Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Dec. 31, 2020 | Feb. 16, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | ESPORTS ENTERTAINMENT GROUP, INC. | |
Entity Central Index Key | 0001451448 | |
Document Type | 10-Q | |
Document Period End Date | Dec. 31, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --06-30 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 17,331,014 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2021 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 |
Current assets | ||
Cash | $ 5,571,431 | $ 12,353,307 |
Restricted cash | 2,006,752 | |
Loans receivable | 1,000,000 | |
Other receivables | 808,946 | |
Receivables reserved for users | 322,215 | |
Deposit on business acquisition | 500,000 | |
Prepaid expenses and other current assets | 891,281 | 263,345 |
Total current assets | 10,600,625 | 13,116,652 |
Equipment, net | 67,470 | 8,041 |
Right of use asset, net | 302,534 | |
Intangible assets, net | 6,474,036 | 2,000 |
Goodwill | 6,908,592 | |
Other non-current assets | 1,169,405 | 6,833 |
TOTAL ASSETS | 25,522,662 | 13,133,526 |
Current liabilities | ||
Accounts payable and accrued expenses | 3,351,150 | 777,778 |
Liabilities to customers | 2,229,724 | |
Contingent consideration | 500,000 | |
Notes payable - current | 26,880 | |
Operating lease liability - current | 143,443 | |
Taxes payable | 40,642 | 12,113 |
Warrant liability | 4,859,782 | |
Liabilities to be settled in stock | 927,855 | |
Due to officers | 21,658 | |
Total current liabilities | 11,151,621 | 1,739,404 |
Operating lease liability - non-current | 74,450 | |
Notes payable - non - current | 314,410 | |
Total liabilities | 11,540,481 | 1,739,404 |
Commitments and contingencies | ||
Stockholders' equity | ||
Preferred stock $0.001 par value; 10,000,000 shares authorized, none issued and outstanding | ||
Common stock $0.001 par value; 500,000,000 shares authorized, 13,579,894 and 11,233,223 shares issued and outstanding as of December 31, 2020 and June 30, 2020, respectively | 13,580 | 11,233 |
Additional paid-in capital | 43,665,482 | 31,918,491 |
Accumulated deficit | (29,634,132) | (20,535,602) |
Accumulated other comprehensive loss | (62,749) | |
Total stockholders' equity | 13,982,181 | 11,394,122 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 25,522,662 | $ 13,133,526 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2020 | Jun. 30, 2020 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 13,579,894 | 11,233,223 |
Common stock, shares outstanding | 13,579,894 | 11,233,223 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Statement [Abstract] | ||||
Net revenue | $ 2,362,193 | $ 2,584,585 | ||
Operating costs and expenses: | ||||
Cost of revenue | 1,333,678 | 1,753,753 | ||
Sales and marketing | 1,888,372 | 78,312 | 2,492,488 | 104,351 |
General and administrative | 4,909,431 | 590,566 | 7,965,239 | 1,257,461 |
Total operating expenses | 8,131,481 | 668,878 | 12,211,480 | 1,361,812 |
Operating loss | (5,769,288) | (668,878) | (9,626,895) | (1,361,812) |
Other income (expense): | ||||
Other income | 479 | 2,990 | ||
Interest expense | (1,550,418) | (1) | (2,262,313) | |
Net amortization of debt discount and premium on convertible debt | (840,170) | (550,259) | ||
Change in fair value of derivative liabilities | 16,631 | 1,087,347 | ||
Change in fair value of warrant liability | (1,472,564) | 628,389 | ||
Gain (loss) on extinguishment of debt, net | (2,795,582) | |||
Impairment of intangible asset | (67,131) | (67,131) | ||
Gain on settlement of debt | 42,896 | 42,896 | ||
Foreign exchange loss | (48,664) | (1,577) | (103,013) | (1,577) |
Loss before income taxes | (7,290,037) | (3,068,647) | (9,098,530) | (5,908,431) |
Income tax | ||||
Net loss | (7,290,037) | (3,068,647) | (9,098,530) | (5,908,431) |
Other comprehensive loss: | ||||
Foreign currency translation loss | (63,690) | (62,749) | ||
Total comprehensive loss | $ (7,353,727) | $ (3,068,647) | $ (9,161,279) | $ (5,908,431) |
Basic and diluted loss per common share | $ (0.57) | $ (0.52) | $ (0.73) | $ (1) |
Weighted average number of common shares outstanding, basic and diluted | 12,877,159 | 5,924,230 | 12,518,507 | 5,893,513 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit) (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Total |
Beginning Balance at Jun. 30, 2019 | $ 5,849 | $ 5,185,380 | $ (10,184,187) | $ (4,992,958) | |
Beginning Balance, shares at Jun. 30, 2019 | 5,849,208 | ||||
Common stock and warrants issued for services | $ 17 | (17) | |||
Common stock and warrants issued for services, shares | 16,667 | ||||
Stock based compensation | 55,672 | 55,672 | |||
Net loss | (2,839,784) | (2,839,784) | |||
Ending Balance at Sep. 30, 2019 | $ 5,866 | 5,241,035 | (13,023,971) | (7,777,070) | |
Ending Balance, shares at Sep. 30, 2019 | 5,865,875 | ||||
Beginning Balance at Jun. 30, 2019 | $ 5,849 | 5,185,380 | (10,184,187) | (4,992,958) | |
Beginning Balance, shares at Jun. 30, 2019 | 5,849,208 | ||||
Common stock issued for FLIP Acquisition | |||||
Foreign exchange translation | |||||
Net loss | (5,908,431) | ||||
Ending Balance at Dec. 31, 2019 | $ 5,938 | 6,603,865 | (16,092,618) | (9,482,816) | |
Ending Balance, shares at Dec. 31, 2019 | 5,937,670 | ||||
Beginning Balance at Sep. 30, 2019 | $ 5,866 | 5,241,035 | (13,023,971) | (7,777,070) | |
Beginning Balance, shares at Sep. 30, 2019 | 5,865,875 | ||||
Common stock issued for services | $ 9 | 57,991 | 58,000 | ||
Common stock issued for services, shares | 8,889 | ||||
Common stock issued for waiver agreement | $ 5 | 26,897 | 26,902 | ||
Common stock issued for waiver agreement, shares | 5,435 | ||||
Warrants exercised for cash | $ 4 | 9,996 | 10,000 | ||
Warrants exercised for cash, shares | 4,444 | ||||
Non-cash warrant exercised | $ 53 | 1,222,549 | 1,222,602 | ||
Non-cash warrant exercised, shares | 53,027 | ||||
Stock based compensation | 45,397 | 45,397 | |||
Foreign exchange translation | |||||
Net loss | (3,068,647) | (3,068,647) | |||
Ending Balance at Dec. 31, 2019 | $ 5,938 | 6,603,865 | (16,092,618) | (9,482,816) | |
Ending Balance, shares at Dec. 31, 2019 | 5,937,670 | ||||
Beginning Balance at Jun. 30, 2020 | $ 11,233 | 31,918,491 | (20,535,602) | 11,394,122 | |
Beginning Balance, shares at Jun. 30, 2020 | 11,233,223 | ||||
Common stock issued upon the exercise of warrants | $ 276 | 1,024,648 | 1,024,924 | ||
Common stock issued upon the exercise of warrants, shares | 275,463 | ||||
Common stock and warrants issued for LHE Enterprises Limited | $ 650 | 3,801,850 | 3,802,500 | ||
Common stock and warrants issued for LHE Enterprises Limited, Shares | 650,000 | ||||
Common stock issued for FLIP Acquisition | $ 94 | 499,906 | 500,000 | ||
Common stock issued for FLIP Acquisition, Shares | 93,808 | ||||
Common stock issued for services | $ 291 | 1,873,551 | 1,873,842 | ||
Common stock issued for services, shares | 291,256 | ||||
Stock based compensation | 36,035 | 36,035 | |||
Foreign exchange translation | 941 | 941 | |||
Net loss | (1,808,493) | (1,808,493) | |||
Ending Balance at Sep. 30, 2020 | $ 12,544 | 39,154,481 | (22,344,095) | 941 | 16,823,871 |
Ending Balance, shares at Sep. 30, 2020 | 12,543,750 | ||||
Beginning Balance at Jun. 30, 2020 | $ 11,233 | 31,918,491 | (20,535,602) | 11,394,122 | |
Beginning Balance, shares at Jun. 30, 2020 | 11,233,223 | ||||
Common stock issued for FLIP Acquisition | $ 500,000 | ||||
Non-cash warrant exercised, shares | |||||
Foreign exchange translation | $ (62,749) | ||||
Net loss | (9,098,530) | ||||
Ending Balance at Dec. 31, 2020 | $ 13,580 | 43,665,482 | (29,634,132) | (62,749) | 13,982,181 |
Ending Balance, shares at Dec. 31, 2020 | 13,579,894 | ||||
Beginning Balance at Sep. 30, 2020 | $ 12,544 | 39,154,481 | (22,344,095) | 941 | 16,823,871 |
Beginning Balance, shares at Sep. 30, 2020 | 12,543,750 | ||||
Common stock issued upon the exercise of warrants | $ 844 | 3,232,274 | 3,233,118 | ||
Common stock issued upon the exercise of warrants, shares | 844,408 | ||||
Common stock issued for services | $ 192 | 982,579 | 982,771 | ||
Common stock issued for services, shares | 191,736 | ||||
Stock based compensation | 296,148 | 296,148 | |||
Foreign exchange translation | (63,690) | (63,690) | |||
Net loss | (7,290,037) | (7,290,037) | |||
Ending Balance at Dec. 31, 2020 | $ 13,580 | $ 43,665,482 | $ (29,634,132) | $ (62,749) | $ 13,982,181 |
Ending Balance, shares at Dec. 31, 2020 | 13,579,894 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flows from operating activities: | ||
Net loss | $ (9,098,530) | $ (5,908,431) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Amortization and depreciation | 717,890 | 15,527 |
Stock based compensation | 2,311,591 | 329,960 |
Change in fair market value of warrant liability | (628,389) | |
Right of use asset amortization | 86,320 | |
Impairment of intangible asset | 67,131 | |
Net amortization of debt discount and premium on convertible debt | 550,259 | |
Change in the fair market value of derivative liabilities | (1,087,347) | |
Loss on extinguishment of debt | 2,795,582 | |
Non-cash interest expense | 2,064,749 | |
Gain on settlement of debt | (42,896) | |
Changes in operating assets and liabilities: | ||
Other receivables | (169,801) | |
Receivables reserved for users | (282,326) | |
Prepaid expenses and other current assets | (279,452) | 19,123 |
Other non-current assets | (1,770) | |
