audited consolidated financial statements as of that date. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts therein. Due to the inherent uncertainty involved in making estimates, actual results in future periods may differ from the estimates. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to rules and regulations of the SEC. Accordingly, the condensed consolidated financial statements do not include all of the information and footnotes required by GAAP for complete financial statement presentation. It is suggested that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto for the year ended December 31, 2020, which are included in SharpLink Gaming Ltd.’s (formerly Mer Telemangement Solutions Ltd.) Form 6-K filed with the SEC on June 16, 2021. |
New Accounting Pronouncements
New Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2021 | |
New Accounting Pronouncements | |
New Accounting Pronouncements | Note 2 - New Accounting Pronouncements Recently Issued Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASC 326, Financial Instruments – Credit Losses Measurements of Credit Losses on Financial Instruments In October 2021, the FASB issued Accounting Standards Update (“ASU”) 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers Revenue from Contracts with Customers |
Additional Balance Sheet Inform
Additional Balance Sheet Information | 6 Months Ended |
Jun. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Additional Balance Sheet Information | Note 3 - Additional Balance Sheet Information Equipment, net Equipment, net is presented net of accumulated depreciation in the amount of $ 67,094 58,098 Intangible assets, net Intangible assets, net as of June 30, 2021 and December 31, 2020 consisted of the following: Schedule Of Impaired Intangible Assets Accumulated Cost Amortization Net Balance, June 30, 2021 Customer relationships $ 160,000 $ 120,000 $ 40,000 Acquired technology 430,000 332,502 97,498 Internally developed software 507,251 80,726 426,525 Software in development 78,722 — 78,722 $ 1,175,973 $ 533,228 $ 642,745 Balance, December 31, 2020 Customer relationships $ 160,000 $ 108,571 $ 51,429 Acquired technology 430,000 304,645 125,355 Internally developed software 341,267 34,127 307,140 Software in development 124,672 — 124,672 $ 1,055,939 $ 447,343 $ 608,596 The change in the gross carrying amount of intangible assets as of June 30, 2021 compared to December 31, 2020 was due to additional costs related to internally developed software that were deferred during the six-month period. Amortization expense on intangible assets was $ 85,885 39,286 |
Convertible Preferred Stock and
Convertible Preferred Stock and Subsequent Events | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Convertible Preferred Stock And Subsequent Events | ||
Convertible Preferred Stock and Subsequent Events | Note 4 - Convertible Preferred Stock and Subsequent Events On December 23, 2020, the Company’s board authorized the establishment and designation of 9,000 0.01 4,150,000 2,000 2,000,000 Voting Dividends 8 Liquidation Conversion Second Tranche 5,000,000 Commitment Fee Redemption 12 On June 15, 2021, the Company entered into the first amendment to the securities purchase agreement, which amended the following terms: Second Tranche 6,000,000 Commitment Fee On July 23, 2021, the Company 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 Terms of the Series A-1 Preferred Stock are as follows: Voting Liquidation 2.1693 Conversion Redemption On July 26, 2021, the Company’s board authorized the establishment and designation of 2,765,824 Terms of the Series B Preferred Stock are as follows: Voting Dividends Liquidation 2.1693 Conversion Redemption damages. Interest shall accrue at the lesser of 12% per annum or the maximum rate permitted by applicable law until the amount is paid in full. | Note 6 - Convertible Preferred Stock During December 2020, the Company's board authorized the establishment and designation of 9,000 0.01 4,150,000 December 23, 2020, the Company entered into a securities purchase agreement with an investor to issue 2,000 2,000,000 Terms of the Preferred Stock are as follows: Voting Dividends 8 Liquidation 1,000 Conversion 21,693 Second Tranche 5,000,000 Redemption 12 |
Warrants
Warrants | 6 Months Ended |
Jun. 30, 2021 | |
Guarantees and Product Warranties [Abstract] | |
Warrants | Note 5 - Warrants On February 1, 2021, the Company issued a common stock purchase warrant (“warrant”) in exchange for advisory services, which gives 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 The warrant is in the scope of ASC 718, Compensation – Stock Compensation 2,001,677 Schedule Of Warrants Options Pricing Fair value of common stock 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 % The Company’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, 2020 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. |
Net Loss Per Share
Net Loss Per Share | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Net Loss Per Share | ||
Net Loss Per Share | Note 10 - Net Loss Per Share Basic net loss per share is calculated by dividing net loss available to common stockholders adjusted for preferred stock discount accretion and dividends accrued on preferred stock by the weighted-average number of common 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 common shares that would have been outstanding if potential common shares had been issued if such additional common 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 common shares have been excluded, as their effect would be anti-dilutive. The calculation of loss per share and weighted-average shares of the Company’s common stock outstanding for the periods presented are as follows: Schedule Of Weighted Average Number Of Shares Six months ended June 30 2021 2020 Net loss $ (21,089,284 ) $ (235,441 ) Less: discount accretion on preferred stock (326,530 ) — Less: dividends accrued on preferred stock (79,160 ) — Net loss available to common shareholders $ (21,494,974 ) $ (235,441 ) Basic and diluted weighted-average shares outstanding 8,061,772 8,049,309 Basic and diluted net loss per share $ (2.67 ) $ (0.03 ) The 4,061,141 shares issued at the time of the common control merger on November 1, 2020 have been treated as outstanding for all of 2020. The redeemable convertible preferred stock is a participating security, whereby if a dividend is declared to the holders of shares of common stock, the holders of preferred stock would participate to the same extent as if they had converted the preferred stock to common stock. For the periods presented, the following securities were not required to be included in the computation of diluted shares outstanding: Schedule Of Weighted Average Number Of Shares Diluted June 30, 2021 June 30, 2020 Stock options 360,000 15,000 Preferred stock 940,405 — Warrant 636,867 — Prepaid stock issuance — 275,000 Total 1,937,272 290,000 | Note 14 - Loss Per Share The calculation of loss per share and weighted-average shares of the Company's common stock outstanding for the periods presented are as follows: Schedule of loss per share and weighted-average 2020 2019 Net loss $ (1,139,072 ) $ (306,153 ) Less: dividends accrued on preferred stock (3,507 ) — Less: discount accretion on preferred stock (13,321 ) — Net loss available to common shareholders $ (1,155,900 ) $ (306,153 ) Basic and diluted weighted-average shares outstanding 8,048,194 6,587,361 Basic and diluted net loss per share $ (0.14 ) $ (0.05 ) The 4,061,141 shares issued at the time of the common control merger as described in Note 1 have been treated as outstanding for all of 2020 and 2019. The redeemable convertible preferred stock is a participating security, whereby if a dividend is declared to the holders of shares of common stock, the holders of preferred stock would participate to the same extent as if they had converted the preferred stock to common stock as described in Note 6. 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 2020 2019 Stock options 360,000 — Preferred stock 921,941 — Stock subscriptions 2,633 65,266 Convertible debt — 941,250 Total 1,284,574 1,006,516 |
Subsequent Event
Subsequent Event | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Subsequent Events [Abstract] | ||
Subsequent Event | Note 12 - Subsequent Event On July 26, 2021, the Company completed its merger with Mer Telemanagement Solutions Ltd. (the “merger”), which changed its name to SharpLink Gaming Ltd. (the “combined company”) and commenced trading on NASDAQ under the ticker symbol “SBET”. As of the date of the merger, the SharpLink, Inc. and Subsidiary shareholders own approximately 86 10 Immediately prior to the merger, the outstanding shares of the Company’s Series A Preferred Stock were exchanged for 1,230,956 shares of Series A-1 Preferred Stock in the combined company and the warrant vested and became fully exercisable into 850,330 ordinary shares of the combined company. Additionally, the holder of the Series A Preferred Stock received 700,989 Series A-1 Preferred Stock in the combined company to settle the commitment fee and 3,692,862 shares of Series B Preferred Stock in the combined company in exchange for $6,000,000 to settle the second tranche commitment. Subsequent to the merger, the holder of the Series A-1 Preferred Stock and Series B Preferred Stock converted 1,931,945 and 3,568,055 shares, respectively, to ordinary shares of the combined company, each at a 1:1 ratio. In connection with the merger, the combined company adopted the 2021 Equity Incentive Plan (the “2021 plan”) and reserved 2,336,632 1,329,500 3,275,470 On November 16, 2021, the combined company entered into a securities purchase agreement with an existing institutional investor pursuant to which the combined company agreed to issue and sell, in a registered direct offering (the “offering”), an aggregate of 1,413,075 price of $ 3.75 1,253,592 3.74 0.01 In a concurrent private placement, the combined company agreed to issue to the same institutional investor, for each ordinary share and prefunded warrant purchased in the offering, an additional ordinary share purchase warrant (“regular warrants”), each to purchase one ordinary share of the combined company. The regular warrants are initially exercisable six months following issuance and terminate four years following issuance. The regular warrants have an exercise price of $ 4.50 2,666,667 On December 31, 2021, the combined company entered into an Asset Purchase Agreement with FourCubed Acquisition Company, LLC, FourCubed Management, LLC (collectively, “FourCubed”) and its principal shareholder (“Seller”). The combined company acquired the intellectual property and other specified assets of FourCubed. In consideration for the purchase of the acquired assets, the combined company agreed to deliver: (i) at closing, a cash payment of $5,950,000; (ii) effective as of the closing, 606,114 ordinary shares of the combined company; (iii) within 45 days subsequent to closing, a cash payment of $300,000; and (iv) an amount of $250,000 that will be retained by the combined company for indemnity purposes and will be released 180 days after closing if no indemnity claims are made within that period. Additionally, subsequent to closing, the combined company agreed to issue and deliver up to an additional 587,747 ordinary shares of the combined company (“Earnout Shares”). The combined company’s obligation to issue and deliver the Earnout Shares is subject to the achievement of certain milestones relating to the development of the Seller’s technologies and revenue and gross margin targets, as described in the Asset Purchase Agreement. | Note 15 - Subsequent Events The Company has evaluated subsequent events through March 19, 2021, the date which the consolidated financial statements were issued. |
BUSINESS AND SIGNIFICANT ACCOUN
BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Four Cubed Management Llc [Member] | ||
BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 – BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES Nature of Operations FourCubed Management, (“FCM”) and referred “the Company”) operate as an agency which primarily pay-for-performance and incentive-based markets international operators international marketers. gaming operators and marketers with traffic their websites advertisements incentive-based offers. FCM limited liability company registered Minnesota. members have under Minnesota law. Trendfront Marketing International based and LLC based Nevis. 6t4 Company (6t4) Minnesota based S-Corporation operates as management company Company. Principles Consolidation The consolidated statements represent consolidated balances of FCM and subsidiaries, Trendfront Marketing International and LLC. consolidated financial statements also include activities as was determined be variable interest material intercompany balances and transactions eliminated Use of Estimates The preparation consolidated financial accordance principles generally accepted United States America requires management make estimates and assumptions that affect reported assets and liabilities and disclosure contingent assets liabilities at date consolidated financial reported amounts revenues and expenses reporting Actual results could differ estimates. Cash and Cash Equivalents For statements flows, Company cash financial and all instruments purchased maturity three less cash and had no equivalents and December has cash various financial and electronic Certain balances exceed balances insured and December uninsured cash balances were approximately 229,000 and 800,000 respectively. Accounts Receivable, Net The Company grants customers normal course of expects payments invoice. Accounts are carried at amount estimate accounts. evaluates need allowance accounts performing review outstanding receivables, historical collection information, existing economic conditions. Individual accounts are against allowance collection efforts exhausted. allowance accounts was approximately 21,000 and 20,000 at and December respectively. Paycheck Protection Program During Company applied and forgivable Coronavirus Relief, and Economic Act. was subject forgiveness during period after company same number employees, reduce salaries 25%, and uses proceeds eligible expenses payroll, benefits, and has elected account loan as December and recorded loan as income once retain all relating loan years date forgiveness authorized representatives from including representatives Office Inspector General, access files request. Revenue Recognition The Company recognizes revenue accordance Financial Standards Board (“FASB”), Accounting Standards Codification (“ASC”), Revenue Recognition from Contracts with Generally, earns from online gambling for connecting players/gamblers sites and are based revenue gambling has performance obligation, connection between and player/gambler. Subsequently, has right from gambling based player/gambler’s activities. recognizes revenue as services performed, which when player/gambler gambling and/or when player/gambler has performed share as identified terms contract gambling Cost of Sales The Company may party marketing perform additional advertising services related agreements gambling Marketing partners earn commissions from for advertising services. sales recorded as services are performed. Income Taxes FCM an elected as C-Corporation. FCM evaluates uncertain tax “more likely than threshold (i.e., likelihood occurrence greater than fifty recognition threshold met when an entity that tax based solely technical merits, likely than sustained examination relevant taxing authority. failing initial recognition are classified as unrecognized benefit first interim period they meet likely than standard, negotiation litigation authority, statute limitations. De-recognition that was previously recognized an entity subsequently determines meets likely than being sustained. Only the portion unrecognized benefit that expected year as current result, liabilities expected resolved payment resolution expiration statute are expected year classified as current. It record estimated interest as expense and credits as reduction income tax expense. Deferred taxes recorded reflect consequences years differences between financial and basis assets liabilities. Income expense tax currently payable and change deferred assets and period. established when, management, likely than portion all deferred assets realized. FCM evaluates realizability deferred assets and need allowance all and negative evidence. 6t4 is treated as entity purposes. members report taxable income returns. Therefore, liability taxes has included consolidated financial statements related Foreign Currency The Company has functional currency Trendfront International US Dollar. Foreign currency gains are reported general and administrative expense and (expense) statements recognized foreign transaction losses approximately 17,000 ended which approximately 31,000 recorded other and approximately 14,000 recorded general administrative expenses. recognized foreign currency transaction losses 18,000 ended which approximately 13,500 recorded other and approximately 4,500 recorded general and administrative | NOTE 1 – BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES Nature of Operations FourCubed Management, (“FCM”) and referred “the Company”) operate as an agency which primarily pay-for-performance and incentive-based markets international operators international marketers. gaming operators and marketers with traffic their websites advertisements incentive-based offers. FCM limited liability company registered Minnesota. members have under Minnesota law. Trendfront Marketing International based and LLC based Nevis. 6t4 Company (6t4) Minnesota based S-Corporation operates as management company Company. Principles Consolidation The consolidated statements represent consolidated balances of FCM and subsidiaries, Trendfront Marketing International and LLC. consolidated financial statements also include activities as was determined be interest material intercompany balances and transactions eliminated Use of Estimates The preparation consolidated financial accordance principles generally accepted United States America requires management make estimates and assumptions that affect reported assets and liabilities and disclosure contingent assets liabilities at date consolidated financial reported revenues and expenses reporting Actual results could differ estimates. Cash and Cash Equivalents For statements flows, Company cash financial and all instruments purchased maturity three less cash and had no equivalents December and has cash financial and electronic wallets. Certain cash exceed balances subject to insured December and uninsured cash were approximately 800,000 and 345,000 respectively. Digital Assets The Company accepts cryptocurrency as form of payment from may experience gains cryptocurrency any cryptocurrency at and Accounts Receivable, Net The Company grants customers normal course of expects payments invoice. Accounts are carried at amount estimate accounts. evaluates need allowance accounts performing review outstanding receivables, historical collection information, existing economic conditions. Individual accounts are against allowance collection efforts exhausted. allowance accounts was approximately 20,000 and 89,000 at December and respectively. Paycheck Protection Program During applied and forgivable Coronavirus Relief, and Economic Act. was subject forgiveness during period after company same number employees, reduce salaries 25%, and uses proceeds eligible expenses payroll, benefits, and has elected account loan as December and record as income once Revenue Recognition The Company recognizes revenue accordance Financial Standards Board (“FASB”), Accounting Standards Codification (“ASC”), Revenue Recognition from Contracts with Generally, earns from gambling for connecting players/gamblers sites and are based revenue gambling has performance obligation, connection between and player/gambler. Subsequently, has right from gambling based player/gambler’s activities. recognizes revenue as services performed, which when player/gambler gambling and/or when player/gambler has performed share as identified terms contract gambling Cost of Sales The Company may party marketing perform additional advertising services related agreements gambling Marketing partners earn commissions from for advertising services. sales recorded as services are performed. Income Taxes FCM an elected as C-Corporation. FCM evaluates uncertain tax “more likely than threshold (i.e., likelihood occurrence greater than fifty recognition threshold met when an entity that tax based solely its technical merits, likely than sustained examination relevant taxing authority. failing qualify for recognition are classified as unrecognized benefit first interim period they meet likely than standard, negotiation litigation authority, expiration statute limitations. De-recognition that was previously recognized an entity subsequently determines meets likely than being sustained. Only the portion unrecognized benefit that expected year as current result, liabilities expected resolved payment resolution expiration statute are expected year classified as current. It record estimated interest as expense and credits as reduction income tax expense. Deferred taxes recorded reflect consequences years differences between financial and basis assets liabilities. Income expense tax currently payable and change deferred assets and period. established when, management, likely than portion all deferred assets realized. FCM evaluates realizability deferred assets and need allowance all and negative evidence. 6t4 has is treated as entity purposes. report taxable income returns. Therefore, liability taxes has consolidated statements related Foreign Currency The Company has functional currency Trendfront International US Dollar. Foreign currency gains are reported general and administrative expense and (expense) statements recognized foreign currency transaction gains approximately 80,000 which approximately 76,000 recorded other income. recognized foreign currency transaction losses approximately 32,000 which approximately 7,200 recorded other expense. |
CONCENTRATIONS, RISKS UNCERTAIN
CONCENTRATIONS, RISKS UNCERTAINTIES | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Four Cubed Management Llc [Member] | ||
CONCENTRATIONS, RISKS UNCERTAINTIES | NOTE 2 – CONCENTRATIONS, RISKS UNCERTAINTIES Cash in Excess FDIC Insured Limits The Company maintains cash bank deposit accounts which, at exceed federally insured Accounts are guaranteed Federal Insurance Corporation (FDIC) certain Company has experienced any such accounts. Customer Concentrations During ended and Company had customer that represented 86 and 87 respectively. receivable balances from same customer represented 72 and 88 accounts receivable at and respectively. In addition, customer accounts receivable balance represented 12 receivable at customer have significant receivable at December Marketing Partner Concentrations The Company has relationships various marketing marketing partner could significantly impact financial results. COVID-19 A novel strain (“COVID-19”) identified December 2019, and March World Health Organization categorized as pandemic. COVID-19 affects Company’s customers, marketing partners, employees. ultimate impacts COVID-19 business, results operations, and prospects at time. impact COVID-19 outbreak cannot specifically identified and result changes operations future. | NOTE 2 – CONCENTRATIONS, RISKS UNCERTAINTIES Cash in Excess FDIC Insured Limits The Company maintains cash bank deposit accounts which, at times, exceed federally insured Accounts are guaranteed Federal Insurance Corporation (FDIC) certain Company has experienced any such accounts. Customer Concentrations During had sales represented approximately 92 and 87 sales, Accounts receivable balances from same customer represented approximately 88 and 81 accounts receivable at December and respectively. Marketing Partner Concentrations The Company has relationships various marketing marketing partner could significantly impact financial results. COVID-19 A novel strain (“COVID-19”) identified December 2019, and March World Health Organization categorized as pandemic. COVID-19 affects Company’s customers, marketing partners, employees. ultimate impacts COVID-19 business, results operations, and prospects at time. impact COVID-19 outbreak cannot specifically identified and result changes future. |
LONG-TERM DEBT
LONG-TERM DEBT | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Four Cubed Management Llc [Member] | ||
LONG-TERM DEBT | NOTE 3 – LONG-TERM DEBT As part Small Administration (SBA) Paycheck Protection Program received amount 39,184 bears interest 1.00 per annum, principal balance and interest forgiven subsequent end conditions Relief, and Security Act. ended was forgiven and recorded as income. The Company must retain all records relating loan date forgiveness and permit authorized representatives from including representatives Office Inspector General, files | NOTE 3 – LONG-TERM DEBT As part Small Administration (SBA) Paycheck Protection Program received amount 39,184 bears interest 1.00 per annum, principal and interest forgiven subsequent end conditions Relief, and Security Act. recorded full amount, which was forgiven, as when forgiveness was |
VARIABLE INTEREST ENTITIES
VARIABLE INTEREST ENTITIES | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
VARIABLE INTEREST ENTITIES | Note 9 - Variable Interest Entity A variable interest entity (VIE) is an entity that either (1) has insufficient equity to permit the entity to finance its activities without additional subordinated financial support or (2) has equity investors who lack the characteristics of a controlling financial interest. A VIE is consolidated by its primary beneficiary. The primary beneficiary has both the power to direct the activities that most significantly impact the entity's economic performance (Power Criterion) and the obligation to absorb losses or the right to receive benefits from the entity that could potentially be significant to the VIE (Economics Criterion). If the Company determines that it meets the Power Criterion and the Economics Criterion, it consolidates the VIE. Significant estimates made in evaluating whether or not an entity should be consolidated as a VIE include determining whether or not the Company has a variable interest in the an entity, determining the activities that most significantly impact the economic performance of the entity , determining whether or not the Company has the power to direct those activities, and whether or not the Company's variable interest in an entity is significant to that entity. The determination of whether or not an entity is a VIE also requires significant judgment. The Company leases office space from CJEM, LLC (CJEM) in Canton, Connecticut, an entity that is owned by a significant shareholder and executive of the Company through an operating lease. At December 31, 2019, the underlying property subject to the operating lease, which had a cancellable original term of five years with an optional five year renewal term, is encumbered by a mortgage loan with a principal balance of approximately $ 282,000 In August 2020, the owner of CJEM repaid the outstanding balance of the mortgage note that encumbered the property subject to the lease, and in December 2020, the Company renegotiated the operating lease with CJEM. Under the new operating lease, the original term is three years with one three-year renewal option. The lease agreement is cancellable by either party at any time. At December 31, 2020, based upon changes in facts and circumstance, including but not limited to CJEM's repayment of the mortgage on the property under lease, the Company reconsidered its involvement with CJEM and concluded that the Company no longer had an implicit variable interest in CJEM as of December 31, 2020. See Note 5 for additional information the Company's lease with CJEM. | |
Four Cubed Management Llc [Member] | ||
VARIABLE INTEREST ENTITIES | NOTE VARIABLE INTEREST ENTITIES FCM with was determined variable interest liabilities consolidated at: Schedule Of Variable Interest Entities June 30, 2021 December 31, 2020 Current assets $ 195,566 $ 823,575 Long-term assets — — Current liabilities $ (703,493 ) $ (700,746 ) Long-term liabilities — (39,184 ) | NOTE 5 – VARIABLE INTEREST ENTITIES FCM has consolidated with as was determined interest carrying amount and liabilities included consolidated financial statements as at December and Schedule Of Variable Interest Entities 2020 2019 Current assets $ 823,575 $ 375,834 Long-term assets — — Current liabilities $ (700,746 ) $ (401,492 ) Long-term liabilities (39,184 ) — |
GENERAL
GENERAL | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2020 | |
Mer Telemanagement Solutions Ltd [Member] | ||