Accounts payable and accrued expenses | 296,483 | 226,214 |
Liabilities to customers | 403,250 | |
Operating lease liability | (40,788) | |
Taxes payable | (39,235) | |
Due to officers | (21,658) | |
Net cash used in operating activities | (6,746,415) | (970,129) |
Cash flows from investing activities: | ||
Payment made in connection with LHE Enterprises Limited business acquisition, net of cash acquired of $21,074 | (728,926) | |
Payment made in connection with FLIP business acquisition | (100,000) | |
Payments made in connection with loans receivable | (1,000,000) | |
Purchase of intangible assets | (337,827) | |
Purchase of property and equipment | (12,660) | |
Net cash used in investing activities | (2,179,413) | |
Cash flows from financing activities: | ||
Proceeds from the exercise of warrants | 4,258,042 | 10,000 |
Proceeds from promissory convertible note | 1,160,000 | |
Repayment of promissory convertible notes | (105,000) | |
Deferred financing costs | (85,000) | |
Net cash provided by financing activities | 4,258,042 | 980,000 |
Effect of exchange rate on changes in cash and restricted cash | (107,338) | |
Net (decrease) increase in cash and restricted cash | (4,775,124) | 9,871 |
Cash and restricted cash, beginning of period | 12,353,307 | 43,412 |
Cash and restricted cash, end of period | 7,578,183 | 53,283 |
Cash | 5,571,431 | 53,283 |
Restricted cash | 2,006,752 | |
Supplemental cash flow disclosures: | ||
Interest | ||
Income taxes | ||
Supplemental disclosure of non-cash investing and financing activities: | ||
Common stock issued in connection with LHE Enterprises Limited business acquisition | 3,802,500 | |
Warrants issue in connection with LHE Enterprises Limited business acquisition | 5,488,171 | |
Deposit applied to purchase consideration in acquistion of LHE Enterprises Limited | 500,000 | |
Common stock issued in connection with FLIP business acquisition | 500,000 | |
Common stock for the settlement of liabilities to be settled in stock | 927,855 | |
Contingent consideration in connection with acquisition of FLIP | 500,000 | |
Operating lease asset obtained in exchange for operating lease obligation | 367,513 | |
Extinguishment of derivative liability associated with extinguishment of convertible notes | 1,426,323 | |
Extinguishment of debt discount associated with extinguishment of convertible notes | 1,909,280 | |
Debt discount and derivative associated with amended and restated note | 1,565,617 | |
Increase in principal amount of convertible debt associated with amended and restated note | 660,000 | |
Derivative liability associated with convertible notes entered into | 1,136,231 | |
Debt discount associated with notes entered into | 1,276,000 | |
Extinguishment of derivative liability associated with cashless warrant exercise | 1,222,602 | |
Original issuance discount of convertible notes | $ 116,000 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) | 6 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Statement of Cash Flows [Abstract] | ||
Cash acquired | $ 21,074 | $ 21,074 |
Nature of Operations
Nature of Operations | 6 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations | Note 1 – Nature of Operations Esports Entertainment Group, Inc. (formerly VGambling Inc.) (the “Company” or “Esports Entertainment Group”) was incorporated in the state of Nevada on July 22, 2008. On April 18, 2017, the majority of the shareholders of the Company’s common stock voted to approve a change of the name of the Company from VGambling, Inc. to Esports Entertainment Group, Inc. Esports Entertainment Group is a diversified operator of esports, sports and igaming businesses with a global footprint. The Company’s strategy is to build and acquire betting and related platforms in the businesses of igaming and sports betting, and to lever them into the rapidly growing esports business. The Company is primarily focused on three vertical markets, namely esports entertainment, esports wagering, and iGaming and traditional sports betting. On July 31, 2020, the Company commenced substantive revenue generating operations with the acquisition of LHE Enterprises Ltd, the holding company for an online sportsbook and casino operator Argyll Entertainment (“Argyll”). The Company also recently acquired Phoenix Games Network Limited, the holding company for the Esports Gaming League (“EGL”) on January 21, 2021 and has announced the acquisitions of Lucky Dino Gaming Limited (“Lucky Dino”), an online casino operator, Helix Holdings, LLC (“Helix”), an owner and operator of esports centers that provide esports programming and gaming infrastructure, and ggCircuit, a business-to-business software company that provides cloud-based management for gaming centers, a tournament platform and integrated wallet and point-of-sale solutions. The acquisition of Lucky Dino is expected to close by March 31, 2021, the Company’s third fiscal quarter, and the acquisitions of Helix and ggCircuit are expected to close prior to the Company’s fiscal year ended June 30, 2021. The acquisitions of Lucky Dino, Helix and ggCircuit are discussed further in Note 16, Subsequent Events |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 – Summary of Significant Accounting Policies Basis of presentation and principles of consolidation The accompanying unaudited condensed consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) set forth in Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete consolidated financial statements. The unaudited condensed consolidated financial statements reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Unaudited interim results are not necessarily indicative of the results for the full fiscal year. These unaudited condensed consolidated financial statements should be read along with the Annual Report filed on Form 10-K of the Company for the annual period ended June 30, 2020. The consolidated balance sheet as of June 30, 2020 was derived from the audited consolidated financial statements as of and for the year then ended. The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All material intercompany transactions and balances have been eliminated on consolidation. Reportable Segment The Company determined it has one reportable segment. This determination considers the organizational structure of the Company and the nature of financial information available and reviewed by the chief operating decision maker to assess performance and make decisions about resource allocations. Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications had no effect on the reported results of operations. The Company reclassified taxes payable on its unaudited condensed consolidated balance sheet from accounts payable and accrued expenses. The Company also reclassified sales and marketing expenses on its unaudited condensed consolidated statements of operations and comprehensive loss from general and administrative expenses. Use of estimates The preparation of unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, as of the date of the unaudited condensed consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include the valuation and accounting for equity awards related to warrants and stock-based compensation, determination of fair value for derivative instruments, the accounting for business combinations and allocating purchase price, estimating the useful life of fixed assets and intangible assets, as well as the estimates related to accruals and contingencies. Liquidity and Going Concern The Company has historically incurred losses and negative cash flows as it prepared to grow its esports business through acquisitions and new venture opportunities. As of December 31, 2020, the Company had approximately $5.6 million of available cash on-hand and has raised additional funding of $10.7 million subsequent to December 31, 2020 from the exercise of certain warrants. The Company also raised aggregate gross proceeds of $30.0 million from an equity offering on February 16, 2021. Considering the cash on-hand as well as these additional sources of financing, the Company currently expects that its cash will be sufficient to fund its operating expenses and capital expenditure requirements for at least 12 months after February 16, 2021. While the Company expects revenues and cash flows to increase related to current and planned acquisitions, the Company expects to incur an annual operating loss and annual negative operating cash flows during the growth phase of the business. In December 2019, a novel strain of coronavirus (COVID-19) emerged in Wuhan, Hubei Province, China. While initially the outbreak was largely concentrated in China and caused significant disruptions to its economy, it has now spread to several other countries and infections have been reported globally. Due to the outbreak of Covid-19, almost all major sports events and leagues were postponed or put-on hold, for the period of Apr 2020-June 2020. The cancelation of major sports events had a significant short-term negative effect on betting activity globally. As a result, iGaming operators faced major short-term losses in betting volumes. Online casino operations have generally continued as normal without any noticeable disruption due to the Covid-19 outbreak. The virus’s expected effect on online casino activity globally is expected to be overall positive or neutral. Travel restrictions and border closures have not materially impacted the Company’s ability to manage and operate the day-to-day functions of the business. Management has been able to operate in a virtual setting. However, if such restrictions become more severe, they could negatively impact those activities in a way that would harm the business over the long term. Travel restrictions impacting people can restrain the ability to operate, but at present we do not expect these restrictions on personal travel to be material to the Company’s operations or financial results. The ultimate impact of the COVID-19 pandemic on the Company’s operations is unknown and will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the COVID-19 outbreak, new information which may emerge concerning the severity of the COVID-19 pandemic, and any additional preventative and protective actions that governments, or the Company, may direct, which may result in an extended period of continued business disruption and reduced operations. Any resulting financial impact cannot be reasonably estimated at this time but may have a material adverse impact on our business, financial condition and results of operations. Cash Cash includes cash on hand. Cash equivalents consist of highly liquid debt instruments purchased with an original maturity of three months or less. As of December 31, 2020 and June 30, 2020 there were no cash equivalents. At times, cash deposits inclusive of restricted cash may exceed FDIC-insured limits. At December 31, 2020 and June 30, 2020, the amount the Company had on deposit funds that exceeded the FDIC-insured limits were approximately $7,250,000 and $12,000,000, respectively. Restricted Cash Restricted cash includes cash reserves maintained by the Company in satisfaction of regulatory requirements related to user account balances. The Company presents 90% of its liabilities to customer as restricted cash. Receivables Reserved for Users User deposit receivables are stated at the amount the Company expects to collect from a payment processor. These arise due to the timing differences between a user’s deposit and the receipt of the payment into the Company’s bank accounts. Receivables also arise as the result of the securitization policies of certain payment processors. Equipment Equipment is stated at cost less accumulated depreciation. Cost includes expenditures that are directly attributable to the acquisition of the asset. Additions and improvements that significantly extend the useful lives of assets are capitalized. Repairs and maintenance costs are charged to expense during the year in which they are incurred. Depreciation is provided for over the estimated useful life of the asset as follows: Furniture and equipment 5 years Computer equipment 3 years Useful lives and residual values are reviewed and adjusted, if appropriate, at the end of each reporting period. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. The cost and accumulated depreciation of assets retired or sold are removed from the respective accounts and any gain or loss is recognized in operations. Business Acquisition Accounting The Company applies the acquisition method of accounting for business acquisitions. The Company allocates the purchase price of its business acquisitions based on the fair value of identifiable tangible and intangible assets. The difference between the total cost of the acquisition and the sum of the fair values of acquired tangible and identifiable intangible assets less liabilities is recorded as goodwill. Transaction costs are expensed as incurred in general and administrative expenses. Goodwill and Intangible Assets The Company has recorded intangible assets, including goodwill, in connection with business acquisitions. Estimated useful lives of amortizable intangible assets are determined by management based on an assessment of the period over which the asset is expected to contribute to future cash flows. In accordance with U.S. GAAP for goodwill and other indefinite-lived intangibles, the Company tests these assets for impairment annually and whenever events or circumstances make it more likely than not that impairment may have occurred. For the purposes of that assessment, the Company has determined to assign assets acquired in business combinations to a single reporting unit including all goodwill and indefinite-lived intangible assets acquired in business combinations. The Company did not record any impairment of goodwill or intangible assets during the six months ending December 31, 2020. The Company recorded an impairment of intangible assets of $67,131 during the six months ending December 31, 2019. Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases using the cumulative-effect adjustment transition method, which applies the provisions of the standard at the effective date without adjusting the comparative periods presented. The Company adopted the following practical expedients and elected the following accounting policies related to this standard update: ● Short-term lease accounting policy election allowing lessees to not recognize right-of-use assets and liabilities for leases with a term of 12 months or less. ● The option to not separate lease and non-lease components. ● The package of practical expedients applied to all of its leases, including (i) not reassessing whether any expired or existing contracts are or contain leases, (ii) not reassessing the lease classification for any expired or existing leases, and (iii) not reassessing initial direct costs for any existing leases. As a result of the above, the adoption of ASC 842 did not have a material effect on the unaudited condensed consolidated financial statements. Upon the acquisition of LHE Enterprises Limited, the Company recognized an operating lease right-of-use asset of $367,513 and lease liabilities of $236,807 on the unaudited condensed consolidated balance sheet . Disclosures related to the amount, timing and uncertainty of cash flows arising from leases are included in Note 11. Internal-Use Software Capitalized internal-use software costs include external consulting fees, payroll and payroll-related costs and stock-based compensation for employees in the Company’s development and information technology groups who are directly associated with, and who devote time to, the Company’s internal-use software projects. Capitalization begins when the planning stage is complete and the Company commits resources to the software project, and continues during the application development stage. Capitalization ceases when the software has been tested and is ready for its intended use. Costs incurred during the planning, training and post-implementation stages of the software development life-cycle are expensed as incurred. Impairment of Long-Lived Assets The Company reviews its long-lived assets, including definite-lived intangible assets for impairment whenever events and circumstances indicate that the carrying value of an asset might not be recoverable. An impairment loss, measured as the amount by which the carrying amount exceeds the fair value, is recognized if the carrying amount exceeds estimated undiscounted future cash flows. There were no long-lived asset impairment charges recorded during the three and six months periods ended December 31, 2020 and 2019. Income Taxes The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the unaudited condensed consolidated financial statements or in the Company’s tax returns. Deferred tax assets and liabilities are determined on the basis of the differences between U.S. GAAP treatment and tax treatment of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. The Company assesses the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely than not that all or a portion of the deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense. Potential for recovery of deferred tax assets is evaluated by considering taxable income in carryback years, existing taxable temporary differences, prudent and feasible tax planning strategies and estimated future taxable profits. The Company accounts for uncertainty in income taxes recognized in the unaudited condensed consolidated financial statements by applying a twostep process to determine the amount of tax benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination by the taxing authorities. If the tax position is deemed more-likely-than-not to be sustained, the tax position is then assessed to determine the amount of benefit to recognize in the unaudited condensed consolidated financial statements. The amount of the benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. The provision for income taxes includes the effects of any resulting tax reserves, or unrecognized tax benefits, that are considered appropriate, as well as the related net interest and penalties. Derivative Instruments The Company evaluates its convertible notes and warrants to determine if those contracts or embedded components of those contracts qualify as derivatives. The result of this accounting treatment is that the fair value of the embedded derivative is marked-to-market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statements of operations as other income or expense. In circumstances where the embedded conversion option in a convertible instrument is required to be bifurcated and there are also other embedded derivative instruments in the convertible instrument that are required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Equity