GENERAL | NOTE 1: GENERAL a. SharpLink Gaming Ltd. (formaly Mer Telemanagement Solutions Ltd.) (the "Company" or "MTS") was incorporated on December 27, 1995. The Company and its subsidiaries (the "Group") is a worldwide provider of telecom expense management ("TEM"), billing solutions and contact center software. The Company's wholly-owned subsidiaries in the United States and Hong Kong, MTS IntegraTRAK Inc. and MTS Asia Ltd., act as marketing and customer service organizations in those countries. The Company's shares listed for trade on the Nasdaq Capital Market under the symbol "SBET" (See also Note 6). On September 6, 2018, the Company entered into a Securities Purchase Agreement (the "Alpha Capital SPA") with Alpha Capital Anstalt, an institutional investor ("Alpha Capital", for the investment of $ 1,353 188 b. Discontinued operations: 1. In March 2009, the Company discontinued the operations of TABS Brazil Ltda. ("TABS Brazil") its wholly owned subsidiary in Brazil. 2. In June 2018, the Company discontinued the operations of Vexigo Ltd. ("Vexigo") a wholly owned subsidiary in Israel, which was then sold to a third party. Vexigo, a privately-held Israeli-based software company supporting video advertising over the internet and mobile devices, was acquired by the Company in April 2015. The results of the discontinued operations including prior periods' compaConsolidated Balance Sheetsrable results, assets and liabilities which have been retroactively included in discontinued operations as separate line items in the statements of income and balance sheets are presented below. The summarized results of operations for Vexigo and TABS Brazil Ltd for the period ended June 30, 2021 and 2020, are as follows: Schedule of Financial Results of Discontinued Operations Six months ended June 30, 2021 2020 Unaudited Operating expenses (income) $ 26 $ 31 Operating loss (income) 26 31 Financial expenses (income), net 3 (30 ) Total net loss (income) from discontinued operations $ 29 $ 1 The major classes of assets and liabilities that were classified as discontinued operations were: Six months ended June 30, 2021 2020 Unaudited Cash and cash equivalents $ 180 $ 175 Property and equipment, net — 3 Total assets of discontinued operations 180 178 Trade payables 329 333 Accrued expenses and other liabilities 170 155 Total liabilities of discontinued operations $ 499 $ 488 c. The Company has historically suffered recurring losses from its operating activities. The Company incurred losses for the six months period ended June 30, 2021 and 2020, amounting to $ 994 661 30,356 In addition, the Company incurred negative cash flows from continuing operations of $ 629 Those factors raise substantial doubt about the Company's ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they become due. The Company intends to finance operating costs over the next twelve months with existing cash on hand after reducing operating spend if needed. During 2018 - 2020, the Company implemented a substantive cost reduction mainly by employee's layoff and reduced its lease expenses during the first quarter of 2019 and the second half of 2020. The Company searched for additional sources of financing and on April 15, 2021, the Company entered into a definitive agreement and Plan of Merger (the "Merger Agreement") with SharpLink, Inc., a company incorporated under the laws of the State of Minnesota and a leading online technology company that works with sports leagues, fantasy sports sites and media companies to connect fans to relevant and timely betting content sourced from its sportsbook partners ("SharpLink"), and New SL Acquisition Corp., a company incorporated under the laws of the State of Delaware and a wholly-owned subsidiary of the Company ("Merger Sub"). Upon the terms and subject to the satisfaction of the conditions described in the Merger Agreement, including approval of the transaction by the Company's shareholders, Merger Sub will be merged with and into SharpLink (the "Merger"), with SharpLink surviving the Merger as a wholly-owned subsidiary of the Company. As a result of the transaction, the securityholders of SharpLink will own 86 10 The accompanying unaudited interim consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and liabilities and commitments in the normal course of business. The unaudited interim consolidated financial statements for the period ended June 30, 2021, do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from uncertainty to the Company's ability to continue as a going concern. | NOTE 1: GENERAL a. Mer Telemanagement Solutions Ltd. (the "Company" or "MTS") was incorporated on December 27, 1995. MTS and its subsidiaries (the "Group") is a worldwide provider of telecom expense management (“TEM”), billing solutions and contact center software. The Company's wholly-owned subsidiaries in the United States and Hong Kong, MTS IntegraTRAK Inc. and MTS Asia Ltd., act as marketing and customer service organizations in those countries. The Company's shares are listed for trade on the NASDAQ Capital Market under the symbol "MTSL". In April 2015, the Company acquired 100 During 2018, Vexigo sold its operation to an unaffiliated third party. The consideration for the sale was $ 250 On September 6, 2018, the Company entered into a Securities Purchase Agreement (the "Alpha Capital SPA") with Alpha Capital Anstalt, an institutional investor, for the investment of $ 1,353 188 The Alpha Capital SPA includes a greenshoe option for a future investment by Alpha Capital of up to $ 1.5 1,315,789 1,500,000 b. Discontinued operations: 1. In March 2009, the Company discontinued the operations of TABS Brazil Ltda. its wholly owned subsidiary in Brazil. 2. In June 2018, the Company discontinued the operations of Vexigo ltd. a wholly owned subsidiary in Israel, which was then sold to a third party. The results of the discontinued operations including prior periods' comparable results, assets and liabilities which have been retroactively included in discontinued operations as separate line items in the statements of income and balance sheets are presented below. The summarized results of operations for Vexigo and TABS Brazil Ltd for the years ended December 31, 2018, 2019 and 2020, are as follows: Schedule of Financial Results of Discontinued Operations Year ended December 31, 2020 2019 *)2018 Revenue $ - $ 301 $ 794 Cost of revenues - 255 1,034 Gross profit (loss) - 46 (240 ) Operating expenses (income) (58 ) (9 ) 310 Operating loss (income) (58 ) (55 ) 550 Financial income, net 21 2 16 Gain on disposal of the discontinued operations - - 250 Total net loss (income) from discontinued operations $ (37 ) $ (57 ) $ 284 *) Represent the results of the discontinued operations until their disposal. The major classes of assets and liabilities that were classified as discontinued operations were: Schedule of assets and liabilities December 31, 2020 2019 Cash and cash equivalents $ 176 $ 170 Property and equipment, net 2 2 Total assets of discontinued operations 178 172 Trade payables 334 337 Accrued expenses and other liabilities 162 179 Total liabilities of discontinued operations $ 496 $ 516 c. The Company has historically suffered recurring losses from its operating activities. The Company incurred losses for the years ended December 31, 2019 and 2020, amounting to $ 135 1,815 29,362 In addition, the Company incurred negative cash flows from continuing operations of $ 1,331 Those factors raise substantial doubt about the Company's ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they become due. The Company intends to finance operating costs over the next twelve months with existing cash on hand after reducing operating spend if needed. During 2018 - 2020, the Company implemented a substantive cost reduction mainly by employee’s layoff and reduced its lease expenses during the first quarter of 2019 and the second half of 2020. The Company searched for additional sources of financing and on April 15, 2021, the Company entered into a definitive agreement and Plan of Merger (the “Merger Agreement”) with SharpLink, Inc., a company incorporated under the laws of the State of Minnesota and a leading online technology company that works with sports leagues, fantasy sports sites and media companies to connect fans to relevant and timely betting content sourced from its sportsbook partners (“SharpLink”), and New SL Acquisition Corp., a company incorporated under the laws of the State of Delaware and a wholly-owned subsidiary of the Company (“Merger Sub”). The Merger Agreement is subject to the approval of the Company’s shareholders at a meeting of shareholders that is expected to be held in the second quarter of 2021, along with the satisfaction or waiver of other customary conditions. For additional information, see Note 10. The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and liabilities and commitments in the normal course of business. The consolidated financial statements for the year ended December 31, 2020, do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from uncertainty to the Company's ability to continue as a going concern. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2020 | |
SIGNIFICANT ACCOUNTING POLICIES | Note 1 - Summary of Significant Accounting Policies Nature of Business SharpLink, Inc. (SharpLink or the Company) was incorporated in February 2019 in Minnesota. The Company develops software to engage the end users of sports media content in a variety of different ways, including providing games and contests primarily on a software-as-a-service (SaaS) basis, with the occasional licensing agreement to develop software. SharpLink is also developing lead generation software that connects sports media consumers to legal sports wagering operators in the United States. The Company is majority owned by SportsHub Games Network (Parent). The Parent owns 83 Merger On November 1, 2020, the Company entered into a Contribution Agreement with the Parent that contributed certain assets and liabilities to the Parent's newly formed, wholly owned subsidiary, Sports Technologies, LLC (STI). Following this contribution, STI merged into the Company's wholly owned subsidiary, ST Acquisitions, LLC, in a reverse triangular merger under which STI remains as the surviving subsidiary to the Company. As consideration in exchange for the merger, the Company issued 4,061,141 The assets and liabilities contributed to STI previously operated as a division of the Parent. Divisional equity represents the net assets of this division prior to merger. The Company has accounted for the operations of STI beginning January 1, 2019, due to the common control nature of the merger. Principles of Consolidation The accompanying consolidated financial statements include the accounts of SharpLink, which is developing the lead generation software for online sports gambling sites, and its wholly owned subsidiary, STI, which operates the SaaS and software licensing business. All significant inter-company balances and transactions have been eliminated in consolidation. Concentrations of Credit Risk The Company maintains its cash accounts in financial institutions, the balances of which are periodically in excess of federally insured limits. Receivables and Credit Policy Accounts receivable are recorded at their estimated net realizable value, net of an allowance for doubtful accounts. The Company has determined, based upon historical experience, its evaluation of the current status of receivables, and unusual circumstances, there is no need for an allowance for doubtful accounts. Credit terms are extended to customers in the normal course of business. The Company performs ongoing credit evaluations of its customers' financial conditions and generally requires no collateral. 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, 2020 and 2019, was $ 20,331 15,952 Intangible Assets Intangible assets consist of internally developed software, customer relationships, 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 to seven 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 $ 292,229 173,710 Long-Lived Assets The Company reviews the carrying value of its equipment and 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, an impairment loss is recognized equal to an amount by which the 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 obsolescence, demand, competition, and other economic factors. Based on this assessment there was no triggering events to assess for impairment for the years ended December 31, 2020 and 2019. Goodwill The Company records goodwill when consideration paid in an acquisition exceeds the fair value of the net tangible assets and the identified intangible assets acquired. Goodwill is not amortized, but rather is tested for impairment annually or more frequently if facts and circumstances warrant a review. The Company has determined that there are two reporting units for the purpose of goodwill impairment tests, though only one reporting unit contains goodwill. For purposes of assessing the impairment of goodwill, the Company annually, at its fiscal year end, estimates the fair value of the reporting unit and compares this amount to the carrying value of the reporting unit. The Company determines the fair value of its reporting units by utilizing market multiples from guideline public companies and other factors that it believes marketplace participants would utilize. If the Company determines that the carrying value of the reporting unit exceeds its fair value, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds its fair value. As of December 31, 2020 and 2019, the Company completed its annual impairment test of goodwill. Based upon that evaluation, the Company determined that its goodwill was not impaired. 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 leases with terms greater than 12 months, the right-of-use (ROU) assets and lease liabilities are 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 assets also includes any prepaid lease payments and are reduced by any previously accrued deferred rent. The Company's 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 lease does not include a fixed rental escalation clause. Lease terms include an option to extend or terminate the lease 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. Income Taxes The Company accounts for income taxes in accordance with ASC Topic, Income Taxes, 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. In December 2019, the FASB issued ASU 2019-12, Income Taxes Simplifying the Accounting for Income Taxes Income Taxes Revenue Recognition The Company enters into contracts for the development, hosting, operations, maintenance, and service of games and contests that are hosted by the Company and accessed through the customer's website or other electronic media. This generally results in revenue from developing, hosting, and maintaining software for customers (cloud-hosted SaaS) or licensing revenue for the development of software. 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. The Company's performance obligations are satisfied either over time (for cloud-hosted SaaS) or at a point in time (for software licenses), see Note 2. 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. Transactions with Parent Distributions The Parent has historically paid direct expenses incurred by STI, which includes salaries and related expense for the employees of STI. The Parent collects cash on behalf of STI's revenue generating activities. The excess of revenue collected by the Parent over the expenses paid by the Parent is recorded as a distribution to the Parent. Distribution per share has been excluded from disclosure within the Consolidated Statement of Stockholders' Equity as only the Parent received the distribution. Due to Parent Since the merger of STI and SharpLink on November 1, 2020, the Company has generated a payable to the Parent for expenses paid on behalf of STI in excess of cash collected by the Parent on behalf of STI's revenue generating activities. Advance to Parent In October 2019, SharpLink advanced $ 227,807 0 124,563 Allocation of Expenses The Company was allocated cost of revenue, selling, general, and administrative expenses totaling $ 2,211,303 2,297,723 Stock-Based Compensation Stock-based compensation expense reflects the fair value of stock-based awards measured at the grant date and recognized over the relevant vesting 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. Stock Subscriptions The Company issued stock subscriptions in December 2019 for 65,266 130,532 50,000 2,633 5,266 Convertible Notes The Company issued $ 1,882,500 4 2 Redeemable Preferred Stock Issued with a Commitment Fee The Company considers guidance within ASC 470-20, Debt Commitment Fee The Company accounts for the commitment fee as either equity instrument, liability, or derivative liability in accordance with ASC 480, Distinguishing Liabilities from Equity Derivatives and Hedging Net loss per share Basic net loss per share is calculated by dividing net loss available to common stockholders adjusted for preferred stock discount accretion and dividends accrued on preferred stock by the weighted-average number of common 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 common shares that would have been outstanding if potential common shares had been issued if such additional common 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 common shares have been excluded, as their effect would be anti-dilutive. 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 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. Paycheck Protection Program (PPP) Loan The Company was granted a $ 46,500 1 46,500 Recently Issued Accounting Pronouncements Not Yet Adopted Financial Instruments – Credit Losses In June 2016, the FASB issued ASC 326, Financial Instruments – Credit Losses Measurements of Credit Losses on Financial Instruments Revision of Prior Consolidated Statements of Shareholders' Equity and Cash Flows The Company identified an omission of a prepaid stock issuance transaction between the Company and a related party investor during the year ended December 31, 2020. The Company evaluated the materiality of the omission and concluded it was not material to previously issued consolidated financial statements. The Company revised its Statement of Shareholders' Equity and Statement of Cash Flows for the year ended December 31, 2020 by increasing additional paid-in capital and net cash from financing activities by $ 750,000 | |
Mer Telemanagement Solutions Ltd [Member] | ||
SIGNIFICANT ACCOUNTING POLICIES | NOTE 2: BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the six months ended June 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021. For further information, reference is made to the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 20-F for the year ended December 31, 2020. The significant accounting policies applied in the annual consolidated financial statements of the Company as of December 31, 2020, contained in the Company's Annual Report on Form 20-F filed with the Securities and Exchange Commission on May 14, 2021, have been applied consistently in these unaudited interim consolidated financial statements. Recently Adopted Accounting Pronouncements In December 2019, the FASB issued ASU No. 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes" ("ASU 2020-12"), which simplifies the accounting for income taxes. ASU 2019-12 is effective for annual reporting periods, and interim periods within those years, beginning after December 15, 2020. The adoption of this standard did not have a material impact on the Company's consolidated financial statements. Use of Estimates The preparation of the interim consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions. The Company's management believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the dates of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The novel coronavirus ("COVID-19") pandemic has created, and may continue to create, significant uncertainty in macroeconomic conditions, and the extent of its impact on the Company's operational and financial performance will depend on certain developments, including the duration and spread of the outbreak and the impact on the Company's customers and its sales cycles. The Company considered the impact of COVID-19 on the estimates and assumptions and determined that there were no material adverse impacts on the interim consolidated financial statements for the period ended June 30, 2021. As events continue to evolve and additional information becomes available, the Company's estimates and assumptions may change materially in future periods. | NOTE 2: SIGNIFICANT ACCOUNTING POLICIES The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"). a. Use of estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company's management believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they were made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, the Company's management evaluates estimates, including those related to goodwill, tax assets and liabilities, fair values of stock-based awards, allowance for credit losses. Such estimates are based on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. A majority of the revenues of the Group are denominated in U.S. dollars ("dollar" or "dollars"). The dollar is the primary currency of the economic environment in which the Group operates. Thus, the functional and reporting currency of the Group is the dollar. Accordingly, monetary accounts maintained in currencies other than the dollar are re-measured into dollars in accordance with Accounting Standards Codification ("ASC") No. 830, "Foreign Currency Matters". Changes in currency exchange rates between the Company's functional currency and the currency in which a transaction is denominated are included in the Company's results of operations as finance income (expenses), net in the period in which the currency exchange rates change. c. Principles of consolidation The consolidated financial statements include the accounts of the Group. Intercompany transactions and balances, including profits from intercompany sales not yet realized outside the Group, have been eliminated upon consolidation. d. Cash equivalents Cash equivalents are short-term unrestricted highly liquid investments that are readily convertible to cash with original maturities of three months or less, at acquisition. e. Restricted cash Restricted cash is a deposit account which is held by the Company on behalf of Company's customers. f. Property and equipment, net Property and equipment are measured at cost, including directly attributable costs, less accumulated depreciation and accumulated impairment losses. Depreciation is calculated on a straight-line basis over the useful life of the assets at annual rates as follows: Schedule of Property and Equipment, Depreciation Rates % Computers and peripheral equipment 33 Office furniture and equipment 3 20 7 Leasehold improvements Over the shorter of the lease term or useful economic life g. Impairment of long-lived assets The Company's long-lived assets (assets group) to be held or used, including property and equipment, and certain identifiable intangibles are reviewed for impairment in accordance with ASC 360, "Property, Plant and Equipment" ("ASC 360"), whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. h. Goodwill Goodwill and other certain purchased intangible assets have been recorded in the Company’s financial statements as a result of acquisitions. Goodwill represents the excess of the purchase price in a business combination over the fair value of the net tangible and intangible assets acquired. Under ASC 350, "Intangible - Goodwill and Other," ("ASC 350") goodwill is not amortized, but rather is subject to an annual impairment test. ASC 350 requires goodwill to be tested for impairment at the reporting unit level at least annually or between annual tests in certain circumstances and written down when impaired. Goodwill is tested for impairment by comparing the fair value of the reporting unit with its carrying value. ASC 350 allows an entity to first assess qualitative factors to determine whether it is necessary to perform the quantitative goodwill impairment test. If the qualitative assessment does not result in a more likely than not indication of impairment, no further impairment testing is required. If the Company elects not to use this option, or if the Company determines that it is more likely than not that the fair value of a reporting unit is less than its carrying value, then the Company prepares a quantitative analysis to determine whether the carrying value of a reporting unit exceeds its estimated fair value. If the carrying value of a reporting unit would exceed its estimated fair value, the Company would have recognizes an impairment of goodwill for the amount of this excess, in accordance with the guidance in FASB Accounting Standards Update (“ASU”) No. 2017-04, Intangibles - Goodwill and Other (Topic 350), Simplifying the test for Goodwill Impairment, which was adopted as of January 1, 2020. The Company’s goodwill balance is only assigned to its Enterprise reporting unit. The Company performs an annual impairment test of its reporting unit as of the 1 st 617 In addition, as part of the Company's annual impairment test procedures, it has reassessed the results of the impairment test performed during the second quarter of 2020 and concluded that an additional impairment is required as of December 31, 2020 at the amount of $ 1,106 The material assumptions used for the income approach were five ( 5 25 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 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 these deposits is recorded as an asset with other assets on the Company's balance sheet. 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. Severance expense (income) for the years ended December 31, 2020 and 2019 amounted to approximately $( 525 109 j. Revenue recognition The Company generates revenues mainly from licensing the rights to use its software products and from providing maintenance, hosting and managed services, support and training. Certain software licenses require significant customization. The Company sells its products directly to end-users and indirectly through resellers and OEMs (who are considered end users). The Company recognizes revenue under the five-step methodology required under ASC 606, “Revenue from Contracts with Customers”, which requires the Company to identify The Company’s primary revenue categories, related performance obligations, and associated recognition patterns are as follows: Revenue Recognition for software license fee In cases when the conditions require delivery, then delivery must have occurred for purposes of revenue recognition. Revenue Recognition for managed services arrangement The revenue from managed services arrangement is recognized over the time of the service. Revenue Recognition for maintenance Arrangements with multiple performance obligations - accordance with ASC 606. 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 s renewal contract. k. Research and development expenses Research and development costs are charged to the consolidated statements of operation, as incurred. Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, is recognized in the statement of operation when incurred. l. Income taxes The Company accounts for income taxes and uncertain tax positions in accordance with ASC Topic No. 740, "Income Taxes" ("ASC 740"). ASC 740 prescribes the use of the liability method, according to which deferred tax assets and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Valuation allowances are provided to reduce deferred tax assets to the amounts that are more likely-than-not to be realized. ASC No. 740 contains a two-step approach to recognizing and measuring a liability for uncertain tax positions. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. m. Accounting for share-based compensation The Company accounts for stock-based compensation in accordance with ASC 718, "Compensation-Stock Compensation" ("ASC 718"). ASC 718 requires companies to estimate the fair value of equity-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service period in the Company's consolidated statement of income (loss). The Company recognizes compensation expenses for the value of its awards, based on the straight-line method over the requisite service period of each of the awards. The Company selected the Black-Scholes-Merton option pricing model as the most appropriate fair-value method for its stock-option compensation awards and values restricted stock units based on the market value of the underlying shares at the date of grant. No options were granted in 2020 and 2019. n. Concentrations of credit risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, restricted cash, trade receivables and other account receivable. Cash, cash equivalents and restricted cash are deposited with major banks in Israel, Hong Kong and the United States. Such deposits in the United States may be in excess of insured limits and are not insured in other jurisdictions. Management believes that the financial institutions that hold the Company's investments are institutions with high credit standing, and accordingly, minimal credit risk exists with respect to these investments. The Company's customers are located mainly in the United States. The Company performs ongoing credit evaluations of its customers. In certain circumstances, the Company may require letters of credit, other collateral or additional guarantees. The Company establishes an allowance for credit losses based on historical experience, credit quality, the age of the accounts receivable balances and current economic conditions that may affect a customer's ability to pay. Allowance for credit losses as of December 31, 2019 and 2020, amounted to $ 69 75 The allowance for credit losses is determined with respect to specific debts that are doubtful of collection according to management estimates. The Company has no off-balance-sheet concentrations of credit risk. Basic net earnings (loss) per share are computed based on the weighted average number of Ordinary and Preferred shares outstanding during each year. Diluted net earnings (loss) per share is computed based on the weighted average number of Ordinary and Preferred shares outstanding during each year, plus dilutive potential Ordinary shares considered outstanding during the year, in accordance with ASC No.260, "Earnings Per Share". Preferred shares have been included together with the Ordinary shares as a component of both basic and dilutive earnings (loss) per share as these securities participate equally with the Ordinary shares in the profits, losses and liquidation values. No options have been included in the calculation of the diluted net earnings per share due to the Company’s losses during all the years presented. p. Derivatives instruments ASC No. 815, "Derivatives and Hedging"("ASC 815"), as amended, requires the Company to recognize all derivatives on the balance sheet at fair value. The Company entered into put and call option contracts to hedge certain transactions denominated in foreign currencies. The purpose of the Company's foreign currency hedging activities is to protect the Company from risk that the eventual dollar cash flows from international activities will be adversely affected by changes in the exchange rates. The Company's put option contracts did not qualify as hedging instruments under ASC 815. Changes in the fair value of put option contracts are reflected in the consolidated statements of operations as financial income or expense, when they occur. During 2020, 2019 and 2018, the Company entered into forward, call and put option contracts in the aggregate notional amounts of $ 1,193 2,193 2,100 4 4 9 q. Comprehensive income (loss) The Company accounts for comprehensive income (loss) in accordance with ASC No. 220, "Comprehensive Income". This statement establishes standards for the reporting and display of comprehensive income and its components in a full set of general purpose financial statements. Comprehensive income (loss) generally represents all changes in shareholders' equity during the period except those resulting from investments by, or distributions to, shareholders. The Company determined that its items of other comprehensive income (loss) relate to unrealized gains and losses on available for sale marketable securities and changes in foreign currency translation adjustments. r. Treasury shares 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. s. Impact of recently adopted accounting standards In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (ASU) No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The FASB subsequently issued amendments to ASU 2016-13, which have the same effective date and transition date of January 1, 2020. This standard requires entities to estimate an expected lifetime credit loss on financial assets ranging from short-term trade accounts receivable to long-term financings and report credit losses using an expected losses model rather than the incurred losses model that was previously used, and establishes additional disclosures related to credit risks. The Company adopted Topic 326 using the effective date of January 1, 2020, based on the composition of the Company’s trade receivables, investment portfolio and other financial assets, current economic conditions and historical credit loss activity. The adoption of this standard did not have a material effect on the Company’s consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The amended guidance simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Under the amended guidance, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying value, and an impairment charge is recognized for the amount by which the carrying value exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to that reporting unit. Additionally, the amount of goodwill allocated to each reporting unit with a zero or negative carrying amount of net assets should be disclosed. The Company adopted this standard prospectively effective January 1, 2020. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. t. Impact of recently issued accounting standards In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes” (“ASU 2020-12”), which simplifies the accounting for income taxes. ASU 2019-12 is effective for annual reporting periods, and interim periods within those years, beginning after December 15, 2020. The Company is currently evaluating the impact of the new guidance on the Company’s consolidated financial statements. |
OTHER ACCOUNTS RECEIVABLE AND P
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES | 12 Months Ended |
Dec. 31, 2020 | |
Mer Telemanagement Solutions Ltd [Member] | |
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES | NOTE 3: OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES Schedule of Other Accounts Receivable and Prepaid Expenses December 31, 2020 2019 Government authorities $ 15 $ 27 Prepaid expenses 376 175 Others 8 34 Total $ 399 $ 236 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2020 | |
Mer Telemanagement Solutions Ltd [Member] | |
PROPERTY AND EQUIPMENT | NOTE 4: PROPERTY AND EQUIPMENT Schedule of Property and Equipment December 31, 2020 2019 Cost: Computers and peripheral equipment $ 632 $ 627 Office furniture and equipment 66 66 698 693 Accumulated depreciation: Computers and peripheral equipment 599 567 Office furniture and equipment 64 64 Accumulated depreciation 663 631 Depreciated cost $ 35 $ 62 The depreciation expense for the years ended December 31, 2020, 2019 and 2018 amounted to $ 32 58 61 In 2020 and 2019, the Company derecognized fully depreciated property, plant and equipment in an amount of $ 2 $ 13 |
ACCRUED EXPENSES AND OTHER LIAB
ACCRUED EXPENSES AND OTHER LIABILITIES | 12 Months Ended |
Dec. 31, 2020 | |
Mer Telemanagement Solutions Ltd [Member] | |
ACCRUED EXPENSES AND OTHER LIABILITIES | NOTE 5: ACCRUED EXPENSES AND OTHER LIABILITIES Schedule of Accrued Expenses and Other Liabilities December 31, 2020 2019 Employees and payroll accruals $ 257 $ 307 Institutions and income tax payable 140 143 Accrued expenses 1,368 1,857 Related parties 4 10 Total $ 1,769 $ 2,317 MER TELEMANAGEMENT SOLUTIONS LTD. AND ITS SUBSIDIARIES |
COMMITMENTS AND CONTINGENT LIAB
COMMITMENTS AND CONTINGENT LIABILITIES | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2020 | |
Mer Telemanagement Solutions Ltd [Member] | ||
COMMITMENTS AND CONTINGENT LIABILITIES | NOTE 3: COMMITMENTS AND CONTINGENT LIABILITIES a. Lease commitments: During the first half of 2020, the Company's facilities in Israel were leased under non-obligating lease contract on a monthly basis. The monthly rental charge ranged from $ 10 to $ 15. Due to the COVID 19 pandemic the Company terminated the Israeli lease contract and since the second half of 2020, the Company's employees work remotely. b. Royalty commitments: The Company is committed to pay royalties to Israel Innovation Authority ("IIA"), formerly known as the Office of the Chief Scientist, of the Ministry of Industry, Trade and Labor of the Government of Israel on proceeds from sales of products resulting from the research and development projects in which the IIA participated. In the event that development of a specific product in which the IIA participated is successful, the Company will be obligated to repay the gzrants through royalty payments at the rate of 3 5 100 150 As of June 30, 2021, the Company had a contingent liability to pay royalties in the amount of approximately $ 8,129 The Company has paid or accrued royalties in its cost of revenues relating to the repayment of such IIA grants in the amount of $ 17 20 c. Claims and demands: 1. Claims related to discontinued operations: The Company is a party to various tax claims that arose in TABS Brazil a subsidiary which was discontinued in 2009. During 2019, the Company reassessed the likelihood of those tax claims and based on its legal advisors' opinion it concluded that they have become remote. In August 2007, the Company's Brazilian subsidiary, TABS Brazil, was ordered by the Labor Law Court in Brazil to pay approximately $ 32 1 95 2. During February 2020, a legal action was filed against the Company's US subsidiary in the New York Supreme Court in the amount of $ 32 3. On June 28, 2021, following the announcement of the Merger Agreement with SharpLink, the Company learned of a complaint by a purported shareholder of the Company that was filed in the Supreme Court of the State of New York against the 4. Company and its directors (the "Complaint"). The Complaint alleges that the intrinsic value of the Company is in excess of the amount the Company's shareholders will receive in connection with the Merger and that the proxy statement submitted by the Company in connection with the proposed Merger omits material information as set forth in the Complaint. The Complaint has not been served on the defendants but, based on a cursory review, the Company and its legal counsel believe that the claims asserted in the Complaint are without merit and the Company plans to vigorously defend against them. | NOTE 6: COMMITMENTS AND CONTINGENT LIABILITIES a. Lease commitments: The Group leases office space through operating leases. The facilities of the Company in Israel were leased until February 2019. There are no lease commitments under non-cancelable operating leases as of December 31, 2020. Commencing February 2019, the Company entered on a monthly basis into non-obligating lease contract in Israel with a monthly rental charge that ranged from $ 10 to $ 15. Due to the COVID 19 pandemic the Company terminated the Israeli lease contract and since the second half of 2020, the Company’s employees work remotely. b. Royalty commitments: The Company is committed to pay royalties to Israel Innovation Authority ("IIA"), formerly known as the Office of the Chief Scientist, of the Ministry of Industry, Trade and Labor of the Government of Israel on proceeds from sales of products resulting from the research and development projects in which the IIA participated. In the event that development of a specific product in which the IIA participated is successful, the Company will be obligated to repay the grants through royalty payments at the rate of 3 5 100 150 As of December 31, 2020, the Company had a contingent liability to pay royalties in the amount of approximately $ 8,150 The Company has paid or accrued royalties in its cost of revenues relating to the repayment of such IIA grants in the amount of $ 40 51 66 c. Claims and demands: 1. Claims related to discontinued operations: The Company is a party to various tax claims that arose in TABS Brazil a subsidiary which was discontinued in 2009. During 2019, the Company reassessed the likelihood of those tax claims and based on its legal advisors' opinion it concluded that they have become remote. In August 2007, the Company’s Brazilian subsidiary, TABS Brazil, was ordered by the Labor Law Court in Brazil to pay approximately $ 32 1 89 NOTE 7: TAXES ON INCOME (Cont.) c. U.S. subsidiary On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Act”), which among other provisions, reduced the U.S. corporate tax rate from 35% to 21%, effective January 1, 2018. At December 31, 2017, the Company re-measured its U.S. deferred tax assets and liabilities, based on the new rates at which they are expected to reverse in the future. d. Net operating loss carry-forwards: As of December 31, 2020, the Company, its subsidiaries in Hong Kong and in the U.S had an estimated total amount of available carry-forward tax losses of approximately $ 26,000 607 636 $ 507 MTS IntegraTRAK, the Company’s U.S. subsidiary, is subject to U.S. income taxes. Total net operating loss carry-forwards of approximately $ 636 e. Deferred income taxes: Deferred taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Group's deferred tax liabilities and assets are as follows: Schedule of Deferred Tax Liabilities and Assets December 31, 2020 2019 Deferred tax asset (liability): Tax loss carry-forwards $ 6,254 $ 6,089 Accruals for interest 283 283 R&D expenses 42 148 Allowances for credit losses and accruals for employee benefits 45 76 Depreciation and amortization 5 16 Deferred tax asset before valuation allowance 6,629 6,612 Goodwill (351 ) (746 ) Valuation allowance (6,107 ) (6,029 ) Deferred tax asset (liability), net $ 171 $ (163 ) The Company and certain of its subsidiaries have provided valuation allowances in respect of deferred tax assets resulting from tax loss carry-forwards and other temporary differences, since they have a history of losses incurred over the past years. Management currently believes that it is more likely than not that part of the deferred tax relating to the loss carry-forwards in the Company and its subsidiaries and other temporary differences will not be realized in the foreseeable future. f. A reconciliation between the theoretical tax expense, assuming all income is taxed at the statutory tax rate applicable to income of the Company and the actual tax expense as reported in the statements of operations is as follows: Schedule of Reconciliation of the Statutory Tax Rate to the Effective Income Tax Rate Year ended December 31, 2020 2019 2018 Loss before taxes on income, net, as reported in the statements of operations from continuing operations $ (2,103 ) $ (188 ) $ (840 ) Tax rates 23 % 23 % 23 % Theoretical tax benefit $ (484 ) $ (43 ) $ (193 ) Decrease in taxes resulting from: Non - deductible expenses (116 ) 38 37 Loss and timing differences for which no deferred tax was provided 264 (2 ) 187 Tax adjustment in respect of different tax rate of subsidiaries 9 3 6 Changes in provision for uncertain tax positions 2 8 9 Taxes on income, net, as reported in the statements of operations $ (325 ) $ 4 $ 46 g. Loss before income (expense) taxes is comprised as follows: Schedule of Income (Loss) Before Income Tax Domestic and Foreign Year ended December 31, 2020 2019 2018 Domestic $ (320 ) $ (217 ) $ (803 ) Foreign (1,783 ) 29 (37 ) Loss before taxes on income $ (2,103 ) $ (188 ) $ (840 ) h. Taxes on income are comprised as follows: Schedule of Components of Income Taxes Year ended December 31, 2020 2019 2018 Current $ 10 $ 22 $ 11 Deferred (335 ) (18 ) 35 Taxes in respect of previous years as a result of court ruling $ (325 ) $ 4 $ 46 Domestic $ - $ - $ - Foreign (325 ) 4 46 Taxes on income, net, as reported in the statements of operations $ (325 ) $ 4 $ 46 i. As of December 31, 2020, the Company recorded a liability for unrecognized tax benefits of $ 158 Reconciliation of Total Unrecognized Tax Benefits 2020 2019 Balance as of beginning of the year $ 156 $ 148 Cumulative translation adjustments and other 2 8 Balance at the end of the year $ 158 $ 156 |
TAXES ON INCOME
TAXES ON INCOME | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
TAXES ON INCOME | Note 9 - Income Taxes On a quarterly basis, we estimate our annual effective tax rate and record a quarterly income tax provision based on the anticipated rate. As the year progresses, we refine our estimate based on the facts and circumstances, including discrete events, by each tax jurisdiction. The effective tax rate for the six months ended June 30, 2021 and 2020 was ( 0.0 0.1 | Note 8 - Income Taxes Deferred tax assets and liabilities as of December 31, 2020 and 2019, consist of the following: Schedule of Deferred tax assets and liabilities 2020 2019 Deferred tax assets Net operating losses $ 445,673 $ 155,178 Research and development tax credit 22,086 8,234 Nonqualified stock options 2,351 — Business interest expense 983 970 Equipment 668 — Gross deferred tax assets 471,761 164,382 Valuation allowance (418,227 ) (99,179 ) Total deferred tax assets 53,534 65,203 Deferred tax liabilities Equipment — (1,447 ) Intangible assets (35,985 ) (50,088 ) Goodwill (21,935 ) (17,085 ) Deferred tax liabilities (57,920 ) (68,620 ) Net deferred tax liability $ (4,386 ) $ (3,417 ) As of December 31, 2020, the Company established 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, 2020, the Company has a federal tax net operating loss carryforward of $ 1,798,433 1,200,258 22,086 8,234 A company's ability to utilize a portion of its net operating loss carryforwards to offset future taxable income may be subject to certain limitations under Section 382 of the Internal Revenue Code due to changes in the equity ownership of the Company. The Company has determined that all net operating losses are fully available as of December 31, 2020. In addition, future changes in ownership as defined in Section 382 of the Internal Revenue Code could put limitations on the availability of the net operating loss carryforwards. The provision for (benefit from) income taxes charged to income for the years ended December 31, 2020 and 2019 consist of the following: Schedule of income tax expenses benefits 2020 2019 Current tax expense $ — $ — Deferred tax expense (benefit) Federal 883 (73,661 ) State 87 (6,209 ) Total $ 970 $ (79,870 ) 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 2020 2019 Income tax benefit at federal statutory rate $ (239,001 ) $ (81,064 ) State and local income taxes net of federal tax benefit (27,523 ) (10,786 ) STI taxable income prior to merger (41,843 ) (48,417 ) Meals and entertainment 1,042 1,682 Incentive stock option expense 11,945 — PPP loan forgiveness income (9,765 ) — Rate differentials 919 (32,230 ) Research and development credits (13,852 ) (8,234 ) Change in valuation allowance 319,048 99,179 Income tax expense (benefit) $ 970 $ (79,870 ) 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 2019, when the Company was incorporated. 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 Company recognizes interest and penalties accrued related to unrecognized tax benefits as additional income tax expense. During the years ended December 31, 2020, and 2019, the Company did not recognize material income tax expense related to interest and penalties. |
Mer Telemanagement Solutions Ltd [Member] | ||
TAXES ON INCOME | NOTE 7: TAXES ON INCOME a. Israeli taxation: 1. Corporate tax rates: Taxable income of the Company is subject to the Israeli corporate tax at the rate of 23 2. Tax Benefits for Research and Development: Israeli tax law permits, under some conditions, a tax deduction for expenditures in the year incurred, including capital expenditures, in scientific research and development projects. The deduction is permitted if, among other things, the expenditures are approved by the relevant government ministry and the research and development is for the promotion of the enterprise and is carried out by, or on behalf of, a company seeking the deduction. The IIA has approved some of the Company's research and development programs and the Company has been able to deduct, for tax purposes, a portion of its research and development expenses net of the grants received. Other research and development expenses that are not approved may be deducted for tax purposes in three equal installments during a three-year period. 3. Tax assessments: The Company has received final tax assessments through the tax year of 2016. b. Income taxes on non-Israeli subsidiaries: Non-Israeli subsidiaries are taxed according to the tax laws in their respective countries of residence. NOTE 7: TAXES ON INCOME (Cont.) c. U.S. subsidiary On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Act”), which among other provisions, reduced the U.S. corporate tax rate from 35% to 21%, effective January 1, 2018. At December 31, 2017, the Company re-measured its U.S. deferred tax assets and liabilities, based on the new rates at which they are expected to reverse in the future. d. Net operating loss carry-forwards: As of December 31, 2020, the Company, its subsidiaries in Hong Kong and in the U.S had an estimated total amount of available carry-forward tax losses of approximately $ 26,000 607 636 $ 507 MTS IntegraTRAK, the Company’s U.S. subsidiary, is subject to U.S. income taxes. Total net operating loss carry-forwards of approximately $ 636 e. Deferred income taxes: Deferred taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Group's deferred tax liabilities and assets are as follows: Schedule of Deferred Tax Liabilities and Assets December 31, 2020 2019 Deferred tax asset (liability): Tax loss carry-forwards $ 6,254 $ 6,089 Accruals for interest 283 283 R&D expenses 42 148 Allowances for credit losses and accruals for employee benefits 45 76 Depreciation and amortization 5 16 Deferred tax asset before valuation allowance 6,629 6,612 Goodwill (351 ) (746 ) Valuation allowance (6,107 ) (6,029 ) Deferred tax asset (liability), net $ 171 $ (163 ) The Company and certain of its subsidiaries have provided valuation allowances in respect of deferred tax assets resulting from tax loss carry-forwards and other temporary differences, since they have a history of losses incurred over the past years. Management currently believes that it is more likely than not that part of the deferred tax relating to the loss carry-forwards in the Company and its subsidiaries and other temporary differences will not be realized in the foreseeable future. f. A reconciliation between the theoretical tax expense, assuming all income is taxed at the statutory tax rate applicable to income of the Company and the actual tax expense as reported in the statements of operations is as follows: Schedule of Reconciliation of the Statutory Tax Rate to the Effective Income Tax Rate Year ended December 31, 2020 2019 2018 Loss before taxes on income, net, as reported in the statements of operations from continuing operations $ (2,103 ) $ (188 ) $ (840 ) Tax rates 23 % 23 % 23 % Theoretical tax benefit $ (484 ) $ (43 ) $ (193 ) Decrease in taxes resulting from: Non - deductible expenses (116 ) 38 37 Loss and timing differences for which no deferred tax was provided 264 (2 ) 187 Tax adjustment in respect of different tax rate of subsidiaries 9 3 6 Changes in provision for uncertain tax positions 2 8 9 Taxes on income, net, as reported in the statements of operations $ (325 ) $ 4 $ 46 g. Loss before income (expense) taxes is comprised as follows: Schedule of Income (Loss) Before Income Tax Domestic and Foreign Year ended December 31, 2020 2019 2018 Domestic $ (320 ) $ (217 ) $ (803 ) Foreign (1,783 ) 29 (37 ) Loss before taxes on income $ (2,103 ) $ (188 ) $ (840 ) h. Taxes on income are comprised as follows: Schedule of Components of Income Taxes Year ended December 31, 2020 2019 2018 Current $ 10 $ 22 $ 11 Deferred (335 ) (18 ) 35 Taxes in respect of previous years as a result of court ruling $ (325 ) $ 4 $ 46 Domestic $ - $ - $ - Foreign (325 ) 4 46 Taxes on income, net, as reported in the statements of operations $ (325 ) $ 4 $ 46 i. As of December 31, 2020, the Company recorded a liability for unrecognized tax benefits of $ 158 Reconciliation of Total Unrecognized Tax Benefits 2020 2019 Balance as of beginning of the year $ 156 $ 148 Cumulative translation adjustments and other 2 8 Balance at the end of the year $ 158 $ 156 |
RELATED PARTY TRANSACTIONS AND
RELATED PARTY TRANSACTIONS AND BALANCES | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
RELATED PARTY TRANSACTIONS AND BALANCES | Note 11 - Related Party Transactions The Company has a banking relationship with Platinum Bank (Platinum), which is considered a related party due to a board member of Platinum also serving on the board of directors for the Parent and owns common stock in both the Parent and the Company. As of June 30, 2021 and December 31, 2020, the Company had related party cash balances of $ 411,614 2,585,180 The Company uses Hays Companies (“Hays”) for all of its insurance brokerage needs. Hays is considered a related party as an executive of Hays own common stock in the Company and serves on the board of directors for the Company. The Company paid $ 12,603 9,165 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 $ 19,200 The Company is majority owned by SportsHub Games Network (“Parent”). The Parent has historically paid direct expenses incurred by the Company’s subsidiary, STI, which includes salaries and related expense for the employees of STI. The Parent collects cash on behalf of the STI’s revenue generating activities. The excess of revenue collected by the Parent over the expenses paid by the Parent is recorded as a distribution to the Parent. Distribution per share has been excluded from disclosure within the condensed consolidated statement of stockholders’ equity as only the Parent received the distribution. The Company has generated a payable to the Parent for expenses paid on behalf of STI in excess of cash collected by the Parent on behalf of STI’s revenue generating activities, which is recorded in Due to Parent in the condensed consolidated balance sheet. In June 2020, an investor contributed $ 550,000 June 30, 2021 2.00 200,000 750,000 | Note 4 - Related Party Transactions The Company has a banking relationship with Platinum Bank (Platinum), which is considered a related party due to a board member of Platinum also serving on the board of directors for the Parent and owns common stock in both the Parent and Company. As of December 31, 2020 and 2019, the Company had related party cash balances of $ 2,585,180 1,801,230 The Company uses Hays Companies (Hays) for all of its insurance brokerage needs. Hays is considered a related party as executives in Hays own common stock in the Company, a Hays employee serves on the board of directors for the Parent, and another Hays employee serves on the board of directors for both the Parent and the Company. The Company paid $ 18,330 24,357 The Company leases office space in Canton, Connecticut from CJEM, LLC (CJEM), which is owned by an executive of the Company. Management had evaluated CJEM as a variable interest entity until July, 2020 (see Note 9). The Company paid rent expense of $ 38,400 In June 2020, an investor contributed $ 550,000 June 30, 2021 2.00 200,000 750,000 | |
Mer Telemanagement Solutions Ltd [Member] | |||
RELATED PARTY TRANSACTIONS AND BALANCES | NOTE 4: RELATED PARTY TRANSACTIONS AND BALANCES a. The Company receives certain services from C. Mer, a publicly traded company. Mr. Haim Mer, the Company's chairman of the board and Mr. Isaac Ben Bassat, a former director of the Company, are members of the controlling group of C. Mer. These services include reimbursement for shared expenses related to a commercial insurance policy. b. From January 1, 2009 until September 2011, as part of the acquisition of certain assets and liabilities of AnchorPoint, Inc., the Company received certain services from Data Distributors Inc., a company controlled by Mr. Roger Challen, a former director of the Company and the controlling shareholder of the Info Group Inc., a beneficial owner of 9.70 9 0 18 28 c. Balances and transactions with related parties were as follows: 1. Balances with related parties: Schedule of Related Party Balances and Transactions June 30, 2021 December 31, Unaudited Other accounts payable and accrued expenses $ 16 $ 15 2. Transactions with related parties: | NOTE 8: RELATED PARTY TRANSACTIONS AND BALANCES a. The Company receives certain services from C. Mer, a publicly traded company. Mr. Chaim Mer, the Company's chairman of the board and Mr. Isaac Ben Bassat, a former director of the Company, are members of the controlling group of C. Mer. These services include reimbursement for shared expenses related to a commercial insurance policy. b. From January 1, 2009 until September 2011, as part of the acquisition of certain assets and liabilities of AnchorPoint, Inc., the Company received certain services from Data Distributors Inc., a company controlled by Mr. Roger Challen, a former director of the Company and the controlling shareholder of the Info Group Inc., a beneficial owner of 11.45 5 0 10 53 56 c. Balances and transactions with related parties were as follows: 1. Balances with related parties: Schedule of Related Party Balances and Transactions December 31, 2020 2019 Other accounts payable and accrued expenses (Note 5) $ 15 $ 10 2. Transactions with related parties: Year ended December 31, 2020 2019 2018 Amounts charged by related parties: Cost of revenues $ 47 $ 44 $ 37 Operating expenses 116 125 148 $ 163 $ 169 $ 185 |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2020 | |
Mer Telemanagement Solutions Ltd [Member] | ||
SHAREHOLDERS' EQUITY | NOTE 5: SHAREHOLDERS' EQUITY a. Share capital: The Ordinary shares entitle their holders the right to receive notice to participate in and vote at general meetings of the Company and the right to receive cash dividends, if declared. In August 2017, the Company converted $1,220 of debt to Vexigo's former shareholders incurred in connection with the acquisition of Vexigo into warrants to acquire 200,000 Ordinary shares. Following such debt conversion, the Company currently does not have any outstanding debt in connection with the Vexigo acquisition. The warrants have a term of five years and are exercisable without any additional consideration commencing on the second anniversary of their issuance. During the two years period following issuance, the Company had an option to purchase all or a portion of such warrants at a price per warrant of $6. By June 30, 2021, all of Vexigo's former shareholders exercised their warrants and were issued an aggregate of 200,000 Ordinary shares. The Alpha Capital SPA included a greenshoe option for a future investment by Alpha Capital of up to $1,500 in the newly created preferred shares at the same price per preferred share paid in the initial investment during a period of 18 months following the closing date of the Alpha Capital SPA. In December 2019 and April 2020, the Company and its Board members approved an extension of Alpha Capital's remaining portion of the greenshoe option by six months until April 30, 2020 and by an additional three-month period until July 31, 2020, respectively. During 2020 and 2019 Alpha Capital fully exercised its greenshoe option and purchased an aggregated number of 657,895 convertible preferred shares in consideration of $1,500. In addition, during March 2021 and June 2020, Alpha Capital converted 120,000 and 400,000 preferred shares into Ordinary shares, respectively at a 1:1 ratio (See also Note 6). b. Share options: In 2003, the Company adopted its 2003 Incentive Share Option Plan (the "2003 Plan") that conforms with the provisions of section 102 of the Israel Income Tax Ordinance. As amended by the Company's shareholders in 2013 and 2016, the 2003 Plan authorizes the grant of options to purchase up to 241,160 of the Company's Ordinary shares to officers, employees and directors of the Company or any subsidiary, pursuant to section 102 of the Israel Income Tax Ordinance and will expire on November 30, 2023. In June 2006, the Company adopted its 2006 Stock Option plan (the "2006 Plan"), intended to grant options to officers, employees and directors of MTS IntegraTRAK or any subsidiary of the Company. Each option granted under the 2006 Plan may be either an option intended to be treated as an "incentive stock option", within the meaning of section 422 of the Internal Revenue Code of 1986, as amended, or an option that will be treated as a "non-qualified stock option". As amended in 2011 and 2013, the 2006 Plan authorizes the grant of options to purchase up to 91,667 of the Company's Ordinary shares and will expire on July 2026.The total number of Ordinary shares with respect to which options may be granted to any eligible employee during any twelve months period under the 2006 Plan is 25,000 Ordinary shares, subject to adjustment as provided in the 2006 Plan. Each option granted under the 2006 Plan is exercisable until the earlier of five years from the date of the grant of the option or the expiration dates of the option plan. The exercise price of the options granted under the 2006 Plan may not be less than the fair market value of an Ordinary share determined as of the date of grant of the option. On October 1, 2017 the Company authorized an options grant to its CEO, to acquire 58,334 ordinary shares under 2003 Israeli Share Option Plan. These options vest over a period of four years (25% vesting on October 1, 2018 and an additional 12.5% vesting every six months for the following three years), subject to the fulfillment of a condition to vesting. The condition to vesting will be fulfilled in the event the closing price of the Company's Ordinary shares is equal to or higher than a price per share of $9 for a consecutive period of three months. The exercise price per share of the options is $4.32 (the closing price per share of the Company's Ordinary shares on the NASDAQ Capital Market on September 28, 2017, the date of the Company's Board of Directors' approval of the terms). In addition, in the event of an M&A or reverse merger transaction (where current shareholders will hold less than 50% of the shares of the company) and if the CEO will not continue to serve as the CEO of the company (or is released during the six-month period following the closing of the transaction), 50% of all of the unvested options will become vested. The options are due to expire on October 1, 2027, unless earlier terminated pursuant to the terms of our 2003 Israeli Share Option Plan. These options expired in connection with the termination of employment of the Company's CEO on December 31, 2020, when the Company's CEO began providing CEO services to the Company under a consulting agreement. The compensation committee in a meeting held on April 6, 2021 and the board of directors in a meeting held on April 8, 2021, approved, subject to the approval of the Company's shareholders, the following equity compensation:(1) to the Company's CEO: (a) a warrant to acquire 58,334 ordinary shares, at an exercise price of $2.642, valid for a period of three years, which will become exercisable in full upon the earliest of: (i) six months from the date of issuance or (ii) the consummation of an M&A or reverse merger transaction; and (b) a warrant to acquire 25,000 ordinary shares, with no exercise price (i.e., an exercise price equal to $0), valid for a period of three years, which will become exercisable upon the earliest of: (i) the consummation of an M&A or reverse merger transaction, provided that he still serves as the company's CEO until immediately prior to the consummation or (ii) the consummation of the Transaction with SharpLink, and (2) to the Company's CFO, options under the Company's 2003 Israeli Share Option Plan to acquire 25,000 ordinary shares, with no exercise price (i.e., an exercise price equal to $0), valid for a period of five years, which will become exercisable over a period of five years, with 33.33% vesting on the third, fourth and fifth anniversary of the grant date, provided that the vesting will accelerate, and the options will become fully exercisable upon the consummation of any