instruments that are initially classified as equity that become subject to reclassification are reclassified to liability at the fair value of the instrument on the reclassification date. Derivative instrument liabilities are classified in the balance sheet as current or non-current to correspond with its host instrument. The Company marks to market the fair value of the remaining embedded derivative warrants at each balance sheet date and records the change in the fair value of the remaining embedded derivative warrants as other income or expense in the statements of operations. The Company utilizes the Monte Carlo Method that values the liability of the debt conversion feature derivative financial instruments and utilizes the Black-Scholes valuation model to value the derivative warrants. Fair Value of Financial Instruments The carrying amounts reported in the unaudited condensed consolidated balance sheets for cash, other receivables, loans receivable, receivables reserved for users, prepaid expenses and other current assets, accounts payable and accrued expenses, and liabilities to customers approximate fair value because of the immediate or short-term maturity of the financial instruments. The Company believes that its indebtedness approximates fair value based on current yields for debt instruments with similar terms. Income (Loss) Per Share Basic income (loss) per share is computed by dividing net income (loss) attributable to common shareholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) for the period. In periods of losses, diluted loss per share is computed on the same basis as basic loss per share as the inclusion of any other potential shares outstanding would be anti-dilutive. The following securities were excluded from weighted average diluted common shares outstanding for the three and six months ended December 31, 2020 and 2019 because their inclusion would have been antidilutive. As of December 31, 2020 2019 Common stock equivalents: Common stock options 457,009 51,942 Common stock warrants 5,156,722 807,717 Convertible notes - 375,834 Contingently issuable shares 15,667 2,667 Total 5,629,398 1,238,160 Comprehensive Loss Comprehensive loss consists of net loss and foreign currency translation adjustments related to the effect of foreign exchange on the value of assets and liabilities. The net translation loss for the period is included in the unaudited condensed consolidated statements of comprehensive loss. Foreign Currency Translation The functional currencies of the Company include the U.S. dollar, British Pounds Sterling, Euros, and Canadian dollar. The reporting currency of the Company is the U.S. Dollar. Assets and liabilities of the Company’s foreign operations with functional currencies other than the US dollar are translated at the exchange rate in effect at the balance sheet date, while revenues and expenses are translated at average rates prevailing during the periods. Translation adjustments are reported in accumulated other comprehensive loss, a separate component of stockholders’ equity. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. Stock-based Compensation The Company applies ASC 718-10, “ Share-Based Payments ASC 718-10 requires companies to estimate the fair value of equity-based payment awards on the date of grant using an option-pricing model. The fair value of the award is recognized as an expense on a straight-line basis over the requisite service periods in the Company’s consolidated statements of operations and comprehensive loss. The Company recognizes share-based award forfeitures as they occur rather than estimating by applying a forfeiture rate due to lack of historical experience. All issuances of stock options or other equity instruments to non-employees as consideration for goods or services received by the Company are accounted for based on the fair value of the equity instruments issued. The Company recognizes compensation expense for the fair value of non-employee awards based on the straight-line method over the requisite service period of each award. The Company estimates the fair value of stock options granted as equity awards using a Black-Scholes options pricing model. Advertising Advertising costs consist primarily of online search advertising and placement, trade shows, advertising fees, and other promotional expenses. Advertising costs are expensed as incurred and are included in sales and marketing on the unaudited condensed consolidated statements of operations. Revenue Recognition The Company recognizes revenue in accordance with ASC Topic 606 – Revenue from Contracts with Customers i. Identification of the contract, or contracts, with a customer ii. Identification of the performance obligations in the contract iii. Determination of the transaction price iv. Allocation of the transaction price to the performance obligations in the contract v. Recognition of revenue, when, or as, the Company satisfies the performance obligation The Company generates revenue from end-users (“customers”) placing bets on its online gambling sites it operates for its brands. The performance obligations in the contract are the settlements of each individual bet. The Company offers a loyalty program that includes free play, cash bonuses, and loyalty points awarded based on individual play. The loyalty program is considered a nondiscretionary incentive available to the customer. The transaction price is the amount wagered by the customer less the amounts returned to, or won by, the customer. This is commonly referred to as the win or Gross Gaming Revenue (“GGR”). Management allocates the transaction price or the GGR to the performance obligations using relative standalone selling price. The Company’s performance obligations are as follows: 1. Settlement of each individual bet 2. Honoring of nondiscretionary incentives available to the customer as a result of the loyalty program. The Company records revenue as Net Gaming Revenue (“NGR”), which is the difference between the amount of money players wager minus the amount that they win, less any nondiscretionary incentives awarded. The Company records liabilities for amounts due to users of which the balance consists of user deposits, user winnings and nondiscretionary incentives awarded less user withdrawals and user losses. The Company applies a practical expedient by accounting for its performance obligations on a portfolio basis as these bets have similar characteristics and the Company reasonably expects the effects on the financial statements of applying the revenue recognition guidance to the portfolio will not differ materially from that which would result if applying the guidance to an individual bet placed. The Company grants three types of incentives that are standard in the gaming industry: (i) free bet whereby upon making a deposit and get another free bet regardless of the outcome of the first bet (ii) deposit match bonus in which the Company will match the player’s deposit up to a certain specified percentage or amount and (iii) loyalty points are earned based on the customers level of play which can be exchanged for free bets or cash. The incentives typically expire 3-6 months after they are granted and represent consideration payable to a customer that are included as a reduction of the transaction price for the wagering transaction. The transaction price for the bonus is variable based on the percentage of rewards expected to expire. We evaluate bets that users place on websites owned by third party brands in order to determine whether we are acting as the principal or as the agent when providing services, which we consider in determining if revenue should be reported gross or net. An entity is a principal if it has the ability to direct the use of and obtain substantially all the remaining benefits from, the asset. Control includes the ability to prevent other entities from directing the use of, and obtaining the benefits from, an asset. For these arrangements, we are the principal as we control the wagering service; therefore, any charges, including any applicable simulcast fees, we incur for delivering the wagering service are presented as operating expenses. Recently Adopted Accounting Pronouncements In August 2018, the FASB issued ASU 2018-15 , Intangibles-Goodwill and Other- Internal-Use Software (Subtopic 350-40 In October 2018, the FASB issued ASU 2018-17, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities Recently Issued Accounting Standards In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740) In June 2020, the FASB issued ASU No. 2020-06, Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40). From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that the Company adopts as of the specified effective date. The Company does not believe that the impact of recently issued standards that are not yet effective will have a material impact on the Company’s financial position or results of operations upon adoption. |
Business Acquisitions
Business Acquisitions | 6 Months Ended |
Dec. 31, 2020 | |
Business Combinations [Abstract] | |