M&A or reverse merger transaction. In addition, upon her termination of employment, the option if vested, will remain valid until the earliest to occur of: (i) six months following the date of her termination of employment and (ii) five years from the grant date. As of June 30, 2021, 234,142 Ordinary shares are available for future option grants under the Company's plans. c. A summary of option activity under the Company's stock option plans to its employees as of June 30, 2021, and changes during the six months ended June 30, 2021, are as follows: Schedule of Stock Options Activity Number of options Weighted-average exercise price Weighted- average remaining contractual term (in years) Aggregate intrinsic value Outstanding at January 1, 2021 58,334 $ 4.32 7.76 $ — Granted — $ — — $ — Exercised — $ — — $ — Expired and forfeited (58,334 ) $ (4.32 ) 7.76 $ — Outstanding at June 30, 2021 — $ — — $ — Exercisable at June 30, 2021 — $ — — $ — There were no new grants or exercises during the six months ended June 30, 2021 and 2020. The total compensation cost related to options granted to employees under the Company's share-based compensation plans recognized for the six months ended June 30, 2021 and 2020 amounted to $0, and $14, respectively. As of June 30, 2021, there was no unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the Company's stock option plans. d. Total stock-based compensation expenses recognized during the period: The total stock-based compensation expense related to employees' equity-based awards, recognized for the six months ended June 30, 2021 and 2020, was comprised as follows: Schedule of Stock-based Compensation Expenses Six months ended 30 June 2021 2020 General and administrative — 14 $ — $ 14 | NOTE 9: SHAREHOLDERS' EQUITY a. Share capital: The Ordinary shares entitle their holders the right to receive notice to participate in and vote at general meetings of the Company and the right to receive cash dividends, if declared. In August 2017, the Company converted $ 1,220 400,000 3 330,668 In June 2018, the Company issued 175,439 188 In October 2018, the Company issued 1,315,789 1,353 The Preferred Shares confer the following rights upon their holders: (i) equal rights to receive dividends, if and when distributed, whether in cash or any other manner, and to participate in a distribution of bonus shares, if and when distributed (on an as-converted basis), (ii) equal right to participate in a distribution of the Company’s assets available for distribution, in the event of liquidation or winding-up of the Company (on an as-converted basis), (iii) a right of conversion into Ordinary shares as described below and (iv) equal rights to vote on all matters submitted to a vote of the Ordinary shares (on an as-converted basis, up to the beneficial ownership limitation described below, to the extent applicable). Each Preferred Share is convertible, at any time and from time to time at the option of the shareholder thereof, into such number of Ordinary shares determined by dividing the Per Preferred Share Purchase Price ($ 1.14 0.10 The Company’s Articles provide that it shall not affect any conversion of the Preferred Shares to the extent that, after giving effect to the conversion, the applicable shareholder would beneficially own in excess of the Beneficial Ownership Limitation. The “Beneficial Ownership Limitation” is defined a 9.99 st During 2020 and 2019 Alpha Capital fully exercised its greenshoe option and purchased an aggregated number of 1,315,789 1,500,000 800,000 b. Share options: In 2003, the Company adopted its 2003 Incentive Share Option Plan (the "2003 Plan") that conforms with the provisions of section 102 of the Israel Income Tax Ordinance. As amended by the Company’s shareholders in 2013 and 2016, the 2003 Plan authorizes the grant of options to purchase up to 482,319 November 30, 2023 In June 2006, the Company adopted its 2006 Stock Option plan (the "2006 Plan"), intended to grant options to officers, employees and directors of MTS IntegraTRAK or any subsidiary of the Company. Each option granted under the 2006 Plan may be either an option intended to be treated as an "incentive stock option", within the meaning of section 422 of the Internal Revenue Code of 1986, as amended, or an option that will be treated as a "non-qualified stock option". As amended in 2011 and 2013, the 2006 Plan authorizes the grant of options to purchase up to 183,333 50,000 On October 1, 2017 the Company authorized an options grant to its CEO, to acquire 116,667 25 12.5 4.5 2.16 50 50 October 1, 2027 As of December 31, 2020, 468,284 c. A summary of option activity under the Company's stock option plans to its employees as of December 31, 2020, and changes during the year ended December 31, 2020, are as follows: Schedule of Stock Options Activity Number of options Weighted-average exercise price Weighted- average remaining contractual term (in years) Aggregate intrinsic value Outstanding at January 1, 2020 116,667 $ 2.16 7.76 $ - Granted - $ - - $ - Exercised - $ - - $ - Expired and forfeited - $ - - $ - Outstanding at December 31, 2020 116,667 $ 2.16 7.76 $ - Exercisable at December 31, 2020 87,500 $ 2.16 7.76 $ - There were no new grants or exercises during 2018, 2019 and 2020. 21 47 90 As of December 31, 2020, there was $ 12 d. Total stock-based compensation expenses recognized during the period: The total stock-based compensation expense related to employees' equity-based awards, recognized for the years ended December 31, 2020, 2019 and 2018, was comprised as follows: Schedule of Stock-based Compensation Expenses Year ended December 31, 2020 2019 2018 Research and development $ - $ - $ 1 General and administrative 21 47 89 $ 21 $ 47 $ 90 |
BASIS OF PRESENTATION AND SUMMA
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2020 | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Note 1 - Summary of Significant Accounting Policies Nature of Business SharpLink, Inc. (SharpLink or the Company) was incorporated in February 2019 in Minnesota. The Company develops software to engage the end users of sports media content in a variety of different ways, including providing games and contests primarily on a software-as-a-service (SaaS) basis, with the occasional licensing agreement to develop software. SharpLink is also developing lead generation software that connects sports media consumers to legal sports wagering operators in the United States. The Company is majority owned by SportsHub Games Network (Parent). The Parent owns 83 Merger On November 1, 2020, the Company entered into a Contribution Agreement with the Parent that contributed certain assets and liabilities to the Parent's newly formed, wholly owned subsidiary, Sports Technologies, LLC (STI). Following this contribution, STI merged into the Company's wholly owned subsidiary, ST Acquisitions, LLC, in a reverse triangular merger under which STI remains as the surviving subsidiary to the Company. As consideration in exchange for the merger, the Company issued 4,061,141 The assets and liabilities contributed to STI previously operated as a division of the Parent. Divisional equity represents the net assets of this division prior to merger. The Company has accounted for the operations of STI beginning January 1, 2019, due to the common control nature of the merger. Principles of Consolidation The accompanying consolidated financial statements include the accounts of SharpLink, which is developing the lead generation software for online sports gambling sites, and its wholly owned subsidiary, STI, which operates the SaaS and software licensing business. All significant inter-company balances and transactions have been eliminated in consolidation. Concentrations of Credit Risk The Company maintains its cash accounts in financial institutions, the balances of which are periodically in excess of federally insured limits. Receivables and Credit Policy Accounts receivable are recorded at their estimated net realizable value, net of an allowance for doubtful accounts. The Company has determined, based upon historical experience, its evaluation of the current status of receivables, and unusual circumstances, there is no need for an allowance for doubtful accounts. Credit terms are extended to customers in the normal course of business. The Company performs ongoing credit evaluations of its customers' financial conditions and generally requires no collateral. 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, 2020 and 2019, was $ 20,331 15,952 Intangible Assets Intangible assets consist of internally developed software, customer relationships, 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 to seven 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 $ 292,229 173,710 Long-Lived Assets The Company reviews the carrying value of its equipment and 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, an impairment loss is recognized equal to an amount by which the 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 obsolescence, demand, competition, and other economic factors. Based on this assessment there was no triggering events to assess for impairment for the years ended December 31, 2020 and 2019. Goodwill The Company records goodwill when consideration paid in an acquisition exceeds the fair value of the net tangible assets and the identified intangible assets acquired. Goodwill is not amortized, but rather is tested for impairment annually or more frequently if facts and circumstances warrant a review. The Company has determined that there are two reporting units for the purpose of goodwill impairment tests, though only one reporting unit contains goodwill. For purposes of assessing the impairment of goodwill, the Company annually, at its fiscal year end, estimates the fair value of the reporting unit and compares this amount to the carrying value of the reporting unit. The Company determines the fair value of its reporting units by utilizing market multiples from guideline public companies and other factors that it believes marketplace participants would utilize. If the Company determines that the carrying value of the reporting unit exceeds its fair value, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds its fair value. As of December 31, 2020 and 2019, the Company completed its annual impairment test of goodwill. Based upon that evaluation, the Company determined that its goodwill was not impaired. 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 leases with terms greater than 12 months, the right-of-use (ROU) assets and lease liabilities are 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 assets also includes any prepaid lease payments and are reduced by any previously accrued deferred rent. The Company's 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 lease does not include a fixed rental escalation clause. Lease terms include an option to extend or terminate the lease 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. Income Taxes The Company accounts for income taxes in accordance with ASC Topic, Income Taxes, 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. In December 2019, the FASB issued ASU 2019-12, Income Taxes Simplifying the Accounting for Income Taxes Income Taxes Revenue Recognition The Company enters into contracts for the development, hosting, operations, maintenance, and service of games and contests that are hosted by the Company and accessed through the customer's website or other electronic media. This generally results in revenue from developing, hosting, and maintaining software for customers (cloud-hosted SaaS) or licensing revenue for the development of software. 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. The Company's performance obligations are satisfied either over time (for cloud-hosted SaaS) or at a point in time (for software licenses), see Note 2. 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. Transactions with Parent Distributions The Parent has historically paid direct expenses incurred by STI, which includes salaries and related expense for the employees of STI. The Parent collects cash on behalf of STI's revenue generating activities. The excess of revenue collected by the Parent over the expenses paid by the Parent is recorded as a distribution to the Parent. Distribution per share has been excluded from disclosure within the Consolidated Statement of Stockholders' Equity as only the Parent received the distribution. Due to Parent Since the merger of STI and SharpLink on November 1, 2020, the Company has generated a payable to the Parent for expenses paid on behalf of STI in excess of cash collected by the Parent on behalf of STI's revenue generating activities. Advance to Parent In October 2019, SharpLink advanced $ 227,807 0 124,563 Allocation of Expenses The Company was allocated cost of revenue, selling, general, and administrative expenses totaling $ 2,211,303 2,297,723 Stock-Based Compensation Stock-based compensation expense reflects the fair value of stock-based awards measured at the grant date and recognized over the relevant vesting 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. Stock Subscriptions The Company issued stock subscriptions in December 2019 for 65,266 130,532 50,000 2,633 5,266 Convertible Notes The Company issued $ 1,882,500 4 2 Redeemable Preferred Stock Issued with a Commitment Fee The Company considers guidance within ASC 470-20, Debt Commitment Fee The Company accounts for the commitment fee as either equity instrument, liability, or derivative liability in accordance with ASC 480, Distinguishing Liabilities from Equity Derivatives and Hedging Net loss per share Basic net loss per share is calculated by dividing net loss available to common stockholders adjusted for preferred stock discount accretion and dividends accrued on preferred stock by the weighted-average number of common 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 common shares that would have been outstanding if potential common shares had been issued if such additional common 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 common shares have been excluded, as their effect would be anti-dilutive. 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 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. Paycheck Protection Program (PPP) Loan The Company was granted a $ 46,500 1 46,500 Recently Issued Accounting Pronouncements Not Yet Adopted Financial Instruments – Credit Losses In June 2016, the FASB issued ASC 326, Financial Instruments – Credit Losses Measurements of Credit Losses on Financial Instruments Revision of Prior Consolidated Statements of Shareholders' Equity and Cash Flows The Company identified an omission of a prepaid stock issuance transaction between the Company and a related party investor during the year ended December 31, 2020. The Company evaluated the materiality of the omission and concluded it was not material to previously issued consolidated financial statements. The Company revised its Statement of Shareholders' Equity and Statement of Cash Flows for the year ended December 31, 2020 by increasing additional paid-in capital and net cash from financing activities by $ 750,000 | |
Mer Telemanagement Solutions Ltd [Member] | ||
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2: BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the six months ended June 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021. For further information, reference is made to the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 20-F for the year ended December 31, 2020. The significant accounting policies applied in the annual consolidated financial statements of the Company as of December 31, 2020, contained in the Company's Annual Report on Form 20-F filed with the Securities and Exchange Commission on May 14, 2021, have been applied consistently in these unaudited interim consolidated financial statements. Recently Adopted Accounting Pronouncements In December 2019, the FASB issued ASU No. 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes" ("ASU 2020-12"), which simplifies the accounting for income taxes. ASU 2019-12 is effective for annual reporting periods, and interim periods within those years, beginning after December 15, 2020. The adoption of this standard did not have a material impact on the Company's consolidated financial statements. Use of Estimates The preparation of the interim consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions. The Company's management believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the dates of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The novel coronavirus ("COVID-19") pandemic has created, and may continue to create, significant uncertainty in macroeconomic conditions, and the extent of its impact on the Company's operational and financial performance will depend on certain developments, including the duration and spread of the outbreak and the impact on the Company's customers and its sales cycles. The Company considered the impact of COVID-19 on the estimates and assumptions and determined that there were no material adverse impacts on the interim consolidated financial statements for the period ended June 30, 2021. As events continue to evolve and additional information becomes available, the Company's estimates and assumptions may change materially in future periods. | NOTE 2: SIGNIFICANT ACCOUNTING POLICIES The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"). a. Use of estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company's management believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they were made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, the Company's management evaluates estimates, including those related to goodwill, tax assets and liabilities, fair values of stock-based awards, allowance for credit losses. Such estimates are based on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. A majority of the revenues of the Group are denominated in U.S. dollars ("dollar" or "dollars"). The dollar is the primary currency of the economic environment in which the Group operates. Thus, the functional and reporting currency of the Group is the dollar. Accordingly, monetary accounts maintained in currencies other than the dollar are re-measured into dollars in accordance with Accounting Standards Codification ("ASC") No. 830, "Foreign Currency Matters". Changes in currency exchange rates between the Company's functional currency and the currency in which a transaction is denominated are included in the Company's results of operations as finance income (expenses), net in the period in which the currency exchange rates change. c. Principles of consolidation The consolidated financial statements include the accounts of the Group. Intercompany transactions and balances, including profits from intercompany sales not yet realized outside the Group, have been eliminated upon consolidation. d. Cash equivalents Cash equivalents are short-term unrestricted highly liquid investments that are readily convertible to cash with original maturities of three months or less, at acquisition. e. Restricted cash Restricted cash is a deposit account which is held by the Company on behalf of Company's customers. f. Property and equipment, net Property and equipment are measured at cost, including directly attributable costs, less accumulated depreciation and accumulated impairment losses. Depreciation is calculated on a straight-line basis over the useful life of the assets at annual rates as follows: Schedule of Property and Equipment, Depreciation Rates % Computers and peripheral equipment 33 Office furniture and equipment 3 20 7 Leasehold improvements Over the shorter of the lease term or useful economic life g. Impairment of long-lived assets The Company's long-lived assets (assets group) to be held or used, including property and equipment, and certain identifiable intangibles are reviewed for impairment in accordance with ASC 360, "Property, Plant and Equipment" ("ASC 360"), whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. h. Goodwill Goodwill and other certain purchased intangible assets have been recorded in the Company’s financial statements as a result of acquisitions. Goodwill represents the excess of the purchase price in a business combination over the fair value of the net tangible and intangible assets acquired. Under ASC 350, "Intangible - Goodwill and Other," ("ASC 350") goodwill is not amortized, but rather is subject to an annual impairment test. ASC 350 requires goodwill to be tested for impairment at the reporting unit level at least annually or between annual tests in certain circumstances and written down when impaired. Goodwill is tested for impairment by comparing the fair value of the reporting unit with its carrying value. ASC 350 allows an entity to first assess qualitative factors to determine whether it is necessary to perform the quantitative goodwill impairment test. If the qualitative assessment does not result in a more likely than not indication of impairment, no further impairment testing is required. If the Company elects not to use this option, or if the Company determines that it is more likely than not that the fair value of a reporting unit is less than its carrying value, then the Company prepares a quantitative analysis to determine whether the carrying value of a reporting unit exceeds its estimated fair value. If the carrying value of a reporting unit would exceed its estimated fair value, the Company would have recognizes an impairment of goodwill for the amount of this excess, in accordance with the guidance in FASB Accounting Standards Update (“ASU”) No. 2017-04, Intangibles - Goodwill and Other (Topic 350), Simplifying the test for Goodwill Impairment, which was adopted as of January 1, 2020. The Company’s goodwill balance is only assigned to its Enterprise reporting unit. The Company performs an annual impairment test of its reporting unit as of the 1 st 617 In addition, as part of the Company's annual impairment test procedures, it has reassessed the results of the impairment test performed during the second quarter of 2020 and concluded that an additional impairment is required as of December 31, 2020 at the amount of $ 1,106 The material assumptions used for the income approach were five ( 5 25 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 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 these deposits is recorded as an asset with other assets on the Company's balance sheet. 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. Severance expense (income) for the years ended December 31, 2020 and 2019 amounted to approximately $( 525 109 j. Revenue recognition The Company generates revenues mainly from licensing the rights to use its software products and from providing maintenance, hosting and managed services, support and training. Certain software licenses require significant customization. The Company sells its products directly to end-users and indirectly through resellers and OEMs (who are considered end users). The Company recognizes revenue under the five-step methodology required under ASC 606, “Revenue from Contracts with Customers”, which requires the Company to identify The Company’s primary revenue categories, related performance obligations, and associated recognition patterns are as follows: Revenue Recognition for software license fee In cases when the conditions require delivery, then delivery must have occurred for purposes of revenue recognition. Revenue Recognition for managed services arrangement The revenue from managed services arrangement is recognized over the time of the service. Revenue Recognition for maintenance Arrangements with multiple performance obligations - accordance with ASC 606. 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 s renewal contract. k. Research and development expenses Research and development costs are charged to the consolidated statements of operation, as incurred. Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, is recognized in the statement of operation when incurred. l. Income taxes The Company accounts for income taxes and uncertain tax positions in accordance with ASC Topic No. 740, "Income Taxes" ("ASC 740"). ASC 740 prescribes the use of the liability method, according to which deferred tax assets and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Valuation allowances are provided to reduce deferred tax assets to the amounts that are more likely-than-not to be realized. ASC No. 740 contains a two-step approach to recognizing and measuring a liability for uncertain tax positions. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. m. Accounting for share-based compensation The Company accounts for stock-based compensation in accordance with ASC 718, "Compensation-Stock Compensation" ("ASC 718"). ASC 718 requires companies to estimate the fair value of equity-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service period in the Company's consolidated statement of income (loss). The Company recognizes compensation expenses for the value of its awards, based on the straight-line method over the requisite service period of each of the awards. The Company selected the Black-Scholes-Merton option pricing model as the most appropriate fair-value method for its stock-option compensation awards and values restricted stock units based on the market value of the underlying shares at the date of grant. No options were granted in 2020 and 2019. n. Concentrations of credit risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, restricted cash, trade receivables and other account receivable. Cash, cash equivalents and restricted cash are deposited with major banks in Israel, Hong Kong and the United States. Such deposits in the United States may be in excess of insured limits and are not insured in other jurisdictions. Management believes that the financial institutions that hold the Company's investments are institutions with high credit standing, and accordingly, minimal credit risk exists with respect to these investments. The Company's customers are located mainly in the United States. The Company performs ongoing credit evaluations of its customers. In certain circumstances, the Company may require letters of credit, other collateral or additional guarantees. The Company establishes an allowance for credit losses based on historical experience, credit quality, the age of the accounts receivable balances and current economic conditions that may affect a customer's ability to pay. Allowance for credit losses as of December 31, 2019 and 2020, amounted to $ 69 75 The allowance for credit losses is determined with respect to specific debts that are doubtful of collection according to management estimates. The Company has no off-balance-sheet concentrations of credit risk. Basic net earnings (loss) per share are computed based on the weighted average number of Ordinary and Preferred shares outstanding during each year. Diluted net earnings (loss) per share is computed based on the weighted average number of Ordinary and Preferred shares outstanding during each year, plus dilutive potential Ordinary shares considered outstanding during the year, in accordance with ASC No.260, "Earnings Per Share". Preferred shares have been included together with the Ordinary shares as a component of both basic and dilutive earnings (loss) per share as these securities participate equally with the Ordinary shares in the profits, losses and liquidation values. No options have been included in the calculation of the diluted net earnings per share due to the Company’s losses during all the years presented. p. Derivatives instruments ASC No. 815, "Derivatives and Hedging"("ASC 815"), as amended, requires the Company to recognize all derivatives on the balance sheet at fair value. The Company entered into put and call option contracts to hedge certain transactions denominated in foreign currencies. The purpose of the Company's foreign currency hedging activities is to protect the Company from risk that the eventual dollar cash flows from international activities will be adversely affected by changes in the exchange rates. The Company's put option contracts did not qualify as hedging instruments under ASC 815. Changes in the fair value of put option contracts are reflected in the consolidated statements of operations as financial income or expense, when they occur. During 2020, 2019 and 2018, the Company entered into forward, call and put option contracts in the aggregate notional amounts of $ 1,193 2,193 2,100 4 4 9 q. Comprehensive income (loss) The Company accounts for comprehensive income (loss) in accordance with ASC No. 220, "Comprehensive Income". This statement establishes standards for the reporting and display of comprehensive income and its components in a full set of general purpose financial statements. Comprehensive income (loss) generally represents all changes in shareholders' equity during the period except those resulting from investments by, or distributions to, shareholders. The Company determined that its items of other comprehensive income (loss) relate to unrealized gains and losses on available for sale marketable securities and changes in foreign currency translation adjustments. r. Treasury shares 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. s. Impact of recently adopted accounting standards In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (ASU) No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The FASB subsequently issued amendments to ASU 2016-13, which have the same effective date and transition date of January 1, 2020. This standard requires entities to estimate an expected lifetime credit loss on financial assets ranging from short-term trade accounts receivable to long-term financings and report credit losses using an expected losses model rather than the incurred losses model that was previously used, and establishes additional disclosures related to credit risks. The Company adopted Topic 326 using the effective date of January 1, 2020, based on the composition of the Company’s trade receivables, investment portfolio and other financial assets, current economic conditions and historical credit loss activity. The adoption of this standard did not have a material effect on the Company’s consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The amended guidance simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Under the amended guidance, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying value, and an impairment charge is recognized for the amount by which the carrying value exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to that reporting unit. Additionally, the amount of goodwill allocated to each reporting unit with a zero or negative carrying amount of net assets should be disclosed. The Company adopted this standard prospectively effective January 1, 2020. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. t. Impact of recently issued accounting standards In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes” (“ASU 2020-12”), which simplifies the accounting for income taxes. ASU 2019-12 is effective for annual reporting periods, and interim periods within those years, beginning after December 15, 2020. The Company is currently evaluating the impact of the new guidance on the Company’s consolidated financial statements. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Nature of Business | Nature of Business SharpLink, Inc. (SharpLink or the Company) was incorporated in February 2019 in Minnesota. The Company develops software to engage the end users of sports media content in a variety of different ways, including providing games and contests primarily on a software-as-a-service (SaaS) basis, with the occasional licensing agreement to develop software. SharpLink is also developing lead generation software that connects sports media consumers to legal sports wagering operators in the United States. The Company is majority owned by SportsHub Games Network (Parent). The Parent owns 83 |
Merger | Merger On November 1, 2020, the Company entered into a Contribution Agreement with the Parent that contributed certain assets and liabilities to the Parent's newly formed, wholly owned subsidiary, Sports Technologies, LLC (STI). Following this contribution, STI merged into the Company's wholly owned subsidiary, ST Acquisitions, LLC, in a reverse triangular merger under which STI remains as the surviving subsidiary to the Company. As consideration in exchange for the merger, the Company issued 4,061,141 The assets and liabilities contributed to STI previously operated as a division of the Parent. Divisional equity represents the net assets of this division prior to merger. The Company has accounted for the operations of STI beginning January 1, 2019, due to the common control nature of the merger. |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of SharpLink, which is developing the lead generation software for online sports gambling sites, and its wholly owned subsidiary, STI, which operates the SaaS and software licensing business. All significant inter-company balances and transactions have been eliminated in consolidation. |
Concentrations of Credit Risk | Concentrations of Credit Risk The Company maintains its cash accounts in financial institutions, the balances of which are periodically in excess of federally insured limits. |
Receivables and Credit Policy | Receivables and Credit Policy Accounts receivable are recorded at their estimated net realizable value, net of an allowance for doubtful accounts. The Company has determined, based upon historical experience, its evaluation of the current status of receivables, and unusual circumstances, there is no need for an allowance for doubtful accounts. Credit terms are extended to customers in the normal course of business. The Company performs ongoing credit evaluations of its customers' financial conditions and generally requires no collateral. 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, 2020 and 2019, was $ 20,331 15,952 |
Intangible Assets | Intangible Assets Intangible assets consist of internally developed software, customer relationships, 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 to seven 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 $ 292,229 173,710 |
Long-Lived Assets | Long-Lived Assets The Company reviews the carrying value of its equipment and 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, an impairment loss is recognized equal to an amount by which the 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 obsolescence, demand, competition, and other economic factors. Based on this assessment there was no triggering events to assess for impairment for the years ended December 31, 2020 and 2019. |
Goodwill | Goodwill The Company records goodwill when consideration paid in an acquisition exceeds the fair value of the net tangible assets and the identified intangible assets acquired. Goodwill is not amortized, but rather is tested for impairment annually or more frequently if facts and circumstances warrant a review. The Company has determined that there are two reporting units for the purpose of goodwill impairment tests, though only one reporting unit contains goodwill. For purposes of assessing the impairment of goodwill, the Company annually, at its fiscal year end, estimates the fair value of the reporting unit and compares this amount to the carrying value of the reporting unit. The Company determines the fair value of its reporting units by utilizing market multiples from guideline public companies and other factors that it believes marketplace participants would utilize. If the Company determines that the carrying value of the reporting unit exceeds its fair value, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds its fair value. As of December 31, 2020 and 2019, the Company completed its annual impairment test of goodwill. Based upon that evaluation, the Company determined that its goodwill was not impaired. |
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 leases with terms greater than 12 months, the right-of-use (ROU) assets and lease liabilities are 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 assets also includes any prepaid lease payments and are reduced by any previously accrued deferred rent. The Company's 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 lease does not include a fixed rental escalation clause. Lease terms include an option to extend or terminate the lease 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. |
Income Taxes | Income Taxes The Company accounts for income taxes in accordance with ASC Topic, Income Taxes, 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. In December 2019, the FASB issued ASU 2019-12, Income Taxes Simplifying the Accounting for Income Taxes Income Taxes |
Revenue Recognition | Revenue Recognition The Company enters into contracts for the development, hosting, operations, maintenance, and service of games and contests that are hosted by the Company and accessed through the customer's website or other electronic media. This generally results in revenue from developing, hosting, and maintaining software for customers (cloud-hosted SaaS) or licensing revenue for the development of software. 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. The Company's performance obligations are satisfied either over time (for cloud-hosted SaaS) or at a point in time (for software licenses), see Note 2. 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. |
Transactions with Parent | Transactions with Parent Distributions The Parent has historically paid direct expenses incurred by STI, which includes salaries and related expense for the employees of STI. The Parent collects cash on behalf of STI's revenue generating activities. The excess of revenue collected by the Parent over the expenses paid by the Parent is recorded as a distribution to the Parent. Distribution per share has been excluded from disclosure within the Consolidated Statement of Stockholders' Equity as only the Parent received the distribution. Due to Parent Since the merger of STI and SharpLink on November 1, 2020, the Company has generated a payable to the Parent for expenses paid on behalf of STI in excess of cash collected by the Parent on behalf of STI's revenue generating activities. Advance to Parent In October 2019, SharpLink advanced $ 227,807 0 124,563 Allocation of Expenses The Company was allocated cost of revenue, selling, general, and administrative expenses totaling $ 2,211,303 2,297,723 |
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 relevant vesting 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. |
Stock Subscriptions | Stock Subscriptions The Company issued stock subscriptions in December 2019 for 65,266 130,532 50,000 2,633 5,266 |
Convertible Notes | Convertible Notes The Company issued $ 1,882,500 4 2 |
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 |
Commitment Fee | Commitment Fee The Company accounts for the commitment fee as either equity instrument, liability, or derivative liability in accordance with ASC 480, Distinguishing Liabilities from Equity Derivatives and Hedging |
Net loss per share | Net loss per share Basic net loss per share is calculated by dividing net loss available to common stockholders adjusted for preferred stock discount accretion and dividends accrued on preferred stock by the weighted-average number of common 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 common shares that would have been outstanding if potential common shares had been issued if such additional common 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 common shares have been excluded, as their effect would be anti-dilutive. |
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 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. |
Paycheck Protection Program (PPP) Loan | Paycheck Protection Program (PPP) Loan The Company was granted a $ 46,500 1 46,500 |
Recently Issued Accounting Pronouncements Not Yet Adopted | Recently Issued Accounting Pronouncements Not Yet Adopted Financial Instruments – Credit Losses In June 2016, the FASB issued ASC 326, Financial Instruments – Credit Losses Measurements of Credit Losses on Financial Instruments |
Revision of Prior Consolidated Statements of Shareholders' Equity and Cash Flows | Revision of Prior Consolidated Statements of Shareholders' Equity and Cash Flows The Company identified an omission of a prepaid stock issuance transaction between the Company and a related party investor during the year ended December 31, 2020. The Company evaluated the materiality of the omission and concluded it was not material to previously issued consolidated financial statements. The Company revised its Statement of Shareholders' Equity and Statement of Cash Flows for the year ended December 31, 2020 by increasing additional paid-in capital and net cash from financing activities by $ 750,000 |
BUSINESS AND SIGNIFICANT ACCO_2
BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of SharpLink, which is developing the lead generation software for online sports gambling sites, and its wholly owned subsidiary, STI, which operates the SaaS and software licensing business. All significant inter-company balances and transactions have been eliminated in consolidation. | |
Paycheck Protection Program Loan | Paycheck Protection Program (PPP) Loan The Company was granted a $ 46,500 1 46,500 | |
Revenue Recognition | Revenue Recognition The Company enters into contracts for the development, hosting, operations, maintenance, and service of games and contests that are hosted by the Company and accessed through the customer's website or other electronic media. This generally results in revenue from developing, hosting, and maintaining software for customers (cloud-hosted SaaS) or licensing revenue for the development of software. 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. The Company's performance obligations are satisfied either over time (for cloud-hosted SaaS) or at a point in time (for software licenses), see Note 2. 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. | |
Income Taxes | Income Taxes The Company accounts for income taxes in accordance with ASC Topic, Income Taxes, 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. In December 2019, the FASB issued ASU 2019-12, Income Taxes Simplifying the Accounting for Income Taxes Income Taxes | |
Four Cubed Management Llc [Member] | ||
Nature of Operations | Nature of Operations FourCubed Management, (“FCM”) and referred “the Company”) operate as an agency which primarily pay-for-performance and incentive-based markets international operators international marketers. gaming operators and marketers with traffic their websites advertisements incentive-based offers. FCM limited liability company registered Minnesota. members have under Minnesota law. Trendfront Marketing International based and LLC based Nevis. 6t4 Company (6t4) Minnesota based S-Corporation operates as management company Company. | |
Principles of Consolidation | Principles Consolidation The consolidated statements represent consolidated balances of FCM and subsidiaries, Trendfront Marketing International and LLC. consolidated financial statements also include activities as was determined be variable interest material intercompany balances and transactions eliminated | Principles Consolidation The consolidated statements represent consolidated balances of FCM and subsidiaries, Trendfront Marketing International and LLC. consolidated financial statements also include activities as was determined be interest material intercompany balances and transactions eliminated |
Use of Estimates | Use of Estimates The preparation consolidated financial accordance principles generally accepted United States America requires management make estimates and assumptions that affect reported assets and liabilities and disclosure contingent assets liabilities at date consolidated financial reported amounts revenues and expenses reporting Actual results could differ estimates. | Use of Estimates The preparation consolidated financial accordance principles generally accepted United States America requires management make estimates and assumptions that affect reported assets and liabilities and disclosure contingent assets liabilities at date consolidated financial reported revenues and expenses reporting Actual results could differ estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents For statements flows, Company cash financial and all instruments purchased maturity three less cash and had no equivalents and December has cash various financial and electronic Certain balances exceed balances insured and December uninsured cash balances were approximately 229,000 and 800,000 respectively. | Cash and Cash Equivalents For statements flows, Company cash financial and all instruments purchased maturity three less cash and had no equivalents December and has cash financial and electronic wallets. Certain cash exceed balances subject to insured December and uninsured cash were approximately 800,000 and 345,000 respectively. |
Digital Assets | Digital Assets The Company accepts cryptocurrency as form of payment from may experience gains cryptocurrency any cryptocurrency at and | |
Accounts Receivable, Net | Accounts Receivable, Net The Company grants customers normal course of expects payments invoice. Accounts are carried at amount estimate accounts. evaluates need allowance accounts performing review outstanding receivables, historical collection information, existing economic conditions. Individual accounts are against allowance collection efforts exhausted. allowance accounts was approximately 21,000 and 20,000 at and December respectively. | Accounts Receivable, Net The Company grants customers normal course of expects payments invoice. Accounts are carried at amount estimate accounts. evaluates need allowance accounts performing review outstanding receivables, historical collection information, existing economic conditions. Individual accounts are against allowance collection efforts exhausted. allowance accounts was approximately 20,000 and 89,000 at December and respectively. |
Paycheck Protection Program Loan | Paycheck Protection Program During Company applied and forgivable Coronavirus Relief, and Economic Act. was subject forgiveness during period after company same number employees, reduce salaries 25%, and uses proceeds eligible expenses payroll, benefits, and has elected account loan as December and recorded loan as income once retain all relating loan years date forgiveness authorized representatives from including representatives Office Inspector General, access files request. | Paycheck Protection Program During applied and forgivable Coronavirus Relief, and Economic Act. was subject forgiveness during period after company same number employees, reduce salaries 25%, and uses proceeds eligible expenses payroll, benefits, and has elected account loan as December and record as income once |
Revenue Recognition | Revenue Recognition The Company recognizes revenue accordance Financial Standards Board (“FASB”), Accounting Standards Codification (“ASC”), Revenue Recognition from Contracts with Generally, earns from online gambling for connecting players/gamblers sites and are based revenue gambling has performance obligation, connection between and player/gambler. Subsequently, has right from gambling based player/gambler’s activities. recognizes revenue as services performed, which when player/gambler gambling and/or when player/gambler has performed share as identified terms contract gambling | Revenue Recognition The Company recognizes revenue accordance Financial Standards Board (“FASB”), Accounting Standards Codification (“ASC”), Revenue Recognition from Contracts with Generally, earns from gambling for connecting players/gamblers sites and are based revenue gambling has performance obligation, connection between and player/gambler. Subsequently, has right from gambling based player/gambler’s activities. recognizes revenue as services performed, which when player/gambler gambling and/or when player/gambler has performed share as identified terms contract gambling |
Cost of Sales | Cost of Sales The Company may party marketing perform additional advertising services related agreements gambling Marketing partners earn commissions from for advertising services. sales recorded as services are performed. | Cost of Sales The Company may party marketing perform additional advertising services related agreements gambling Marketing partners earn commissions from for advertising services. sales recorded as services are performed. |
Income Taxes | Income Taxes FCM an elected as C-Corporation. FCM evaluates uncertain tax “more likely than threshold (i.e., likelihood occurrence greater than fifty recognition threshold met when an entity that tax based solely technical merits, likely than sustained examination relevant taxing authority. failing initial recognition are classified as unrecognized benefit first interim period they meet likely than standard, negotiation litigation authority, statute limitations. De-recognition that was previously recognized an entity subsequently determines meets likely than being sustained. Only the portion unrecognized benefit that expected year as current result, liabilities expected resolved payment resolution expiration statute are expected year classified as current. It record estimated interest as expense and credits as reduction income tax expense. Deferred taxes recorded reflect consequences years differences between financial and basis assets liabilities. Income expense tax currently payable and change deferred assets and period. established when, management, likely than portion all deferred assets realized. FCM evaluates realizability deferred assets and need allowance all and negative evidence. 6t4 is treated as entity purposes. members report taxable income returns. Therefore, liability taxes has included consolidated financial statements related | Income Taxes FCM an elected as C-Corporation. FCM evaluates uncertain tax “more likely than threshold (i.e., likelihood occurrence greater than fifty recognition threshold met when an entity that tax based solely its technical merits, likely than sustained examination relevant taxing authority. failing qualify for recognition are classified as unrecognized benefit first interim period they meet likely than standard, negotiation litigation authority, expiration statute limitations. De-recognition that was previously recognized an entity subsequently determines meets likely than being sustained. Only the portion unrecognized benefit that expected year as current result, liabilities expected resolved payment resolution expiration statute are expected year classified as current. It record estimated interest as expense and credits as reduction income tax expense. Deferred taxes recorded reflect consequences years differences between financial and basis assets liabilities. Income expense tax currently payable and change deferred assets and period. established when, management, likely than portion all deferred assets realized. FCM evaluates realizability deferred assets and need allowance all and negative evidence. 6t4 has is treated as entity purposes. report taxable income returns. Therefore, liability taxes has consolidated statements related |
Foreign Currency Transaction Gain/Loss | Foreign Currency The Company has functional currency Trendfront International US Dollar. Foreign currency gains are reported general and administrative expense and (expense) statements recognized foreign transaction losses approximately 17,000 ended which approximately 31,000 recorded other and approximately 14,000 recorded general administrative expenses. recognized foreign currency transaction losses 18,000 ended which approximately 13,500 recorded other and approximately 4,500 recorded general and administrative | Foreign Currency The Company has functional currency Trendfront International US Dollar. Foreign currency gains are reported general and administrative expense and (expense) statements recognized foreign currency transaction gains approximately 80,000 which approximately 76,000 recorded other income. recognized foreign currency transaction losses approximately 32,000 which approximately 7,200 recorded other expense. |
Nature of Operations | Nature of Operations FourCubed Management, (“FCM”) and referred “the Company”) operate as an agency which primarily pay-for-performance and incentive-based markets international operators international marketers. gaming operators and marketers with traffic their websites advertisements incentive-based offers. FCM limited liability company registered Minnesota. members have under Minnesota law. Trendfront Marketing International based and LLC based Nevis. 6t4 Company (6t4) Minnesota based S-Corporation operates as management company Company. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2020 | |
Principles of consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of SharpLink, which is developing the lead generation software for online sports gambling sites, and its wholly owned subsidiary, STI, which operates the SaaS and software licensing business. All significant inter-company balances and transactions have been eliminated in consolidation. | |
Impairment of long-lived assets | Long-Lived Assets The Company reviews the carrying value of its equipment and 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, an impairment loss is recognized equal to an amount by which the 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 obsolescence, demand, competition, and other economic factors. Based on this assessment there was no triggering events to assess for impairment for the years ended December 31, 2020 and 2019. | |
Goodwill | Goodwill The Company records goodwill when consideration paid in an acquisition exceeds the fair value of the net tangible assets and the identified intangible assets acquired. Goodwill is not amortized, but rather is tested for impairment annually or more frequently if facts and circumstances warrant a review. The Company has determined that there are two reporting units for the purpose of goodwill impairment tests, though only one reporting unit contains goodwill. For purposes of assessing the impairment of goodwill, the Company annually, at its fiscal year end, estimates the fair value of the reporting unit and compares this amount to the carrying value of the reporting unit. The Company determines the fair value of its reporting units by utilizing market multiples from guideline public companies and other factors that it believes marketplace participants would utilize. If the Company determines that the carrying value of the reporting unit exceeds its fair value, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds its fair value. As of December 31, 2020 and 2019, the Company completed its annual impairment test of goodwill. Based upon that evaluation, the Company determined that its goodwill was not impaired. | |
Revenue recognition | Revenue Recognition The Company enters into contracts for the development, hosting, operations, maintenance, and service of games and contests that are hosted by the Company and accessed through the customer's website or other electronic media. This generally results in revenue from developing, hosting, and maintaining software for customers (cloud-hosted SaaS) or licensing revenue for the development of software. 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. The Company's performance obligations are satisfied either over time (for cloud-hosted SaaS) or at a point in time (for software licenses), see Note 2. 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. | |
Income taxes | Income Taxes The Company accounts for income taxes in accordance with ASC Topic, Income Taxes, 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. In December 2019, the FASB issued ASU 2019-12, Income Taxes Simplifying the Accounting for Income Taxes Income Taxes | |
Concentrations of credit risk | Concentrations of Credit Risk The Company maintains its cash accounts in financial institutions, the balances of which are periodically in excess of federally insured limits. | |
Earnings Per Share, Policy [Policy Text Block] | Net loss per share Basic net loss per share is calculated by dividing net loss available to common stockholders adjusted for preferred stock discount accretion and dividends accrued on preferred stock by the weighted-average number of common 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 common shares that would have been outstanding if potential common shares had been issued if such additional common 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 common shares have been excluded, as their effect would be anti-dilutive. | |
Impact of recently issued accounting standards | Recently Issued Accounting Pronouncements Not Yet Adopted Financial Instruments – Credit Losses In June 2016, the FASB issued ASC 326, Financial Instruments – Credit Losses Measurements of Credit Losses on Financial Instruments | |
Mer Telemanagement Solutions Ltd [Member] | ||
Use of estimates | Use of Estimates The preparation of the interim consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions. The Company's management believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the dates of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The novel coronavirus ("COVID-19") pandemic has created, and may continue to create, significant uncertainty in macroeconomic conditions, and the extent of its impact on the Company's operational and financial performance will depend on certain developments, including the duration and spread of the outbreak and the impact on the Company's customers and its sales cycles. The Company considered the impact of COVID-19 on the estimates and assumptions and determined that there were no material adverse impacts on the interim consolidated financial statements for the period ended June 30, 2021. As events continue to evolve and additional information becomes available, the Company's estimates and assumptions may change materially in future periods. | a. Use of estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company's management believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they were made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, the Company's management evaluates estimates, including those related to goodwill, tax assets and liabilities, fair values of stock-based awards, allowance for credit losses. Such estimates are based on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. |
Foreign Currency Transactions and Translations Policy [Policy Text Block] | A majority of the revenues of the Group are denominated in U.S. dollars ("dollar" or "dollars"). The dollar is the primary currency of the economic environment in which the Group operates. Thus, the functional and reporting currency of the Group is the dollar. Accordingly, monetary accounts maintained in currencies other than the dollar are re-measured into dollars in accordance with Accounting Standards Codification ("ASC") No. 830, "Foreign Currency Matters". Changes in currency exchange rates between the Company's functional currency and the currency in which a transaction is denominated are included in the Company's results of operations as finance income (expenses), net in the period in which the currency exchange rates change. | |
Principles of consolidation | c. Principles of consolidation The consolidated financial statements include the accounts of the Group. Intercompany transactions and balances, including profits from intercompany sales not yet realized outside the Group, have been eliminated upon consolidation. | |
Cash equivalents | d. Cash equivalents Cash equivalents are short-term unrestricted highly liquid investments that are readily convertible to cash with original maturities of three months or less, at acquisition. | |
Restricted cash | e. Restricted cash Restricted cash is a deposit account which is held by the Company on behalf of Company's customers. | |
Property and equipment, net | f. Property and equipment, net Property and equipment are measured at cost, including directly attributable costs, less accumulated depreciation and accumulated impairment losses. Depreciation is calculated on a straight-line basis over the useful life of the assets at annual rates as follows: Schedule of Property and Equipment, Depreciation Rates % Computers and peripheral equipment 33 Office furniture and equipment 3 20 7 Leasehold improvements Over the shorter of the lease term or useful economic life | |
Impairment of long-lived assets | g. Impairment of long-lived assets The Company's long-lived assets (assets group) to be held or used, including property and equipment, and certain identifiable intangibles are reviewed for impairment in accordance with ASC 360, "Property, Plant and Equipment" ("ASC 360"), whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. | |
Goodwill | h. Goodwill Goodwill and other certain purchased intangible assets have been recorded in the Company’s financial statements as a result of acquisitions. Goodwill represents the excess of the purchase price in a business combination over the fair value of the net tangible and intangible assets acquired. Under ASC 350, "Intangible - Goodwill and Other," ("ASC 350") goodwill is not amortized, but rather is subject to an annual impairment test. ASC 350 requires goodwill to be tested for impairment at the reporting unit level at least annually or between annual tests in certain circumstances and written down when impaired. Goodwill is tested for impairment by comparing the fair value of the reporting unit with its carrying value. ASC 350 allows an entity to first assess qualitative factors to determine whether it is necessary to perform the quantitative goodwill impairment test. If the qualitative assessment does not result in a more likely than not indication of impairment, no further impairment testing is required. If the Company elects not to use this option, or if the Company determines that it is more likely than not that the fair value of a reporting unit is less than its carrying value, then the Company prepares a quantitative analysis to determine whether the carrying value of a reporting unit exceeds its estimated fair value. If the carrying value of a reporting unit would exceed its estimated fair value, the Company would have recognizes an impairment of goodwill for the amount of this excess, in accordance with the guidance in FASB Accounting Standards Update (“ASU”) No. 2017-04, Intangibles - Goodwill and Other (Topic 350), Simplifying the test for Goodwill Impairment, which was adopted as of January 1, 2020. The Company’s goodwill balance is only assigned to its Enterprise reporting unit. The Company performs an annual impairment test of its reporting unit as of the 1 st 617 In addition, as part of the Company's annual impairment test procedures, it has reassessed the results of the impairment test performed during the second quarter of 2020 and concluded that an additional impairment is required as of December 31, 2020 at the amount of $ 1,106 The material assumptions used for the income approach were five ( 5 25 | |