Business Acquisitions | Note 3 – Business Acquisitions Business acquisitions are accounted for under the purchase method of accounting in accordance with ASC 805. The results of operations of the acquired businesses since the date of acquisition are included in the unaudited condensed consolidated financial statements of the Company for the three and six months ended December 31, 2020. The total purchase consideration was allocated to the assets acquired and liabilities assumed at their preliminary estimated fair values as of the date of acquisition, as determined by management. The purchase price allocations are preliminary and a final determination of purchase accounting adjustments, which may be material, will be made upon the finalization of the Company’s integration activities, which are expected to be completed during the fiscal year ending 2021. The excess of the purchase price over the amounts allocated to assets acquired and liabilities assumed has been recorded as goodwill. The value of the goodwill from the acquisitions described below can be attributed to a number of business factors including, but not limited to, cost synergies expected to be realized and a trained technical workforce. Acquisition of LHE Enterprises Limited. On July 7, 2020, the Company entered into the “Argyll Purchase Agreement” between the Company, LHE, and AHG, whereby upon closing on July 31, 2020 the Company acquired all of the outstanding capital stock of LHE and its subsidiaries, (i) Argyll Entertainment AG, (ii) Nevada Holdings Limited and (iii) Argyll Productions Limited. Argyll Entertainment AG is licensed and regulated by the UK Gambling Commission and the Irish Revenue Commissioners to operate online sportsbook and casino sites in the UK and Ireland, respectively. Argyll has a flagship brand, www.SportNation.bet www.RedZone.bet www.uk.Fansbet.com On July 31, 2020, the Company consummated the closing of the Argyll Purchase Agreement. As consideration for the Acquired Companies, the Company (i) paid AHG $1,250,000 in cash (the “Cash Purchase Price”) of which $500,000 was previously paid; (ii) issued to AHG 650,000 shares of common stock of the Company (the “Consideration Shares”); and (iii) issued to AHG warrants to purchase up to 1,000,000 shares of common stock of the Company at an exercise price of $8.00 per share (the “Consideration Warrants” together with the Cash Purchase Price and the Consideration Shares the “Purchase Price”). The Consideration Warrants are exercisable for a term of three (3) years. The purchase price and purchase price allocation are preliminary pending the final determination of fair value for warrants issued as well as a final valuation of assets acquired and liabilities assumed. The preliminary purchase price and purchase price allocation as of the acquisition completion date follows: Purchase price: Cash $ 1,250,000 Value of common stock issued 3,802,500 Value of warrant issued 5,488,171 Total purchase price consideration $ 10,540,671 Allocation of the purchase price: Current assets $ 833,769 Long-term assets 1,385,274 Player relationships 2,460,798 Betting platform software 2,698,968 Tradenames 839,189 Gaming licenses 144,000 Goodwill 6,358,592 Less: Current liabilities assumed (3,721,573 ) Non-current liabilities assumed (458,346 ) Total allocation of purchase price consideration $ 10,540,671 The estimated useful life of the identifiable intangible assets is five years. The goodwill is not amortizable for tax purposes. Transaction related costs for the Argyll Purchase Agreement were $77,113 and included in general and administrative expenses on the unaudited condensed consolidated statements of operations. Pro Forma Operating Results The following table provides unaudited pro forma results for the three months ended December 31, 2019, as if the Argyll Purchase Agreement consummated on July 1, 2019. The pro forma results of operations for these three months ended were prepared for comparative purposes only and do not purport to be indicative of what would have occurred had the Argyll Purchase Agreement been made as of July 1, 2019 or results that may occur in the future. Net revenue $ 2,944,522 Net loss $ (4,089,348 ) Net loss per common share, basic and diluted $ (0.62 ) The following table provides unaudited pro forma results for the six months ended December 31, 2020 and 2019, as if the Argyll Purchase Agreement consummated on July 1, 2019. The pro forma results of operations for these six month periods ended were prepared for comparative purposes only and do not purport to be indicative of what would have occurred had the Argyll Purchase Agreement been made as of July 1, 2019 or results that may occur in the future. Pro Forma (Unaudited) for the six months ended December 31, 2020 2019 Net revenue $ 2,725,840 $ 5,889,043 Net loss $ (9,985,552 ) $ (7,303,115 ) Net loss per common share, basic and diluted $ (0.76 ) $ (1.12 ) Acquisition of Flip On September 3, 2020 the Company, entered into an Assignment of Intellectual Property Rights Agreement (the “IP Assignment Agreement”), by and among the Company, AHG and Flip Sports Limited (“Flip”) whereby the Company acquired all intellectual property rights in connection with the software developed by Flip and owned by AHG related to AHG’s online games and rewards platform and all other online software (the “Software”). This includes all works in relation to the same, including, but not limited to the source code of the Software and all technical and functional information and documentation required to operate the Software, all artwork, content and materials used in connection with the Software and any other works in respect of which AHG is the legal and beneficial owner and which are being used in connection with the Software (the “Works” together with the intellectual property rights in the Software the “Assigned Intellectual Property”). As consideration for the Assigned Intellectual Property, the Company agreed to pay AHG an aggregate of $1,100,000 (the “Flip Purchase Price”) payable as follows: (a) $100,000 in cash on the Effective Date (“Cash Consideration”); and (b) that certain number of shares the Company’s restricted common stock, equal to $1,000,000 (the “Share Consideration”) at a price per share equal to the 30-day weighted average of the Company’s common stock immediately prior to the effective date, September 3, 2020, in accordance with the following payment schedule (i) that certain number of shares equal to $500,000 issued to AHG on the Effective Date (“Closing Shares”); and (ii) that certain number of shares equal to $500,000 of restricted common stock (the “Post Closing Shares”) issued to AHG on the sixth (6) month anniversary of the Effective Date (“Final Payment Date”), subject to the continued employment of certain key employees of Flip as identified in the IP Assignment Agreement (the “Key Employees”). The cash equivalent amount of the Post Closing Shares shall be reduced by $100,000 per Key Employee no longer with the Company on the Final Payment Date. On September 14, 2020, the Company issued 93,808 shares in accordance with the agreement. The preliminary purchase price allocation of $1,100,000 as of the acquisition completion date of September 3, 2020 is as follows: Purchase price: Cash $ 100,000 Value of common stock issued 500,000 Value of contingent consideration 500,000 Total purchase price consideration $ 1,100,000 Allocation of the purchase price: Rewards platform software $ 550,000 Goodwill 550,000 Total allocation of purchase price consideration $ 1,100,000 The unaudited pro forma financial results for Flip are immaterial for the three and six months ending December 31, 2020 and 2019. The estimated useful life of the identifiable intangible assets is five years. The goodwill is amortizable for tax purposes. Transaction related costs for the Flip acquisition were immaterial. |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 6 Months Ended |
Dec. 31, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid Expenses and Other Current Assets | Note 4 – Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets as of December 31, 2020 and June 30, 2020 consists of the following December 31, 2020 June 30, 2020 Loan receivable from Phoenix Games Network Limited $ 274,067 $ - Other receivable 132,769 - Prepaid insurance 60,206 159,941 Prepaid service contract 84,052 - Prepaid equity 50,000 100,000 Marketing expenses 34,129 - Licenses and fees 29,487 - Other prepaid operating costs 226,571 3,404 Prepaid expenses and other current assets $ 891,281 $ 263,345 The Company completed the acquisition of Phoenix Games Network Limited on January 21, 2021. The settlement of the loan receivable from Phoenix Network Games Limited is included in the purchase consideration for this acquisition discussed further in Note 16, Subsequent Events |
Equipment
Equipment | 6 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Equipment | Note 5 – Equipment Fixed assets as of December 31, 2020 and June 30, 2020 consists of the following: December 31, 2020 June 30, 2020 Computer equipment $ 100,944 $ 14,450 Furniture and equipment 152,320 20,241 253,264 34,691 Accumulated depreciation (185,794 ) (26,650 ) Equipment, net $ 67,470 $ 8,041 During the six months ended December 31, 2020 and 2019, the Company recorded total depreciation expense of $159,144 and $4,432, respectively. During the three months ended December 31, 2020 and 2019, the Company recorded total depreciation expense of $110,048 and $2,216, respectively. |
Intangible Assets