Pension and Other Postretirement Plans, Nonpension Benefits, Policy [Policy Text Block] | 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 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 these deposits is recorded as an asset with other assets on the Company's balance sheet. 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. Severance expense (income) for the years ended December 31, 2020 and 2019 amounted to approximately $( 525 109 | |
Revenue recognition | j. Revenue recognition The Company generates revenues mainly from licensing the rights to use its software products and from providing maintenance, hosting and managed services, support and training. Certain software licenses require significant customization. The Company sells its products directly to end-users and indirectly through resellers and OEMs (who are considered end users). The Company recognizes revenue under the five-step methodology required under ASC 606, “Revenue from Contracts with Customers”, which requires the Company to identify The Company’s primary revenue categories, related performance obligations, and associated recognition patterns are as follows: Revenue Recognition for software license fee In cases when the conditions require delivery, then delivery must have occurred for purposes of revenue recognition. Revenue Recognition for managed services arrangement The revenue from managed services arrangement is recognized over the time of the service. Revenue Recognition for maintenance Arrangements with multiple performance obligations - accordance with ASC 606. 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 s renewal contract. | |
Research and development expenses | k. Research and development expenses Research and development costs are charged to the consolidated statements of operation, as incurred. Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, is recognized in the statement of operation when incurred. | |
Income taxes | l. Income taxes The Company accounts for income taxes and uncertain tax positions in accordance with ASC Topic No. 740, "Income Taxes" ("ASC 740"). ASC 740 prescribes the use of the liability method, according to which deferred tax assets and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Valuation allowances are provided to reduce deferred tax assets to the amounts that are more likely-than-not to be realized. ASC No. 740 contains a two-step approach to recognizing and measuring a liability for uncertain tax positions. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. | |
Accounting for share-based compensation | m. Accounting for share-based compensation The Company accounts for stock-based compensation in accordance with ASC 718, "Compensation-Stock Compensation" ("ASC 718"). ASC 718 requires companies to estimate the fair value of equity-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service period in the Company's consolidated statement of income (loss). The Company recognizes compensation expenses for the value of its awards, based on the straight-line method over the requisite service period of each of the awards. The Company selected the Black-Scholes-Merton option pricing model as the most appropriate fair-value method for its stock-option compensation awards and values restricted stock units based on the market value of the underlying shares at the date of grant. No options were granted in 2020 and 2019. | |
Concentrations of credit risk | n. Concentrations of credit risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, restricted cash, trade receivables and other account receivable. Cash, cash equivalents and restricted cash are deposited with major banks in Israel, Hong Kong and the United States. Such deposits in the United States may be in excess of insured limits and are not insured in other jurisdictions. Management believes that the financial institutions that hold the Company's investments are institutions with high credit standing, and accordingly, minimal credit risk exists with respect to these investments. The Company's customers are located mainly in the United States. The Company performs ongoing credit evaluations of its customers. In certain circumstances, the Company may require letters of credit, other collateral or additional guarantees. The Company establishes an allowance for credit losses based on historical experience, credit quality, the age of the accounts receivable balances and current economic conditions that may affect a customer's ability to pay. Allowance for credit losses as of December 31, 2019 and 2020, amounted to $ 69 75 The allowance for credit losses is determined with respect to specific debts that are doubtful of collection according to management estimates. The Company has no off-balance-sheet concentrations of credit risk. | |
Earnings Per Share, Policy [Policy Text Block] | Basic net earnings (loss) per share are computed based on the weighted average number of Ordinary and Preferred shares outstanding during each year. Diluted net earnings (loss) per share is computed based on the weighted average number of Ordinary and Preferred shares outstanding during each year, plus dilutive potential Ordinary shares considered outstanding during the year, in accordance with ASC No.260, "Earnings Per Share". Preferred shares have been included together with the Ordinary shares as a component of both basic and dilutive earnings (loss) per share as these securities participate equally with the Ordinary shares in the profits, losses and liquidation values. No options have been included in the calculation of the diluted net earnings per share due to the Company’s losses during all the years presented. | |
Derivatives instruments | p. Derivatives instruments ASC No. 815, "Derivatives and Hedging"("ASC 815"), as amended, requires the Company to recognize all derivatives on the balance sheet at fair value. The Company entered into put and call option contracts to hedge certain transactions denominated in foreign currencies. The purpose of the Company's foreign currency hedging activities is to protect the Company from risk that the eventual dollar cash flows from international activities will be adversely affected by changes in the exchange rates. The Company's put option contracts did not qualify as hedging instruments under ASC 815. Changes in the fair value of put option contracts are reflected in the consolidated statements of operations as financial income or expense, when they occur. During 2020, 2019 and 2018, the Company entered into forward, call and put option contracts in the aggregate notional amounts of $ 1,193 2,193 2,100 4 4 9 | |
Comprehensive income (loss) | q. Comprehensive income (loss) The Company accounts for comprehensive income (loss) in accordance with ASC No. 220, "Comprehensive Income". This statement establishes standards for the reporting and display of comprehensive income and its components in a full set of general purpose financial statements. Comprehensive income (loss) generally represents all changes in shareholders' equity during the period except those resulting from investments by, or distributions to, shareholders. The Company determined that its items of other comprehensive income (loss) relate to unrealized gains and losses on available for sale marketable securities and changes in foreign currency translation adjustments. | |
Treasury shares | r. Treasury shares 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. | |
Impact of recently adopted accounting standards | s. Impact of recently adopted accounting standards In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (ASU) No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The FASB subsequently issued amendments to ASU 2016-13, which have the same effective date and transition date of January 1, 2020. This standard requires entities to estimate an expected lifetime credit loss on financial assets ranging from short-term trade accounts receivable to long-term financings and report credit losses using an expected losses model rather than the incurred losses model that was previously used, and establishes additional disclosures related to credit risks. The Company adopted Topic 326 using the effective date of January 1, 2020, based on the composition of the Company’s trade receivables, investment portfolio and other financial assets, current economic conditions and historical credit loss activity. The adoption of this standard did not have a material effect on the Company’s consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The amended guidance simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Under the amended guidance, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying value, and an impairment charge is recognized for the amount by which the carrying value exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to that reporting unit. Additionally, the amount of goodwill allocated to each reporting unit with a zero or negative carrying amount of net assets should be disclosed. The Company adopted this standard prospectively effective January 1, 2020. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. | |
Impact of recently issued accounting standards | Recently Adopted Accounting Pronouncements In December 2019, the FASB issued ASU No. 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes" ("ASU 2020-12"), which simplifies the accounting for income taxes. ASU 2019-12 is effective for annual reporting periods, and interim periods within those years, beginning after December 15, 2020. The adoption of this standard did not have a material impact on the Company's consolidated financial statements. | t. Impact of recently issued accounting standards In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes” (“ASU 2020-12”), which simplifies the accounting for income taxes. ASU 2019-12 is effective for annual reporting periods, and interim periods within those years, beginning after December 15, 2020. The Company is currently evaluating the impact of the new guidance on the Company’s consolidated financial statements. |
BASIS OF PRESENTATION AND SUM_2
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Basis of Presentation | Note 1 - Basis of Presentati The condensed consolidated financial statements included herein have been prepared by SharpLink, Inc. and Subsidiary (the “Company,” “SharpLink,” “we,” or “our”), pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of the Company, the foregoing statements contain all adjustments, consisting only of normal recurring adjustments necessary to present fairly the financial position of the Company as of June 30, 2021 and December 31, 2020, its results of operations for the six months ended June 30, 2021 and 2020, and cash flows for the six months ended June 30, 2021 and 2020. The condensed consolidated balance sheet as of December 31, 2020, has been derived from the audited consolidated financial statements as of that date. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts therein. Due to the inherent uncertainty involved in making estimates, actual results in future periods may differ from the estimates. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to rules and regulations of the SEC. Accordingly, the condensed consolidated financial statements do not include all of the information and footnotes required by GAAP for complete financial statement presentation. It is suggested that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto for the year ended December 31, 2020, which are included in SharpLink Gaming Ltd.’s (formerly Mer Telemangement Solutions Ltd.) Form 6-K filed with the SEC on June 16, 2021. | ||
Recently Adopted Accounting Pronouncements | Recently Issued Accounting Pronouncements Not Yet Adopted Financial Instruments – Credit Losses In June 2016, the FASB issued ASC 326, Financial Instruments – Credit Losses Measurements of Credit Losses on Financial Instruments | ||
Mer Telemanagement Solutions Ltd [Member] | |||
Basis of Presentation | Basis of Presentation The accompanying unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the six months ended June 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021. For further information, reference is made to the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 20-F for the year ended December 31, 2020. The significant accounting policies applied in the annual consolidated financial statements of the Company as of December 31, 2020, contained in the Company's Annual Report on Form 20-F filed with the Securities and Exchange Commission on May 14, 2021, have been applied consistently in these unaudited interim consolidated financial statements. | ||
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In December 2019, the FASB issued ASU No. 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes" ("ASU 2020-12"), which simplifies the accounting for income taxes. ASU 2019-12 is effective for annual reporting periods, and interim periods within those years, beginning after December 15, 2020. The adoption of this standard did not have a material impact on the Company's consolidated financial statements. | t. Impact of recently issued accounting standards In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes” (“ASU 2020-12”), which simplifies the accounting for income taxes. ASU 2019-12 is effective for annual reporting periods, and interim periods within those years, beginning after December 15, 2020. The Company is currently evaluating the impact of the new guidance on the Company’s consolidated financial statements. | |
Use of Estimates | Use of Estimates The preparation of the interim consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions. The Company's management believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the dates of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The novel coronavirus ("COVID-19") pandemic has created, and may continue to create, significant uncertainty in macroeconomic conditions, and the extent of its impact on the Company's operational and financial performance will depend on certain developments, including the duration and spread of the outbreak and the impact on the Company's customers and its sales cycles. The Company considered the impact of COVID-19 on the estimates and assumptions and determined that there were no material adverse impacts on the interim consolidated financial statements for the period ended June 30, 2021. As events continue to evolve and additional information becomes available, the Company's estimates and assumptions may change materially in future periods. | a. Use of estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company's management believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they were made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, the Company's management evaluates estimates, including those related to goodwill, tax assets and liabilities, fair values of stock-based awards, allowance for credit losses. Such estimates are based on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Revenue Recognition | ||
Schedule of revenue | Schedule of revenue 2020 2019 Software license $ 142,600 $ 587,750 Software-as-a-service and other 2,136,214 1,793,987 Total $ 2,278,814 $ 2,381,737 | |
Schedule of contract assets | Schedule of contract assets Amount Balance as of January 1, 2019 $ 144,364 Labor costs expensed (298,866 ) Labor costs deferred 350,018 Balance as of December 31, 2019 195,516 Labor costs expensed (391,423 ) Labor costs deferred 471,244 Balance as of December 31, 2020 $ 275,337 | |
Schedule of assets and liabilities | Schedule of assets and liabilities December 31, December 31, January 1, 2020 2019 2019 Accounts receivable $ 324,302 $ 730,890 $ 685,111 Unbilled revenue (reported in accounts receivable) 31,610 183,002 256,252 Contract assets 275,337 195,516 144,364 Deferred revenue (406,508 ) (816,672 ) (466,045 ) | |
Schedule Of Revenue Category | Schedule Of Revenue Category Six months ended June 30 2021 2020 Software license $ — $ 90,600 Software-as-a-service and other 1,631,966 1,259,225 $ 1,631,966 $ 1,349,825 | |
Schedule Of Contract With Customer Asset | Schedule Of Contract With Customer Asset Balance as of December 31, 2020 $ 275,337 Labor costs expensed (392,321 ) Labor costs deferred 207,576 Balance as of June 30, 2021 $ 90,592 | |
Schedule Of Customers Assets And Liabilities | Schedule Of Customers Assets And Liabilities June 30 December 31 2021 2020 Accounts receivable $ 368,371 $ 324,302 Unbilled revenue (reported in accounts receivable) 131,178 31,610 Contract assets 90,592 275,337 Deferred revenue (120,611 ) (406,508 ) |
Intangible Assets (Tables)
Intangible Assets (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Schedule of Intangible assets | Schedule Of Impaired Intangible Assets Accumulated Cost Amortization Net Balance, June 30, 2021 Customer relationships $ 160,000 $ 120,000 $ 40,000 Acquired technology 430,000 332,502 97,498 Internally developed software 507,251 80,726 426,525 Software in development 78,722 — 78,722 $ 1,175,973 $ 533,228 $ 642,745 Balance, December 31, 2020 Customer relationships $ 160,000 $ 108,571 $ 51,429 Acquired technology 430,000 304,645 125,355 Internally developed software 341,267 34,127 307,140 Software in development 124,672 — 124,672 $ 1,055,939 $ 447,343 $ 608,596 | Schedule of Intangible assets Accumulated Cost Amortization Net Balance, December 31, 2020 Customer relationships $ 160,000 $ 108,571 $ 51,429 Acquired technology 430,000 304,645 125,355 Internally developed software 341,267 34,127 307,140 Software in development 124,672 — 124,672 $ 1,055,939 $ 447,343 $ 608,596 Balance, December 31, 2019 Customer relationships $ 160,000 $ 85,714 $ 74,286 Acquired technology 430,000 248,930 181,070 Software in development 173,710 — 173,710 $ 763,710 $ 334,644 $ 429,066 |
Schedule of future amortization expense | Schedule of future amortization expense Years Ending December 31, Amount 2021 $ 146,824 2022 146,824 2023 87,896 2024 68,253 2025 34,127 Total $ 483,924 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Schedule of lease costs | Schedule of lease costs 2020 2019 Operating lease cost $ 38,400 $ 38,400 |
Schedule of weighted average | Schedule of supplemental cash flow 2020 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 38,400 $ 38,400 The following summarizes the weighted-average remaining lease term and weight-average discount rate: Schedule of weighted average 2020 2019 Weighted-average remaining lease term Operating leases 72 84 Weighted-average discount rate Operating leases 6.00 % 6.00 % |
Schedule of weighted average | Schedule of weighted average 2020 2019 Weighted-average remaining lease term Operating leases 72 84 Weighted-average discount rate Operating leases 6.00 % 6.00 % |
Schedule of future minimum lease payment | Schedule of future minimum lease payment Operating Years Ending December 31, Leases 2021 $ 38,400 2022 38,400 2023 38,400 2024 38,400 2025 38,400 Thereafter 38,400 Total lease payments 230,400 Less interest 37,313 Present value of lease liability $ 193,087 |
Fair Value (Tables)
Fair Value (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | ||
Schedule of liability measured at fair value | Schedule of liability measured at fair value Carrying Amount Fair Value Measurement Fair Value (Level 1) (Level 2) (Level 3) December 31, 2020 Commitment Fee $ 577,000 $ — $ — $ 577,000 | |
Schedule of Assumptions | Schedule of Assumptions Probability of a Going Public Transaction 50.0 % Volatility 58.5 % Stock price of public company at the time of measurement $ 0.627 Date of a Going Public Transaction April 30, 2021 Pro-forma common shares outstanding at Going Public Transaction date 52,077,000 | |
Schedule Of Fair Value Market | Schedule Of Fair Value Market June 30, 2021 December 31, 2020 Fair Value Hierarchy Commitment Fee $ 19,428,927 $ 577,000 Level 3 | |
Schedule Of Inputs And Assumptions | Schedule Of Inputs And Assumptions Probability of a Going Public Transaction 90.0 % Volatility 50.6 % Stock price of public company at the time of measurement $ 6.14 Date of a Going Public Transaction July 31, 2021 Pro-forma common shares outstanding at Going Public Transaction date 23,366,319 Significant inputs and assumptions used in the valuation model as of December 31, 2020 are as follows: 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 |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Schedule of Deferred tax assets and liabilities | Schedule of Deferred tax assets and liabilities 2020 2019 Deferred tax assets Net operating losses $ 445,673 $ 155,178 Research and development tax credit 22,086 8,234 Nonqualified stock options 2,351 — Business interest expense 983 970 Equipment 668 — Gross deferred tax assets 471,761 164,382 Valuation allowance (418,227 ) (99,179 ) Total deferred tax assets 53,534 65,203 Deferred tax liabilities Equipment — (1,447 ) Intangible assets (35,985 ) (50,088 ) Goodwill (21,935 ) (17,085 ) Deferred tax liabilities (57,920 ) (68,620 ) Net deferred tax liability $ (4,386 ) $ (3,417 ) | |
Schedule of income tax expenses benefits | Schedule of income tax expenses benefits 2020 2019 Current tax expense $ — $ — Deferred tax expense (benefit) Federal 883 (73,661 ) State 87 (6,209 ) Total $ 970 $ (79,870 ) | |
Schedule of Effective tax rate | Schedule of Effective tax rate 2020 2019 Income tax benefit at federal statutory rate $ (239,001 ) $ (81,064 ) State and local income taxes net of federal tax benefit (27,523 ) (10,786 ) STI taxable income prior to merger (41,843 ) (48,417 ) Meals and entertainment 1,042 1,682 Incentive stock option expense 11,945 — PPP loan forgiveness income (9,765 ) — Rate differentials 919 (32,230 ) Research and development credits (13,852 ) (8,234 ) Change in valuation allowance 319,048 99,179 Income tax expense (benefit) $ 970 $ (79,870 ) | |
Schedule Of Components Of Income Tax Expense Benefit | Schedule of income tax expenses benefits 2020 2019 Current tax expense $ — $ — Deferred tax expense (benefit) Federal 883 (73,661 ) State 87 (6,209 ) Total $ 970 $ (79,870 ) | |
Schedule Of Deferred Tax Assets | Schedule of Deferred tax assets and liabilities 2020 2019 Deferred tax assets Net operating losses $ 445,673 $ 155,178 Research and development tax credit 22,086 8,234 Nonqualified stock options 2,351 — Business interest expense 983 970 Equipment 668 — Gross deferred tax assets 471,761 164,382 Valuation allowance (418,227 ) (99,179 ) Total deferred tax assets 53,534 65,203 Deferred tax liabilities Equipment — (1,447 ) Intangible assets (35,985 ) (50,088 ) Goodwill (21,935 ) (17,085 ) Deferred tax liabilities (57,920 ) (68,620 ) Net deferred tax liability $ (4,386 ) $ (3,417 ) | |
Four Cubed Management Llc [Member] | ||
Income Tax Disclosure [Abstract] | ||
Schedule of Deferred tax assets and liabilities | Schedule Of Deferred Tax Assets June 30, 2021 December 31, 2020 Deferred tax asset Accrued liabilities $ 5,500 $ 5,500 Deferred tax asset $ 5,500 $ 5,500 | |
Schedule of income tax expenses benefits | Schedule Of Components Of Income Tax Expense Benefit 2020 2019 Federal benefit at statutory rate $ 28,488 $ 86,551 State taxes, net of federal benefit 15,384 45,455 Deferred income taxes 20,000 (12,000 ) Total provision for income taxes $ 63,872 $ 120,006 Deferred tax assets consist of the following as of December 31, 2020 and 2019: 2020 2019 Deferred tax asset Accrued liabilities $ 5,500 $ 25,500 Deferred tax asset $ 5,500 $ 25,500 | |
Schedule Of Components Of Income Tax Expense Benefit | Schedule Of Components Of Income Tax Expense Benefit 2020 2019 Federal benefit at statutory rate $ 28,488 $ 86,551 State taxes, net of federal benefit 15,384 45,455 Deferred income taxes 20,000 (12,000 ) Total provision for income taxes $ 63,872 $ 120,006 Deferred tax assets consist of the following as of December 31, 2020 and 2019: 2020 2019 Deferred tax asset Accrued liabilities $ 5,500 $ 25,500 Deferred tax asset $ 5,500 $ 25,500 | |
Schedule Of Deferred Tax Assets | Schedule Of Federal Tax Six Months Ended June 30, 2021 2020 Federal benefit at statutory rate $ — $ 36,000 State taxes, net of federal benefit — 21,351 Deferred income taxes — (7,000 ) Total provision for income taxes $ — $ 50,351 Deferred tax assets consist of the following as of: Schedule Of Deferred Tax Assets June 30, 2021 December 31, 2020 Deferred tax asset Accrued liabilities $ 5,500 $ 5,500 Deferred tax asset $ 5,500 $ 5,500 | |
Schedule Of Deferred Tax Assets | Schedule Of Deferred Tax Assets June 30, 2021 December 31, 2020 Deferred tax asset Accrued liabilities $ 5,500 $ 5,500 Deferred tax asset $ 5,500 $ 5,500 |
Stock Option Plan (Tables)
Stock Option Plan (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Stock Option Plan | |
Schedule of estimates the volatility | Schedule of estimates the volatility 2020 Expected volatility 52.4 70.0 % Expected dividends 0.0 % Expected term (in years) 5.17 10 Risk-free rate 0.11 0.48 % Fair value of common stock on grant date $ 1.25 |
Schedule of weighted average | Schedule of weighted average Weighted-Average Aggregate Weighted-Average Remaining Intrinsic Options Shares Exercise Price Contractual Term Value Outstanding at January 1, 2020 — $ — Granted 360,000 1.28 Exercised — — Forfeited or expired — — Outstanding at December 31, 2020 360,000 $ 1.28 9.949 $ — Exercisable at December 31, 2020 131,250 $ 1.28 9.881 $ — |
Operating Segments (Tables)
Operating Segments (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Segment Reporting [Abstract] | ||
Schedule of reportable segments | Schedule of reportable segments Sports Gaming Affiliate Marketing Client Services Services Total Revenue $ 2,278,814 $ — $ 2,278,814 Adjusted EBITDA 356,032 (1,429,697 ) Adjusted for Depreciation and amortization 96,116 36,914 133,030 Interest income — (23,468 ) (23,468 ) Interest expense — 1,375 1,375 Income tax provision — 970 970 Loan forgiveness — (46,500 ) (46,500 ) Net income (loss) attributable to common shareholders $ 259,916 $ (1,398,988 ) $ (1,139,072 ) Summarized financial information for the Company's reportable segments for the year ended December 31, 2019, is shown below: Sports Gaming Affiliate Marketing Client Services Services Total Revenue $ 2,381,737 $ — $ 2,381,737 Adjusted EBITDA 259,531 (543,438 ) Adjusted for Depreciation and amortization 96,373 1,483 97,857 Interest income — (15,777 ) (15,777 ) Interest expense — 20,037 20,037 Income tax provision — (79,870 ) (79,870 ) Loan forgiveness — — — Net income (loss) attributable to common shareholders $ 163,158 $ (469,311 ) $ (306,153 ) | |
Schedule Of Reconciliation Of Revenue From Segments To Consolidated | Schedule Of Reconciliation Of Revenue From Segments To Consolidated Six months ended June 30 2021 2020 Customer A 37 % 30 % Customer B 24 % 19 % Customer C 12 % 11 % Customer D * 11 % * Revenue from customer was less than 10% for the six months ended June 30, 2021 | Schedule of consolidated revenues 2020 2019 Customer A 18 % 13 % Customer B 13 % 11 % Customer C 13 % 17 % Customer D 28 % 18 % Customer E * 25 % * Revenue from customer was less than 10% for the year ended December 31, 2020. |
Schedule Of Company’s reportable segments | Schedule Of Company’s reportable segments Sports Gaming Affiliate Client Services Marketing Services Total Revenue $ 1,528,425 $ 103,541 $ 1,631,966 Adjusted EBITDA 124,389 (1,324,804 ) (1,200,415 ) Adjusted for Stock compensation expense 17,073 46,160 63,233 Transaction and financing expenses — 883,990 883,990 Commitment fee expense — 18,851,927 18,851,927 Depreciation and amortization 46,734 48,147 94,881 Interest income — (5,862 ) (5,862 ) Interest expense — — — Income tax provision — 700 700 Net income (loss) attributable to common shareholders $ 60,582 $ (21,149,866 ) $ (21,089,284 ) Summarized financial information for the Company’s reportable segments for the six months ended June 30, 2020 is shown below: Sports Gaming Affiliate Client Services Marketing Services Total Revenue $ 1,349,825 $ — $ 1,349,825 Adjusted EBITDA 203,897 (403,004 ) (199,107 ) Adjusted for Stock compensation expense — — — Transaction and financing expenses — — — Commitment fee expense — — — Depreciation and amortization 47,357 1,336 48,693 Interest income — (13,734 ) (13,734 ) Interest expense — 1,375 1,375 Income tax provision — 150 150 Net income (loss) attributable to common shareholders $ 156,540 $ (392,131 ) $ (235,591 ) |
Loss Per Share (Tables)
Loss Per Share (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Loss Per Share | ||
Schedule of loss per share and weighted-average | Schedule Of Weighted Average Number Of Shares Six months ended June 30 2021 2020 Net loss $ (21,089,284 ) $ (235,441 ) Less: discount accretion on preferred stock (326,530 ) — Less: dividends accrued on preferred stock (79,160 ) — Net loss available to common shareholders $ (21,494,974 ) $ (235,441 ) Basic and diluted weighted-average shares outstanding 8,061,772 8,049,309 Basic and diluted net loss per share $ (2.67 ) $ (0.03 ) | Schedule of loss per share and weighted-average 2020 2019 Net loss $ (1,139,072 ) $ (306,153 ) Less: dividends accrued on preferred stock (3,507 ) — Less: discount accretion on preferred stock (13,321 ) — Net loss available to common shareholders $ (1,155,900 ) $ (306,153 ) Basic and diluted weighted-average shares outstanding 8,048,194 6,587,361 Basic and diluted net loss per share $ (0.14 ) $ (0.05 ) |
Schedule of computation of diluted shares outstanding | Schedule of computation of diluted shares outstanding 2020 2019 Stock options 360,000 — Preferred stock 921,941 — Stock subscriptions 2,633 65,266 Convertible debt — 941,250 Total 1,284,574 1,006,516 |
Additional Balance Sheet Info_2
Additional Balance Sheet Information (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Schedule Of Impaired Intangible Assets | Schedule Of Impaired Intangible Assets Accumulated Cost Amortization Net Balance, June 30, 2021 Customer relationships $ 160,000 $ 120,000 $ 40,000 Acquired technology 430,000 332,502 97,498 Internally developed software 507,251 80,726 426,525 Software in development 78,722 — 78,722 $ 1,175,973 $ 533,228 $ 642,745 Balance, December 31, 2020 Customer relationships $ 160,000 $ 108,571 $ 51,429 Acquired technology 430,000 304,645 125,355 Internally developed software 341,267 34,127 307,140 Software in development 124,672 — 124,672 $ 1,055,939 $ 447,343 $ 608,596 | Schedule of Intangible assets Accumulated Cost Amortization Net Balance, December 31, 2020 Customer relationships $ 160,000 $ 108,571 $ 51,429 Acquired technology 430,000 304,645 125,355 Internally developed software 341,267 34,127 307,140 Software in development 124,672 — 124,672 $ 1,055,939 $ 447,343 $ 608,596 Balance, December 31, 2019 Customer relationships $ 160,000 $ 85,714 $ 74,286 Acquired technology 430,000 248,930 181,070 Software in development 173,710 — 173,710 $ 763,710 $ 334,644 $ 429,066 |