Intangible Assets | 6 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Note 6 – Intangible Assets Intangible assets as of December 31, 2020 and June 30, 2020 consists of the following: December 31, 2020 June 30, 2020 Intangible assets not subject to amortization: Tradename $ 839,189 $ - Intangible assets subject to amortization: Player relationships 2,460,798 - Betting platform 2,698,968 - Rewards platform 887,827 - Licenses 144,000 - Online gaming website 6,000 6,000 7,036,782 6,000 Accumulated amortization (562,746 ) (4,000 ) Intangible assets, net $ 6,474,036 $ 2,000 During the six months ended December 31, 2020 and 2019, the Company recorded total amortization expense of $558,746 and $11,095, respectively. During the three months ended December 31, 2020 and 2019, the Company recorded total amortization expense of $341,394 and $501, respectively. |
Loans Receivable
Loans Receivable | 6 Months Ended |
Dec. 31, 2020 | |
Receivables [Abstract] | |
Loans Receivable | Note 7 – Loans Receivable On September 22, 2020, the Company entered into two credit facility agreements with Helix and ggCircuit (the “Borrowers”). Under the agreements, the Company is willing to make a line of credit available to the Borrowers of up to $1,000,000, in the aggregate. The interest rate is 0%. The credit facility was entered into to make funds available to the Borrowers until the proposed acquisition of the Borrowers by the Company is consummated. The Company has entered into an agreement to acquire the Borrowers. The acquisition is expected to close by fiscal year ending 2021. As of December 31, 2020, the Company had recorded $1,000,000 as loans receivable in relation to the credit facility agreements. |
Other Receivables
Other Receivables | 6 Months Ended |
Dec. 31, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Receivables | Note 8 – Other Receivables Other receivables as of December 31, 2020 consists of the following: December 31, 2020 Marketing advances to revenue partners $ 466,740 Other 342,206 Other receivables $ 808,946 The Company did not have other receivables as of June 30, 2020. |
Other Non-Current Assets
Other Non-Current Assets | 6 Months Ended |
Dec. 31, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Non-Current Assets | Note 9 – Other Non-Current Assets Other non-current assets as of December 31, 2020 and June 30, 2020 consists of the following : December 31, 2020 June 30, 2020 Deposits reserved for users $ 293,509 $ - Deposits for gaming duties 747,286 - Other deposits 128,610 6,833 Other non-current assets $ 1,169,405 $ 6,833 |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 10 – Related Party Transactions The Company entered into transactions the following transactions with officers and directors: The Company currently reimburses the Chief Executive Officer for office rent and related expenses. During the three and six months ended December 31, 2020, the Company incurred charges of $1,200 and $2,400, respectively from the Chief Executive Officer. As of December 31, 2020, there were no amounts owed to the Chief Executive Officer. At June 30, 2020, the Company owed $21,658 to its Chief Executive Officer for rent and corporate related expenses. The Company has entered into a services agreement and a referral agreement with Contact Advisory Services Ltd, which is partly owned by a member of the Board of Directors. During the three and six months ended December 31, 2020, the Company expensed approximately $17,192 and $68,577, respectively, in accordance with these agreements. The Company has retained legal and corporate secretarial services from a member of Board of Directors through consultancy and employment agreements. The legal consultancy agreement requires payments of £18,000 per month (approximately $25,000) to the law firm that is controlled by this member of the Board of Directors. The individual also receives payroll of $500 per month through the employment agreement as Legal Counsel and Company Secretary. |
Leases
Leases | 6 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Leases | Note 11 – Leases In conjunction with the acquisition on July 31, 2020 (discussed in Note 3), the Company assumed a lease agreement for office space, which had under two years remaining on upon the acquisition. The assets and liabilities from operating leases are recognized at the acquisition date based on the present value of remaining lease payments over the lease term using the Company’s secured incremental borrowing rates or implicit rates, when readily determinable. The lease term includes the non-cancellable period of the lease plus any additional periods covered by either an option to extend or not terminate the lease that the Company is reasonably certain to exercise, or any option to extend or not to terminate a lease controlled by the lessor. Short-term leases, which have an initial term of 12 months or less, are not recorded on the unaudited condensed consolidated balance sheets. The Company’s operating lease does not provide an implicit rate that can readily be determined. Therefore, we use a discount rate based on incremental borrowing rate of the Company, which is determined using the interest rate of the acquired Company’s long-term debt at the time of the commencement of the lease, which was 5%. The Company’s weighted-average remaining lease term relating to its operating leases is 1.42 years, with a weighted-average discount rate of 5%. The Company incurred lease expense for its operating leases of $87,868 which was included in “General and administrative expenses,” for the six months ended December 31, 2020. The Company incurred lease expense for its operating leases of $53,363 which was included in “General and administrative expenses,” for the three months ended December 31, 2020. At December 31, 2020, the Company had a right-of-use-asset related to operating leases of $388,854 and accumulated amortization related to operating leases of $86,320, both of which are included as right of use asset, net on the unaudited condensed consolidated balance sheets. The following table presents information about the amount, timing and uncertainty of cash flows arising from the Company’s operating leases as of December 31, 2020. Maturity of Lease Liability: Remainder of 2021 $ 75,227 Year ending 2022 150,455 Total undiscounted operating lease payments 225,682 Less: imputed interest (7,789 ) Present value of operating lease liabilities $ 217,893 |
Notes payable
Notes payable | 6 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Notes payable | Note 12 – Notes Payable The Company assumed a sterling term loan facility from HSBC with a limit of £250,000 (approximately $340,000) in connection with its acquisition of LHE (Note 3). The loan allows for a drawdown period up to 60 days following the loan acceptance date, with LHE electing to borrow the total amount available under the loan facility. The loan is to be repaid on a monthly basis beginning on the thirteenth month following the drawdown date until the date 3 years from the date of the drawdown of the loan (“Final Repayment Date.”). There is no interest on the loan in the first year and interest subsequently accrues at a rate of 3.49% per annum over the Bank of England Base Rate. Interest is payable monthly on the outstanding principal amount of the loan and on the Final Repayment Date. On December 31, 2020, the notes payable balance related to this loan facility was $341,290. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 13 – Commitments and contingencies Commitments On October 1, 2019, the Company entered into a sponsorship agreement with an eSports team (the “Team”) in order to obtain certain sponsorship-related rights, benefits, and opportunities with respect to the eSports team. The term of the contract was from October 1, 2019 to June 30, 2022. The Company agreed to pay the Team $516,000 over the term of the contract and $230,000 worth of common stock. The stock is payable in 12 equal installments on the first day of each month. On August 6, 2020, the Company entered into an amended and restated sponsorship agreement whereby the Company agreed to pay a total of $2,545,000 in cash and $825,000 of common stock in tranches throughout the term of the contract which expires on January 31, 2023. The Company issued 33,333 shares of common stock to the Team under the agreement to-date valued at $21,000. As of December 31, 2020, the Company has accrued $196,423 as accrued expenses in relation to this agreement. For the three and six months ended December 31, 2020, the Company has expensed $418,954 and $649,833 in accordance with the agreement. As of December 31, 2020, the commitments under this agreement are estimate at approximately $1,250,000 for the calendar year ended December 31, 2021 and $1,500,000 for the calendar year ended December 2022. On August 17, 2020, the Company entered into an agreement with Twin River Worldwide Holdings, Inc. (“Twin River”) that operates various online gaming and betting services in the state of New Jersey, USA. The organization will assist the Company in the operations and support to make available sports wagering to persons in New Jersey under the State Gaming Law. On the skin launch date (the “Launch Date”), which is expected to occur during the fiscal year ending June 30, 2021, the Company will pay the operator $1,500,000 and issue 50,000 shares of common stock. On each one-year anniversary of the Launch Date, the Company will pay an additional $1,250,000 and issue 10,000 shares of common stock. The agreement shall have a term of ten years from the Launch Date. In the ordinary course of business, the Company enters into multi-year agreements to purchase sponsorships with professional teams as part of its marketing efforts to expand competitive esports gaming. As of December 31, 2020, the commitments under these agreements are estimated at approximately $700,000 for the calender year ended December 31, 2021, $700,000 for the calender year ended December 31,2022 and $700,000 for the calender year ended December 31, 2023. Contingencies In September 2018, Boustead Securities, LLC (“Boustead”) notified the Company of a claim that they were owed $192,664, as well as warrants to purchase 1,417,909 shares of the Company’s common stock as compensation for their acting as the placement agent for the sale of the Company’s securities between June 2017 and 2018. This matter was then brought to arbitration pursuant to a clause in the placement agent agreement entered into by the Company and Boustead. Prior to the Arbitration hearing, Petitioner Boustead Securities, LLC offered a demand of nearly $500,000 to resolve the dispute. The offer was declined. The Arbitration hearing took place on December 7, 2020 through December 11, 2020. At the end of the Arbitration, Petitioner, Boustead Securities, LLC sought over $1.5 million in damages. On February 3, 2021, the Arbitrator issued her final Award on the dispute. While ultimately, the Company did not prevail on liability, the Arbitrator awarded Petitioner, Boustead Securities, LLC significantly less in damages. In total, the Arbitrator awarded Petitioner Boustead Securities, LLC $289,874 in damages and allowable costs (not attorneys’ fees) with interest accruing approximately $21 per day. While the Company disagrees that the Arbitrator should have awarded Petitioner, it is highly unlikely that a award is subject to an favorable appeal or objection to Superior Court, however, the timeline do so has not passed. If no appeal is made by either party Petitioner Boustead Securities, LLC may seek to confirm the Arbitration Award as a Superior Court Judgment and seek collection efforts. The Company may in lieu of such seek to pay some discounted balance of the award. To date, no decisions have been made. On August 3, 2020, Tangiers Global, LLC (“Tangiers”) filed a lawsuit in the United States District Court for the District of Nevada, entitled Tangiers Global, LLC, v. VGambling, Inc. et al, Case No. 2:20-cv-01434-APG-DJA. While filed in Nevada, the matter has now been successfully transferred to the District of Puerto Rico. The new case number is 3:20-cv-01520-RAM. The complaint for the lawsuit alleges, among other things, that the Company breached a certain 8% convertible promissory note, dated June 3, 2016, and Common Stock Purchase warrant of the same date. The Company submitted an Answer with Affirmative Defenses. The matter has not yet proceeded to the discovery phase, which is expected to begin in March, 2021. The Company believes the lawsuit lacks merit and will continue to vigorously challenge the action. At this time, the Company is unable to estimate potential damage exposure, if any, related to the litigation. On November 2, 2020, Brylan Lee Whatley (“Whatley”) filed a lawsuit in the New York State Supreme Court, New York County, entitled Brylan Lee Whatley v. Esports Gambling Group, Inc. f/k/a VGambling, Inc., Index No. 655901/2020. On December 31, 2020, prior to serving the original Complaint, Whatley submitted an Amended Complaint in this matter. The Amended Complaint alleges that the Company breached a consulting agreement with Whatley. The consulting agreement in question was never agreed to, or signed by, the Company. For that reason, and in light of many other available legal defenses, the Company is submitting a Motion to Dismiss the Amended Complaint. The Company believes the lawsuit lacks merit and will vigorously challenge the action, in addition, to file any motions or counterclaims that may exist. At this time, the Company is unable to estimate potential damage exposure, if any, related to the litigation. |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Dec. 31, 2020 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Revenue Recognition | Note 14 – Revenue Recognition As a result of the LHE Enterprises Limited acquisition, the Company has revenue generating operations. The Company recorded contract liabilities in the amount of $1,737,106 in connection with the acquisition of LHE Enterprises Limited. For the six months ended December 31, 2020, the Company recognized approximately $117,229 as revenues in relation to these contract liabilities. As of December 31, 2020, contract liabilities were $2,229,724, which are recorded as “Liabilities to customers” in the accompanying unaudited condensed consolidated balance sheets. Contract liabilities primarily relate to deposits received from customers where bets were not yet settled. The following table presents revenues from contracts with customers disaggregated by revenue source: For the three months ended December 31, 2020 For the six months ended December 31, 2020 Online betting and casino revenues $ 1,823,579 $ 1,891,791 Revenue sharing arrangements 416,609 533,996 Other services 122,005 158,798 Total $ 2,362,193 $ 2,584,585 The Company has revenue sharing arrangements whereby it provides wagering services to customers, software, tools and infrastructure for the operation and maintenance of online gaming services through partner website. The following table presents revenues from contracts with customers disaggregated by geographical area: For the three months ended For the six months ended United States $ 117,933 $ 156,915 Foreign 2,244,260 2,427,670 Total $ 2,362,193 $ 2,584,585 The Company did not have any revenues for the three and six months ended December 31, 2019. |
Equity
Equity | 6 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Equity | Note 15 – Equity Preferred Stock The Company has authorized 10,000,000 shares of preferred stock with a par value of $0.001 per share. There are no preferred shares designated, issued, and outstanding as of December 31, 2020 and June 30, 2020. Common Stock During the six months ended December 31, 2020, the Company issued 482,992 shares of its common stock for services rendered with a weighted average fair value of $5.91 per share or $2,856,613 in the aggregate. During the six months ended December 31, 2020, the Company issued 1,119,871 shares of common stock for the exercise of warrants with a weighted average exercise price of $3.85 per share or $4,258,042 in the aggregate. During the six months ended December 31, 2020, the Company issued 650,000 shares of common stock in relation to the LHE Enterprises Limited acquisition. The Company recorded these shares at fair value in the amount of $3,802,500 (see Note 3). On September 14, 2020, the Company issued 93,808 shares of common stock in relation to the Flip acquisition. The Company recorded these shares at fair value on the date of grant in the amount of $500,000 (see Note 3). During the six months ended December 31, 2019, the Company issued 16,667 shares of common stock related to a consulting agreement dated June 4, 2019. During the six months ended December 31, 2019, the Company issued 8,889 shares of its common stock for services rendered with a weighted average fair value of $6.52 per share or $58,000 in the aggregate. During the six months ended December 31, 2019, the Company issued 4,444 shares of common stock for the exercise of warrants with a weighted average exercise price of $2.25 per share or $10,000 in the aggregate. On October 8, 2019, the Company issued 41,779 shares of its common stock upon the exercise of 79,444 warrants upon a cashless exercise. On October 9, 2019, the Company issued 11,248 shares of its common stock upon the exercise of 21,389 warrants upon a cashless exercise. During the six months ended December 31, 2019, the Company issued 5,435 shares of its common stock upon entering waiver agreements. In consideration for the investors entrance into the waiver agreements, the Company issued to each investor an additional warrant to purchase such number of shares of the Company’s Common Stock equal to 5% of the warrant shares initially issuable to such investor under the warrant issued to such investor in the November 13, 2018 offering, as amended. The additional warrant has an exercise price of $11.25 per share. Common Stock Warrants During the six months ended December 31, 2020, the Company issued a warrant to purchase 1,000,000 shares of common stock in relation to the LHE Enterprises Limited acquisition. The warrant is exercisable at $8.00 per share and expires on July 31, 2023. The Company recorded the warrant at fair value of $5,488,171 (see Note 3). The warrant contains a cash settlement feature which results in a warrant liability. For the period ending December 31, 2020, the Company recorded a warrant liability of $4,859,782 in relation to the cash settlement feature. For the three months ending December 31, 2020, the Company recorded a loss on the change in fair value of warrant liability in the amount of $1,472,564. For the six months ending December 31, 2020, the Company recorded a gain on the change in fair value of warrant liability in the amount of $628,389. The Company valued the warrant using the Black-Scholes option pricing model with the following