Warrants (Tables)
Warrants (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Guarantees and Product Warranties [Abstract] | |
Schedule Of Warrants Options Pricing | Schedule Of Warrants Options Pricing Fair value of common stock 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 % |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Net Loss Per Share | ||
Schedule Of Weighted Average Number Of Shares | Schedule Of Weighted Average Number Of Shares Six months ended June 30 2021 2020 Net loss $ (21,089,284 ) $ (235,441 ) Less: discount accretion on preferred stock (326,530 ) — Less: dividends accrued on preferred stock (79,160 ) — Net loss available to common shareholders $ (21,494,974 ) $ (235,441 ) Basic and diluted weighted-average shares outstanding 8,061,772 8,049,309 Basic and diluted net loss per share $ (2.67 ) $ (0.03 ) | Schedule of loss per share and weighted-average 2020 2019 Net loss $ (1,139,072 ) $ (306,153 ) Less: dividends accrued on preferred stock (3,507 ) — Less: discount accretion on preferred stock (13,321 ) — Net loss available to common shareholders $ (1,155,900 ) $ (306,153 ) Basic and diluted weighted-average shares outstanding 8,048,194 6,587,361 Basic and diluted net loss per share $ (0.14 ) $ (0.05 ) |
Schedule Of Weighted Average Number Of Shares Diluted | Schedule Of Weighted Average Number Of Shares Diluted June 30, 2021 June 30, 2020 Stock options 360,000 15,000 Preferred stock 940,405 — Warrant 636,867 — Prepaid stock issuance — 275,000 Total 1,937,272 290,000 |
VARIABLE INTEREST ENTITIES (Tab
VARIABLE INTEREST ENTITIES (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Four Cubed Management Llc [Member] | ||
Schedule Of Variable Interest Entities | Schedule Of Variable Interest Entities June 30, 2021 December 31, 2020 Current assets $ 195,566 $ 823,575 Long-term assets — — Current liabilities $ (703,493 ) $ (700,746 ) Long-term liabilities — (39,184 ) | Schedule Of Variable Interest Entities 2020 2019 Current assets $ 823,575 $ 375,834 Long-term assets — — Current liabilities $ (700,746 ) $ (401,492 ) Long-term liabilities (39,184 ) — |
GENERAL (Tables)
GENERAL (Tables) - Mer Telemanagement Solutions Ltd [Member] | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2020 | |
Schedule of Financial Results of Discontinued Operations | Schedule of Financial Results of Discontinued Operations Six months ended June 30, 2021 2020 Unaudited Operating expenses (income) $ 26 $ 31 Operating loss (income) 26 31 Financial expenses (income), net 3 (30 ) Total net loss (income) from discontinued operations $ 29 $ 1 The major classes of assets and liabilities that were classified as discontinued operations were: Six months ended June 30, 2021 2020 Unaudited Cash and cash equivalents $ 180 $ 175 Property and equipment, net — 3 Total assets of discontinued operations 180 178 Trade payables 329 333 Accrued expenses and other liabilities 170 155 Total liabilities of discontinued operations $ 499 $ 488 | Schedule of Financial Results of Discontinued Operations Year ended December 31, 2020 2019 *)2018 Revenue $ - $ 301 $ 794 Cost of revenues - 255 1,034 Gross profit (loss) - 46 (240 ) Operating expenses (income) (58 ) (9 ) 310 Operating loss (income) (58 ) (55 ) 550 Financial income, net 21 2 16 Gain on disposal of the discontinued operations - - 250 Total net loss (income) from discontinued operations $ (37 ) $ (57 ) $ 284 |
Schedule of assets and liabilities | Schedule of assets and liabilities December 31, 2020 2019 Cash and cash equivalents $ 176 $ 170 Property and equipment, net 2 2 Total assets of discontinued operations 178 172 Trade payables 334 337 Accrued expenses and other liabilities 162 179 Total liabilities of discontinued operations $ 496 $ 516 |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Mer Telemanagement Solutions Ltd [Member] | |
Schedule of Property and Equipment, Depreciation Rates | Schedule of Property and Equipment, Depreciation Rates % Computers and peripheral equipment 33 Office furniture and equipment 3 20 7 Leasehold improvements Over the shorter of the lease term or useful economic life |
OTHER ACCOUNTS RECEIVABLE AND_2
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Mer Telemanagement Solutions Ltd [Member] | |
Schedule of Other Accounts Receivable and Prepaid Expenses | Schedule of Other Accounts Receivable and Prepaid Expenses December 31, 2020 2019 Government authorities $ 15 $ 27 Prepaid expenses 376 175 Others 8 34 Total $ 399 $ 236 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Mer Telemanagement Solutions Ltd [Member] | |
Schedule of Property and Equipment | Schedule of Property and Equipment December 31, 2020 2019 Cost: Computers and peripheral equipment $ 632 $ 627 Office furniture and equipment 66 66 698 693 Accumulated depreciation: Computers and peripheral equipment 599 567 Office furniture and equipment 64 64 Accumulated depreciation 663 631 Depreciated cost $ 35 $ 62 |
ACCRUED EXPENSES AND OTHER LI_2
ACCRUED EXPENSES AND OTHER LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Mer Telemanagement Solutions Ltd [Member] | |
Schedule of Accrued Expenses and Other Liabilities | Schedule of Accrued Expenses and Other Liabilities December 31, 2020 2019 Employees and payroll accruals $ 257 $ 307 Institutions and income tax payable 140 143 Accrued expenses 1,368 1,857 Related parties 4 10 Total $ 1,769 $ 2,317 |
TAXES ON INCOME (Tables)
TAXES ON INCOME (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Schedule of Deferred Tax Liabilities and Assets | Schedule of Deferred tax assets and liabilities 2020 2019 Deferred tax assets Net operating losses $ 445,673 $ 155,178 Research and development tax credit 22,086 8,234 Nonqualified stock options 2,351 — Business interest expense 983 970 Equipment 668 — Gross deferred tax assets 471,761 164,382 Valuation allowance (418,227 ) (99,179 ) Total deferred tax assets 53,534 65,203 Deferred tax liabilities Equipment — (1,447 ) Intangible assets (35,985 ) (50,088 ) Goodwill (21,935 ) (17,085 ) Deferred tax liabilities (57,920 ) (68,620 ) Net deferred tax liability $ (4,386 ) $ (3,417 ) |
Schedule of Reconciliation of the Statutory Tax Rate to the Effective Income Tax Rate | Schedule of Effective tax rate 2020 2019 Income tax benefit at federal statutory rate $ (239,001 ) $ (81,064 ) State and local income taxes net of federal tax benefit (27,523 ) (10,786 ) STI taxable income prior to merger (41,843 ) (48,417 ) Meals and entertainment 1,042 1,682 Incentive stock option expense 11,945 — PPP loan forgiveness income (9,765 ) — Rate differentials 919 (32,230 ) Research and development credits (13,852 ) (8,234 ) Change in valuation allowance 319,048 99,179 Income tax expense (benefit) $ 970 $ (79,870 ) |
Schedule of Components of Income Taxes | Schedule of income tax expenses benefits 2020 2019 Current tax expense $ — $ — Deferred tax expense (benefit) Federal 883 (73,661 ) State 87 (6,209 ) Total $ 970 $ (79,870 ) |
Mer Telemanagement Solutions Ltd [Member] | |
Schedule of Deferred Tax Liabilities and Assets | Schedule of Deferred Tax Liabilities and Assets December 31, 2020 2019 Deferred tax asset (liability): Tax loss carry-forwards $ 6,254 $ 6,089 Accruals for interest 283 283 R&D expenses 42 148 Allowances for credit losses and accruals for employee benefits 45 76 Depreciation and amortization 5 16 Deferred tax asset before valuation allowance 6,629 6,612 Goodwill (351 ) (746 ) Valuation allowance (6,107 ) (6,029 ) Deferred tax asset (liability), net $ 171 $ (163 ) |
Schedule of Reconciliation of the Statutory Tax Rate to the Effective Income Tax Rate | Schedule of Reconciliation of the Statutory Tax Rate to the Effective Income Tax Rate Year ended December 31, 2020 2019 2018 Loss before taxes on income, net, as reported in the statements of operations from continuing operations $ (2,103 ) $ (188 ) $ (840 ) Tax rates 23 % 23 % 23 % Theoretical tax benefit $ (484 ) $ (43 ) $ (193 ) Decrease in taxes resulting from: Non - deductible expenses (116 ) 38 37 Loss and timing differences for which no deferred tax was provided 264 (2 ) 187 Tax adjustment in respect of different tax rate of subsidiaries 9 3 6 Changes in provision for uncertain tax positions 2 8 9 Taxes on income, net, as reported in the statements of operations $ (325 ) $ 4 $ 46 |
Schedule of Income (Loss) Before Income Tax Domestic and Foreign | Schedule of Income (Loss) Before Income Tax Domestic and Foreign Year ended December 31, 2020 2019 2018 Domestic $ (320 ) $ (217 ) $ (803 ) Foreign (1,783 ) 29 (37 ) Loss before taxes on income $ (2,103 ) $ (188 ) $ (840 ) |
Schedule of Components of Income Taxes | Schedule of Components of Income Taxes Year ended December 31, 2020 2019 2018 Current $ 10 $ 22 $ 11 Deferred (335 ) (18 ) 35 Taxes in respect of previous years as a result of court ruling $ (325 ) $ 4 $ 46 Domestic $ - $ - $ - Foreign (325 ) 4 46 Taxes on income, net, as reported in the statements of operations $ (325 ) $ 4 $ 46 |
Reconciliation of Total Unrecognized Tax Benefits | Reconciliation of Total Unrecognized Tax Benefits 2020 2019 Balance as of beginning of the year $ 156 $ 148 Cumulative translation adjustments and other 2 8 Balance at the end of the year $ 158 $ 156 |
RELATED PARTY TRANSACTIONS AN_2
RELATED PARTY TRANSACTIONS AND BALANCES (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2020 | |
Mer Telemanagement Solutions Ltd [Member] | ||
Schedule of Related Party Balances and Transactions | Schedule of Related Party Balances and Transactions June 30, 2021 December 31, Unaudited Other accounts payable and accrued expenses $ 16 $ 15 2. Transactions with related parties: | Schedule of Related Party Balances and Transactions December 31, 2020 2019 Other accounts payable and accrued expenses (Note 5) $ 15 $ 10 2. Transactions with related parties: Year ended December 31, 2020 2019 2018 Amounts charged by related parties: Cost of revenues $ 47 $ 44 $ 37 Operating expenses 116 125 148 $ 163 $ 169 $ 185 |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2020 | |
Schedule of Stock Options Activity | Schedule of weighted average Weighted-Average Aggregate Weighted-Average Remaining Intrinsic Options Shares Exercise Price Contractual Term Value Outstanding at January 1, 2020 — $ — Granted 360,000 1.28 Exercised — — Forfeited or expired — — Outstanding at December 31, 2020 360,000 $ 1.28 9.949 $ — Exercisable at December 31, 2020 131,250 $ 1.28 9.881 $ — | |
Mer Telemanagement Solutions Ltd [Member] | ||
Schedule of Stock Options Activity | Schedule of Stock Options Activity Number of options Weighted-average exercise price Weighted- average remaining contractual term (in years) Aggregate intrinsic value Outstanding at January 1, 2021 58,334 $ 4.32 7.76 $ — Granted — $ — — $ — Exercised — $ — — $ — Expired and forfeited (58,334 ) $ (4.32 ) 7.76 $ — Outstanding at June 30, 2021 — $ — — $ — Exercisable at June 30, 2021 — $ — — $ — | Schedule of Stock Options Activity Number of options Weighted-average exercise price Weighted- average remaining contractual term (in years) Aggregate intrinsic value Outstanding at January 1, 2020 116,667 $ 2.16 7.76 $ - Granted - $ - - $ - Exercised - $ - - $ - Expired and forfeited - $ - - $ - Outstanding at December 31, 2020 116,667 $ 2.16 7.76 $ - Exercisable at December 31, 2020 87,500 $ 2.16 7.76 $ - |
Schedule of Stock-based Compensation Expenses | Schedule of Stock-based Compensation Expenses Six months ended 30 June 2021 2020 General and administrative — 14 $ — $ 14 | Schedule of Stock-based Compensation Expenses Year ended December 31, 2020 2019 2018 Research and development $ - $ - $ 1 General and administrative 21 47 89 $ 21 $ 47 $ 90 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | Apr. 15, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2021 | Jun. 26, 2021 | Nov. 01, 2020 | Oct. 31, 2020 | Jun. 30, 2020 | Jan. 02, 2020 | Oct. 31, 2019 |
Shares issued | 4,061,141 | |||||||||
Depreciation expense | $ 20,331 | $ 15,952 | ||||||||
Capitalized cost | 292,229 | 173,710 | ||||||||
Prepaid advance | 0 | 124,563 | ||||||||
Allocation of expenses | $ 2,211,303 | $ 2,297,723 | ||||||||
Issuance of stock subscriptions | 65,266 | 130,532 | ||||||||
Issuance of stock subscriptions value | $ 2,633 | $ 5,266 | ||||||||
Issuance of convertible notes | $ 1,882,500 | $ 200,000 | $ 550,000 | |||||||
Interest rate | 4.00% | |||||||||
Price per share | $ 0.63 | $ 6.14 | $ 6.80 | $ 2 | ||||||
Proceeds from loan | $ 46,500 | |||||||||
Loan forgiveness | 46,500 | |||||||||
Increasing net cash from financing activities | $ 750,000 | |||||||||
Paycheck Protection Program Loan [Member] | ||||||||||
Interest rate | 1.00% | |||||||||
Proceeds from loan | $ 46,500 | |||||||||
Related Party [Member] | ||||||||||
Issuance of stock subscriptions value | $ 50,000 | |||||||||
Parent Company [Member] | ||||||||||
Prepaid advance | $ 227,807 | |||||||||
Sports Hub Games Network [Member] | ||||||||||
Percentage of ownership | 83.00% |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Jan. 02, 2019 | Dec. 31, 2018 | |
Revenues | $ 1,631,966 | $ 1,349,825 | $ 2,278,814 | $ 2,381,737 | ||
Accounts receivable | 368,371 | 324,302 | 730,890 | $ 685,111 | ||
Unbilled revenue (reported in accounts receivable) | 131,178 | 31,610 | 183,002 | 256,252 | ||
Contract assets | 90,592 | 275,337 | 195,516 | 144,364 | $ 144,364 | |
Deferred revenue | (120,611) | (406,508) | (816,672) | $ (466,045) | ||
Software License [Member] | ||||||
Revenues | 90,600 | 142,600 | 587,750 | |||
Softwareas Serviceand Other [Member] | ||||||
Revenues | $ 1,631,966 | $ 1,259,225 | $ 2,136,214 | $ 1,793,987 |
Revenue Recognition (Details 1)
Revenue Recognition (Details 1) - USD ($) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenue Recognition | |||
Contract assets, beginning | $ 275,337 | $ 195,516 | $ 144,364 |
Labor costs expensed | (392,321) | (391,423) | (298,866) |
Labor costs deferred | 207,576 | 471,244 | 350,018 |
Contract assets, ending | $ 90,592 | $ 275,337 | $ 195,516 |
Revenue Recognition (Details Na
Revenue Recognition (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenue Recognition | |||
Performance obligations unstatisfied | $ 2,371,619 | $ 1,610,473 | |
Performance obligations satisfied | $ 0 | $ 0 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Finite-Lived Intangible Assets [Line Items] | |||
Cost | $ 1,175,973 | $ 1,055,939 | $ 763,710 |
Accumulated Amortization | 533,228 | 447,343 | 334,644 |
Net | 642,745 | 608,596 | 429,066 |
Customer Relationships [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Cost | 160,000 | 160,000 | 160,000 |
Accumulated Amortization | 120,000 | 108,571 | 85,714 |
Net | 40,000 | 51,429 | 74,286 |
Technology-Based Intangible Assets [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Cost | 430,000 | 430,000 | 430,000 |
Accumulated Amortization | 332,502 | 304,645 | 248,930 |
Net | 97,498 | 125,355 | 181,070 |
Internally Developed Software [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Cost | 507,251 | 341,267 | |
Accumulated Amortization | 80,726 | 34,127 | |
Net | 426,525 | 307,140 | |
Software Development [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Cost | 78,722 | 124,672 | 173,710 |
Accumulated Amortization | |||
Net | $ 78,722 | $ 124,672 | $ 173,710 |
Intangible Assets (Details 1)
Intangible Assets (Details 1) | Dec. 31, 2020USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2021 | $ 146,824 |
2022 | 146,824 |
2023 | 87,896 |
2024 | 68,253 |
2025 | 34,127 |
Total | $ 483,924 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 85,885 | $ 39,286 | $ 112,699 | $ 81,905 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 1 Months Ended | 6 Months Ended | 12 Months Ended | |||
Nov. 30, 2020 | Oct. 31, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Related Party Transaction [Line Items] | ||||||
Cash | $ 411,614 | $ 2,585,180 | $ 1,801,230 | |||
Payment for insurance coverage | 12,603 | $ 9,165 | 18,330 | 24,357 | ||
Rent expense | 19,200 | 19,200 | 38,400 | 38,400 | ||
Convertible promissory note | $ 200,000 | $ 550,000 | 1,882,500 | |||
Maturity date | Jun. 30, 2021 | |||||
Conversion of stock price | $ 2 | |||||
Repayment of debt | $ 750,000 | $ 750,000 | 1,811,460 | |||
Related Party [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Cash | 1,801,230 | $ 2,585,180 | ||||
Cash | $ 411,614 | $ 2,585,180 |
Leases (Details)
Leases (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | ||
Operating lease cost | $ 38,400 | $ 38,400 |
Leases (Details 1)
Leases (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | ||
Operating cash flows from operating leases | $ 38,400 | $ 38,400 |
Leases (Details 2)
Leases (Details 2) | Dec. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Weighted-average remaining lease term | 72 months | 84 months |
Weighted-average discount rate | 6.00% | 6.00% |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Jan. 01, 2019 |
Leases [Abstract] | ||||
Right-of-use-asset | $ 179,510 | $ 193,086 | $ 219,050 | $ 243,505 |
Convertible Preferred Stock (De
Convertible Preferred Stock (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Dec. 23, 2020 | Dec. 31, 2020 | Jun. 30, 2021 | Dec. 31, 2019 | |
Interest rate | 8.00% | |||
Liquidation | $ 1,000 | |||
Conversion price | 21,693 | |||
Preferred Stock shareholder | $ 5,000,000 | |||
Preferred stock redemption | 12.00% | |||
8% Redeemable convertible preferred stock [Member] | ||||
Temporary equity, shares authorized | 9,000 | 9,000 | ||
Temporary equity, per share | $ 0.01 | $ 0.01 | ||
Conversion of preferred stock | 4,150,000 | |||
Temporary equity, shares issued | 2,000 | 2,000 | 2,000 | 2,000 |
Preferred Stock | $ 2,000,000 |
Fair Value (Details)
Fair Value (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Commitment Fee | $ 19,428,927 | $ 577,000 |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Commitment Fee | 0 | |
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Commitment Fee | 0 | |
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Commitment Fee | $ 3 | $ 577,000 |
Fair Value (Details 1)
Fair Value (Details 1) - $ / shares | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Jun. 26, 2021 | Jan. 02, 2020 | |
Fair Value Disclosures [Abstract] | |||||
Probability of a Going Public Transaction | 90.00% | 50.00% | |||
Volatility | 58.20% | 50.60% | 58.50% | ||
Stock price of public company at the time of measurement | $ 0.627 | ||||
Date of a Going Public Transaction | Jul. 31, 2021 | Apr. 30, 2021 | |||
Pro-forma common shares outstanding at Going Public Transaction date | 23,366,319 | 52,077,000 | |||
Stock price of public company at the time of measurement | $ 6.14 | $ 0.63 | $ 6.80 | $ 2 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Net operating losses | $ 445,673 | $ 155,178 | ||
Research and development tax credit | 22,086 | 8,234 | ||
Nonqualified stock options | 2,351 | |||
Business interest expense | 983 | 970 | ||
Equipment | 668 | |||
Gross deferred tax assets | 471,761 | 164,382 | ||
Valuation allowance | (418,227) | (99,179) | ||
Total deferred tax assets | 53,534 | 65,203 | ||
Deferred tax liabilities | ||||
Equipment | (1,447) | |||
Intangible assets | (35,985) | (50,088) | ||
Goodwill | (21,935) | (17,085) | ||
Deferred tax liabilities | (57,920) | (68,620) | ||
Net deferred tax liability | (4,386) | (3,417) | ||
Federal benefit at statutory rate | (239,001) | (81,064) | ||
State taxes, net of federal benefit | (27,523) | (10,786) | ||
Deferred tax expense (benefit) | $ 700 | $ 150 | 970 | (79,870) |
Tax benefit (taxes on income), net | (700) | (150) | (970) | 79,870 |
Four Cubed Management Llc [Member] | ||||
Federal benefit at statutory rate | 36,000 | 28,488 | 86,551 | |
State taxes, net of federal benefit | 21,351 | 15,384 | 45,455 | |
Deferred tax expense (benefit) | (7,000) | 20,000 | (12,000) | |
Tax benefit (taxes on income), net | $ 50,351 | 63,872 | 120,006 | |
Deferred tax asset | ||||
Accrued liabilities | 5,500 | 5,500 | 25,500 | |
Deferred tax asset | $ 5,500 | $ 5,500 | $ 25,500 |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Current tax expense | ||||
Federal | 883 | (73,661) | ||
State | 87 | (6,209) | ||
Total | $ 700 | $ 150 | 970 | (79,870) |
Four Cubed Management Llc [Member] | ||||
Income Tax Disclosure [Abstract] | ||||
Total | $ (50,351) | (63,872) | (120,006) | |
Deferred tax asset | ||||
Accrued liabilities | 5,500 | 5,500 | 25,500 | |
Deferred tax asset | $ 5,500 | $ 5,500 | $ 25,500 |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Income tax benefit at federal statutory rate | $ (239,001) | $ (81,064) | ||
State and local income taxes net of federal tax benefit | (27,523) | (10,786) | ||
STI taxable income prior to merger | (41,843) | (48,417) | ||
Meals and entertainment | 1,042 | 1,682 | ||
Incentive stock option expense | 11,945 | |||
PPP loan forgiveness income | (9,765) | |||
Rate differentials | 919 | (32,230) | ||
Research and development credits | (13,852) | (8,234) | ||
Change in valuation allowance | 319,048 | 99,179 | ||
Provision for (Benefit from) Income Taxes | $ 700 | $ 150 | $ 970 | $ (79,870) |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Operating loss carryforward federal | $ 1,798,433 | |||
Operating loss carryforward state | 1,200,258 | |||
Research and development tax credits | $ 22,086 | $ 8,234 | ||
Effective tax rate | 0.00% | 0.10% |
Variable Interest Entity (Detai
Variable Interest Entity (Details Narrative) | Dec. 31, 2019USD ($) |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principal amount | $ 282,000 |
Concentrations (Details Narrati
Concentrations (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2021 | |
Concentration Risk [Line Items] | |||
Due from customers | $ 316,302 | $ 605,640 | $ 440,780 |
Revenue Benchmark [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 72.00% | 84.00% |
Stock Option Plan (Details)
Stock Option Plan (Details) - $ / shares | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Expected volatility | 58.20% | 50.60% | 58.50% |
Expected dividends | 0.00% | 0.00% | |
Expected term (in years) | 5 years | ||
Risk-free rate | 0.42% | ||
Fair value of common stock on grant date | $ 2.36 | $ 1.25 | |
Minimum [Member] | |||
Expected volatility | 52.40% | ||
Expected term (in years) | 5 years 2 months 1 day | ||
Risk-free rate | 0.11% | ||
Maximum [Member] | |||
Expected volatility | 70.00% | ||
Expected term (in years) | 10 years | ||
Risk-free rate | 0.48% |
Stock Option Plan (Details 1)
Stock Option Plan (Details 1) | 12 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Stock Option Plan | |
Option outstanding, beginning | shares | |
Weighted average exercise price, beginning | $ / shares | |
Granted | shares | 360,000 |
Granted | $ / shares | $ 1.28 |
Exercised | shares | |
Exercised | $ / shares | |
Forfeited or expired | shares | |
Forfeited or expired | $ / shares | |
Option outstanding, ending | shares | 360,000 |
Weighted average exercise price, ending | $ / shares | $ 1.28 |
Weighted average remaining contractual term | 9 years 11 months 11 days |
Exercisable | shares | 131,250 |
Exercisable | $ / shares | $ 1.28 |
Weighted average remaining contractual term, exercisable | 9 years 10 months 17 days |
Stock Option Plan (Details Narr
Stock Option Plan (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Stock Option Plan | ||||
Option granted | 360,000 | |||
Stock-based compensation expense | $ 63,233 | $ 67,070 | ||
Unamortized stock option expense | $ 132,722 |
Operating Segment (Details)
Operating Segment (Details) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenue from External Customer [Line Items] | ||||
Revenues | $ 1,631,966 | $ 1,349,825 | $ 2,278,814 | $ 2,381,737 |
Adjusted EBITDA | (1,200,415) | (199,107) | ||
Depreciation and amortization | 94,881 | 48,693 | 133,030 | 97,857 |
Interest income | (5,862) | (13,734) | (23,468) | (15,777) |
Interest expense | 1,375 | 20,037 | ||
Provision for (Benefit from) Income Taxes | 700 | 150 | 970 | (79,870) |
Loan forgiveness | (46,500) | |||
Net income (loss) attributable to common shareholders | (1,139,072) | |||
Loan forgiveness | 46,500 | |||
Net income (loss) attributable to common shareholders | (21,494,974) | (235,441) | (1,155,900) | (306,153) |
Sports Gaming Client Services [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Revenues | 1,528,425 | 1,349,825 | 2,278,814 | 2,381,737 |
Adjusted EBITDA | 124,389 | 203,897 | 356,032 | 259,531 |
Depreciation and amortization | 46,734 | 47,357 | 96,116 | 96,373 |
Interest income | ||||
Interest expense | ||||
Provision for (Benefit from) Income Taxes | ||||
Loan forgiveness | ||||
Net income (loss) attributable to common shareholders | 259,916 | |||
Loan forgiveness | ||||
Net income (loss) attributable to common shareholders | 163,158 | |||
Affiliate Marketing Services [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Revenues | 103,541 | |||
Adjusted EBITDA | (1,324,804) | (403,004) | (1,429,697) | (543,438) |
Depreciation and amortization | 48,147 | 1,336 | 36,914 | 1,483 |
Interest income | (5,862) | (13,734) | (23,468) | (15,777) |
Interest expense | 1,375 | 20,037 | ||
Provision for (Benefit from) Income Taxes | $ 700 | $ 150 | 970 | (79,870) |
Loan forgiveness | (46,500) | |||
Net income (loss) attributable to common shareholders | $ (1,398,988) | |||
Loan forgiveness | ||||
Net income (loss) attributable to common shareholders | $ (469,311) |
Operating Segment (Details 1)
Operating Segment (Details 1) | Jun. 30, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2019 |
Customer A [Member] | ||||
Revenue percentage | 37.00% | 18.00% | 30.00% | 13.00% |
Customer B [Member] | ||||
Revenue percentage | 24.00% | 13.00% | 19.00% | 11.00% |
Customer C [Member] | ||||
Revenue percentage | 12.00% | 13.00% | 11.00% | 17.00% |
Customer D [Member] | ||||
Revenue percentage | 28.00% | 18.00% | ||
Customer E [Member] | ||||
Revenue percentage | 11.00% | 25.00% |
Loss Per Share (Details)
Loss Per Share (Details) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Loss Per Share | ||||
Net loss | $ (21,089,284) | $ (235,591) | $ (1,139,072) | $ (306,153) |
Less: dividends accrued on preferred stock | (326,530) | (3,507) | ||
Less: discount accretion on preferred stock | (79,160) | (13,321) | ||
Net loss available to common shareholders | $ (21,494,974) | $ (235,441) | $ (1,155,900) | $ (306,153) |
Basic and diluted weighted-average shares outstanding | 8,061,772 | 8,049,309 | 8,048,194 | 6,587,361 |
Basic and diluted net loss per share | $ (2.67) | $ (0.03) | $ (0.14) | $ (0.05) |
Loss Per Share (Details 1)
Loss Per Share (Details 1) - shares | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total dilutive shares outstanding | 1,937,272 | 290,000 | 1,284,574 | 1,006,516 |
Equity Option [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total dilutive shares outstanding | 360,000 | 15,000 | 360,000 | |
Preferred Stock [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total dilutive shares outstanding | 940,405 | 921,941 | ||
Stock Subscriptions [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total dilutive shares outstanding | 2,633 | 65,266 | ||
Convertible Debt [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total dilutive shares outstanding | 941,250 |
Additional Balance Sheet Info_3
Additional Balance Sheet Information (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Finite-Lived Intangible Assets [Line Items] | |||
Cost | $ 1,175,973 | $ 1,055,939 | $ 763,710 |
Accumulated Amortization | 533,228 | 447,343 | 334,644 |
Net | 642,745 | 608,596 | 429,066 |
Customer Relationships [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Cost | 160,000 | 160,000 | 160,000 |
Accumulated Amortization | 120,000 | 108,571 | 85,714 |
Net | 40,000 | 51,429 | 74,286 |
Technology-Based Intangible Assets [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Cost | 430,000 | 430,000 | 430,000 |
Accumulated Amortization | 332,502 | 304,645 | 248,930 |
Net | 97,498 | 125,355 | 181,070 |
Internally Developed Software [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Cost | 507,251 | 341,267 | |
Accumulated Amortization | 80,726 | 34,127 | |
Net | 426,525 | 307,140 | |
Software Development [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Cost | 78,722 | 124,672 | 173,710 |
Accumulated Amortization | |||
Net | $ 78,722 | $ 124,672 | $ 173,710 |
Additional Balance Sheet Info_4
Additional Balance Sheet Information (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Accumulated depreciation | $ 67,094 | $ 58,098 | ||
Amortization expense | $ 85,885 | $ 39,286 | $ 112,699 | $ 81,905 |
Convertible Preferred Stock a_2
Convertible Preferred Stock and Subsequent Events (Details Narrative) - USD ($) | Jun. 15, 2021 | Jul. 23, 2021 | Dec. 23, 2020 | Jun. 30, 2021 | Dec. 31, 2020 | Jul. 26, 2021 | Dec. 31, 2019 |
Interest rate | 8.00% | ||||||
Preferred Stock shareholder | $ 5,000,000 | ||||||
Preferred stock redemption | 12.00% | ||||||
Number of shares new issues, value | $ 6,000,000 | $ 6,000,000 | |||||
Number of shares new issues, shares | 2,765,824 | ||||||
8% Redeemable convertible preferred stock [Member] | |||||||
Temporary equity, shares authorized | 9,000 | 9,000 | |||||
Temporary equity, per share | $ 0.01 | $ 0.01 | |||||
Conversion of preferred stock | 4,150,000 | ||||||
Temporary equity, shares issued | 2,000 | 2,000 | 2,000 | 2,000 | |||
Preferred Stock | $ 2,000,000 | ||||||
Series A Preferred Stock [Member] | |||||||
Number of shares new issues, shares | 2,765,824 | ||||||
Series B Preferred Stock [Member] | |||||||
Number of shares new issues, value | $ 6,000,000 | ||||||
Liquidation price per share | $ 2.1693 | ||||||
Series A 1 Convertible Preferred Stock [Member] | |||||||
Preferred stock shares authorized | 525,016 | ||||||
Series A 1 Preferred Stock [Member] | |||||||
Liquidation price per share | $ 2.1693 | ||||||
Series B Convertible Preferred Stock [Member] | |||||||
Preferred stock shares authorized | 2,765,824 |
Warrants (Details)
Warrants (Details) - $ / shares | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Guarantees and Product Warranties [Abstract] | |||
Fair value of common stock on grant date | $ 2.36 | $ 1.25 | |
Exercise price | $ 0.01 | ||
Expected volatility | 58.20% | 50.60% | 58.50% |
Expected dividends | 0.00% | 0.00% | |
Expected term (in years) | 5 years | ||
Risk-free rate | 0.42% |
Fair values (Details)
Fair values (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Defined Benefit Plan Disclosure [Line Items] | ||
Commitment Fee | $ 19,428,927 | $ 577,000 |
Fair Value, Inputs, Level 3 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Commitment Fee | $ 3 | $ 577,000 |
Operatings segments (Details)
Operatings segments (Details) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenues | $ 1,631,966 | $ 1,349,825 | $ 2,278,814 | $ 2,381,737 |
Adjusted EBITDA | (1,200,415) | (199,107) | ||
Stock-based compensation expense | 63,233 | 67,070 | ||
Transaction and financing expenses | 883,990 | |||
Commitment fee expense | 18,851,927 | |||
Depreciation and amortization | 94,881 | 48,693 | 133,030 | 97,857 |
Interest income | (5,862) | (13,734) | (23,468) | (15,777) |
Interest expense | 1,375 | |||
Provision for (Benefit from) Income Taxes | 700 | 150 | 970 | (79,870) |
Net income (loss) attributable to common shareholders | (21,089,284) | (235,591) | ||
Sports Gaming Client Services [Member] | ||||
Revenues | 1,528,425 | 1,349,825 | 2,278,814 | 2,381,737 |
Adjusted EBITDA | 124,389 | 203,897 | 356,032 | 259,531 |
Stock-based compensation expense | 17,073 | |||
Transaction and financing expenses | ||||
Commitment fee expense | ||||
Depreciation and amortization | 46,734 | 47,357 | 96,116 | 96,373 |
Interest income | ||||
Interest expense | ||||
Provision for (Benefit from) Income Taxes | ||||
Net income (loss) attributable to common shareholders | 60,582 | 156,540 | ||
Affiliate Marketing Services [Member] | ||||
Revenues | 103,541 | |||
Adjusted EBITDA | (1,324,804) | (403,004) | (1,429,697) | (543,438) |
Stock-based compensation expense | 46,160 | |||
Transaction and financing expenses | 883,990 | |||
Commitment fee expense | 18,851,927 | |||
Depreciation and amortization | 48,147 | 1,336 | 36,914 | 1,483 |
Interest income | (5,862) | (13,734) | (23,468) | (15,777) |
Interest expense | 1,375 | |||
Provision for (Benefit from) Income Taxes | 700 | 150 | $ 970 | $ (79,870) |
Net income (loss) attributable to common shareholders | $ (21,149,866) | $ (392,131) |
Operatings Segments (Details 1)
Operatings Segments (Details 1) | Jun. 30, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2019 |
Customer A [Member] | ||||
Revenue percentage | 37.00% | 18.00% | 30.00% | 13.00% |
Customer B [Member] | ||||
Revenue percentage | 24.00% | 13.00% | 19.00% | 11.00% |
Customer C [Member] | ||||
Revenue percentage | 12.00% | 13.00% | 11.00% | 17.00% |
Customer E [Member] | ||||
Revenue percentage | 11.00% | 25.00% |
Revenue Recognition (Details 2)
Revenue Recognition (Details 2) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Jan. 02, 2019 | Dec. 31, 2018 |
Guarantees and Product Warranties [Abstract] | |||||
Accounts receivable | $ 368,371 | $ 324,302 | $ 730,890 | $ 685,111 | |
Unbilled revenue (reported in accounts receivable) | 131,178 | 31,610 | 183,002 | 256,252 | |
Contract assets | 90,592 | 275,337 | 195,516 | 144,364 | $ 144,364 |
Deferred revenue | $ (120,611) | $ (406,508) | $ (816,672) | $ (466,045) |
Warrants (Details Narrative)
Warrants (Details Narrative) - USD ($) | Jun. 15, 2021 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 26, 2021 | Feb. 01, 2021 | Dec. 31, 2020 | Jan. 02, 2020 | Dec. 31, 2019 |
Guarantees and Product Warranties [Abstract] | ||||||||
Purchase of warrants | 636,867 | |||||||
Warrant grant date fair value | $ 2,001,677 | |||||||
Share price | $ 6.14 | $ 6.80 | $ 0.63 | $ 2 | ||||
Issuance of ordinary shares, shares | 2,765,824 | |||||||
Issuance of ordinary shares | $ 6,000,000 | $ 6,000,000 | ||||||
Commitment fee expense | 18,851,927 | |||||||
Due from customers | $ 440,780 | $ 316,302 | $ 605,640 |
Net Loss Per Share (Details)
Net Loss Per Share (Details) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Net Loss Per Share | ||||
Net loss | $ (21,089,284) | $ (235,441) | ||
Less: discount accretion on preferred stock | (326,530) | $ (3,507) | ||
Less: dividends accrued on preferred stock | (79,160) | (13,321) | ||
Net loss available to common shareholders | $ (21,494,974) | $ (235,441) | $ (1,155,900) | $ (306,153) |
Basic and diluted weighted-average shares outstanding | 8,061,772 | 8,049,309 | 8,048,194 | 6,587,361 |
Basic and diluted net loss per share | $ (2.67) | $ (0.03) | $ (0.14) | $ (0.05) |
Net Loss Per Share (Details 1)
Net Loss Per Share (Details 1) - shares | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total dilutive shares outstanding | 1,937,272 | 290,000 | 1,284,574 | 1,006,516 |
Equity Option [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total dilutive shares outstanding | 360,000 | 15,000 | 360,000 | |
Preferred Stock [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total dilutive shares outstanding | 940,405 | 921,941 | ||
Warrant [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total dilutive shares outstanding | 636,867 | |||
Prepaid Stock Issuance [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total dilutive shares outstanding | 275,000 |
Subsequent Event (Details Narra
Subsequent Event (Details Narrative) - USD ($) | 1 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Dec. 31, 2021 | Nov. 16, 2021 | Jul. 26, 2021 | Jun. 30, 2021 | Dec. 31, 2020 | Jun. 26, 2021 | Nov. 01, 2020 | Jan. 02, 2020 | |
Subsequent Event [Line Items] | ||||||||
Issuance of ordinary shares, shares | 2,765,824 | |||||||
Stock options, grants | 360,000 | |||||||
Price per share | $ 6.14 | $ 0.63 | $ 6.80 | $ 2 | ||||
Proceeds from shares | 4,061,141 | |||||||
Forecast [Member] | Securities Purchase Agreement [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Issuance of ordinary shares, shares | 1,413,075 | |||||||
Price per share | $ 3.75 | |||||||
Proceeds from shares | 1,253,592 | |||||||
Warrant price | $ 3.74 | |||||||
Exercisable price | 0.01 | |||||||
Forecast [Member] | Securities Purchase Agreement [Member] | Warrant [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Exercisable price | $ 4.50 | |||||||
Forecast [Member] | Securities Purchase Agreement [Member] | Common Stock [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Proceeds from shares | 2,666,667 | |||||||
Forecast [Member] | Asset Purchase Agreement [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Asset purchase agreement, description | (i) at closing, a cash payment of $5,950,000; (ii) effective as of the closing, 606,114 ordinary shares of the combined company; (iii) within 45 days subsequent to closing, a cash payment of $300,000; and (iv) an amount of $250,000 that will be retained by the combined company for indemnity purposes and will be released 180 days after closing if no indemnity claims are made within that period. Additionally, subsequent to closing, the combined company agreed to issue and deliver up to an additional 587,747 ordinary shares of the combined company (“Earnout Shares”). The combined company’s obligation to issue and deliver the Earnout Shares is subject to the achievement of certain milestones relating to the development of the Seller’s technologies and revenue and gross margin targets, as described in the Asset Purchase Agreement. | |||||||
Subsequent Event [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Percentage of ownership | 10.00% | |||||||
Subsequent events, description | Company’s Series A Preferred Stock were exchanged for 1,230,956 shares of Series A-1 Preferred Stock in the combined company and the warrant vested and became fully exercisable into 850,330 ordinary shares of the combined company. Additionally, the holder of the Series A Preferred Stock received 700,989 Series A-1 Preferred Stock in the combined company to settle the commitment fee and 3,692,862 shares of Series B Preferred Stock in the combined company in exchange for $6,000,000 to settle the second tranche commitment. Subsequent to the merger, the holder of the Series A-1 Preferred Stock and Series B Preferred Stock converted 1,931,945 and 3,568,055 shares, respectively, to ordinary shares of the combined company, each at a 1:1 ratio. | |||||||
Subsequent Event [Member] | 2021 Equity Incentive Plan [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Issuance of ordinary shares, shares | 2,336,632 | |||||||
Stock options, grants | 1,329,500 | |||||||
Unrecognized compensation costs | $ 3,275,470 | |||||||
Sharplink [Member] | Subsequent Event [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Percentage of ownership | 86.00% |
BUSINESS AND SIGNIFICANT ACCO_3
BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Other expense | $ 12,603 | $ 9,165 | $ 18,330 | $ 24,357 |
Four Cubed Management Llc [Member] | ||||
Cash equivalents | 0 | 0 | 0 | |
Uninsured cash | 229,000 | 800,000 | 345,000 | |
Allowance for doubtful accounts | 21,000 | 20,000 | 89,000 | |
Foreign currency transaction gains | 17,000 | 18,000 | 80,000 | 32,000 |
Other income | 31,000 | 76,000 | ||
Other expense | 7,200 | |||
General and administrative expenses | $ 14,000 | 4,500 | ||
Other expense | $ 13,500 | $ 650 | $ 33,108 |
CONCENTRATIONS, RISKS UNCERTA_2
CONCENTRATIONS, RISKS UNCERTAINTIES (Details Narrative) | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenue Benchmark [Member] | |||||
Concentration Risk, Percentage | 72.00% | 84.00% | |||
Revenue Benchmark [Member] | Four Cubed Management Llc [Member] | |||||
Concentration Risk, Percentage | 86.00% | 87.00% | 92.00% | 87.00% | |
Accounts Receivable [Member] | Four Cubed Management Llc [Member] | |||||
Concentration Risk, Percentage | 72.00% | 88.00% | 88.00% | 81.00% | |
Accounts Receivable [Member] | Four Cubed Management Llc [Member] | Customer [Member] | |||||
Concentration Risk, Percentage | 12.00% |
LONG-TERM DEBT (Details Narrati
LONG-TERM DEBT (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2019 | |
Interest rate | 8.00% | |||
Four Cubed Management Llc [Member] | ||||
Long-term debt | $ 39,184 | $ 39,184 | ||
Interest rate | 1.00% | 1.00% |
VARIABLE INTEREST ENTITIES (Det
VARIABLE INTEREST ENTITIES (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Current liabilities | $ (577,000) | ||
Four Cubed Management Llc [Member] | |||
Current assets | $ 195,566 | 823,575 | 375,834 |
Long-term assets | |||
Current liabilities | (703,493) | (700,746) | (401,492) |
Long-term liabilities | $ (39,184) |
GENERAL (Schedule of Statements
GENERAL (Schedule of Statements of Income and Balance Sheets) (Details) - Mer Telemanagement Solutions Ltd [Member] - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | [1] | |
Revenue | $ 301 | $ 794 | ||||
Cost of revenues | 255 | 1,034 | ||||
Gross profit (loss) | 46 | (240) | ||||
Operating expenses (income) | $ 26 | $ 31 | (58) | (9) | 310 | |
Operating loss (income) | 26 | 31 | (58) | (55) | 550 | |
Financial expenses (income), net | 3 | (30) | 21 | 2 | 16 | |
Gain on disposal of the discontinued operations | 250 | |||||
Total net loss (income) from discontinued operations | 29 | 1 | (37) | (57) | 284 | |
Total net loss (income) from discontinued operations | 29 | 1 | (37) | (57) | $ 284 | |
Cash and cash equivalents | 180 | 175 | 176 | 170 | ||
Property and equipment, net | 3 | 2 | 2 | |||
Total assets of discontinued operations | 180 | 178 | 178 | 172 | ||
Trade payables | 329 | 333 | 334 | 337 | ||
Accrued expenses and other liabilities | 170 | 155 | 162 | 179 | ||
Total liabilities of discontinued operations | $ 499 | $ 488 | $ 496 | $ 516 | ||
[1] | Represent the results of the discontinued operations until their disposal. |
GENERAL (Schedule of Statemen_2
GENERAL (Schedule of Statements of Income and Balance Sheets) (Details-1) - Mer Telemanagement Solutions Ltd [Member] - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2019 |
Cash and cash equivalents | $ 180 | $ 176 | $ 175 | $ 170 |
Property and equipment, net | 2 | 3 | 2 | |
Total assets of discontinued operations | 180 | 178 | 178 | 172 |
Trade payables | 329 | 334 | 333 | 337 |
Accrued expenses and other liabilities | 170 | 162 | 155 | 179 |
Total liabilities of discontinued operations | $ 499 | $ 496 | $ 488 | $ 516 |
GENERAL (Details Narrative)
GENERAL (Details Narrative) - USD ($) | Jun. 15, 2021 | Sep. 06, 2018 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Apr. 01, 2015 |
Restructuring Cost and Reserve [Line Items] | ||||||||
Issuance of ordinary shares, shares | 2,765,824 | |||||||
Issuance of ordinary shares | $ 6,000,000 | $ 6,000,000 | ||||||
Net loss | 21,089,284 | $ 235,591 | $ 1,139,072 | $ 306,153 | ||||
Accumulated deficit | 23,777,412 | 2,688,128 | 895,486 | |||||
Mer Telemanagement Solutions Ltd [Member] | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Investment | $ 1,353,000 | $ 1,353,000 | ||||||
Issuance of ordinary shares | $ 188,000 | |||||||
Net loss | 994,000 | 661,000 | 1,815,000 | 135,000 | 1,170,000 | |||
Accumulated deficit | 30,356,000 | 29,362,000 | 27,547,000 | |||||
Cash flows used in operating activities | 595,000 | $ 1,224,000 | $ 1,331,000 | $ 46,000 | 1,276,000 | |||
Cash flow continuing operations | $ 629,000 | |||||||
Ownership percentage of securityholders | 86.00% | |||||||
Percentage of stock option pool of fully diluted outstanding share capital | 10.00% | |||||||
Vexigo Ltd [Member] | Mer Telemanagement Solutions Ltd [Member] | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Percentage of outstanding shares acquired | 100.00% | |||||||
Consideration for sale of assets | 250,000 | |||||||
Alpha Capital Anstalt [Member] | Mer Telemanagement Solutions Ltd [Member] | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Investment in ordinary shares | 188,000 | |||||||
Investment in preferred shares | $ 1,500,000 | |||||||
Issuance of ordinary shares, shares | 1,315,789 | 1,315,789 | ||||||
Issuance of ordinary shares | $ 1,500,000,000 | $ 1,500,000,000 |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES (Property and equipment) (Details) - Mer Telemanagement Solutions Ltd [Member] | 12 Months Ended |
Dec. 31, 2020 | |
Computer Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Depreciation rates in % | 3300.00% |
Furniture and Fixtures [Member] | |
Property, Plant and Equipment [Line Items] | |
Depreciation rates in % | 700.00% |
Furniture and Fixtures [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Depreciation rates in % | 300.00% |
Furniture and Fixtures [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Depreciation rates in % | 2000.00% |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - Mer Telemanagement Solutions Ltd [Member] - USD ($) | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2021 | |
Impairment charges | $ 617 | |||
Impairment charges | $ 1,106,000 | |||
Severance pay monthly deposits as a percentage of employees' monthly salary | 8.33% | |||
Severance expense | $ 525,000 | $ (109,000) | ||
Severance expense | (525,000) | 109,000 | ||
Allowance for credit losses | 75,000 | 69,000 | $ 73,000 | |
Call and put option contracts | 1,193,000 | 2,193,000 | $ 2,100,000 | |
Income (expense) on derivatives | 4,000 | 4,000 | (9,000) | |
Income (expense) on derivatives | $ (4,000) | $ (4,000) | $ 9,000 | |
Enterprise [Member] | ||||
Projected cash flows, period | 5 years | 5 years | ||
Discount rate | 25.00% | 25.00% |
OTHER ACCOUNTS RECEIVABLE AND_3
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Prepaid expenses | $ 13,683 | $ 4,647 | $ 272 |
Mer Telemanagement Solutions Ltd [Member] | |||
Government authorities | 15,000 | 27,000 | |
Prepaid expenses | 376,000 | 175,000 | |
Others | 8,000 | 34,000 | |
Total | $ 288,000 | $ 399,000 | $ 236,000 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | |||
Accumulated depreciation | $ 67,094 | $ 58,098 | |
Equipment, Net | 28,257 | 17,189 | $ 31,449 |
Mer Telemanagement Solutions Ltd [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 698,000 | 693,000 | |
Accumulated depreciation | 663,000 | 631,000 | |
Equipment, Net | $ 26,000 | 35,000 | 62,000 |
Computer Equipment [Member] | Mer Telemanagement Solutions Ltd [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 632,000 | 627,000 | |
Accumulated depreciation | 599,000 | 567,000 | |
Furniture and Fixtures [Member] | Mer Telemanagement Solutions Ltd [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 66,000 | 66,000 | |
Accumulated depreciation | $ 64,000 | $ 64,000 |
PROPERTY AND EQUIPMENT (Detai_2
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Depreciation expense | $ 20,331 | $ 15,952 | |
Mer Telemanagement Solutions Ltd [Member] | |||
Depreciation expense | 32,000 | 58,000 | $ 61,000 |
Derecognition of asset not in use | $ 2,000 | $ 13,000 |
ACCRUED EXPENSES AND OTHER LI_3
ACCRUED EXPENSES AND OTHER LIABILITIES (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Total | $ 578,558 | $ 241,299 | $ 89,521 |
Mer Telemanagement Solutions Ltd [Member] | |||
Employees and payroll accruals | 257,000 | 307,000 | |
Institutions and income tax payable | 140,000 | 143,000 | |
Accrued expenses | 1,368,000 | 1,857,000 | |
Related parties | 4,000 | 10,000 | |
Total | $ 1,631,000 | $ 1,769,000 | $ 2,317,000 |
COMMITMENTS AND CONTINGENT LI_2
COMMITMENTS AND CONTINGENT LIABILITIES (Details Narrative) - Mer Telemanagement Solutions Ltd [Member] - USD ($) $ in Thousands | 1 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Feb. 29, 2020 | Aug. 31, 2007 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Loss Contingencies [Line Items] | |||||||
Maximum loss due to litigation | $ 8,129 | ||||||
Claims Related to Discontinued Operations [Member] | |||||||
Loss Contingencies [Line Items] | |||||||
Maximum loss due to litigation | 95 | $ 89 | |||||
Collectibility of Receivables [Member] | Us Subsidiary [Member] | |||||||
Loss Contingencies [Line Items] | |||||||
Amount sought under legal action | $ 32 | ||||||
Threatened Litigation [Member] | |||||||
Loss Contingencies [Line Items] | |||||||
Litigation loss | $ 32 | ||||||
Loss Contingency Interest Rate | 1.00% | ||||||
Amount sought under legal action | $ 32 | ||||||
Royalty Commitment with the Office of the Chief Scientist [Member] | |||||||
Loss Contingencies [Line Items] | |||||||
Maximum loss due to litigation | 8,150 | ||||||
Royalty Commitment with the Office of the Chief Scientist [Member] | Royalty [Member] | |||||||
Loss Contingencies [Line Items] | |||||||
Royalties included in cost of revenue | $ 17 | $ 20 | $ 40 | $ 51 | $ 66 | ||
Minimum [Member] | Royalty Commitment with the Office of the Chief Scientist [Member] | |||||||
Loss Contingencies [Line Items] | |||||||
Royalty percentage | 3.00% | 3.00% | |||||
Total royalties as a percent of grants received | 100.00% | 100.00% | |||||
Maximum [Member] | Royalty Commitment with the Office of the Chief Scientist [Member] | |||||||
Loss Contingencies [Line Items] | |||||||
Royalty percentage | 5.00% | 5.00% | |||||
Total royalties as a percent of grants received | 150.00% | 150.00% |
TAXES ON INCOME (Schedule of De
TAXES ON INCOME (Schedule of Deferred Income Taxes) (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax asset (liability): | ||
Tax loss carry-forwards | $ 445,673 | $ 155,178 |
R&D expenses | 22,086 | 8,234 |
Gross deferred tax assets | 471,761 | 164,382 |
Valuation allowance | (418,227) | (99,179) |
Mer Telemanagement Solutions Ltd [Member] | ||
Deferred tax asset (liability): | ||
Tax loss carry-forwards | 6,254,000 | 6,089,000 |
Accruals for interest | 283,000 | 283,000 |
R&D expenses | 42,000 | 148,000 |
Allowances for credit losses and accruals for employee benefits | 45,000 | 76,000 |
Depreciation and amortization | 5,000 | 16,000 |
Gross deferred tax assets | 6,629,000 | 6,612,000 |
Goodwill | (351,000) | (746,000) |
Valuation allowance | (6,107,000) | (6,029,000) |
Deferred tax asset (liability), net | $ 171,000 | $ (163,000) |
TAXES ON INCOME (Reconciliation
TAXES ON INCOME (Reconciliation of Income Tax Expense) (Details) - USD ($) | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Loss before taxes on income, net, as reported in the statements of operations from continuing operations | $ (21,088,584) | $ (235,441) | $ (1,138,102) | $ (386,023) | |
Theoretical tax benefit | (239,001) | (81,064) | |||
Decrease in taxes resulting from: | |||||
Taxes on income, net, as reported in the statements of operations | 700 | 150 | 970 | (79,870) | |
Mer Telemanagement Solutions Ltd [Member] | |||||
Loss before taxes on income, net, as reported in the statements of operations from continuing operations | (964,000) | (768,000) | $ (2,103,000) | $ (188,000) | $ (840,000) |
Tax rates | 23.00% | 23.00% | 23.00% | ||
Theoretical tax benefit | $ (484,000) | $ (43,000) | $ (193,000) | ||
Decrease in taxes resulting from: | |||||
Non - deductible expenses | (116,000) | 38,000 | 37,000 | ||
Loss and timing differences for which no deferred tax was provided | 264,000 | (2,000) | 187,000 | ||
Tax adjustment in respect of different tax rate of subsidiaries | 9,000 | 3,000 | 6,000 | ||
Changes in provision for uncertain tax positions | 2,000 | 8,000 | 9,000 | ||
Taxes on income, net, as reported in the statements of operations | $ 1,000 | $ (108,000) | $ (325,000) | $ 4,000 | $ 46,000 |
TAXES ON INCOME (Schedule of In
TAXES ON INCOME (Schedule of Income (Loss) Before Income Taxes) (Details) - USD ($) | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Domestic | $ (1,200,415) | $ (199,107) | |||
Loss Before Income Taxes | (21,088,584) | (235,441) | $ (1,138,102) | $ (386,023) | |
Mer Telemanagement Solutions Ltd [Member] | |||||
Domestic | (320,000) | (217,000) | $ (803,000) | ||
Foreign | (1,783,000) | 29,000 | (37,000) | ||
Loss Before Income Taxes | $ (964,000) | $ (768,000) | $ (2,103,000) | $ (188,000) | $ (840,000) |
TAXES ON INCOME (Schedule of Ta
TAXES ON INCOME (Schedule of Taxes on Income) (Details) - USD ($) | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Current | |||||
Taxes on income, net, as reported in the statements of operations | $ 700 | $ 150 | 970 | (79,870) | |
Mer Telemanagement Solutions Ltd [Member] | |||||
Current | 10,000 | 22,000 | $ 11,000 | ||
Deferred | (335,000) | (18,000) | 35,000 | ||
Taxes in respect of previous years as a result of court ruling | (325,000) | 4,000 | 46,000 | ||
Domestic | |||||
Foreign | (325,000) | 4,000 | 46,000 | ||
Taxes on income, net, as reported in the statements of operations | $ 1,000 | $ (108,000) | (325,000) | 4,000 | 46,000 |
Liability for unrecognized tax benefits | $ 158,000 | $ 156,000 | $ 148,000 |
TAXES ON INCOME (Reconciliati_2
TAXES ON INCOME (Reconciliation of Unrecognized Tax Benefits) (Details) - Mer Telemanagement Solutions Ltd [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Balance as of beginning of the year | $ 156 | $ 148 |
Cumulative translation adjustments and other | 2 | 8 |
Balance at the end of the year | $ 158 | $ 156 |
TAXES ON INCOME (Details Narrat
TAXES ON INCOME (Details Narrative) - Mer Telemanagement Solutions Ltd [Member] - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Operating Loss Carryforwards [Line Items] | |||
Corporate tax rate | 23.00% | 23.00% | 23.00% |
Domestic Tax Authority [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Available carryforward tax losses | $ 26,000 | ||
Capital loss carryforwards | 507 | ||
Foreign Tax Authority [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Available carryforward tax losses | 607 | ||
Vexigo [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Available carryforward tax losses | 636 | ||
M T S Integra R A K [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Available carryforward tax losses | $ 636 |
RELATED PARTY TRANSACTIONS AN_3
RELATED PARTY TRANSACTIONS AND BALANCES (Schedules of Balances and Transactions with Related Parties) (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2021 | |
Other accounts payable and accrued expenses | $ 284,109 | |||
Mer Telemanagement Solutions Ltd [Member] | ||||
Other accounts payable and accrued expenses (Note 5) | 15,000 | 10,000 | ||
Cost of revenues | 47,000 | 44,000 | $ 37,000 | |
Operating expenses | 116,000 | 125,000 | 148,000 | |
Total amounts charged by related parties | 163,000 | $ 169,000 | $ 185,000 | |
Other accounts payable and accrued expenses | $ 15,000 | $ 16,000 |
RELATED PARTY TRANSACTIONS AN_4
RELATED PARTY TRANSACTIONS AND BALANCES (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Related Party Transaction [Line Items] | |||||
Lease expense | $ 19,200 | $ 19,200 | $ 38,400 | $ 38,400 | |
Mer Telemanagement Solutions Ltd [Member] | |||||
Related Party Transaction [Line Items] | |||||
Expenses from related party transactions | 163,000 | $ 169,000 | $ 185,000 | ||
Principal Owner [Member] | Mer Telemanagement Solutions Ltd [Member] | |||||
Related Party Transaction [Line Items] | |||||
Ownership interest | 11.45% | ||||
Expenses from related party transactions | $ 18,000 | 28,000 | |||
Lease expense | 53,000 | $ 56,000 | 56,000 | ||
Ownership interest | 9.70% | ||||
Data Distributors Inc. [Member] | Mer Telemanagement Solutions Ltd [Member] | |||||
Related Party Transaction [Line Items] | |||||
Expenses from related party transactions | $ 9,000 | $ 0 | $ 5,000 | $ 0 | $ 10,000 |
SHAREHOLDERS' EQUITY (Schedule
SHAREHOLDERS' EQUITY (Schedule of Stock Option Activity) (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Option outstanding, beginning | 360,000 | |||
Outstanding at June 30, 2021 | ||||
Outstanding at June 30, 2021 | 9 years 11 months 11 days | |||
Granted | 360,000 | |||
Exercised | ||||
Exercised | ||||
Expired and forfeited | ||||
Expired and forfeited | ||||
Option outstanding, ending | 360,000 | |||
Exercisable at December 31, 2020 | 9 years 10 months 17 days | |||
Expired and forfeited | ||||
Expired and forfeited | ||||
Mer Telemanagement Solutions Ltd [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total compensation cost related to options granted | $ 21 | $ 47 | $ 90 | |
Total unrecognized compensation cost related to non-vested share-based compensation arrangements | $ 12 | |||
Share-based Payment Arrangement, Option [Member] | Mer Telemanagement Solutions Ltd [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Option outstanding, beginning | 116,667 | 116,667 | ||
Outstanding at June 30, 2021 | $ 0 | $ 2.16 | $ 2.16 | |
Outstanding at June 30, 2021 | 7 years 9 months 3 days | 7 years 9 months 3 days | ||
Granted | 0 | |||
Granted | $ 0 | |||
Exercised | 0 | |||
Exercised | $ 0 | |||
Expired and forfeited | 58,334,000 | |||
Expired and forfeited | $ 4.32 | |||
Option outstanding, ending | 116,667 | 116,667 | ||
Exercisable at June 30, 2021 | 0 | 87,500 | ||
Exercisable at June 30, 2021 | $ 0 | $ 2.16 | ||
Exercisable at December 31, 2020 | 7 years 9 months 3 days | |||
Outstanding at January 1, 2021 | 58,334,000 | |||
Outstanding at January 1, 2021 | $ 4.32 | |||
Expired and forfeited | (58,334,000) | |||
Expired and forfeited | $ (4.32) | |||
Expired and forfeited | 7 years 9 months 3 days | |||
Outstanding at June 30, 2021 | 0 | 58,334,000 |
SHAREHOLDERS' EQUITY (Schedul_2
SHAREHOLDERS' EQUITY (Schedule of Stock-Based Compensation Expense) (Details) - Mer Telemanagement Solutions Ltd [Member] - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Stock-based compensation expense | $ 14 | $ 21 | $ 47 | $ 90 | |
Research and Development Expense [Member] | |||||
Stock-based compensation expense | 1 | ||||
General and Administrative Expense [Member] | |||||
Stock-based compensation expense | $ 14 | $ 21 | $ 47 | $ 89 |
SHAREHOLDERS' EQUITY (Details N
SHAREHOLDERS' EQUITY (Details Narrative) - USD ($) | Jun. 15, 2021 | Oct. 01, 2018 | Sep. 06, 2018 | Oct. 01, 2017 | Jun. 30, 2020 | Oct. 31, 2018 | Jun. 30, 2018 | Aug. 31, 2017 | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Jul. 26, 2021 | Apr. 30, 2021 | Apr. 15, 2021 | Sep. 30, 2019 | Sep. 28, 2017 |
Class of Stock [Line Items] | ||||||||||||||||
Amount of debt converted into shares | $ 21,693 | |||||||||||||||
Issuance of ordinary shares, shares | 2,765,824 | |||||||||||||||
Issuance of ordinary shares | $ 6,000,000 | $ 6,000,000 | ||||||||||||||
Conversion price | $ 2 | |||||||||||||||
Granted | 360,000 | |||||||||||||||
Subsequent Event [Member] | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Ownership percentage | 10.00% | |||||||||||||||
Mer Telemanagement Solutions Ltd [Member] | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Issuance of ordinary shares | $ 188,000 | |||||||||||||||
Ordinary shares available for future option grants | 468,284 | |||||||||||||||
Mer Telemanagement Solutions Ltd [Member] | Subsequent Event [Member] | Security Holders Of Sharplink [Member] | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Ownership percentage | 86.00% | |||||||||||||||
Mer Telemanagement Solutions Ltd [Member] | Subsequent Event [Member] | Inclusive of a stock option pool [Member] | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Ownership percentage | 10.00% | |||||||||||||||
Mer Telemanagement Solutions Ltd [Member] | 2003 Plan [Member] | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Number of ordinary shares authorized for issuance | 482,319 | |||||||||||||||
Expiration date of options | Nov. 30, 2023 | |||||||||||||||
Mer Telemanagement Solutions Ltd [Member] | 2006 Plan [Member] | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Number of ordinary shares authorized for issuance | 183,333 | |||||||||||||||
Number of Ordinary shares with respect to which options may be granted thereunder to any eligible employee | 50,000 | |||||||||||||||
Mer Telemanagement Solutions Ltd [Member] | Preferred Shares [Member] | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Share purchase price | $ 1.14 | |||||||||||||||
Beneficial ownership limitation | 9.99% | |||||||||||||||
Mer Telemanagement Solutions Ltd [Member] | Preferred Shares [Member] | Minimum [Member] | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Conversion price | $ 0.10 | |||||||||||||||
Mer Telemanagement Solutions Ltd [Member] | Alpha Capital Anstalt [Member] | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Issuance of ordinary shares, shares | 175,439 | |||||||||||||||
Issuance of ordinary shares | $ 188,000 | |||||||||||||||
Conversion of preferred shares into ordinary shares | 800,000 | |||||||||||||||
Mer Telemanagement Solutions Ltd [Member] | Alpha Capital Anstalt [Member] | Convertible preferred shares [Member] | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Issuance of ordinary shares, shares | 1,315,789 | |||||||||||||||
Issuance of ordinary shares | $ 1,353,000 | |||||||||||||||
Mer Telemanagement Solutions Ltd [Member] | Chief Executive Officer [Member] | Subsequent Event [Member] | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Exercise price per share | $ 1.321 | |||||||||||||||
Warrants | 116,667 | |||||||||||||||
Mer Telemanagement Solutions Ltd [Member] | Chief Executive Officer [Member] | 2003 Israeli Share Option Plan [Member] | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Expiration date of options | Oct. 1, 2027 | |||||||||||||||
Granted | 116,667 | |||||||||||||||
Vesting percentage | 25.00% | 12.50% | ||||||||||||||
Exercise price per share | $ 4.5 | $ 2.16 | ||||||||||||||
Percentage of current shareholders | 50.00% | |||||||||||||||
Percentage of unvested options | 50.00% | |||||||||||||||
Mer Telemanagement Solutions Ltd [Member] | Chief Executive Officer [Member] | Zero-exercise price [Member] | Subsequent Event [Member] | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Warrants | 50,000 | |||||||||||||||
Mer Telemanagement Solutions Ltd [Member] | Chief Financial Officer [Member] | Zero-exercise price [Member] | Subsequent Event [Member] | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Warrants | 50,000 | |||||||||||||||
Vexigo Ltd [Member] | Mer Telemanagement Solutions Ltd [Member] | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Amount of debt converted into shares | $ 1,220,000 | |||||||||||||||
Amount of debt converted into shares to warrants, shares | 400,000 | |||||||||||||||
Exercise price per share | $ 3 | |||||||||||||||
Vexigo Ltd [Member] | Mer Telemanagement Solutions Ltd [Member] | Former Shareholders [Member] | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Number of shares called by warrants | 330,668 | |||||||||||||||
Alpha Capital Anstalt [Member] | Mer Telemanagement Solutions Ltd [Member] | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Issuance of ordinary shares, shares | 1,315,789 | 1,315,789 | ||||||||||||||
Issuance of ordinary shares | $ 1,500,000,000 | $ 1,500,000,000 |