terms on July 31, 2020: (a) exercise price of $8.00, (b) volatility rate of 223.33%, (c) discount rate of 0.11%, (d) term of three years, and (e) dividend rate of 0%. The Company valued the warrant using the Black-Scholes option pricing model with the following terms on December 31, 2020: (a) exercise price of $8.00, (b) volatility rate of 156.04%, (c) discount rate of 0.17%, (d) term of 2 years and 6 months, and (e) dividend rate of 0%. The warrant issued to LHE Enterprises Limited has a call feature where the Company shall have the right to cause the exercise of the warrant (the “Forced Exercise”) if the volume weighted average price of the common stock of the Company shall equal or exceed 125% of the $8.00 exercise price of the warrant. For twenty consecutive trading days. As of December 31, 2020, the warrants are callable by the Company. A summary of the Company’s warrant activities is as follows: Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Life (Years) Intrinsic Value Outstanding and Exercisable, June 30, 2020 5,276,592 $ 4.28 0.86 $ 14,654,296 Issued 1,000,000 8.00 3.00 - Exercised (1,119,871 ) 3.85 2,853,035 Expired - Outstanding and Exercisable, December 31, 2020 5,156,722 $ 5.09 0.77 $ 8,561,967 Common Stock Options On August 1, 2017, the Company adopted the 2017 Stock Incentive Plan (the “2017 Plan”) whereby incentive stock options issued to employees, officers, and directors of the Company shall not exceed 166,667 of which the purchase price of the stock options shall not be less than 100% of the fair value of the Company’s common stock and the period for exercising the stock options not to exceed 10 years from the date of grant. The option price per share with respect to each option shall be determined by the committee for non-qualified stock options. On September 10, 2020, the Company’s board of directors adopted the 2020 Equity and Incentive Plan (the “2020 Plan”) which allows for 1,500,000 shares that may be awarded under the 2020 Plan. As of December 31, 2020, there were 683,854 shares available for issuance under the 2020 Plan. A summary of the Company’s stock option activity is as follows: Number of Options Weighted Average Exercise Price Outstanding, June 30, 2020 51,942 $ 10.50 Granted 408,400 $ 4.82 Exercised - - Cancelled (3,333 ) Outstanding, December 31, 2020 457,009 $ 5.42 As of December 31, 2020, the weighted average remaining life of the options outstanding was 4.94 years. As of December 31, 2020, there were 48,609 stocks options that were available for exercise. Stock Based Compensation During the six months ended December 31, 2020 and 2019, the Company recorded stock-based compensation expense of $2,311,591 and $329,960, respectively, for the amortization of stock options and the issuance of common stock to employees which has been recorded as general and administrative expense in the unaudited condensed consolidated statements of operations. As of December 31, 2020, unamortized stock compensation for stock options was $1,051,455 with a weighted-average recognition period of 1.07 years. The options granted during the six months ended December 31, 2020 were valued using the Black-Scholes option pricing model using the following weighted average assumptions: Six Months Ended December 31, 2020 Expected term, in years 2.63 Expected volatility 128.5 % Risk-free interest rate 0.33 % Dividend yield - Grant date fair value $ 4.60 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 16 – Subsequent Events Equity Issuances On February 11, 2021, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain investors resulting in the raise of $30,000,000 in gross proceeds for the Company. Pursuant to the terms of the Purchase Agreement, the Company agreed to sell, in a registered direct offering, an aggregate of 2,000,000 shares (the “Shares”) of the Company’s common stock, par value $0.001 per share at a price of $15.00 per Share. The closing of the sale of the Shares under the Purchase Agreement is expected to occur on or about February 16, 2021, subject to customary closing conditions. Subsequent to December 31, 2020, the Company issued 1,672,159 shares of common stock upon the exercise of warrants at a weighted average exercise price of $6.48 per share. Lucky Dino Purchase Agreement On December 14, 2020, the Company, via its wholly owned subsidiary, Esports Entertainment (Malta) Limited (“EEL”), entered into an asset purchase agreement (the “Lucky Dino Purchase Agreement”), subject to certain closing conditions, by and among EEL, Lucky Dino Gaming Limited, a company registered in Malta (“Lucky Dino”), and Hiidenkivi Estonia OU, a company registered in Estonia (“HEOU” and, together with Lucky Dino, the “Sellers”) whereby EEL purchased and assumed from the Sellers substantially all the assets and assumed certain specified liabilities of the Sellers’ business of real money online casino gaming (the “Acquired Business”). As consideration for the Acquired Business, the Company agreed to pay the Sellers EUR €25,000,000 (approximately USD $30,000,000) (the “Lucky Dino Purchase Price”) subject to certain adjustments set forth in the Lucky Dino Purchase Agreement. The Lucky Dino Purchase Agreement contains customary representations, warranties, covenants, indemnification and other terms for transactions of this nature. The closing of the transactions contemplated by the Lucky Dino Purchase Agreement is subject to certain conditions, including, among other things, the completion of an audit of Lucky Dino and HEOU. Phoenix Purchase Agreement On December 17, 2020, the Company entered into a share purchase agreement (the “Purchase Agreement”), by and among the Company, Phoenix Games Network Limited, a company registered in England and Wales (“Phoenix”), and the shareholders of Phoenix (the “Phoenix Shareholders” and, together with Phoenix, the “Selling Parties”), whereby the Company acquired from the Selling Parties all of the issued and outstanding share capital of Phoenix (the “Phoenix Shares”). Pursuant to the Purchase Agreement, as consideration for the Phoenix Shares, the Company agreed to pay the Sellers: (i) GBP £1,000,000 (approximately $1,370,000) (the “Original Cash Consideration”); and (ii) shares of common stock of the Company, par value $0.001 per share, in the aggregate value of GBP£3,000,000 (approximately $4,100,600) (the “Original Share Consideration” and, together with the Cash Consideration, the “Original Purchase Price”), subject to adjustment based on certain revenue milestones as outlined therein. On January 21, 2021, the Company and Sellers, having met all conditions precedent, consummated the closing for the Phoenix Shares pursuant to the terms of the Purchase Agreement. The Original Purchase Price was adjusted at closing and as consideration for the Phoenix Shares, the Company paid the Sellers: (i) GBP £350,000 (US $493,495) (the “Closing Cash Consideration”); and (ii) 292,211 shares of common stock of the Company, par value $0.001 per share (aggregate value of $1,927,647) (the “Closing Share Consideration” and, together with the Cash Closing Consideration, the “Closing Purchase Price”). The Closing Cash Consideration was be paid in US Dollars and was calculated in accordance with the applicable exchange rate on the Closing Date (as such term is defined in the Purchase Agreement). The Sellers shall remain eligible to receive the remainder of the Original Purchase Price upon Phoenix meeting certain revenue targets by May 16, 2021. Pursuant to the Purchase Agreement, the Selling Parties shall be entitled to receive an additional GBP£2,000,000 (approximately $2,700,000) if Phoenix has reached certain revenue milestones by the 18 month anniversary of the Closing Date as further outlined therein. Helix Holdings, LLC Purchase Agreement On January 22, 2021, the Company entered into an equity purchase agreement (the “Helix Purchase Agreement”), by and among the Company, Helix Holdings, LLC, a limited liability company incorporated under the laws of Delaware (“Helix”), and the equity holders of Helix (the “Helix Equity Holders”), whereby the Company can acquire from the Helix Equity Holders all of the issued and outstanding membership units of Helix (the “Helix Units”), making Helix a wholly owned subsidiary of the Company. As consideration for the Helix Units, the Company agreed to pay the Helix Equity Holders $17,000,000 (the “Helix Purchase Price”), to be paid fifty percent (50%) in shares of common stock of the Company, par value $0.001 per share (the “Common Stock”) (the “Helix Share Consideration”), and fifty percent (50%) in cash (the “Helix Cash Consideration”. The per share price of the Common Stock issuable as Helix Share Consideration shall be the Closing Base Price minus the Discount. “Closing Base Price” means the volume weighted average price (“VWAP”) of the Common Stock during the thirty (30) trading days immediately preceding the date of the closing under the Helix Purchase Agreement (the “Closing”). “Discount” equals the greater of (A) and (B) minus the lesser of (A) and (B) multiplied by 0.25 where (A) is the VWAP of the common stock during the thirty (30) trading days immediately preceding October 26, 2020 (which was $4.54 per share) multiplied by 1.25 (which is $5.675); and (B) is the Closing Base Price. The Closing under the Helix Purchase Agreement is subject to the simultaneous closing under an equity purchase agreement (the “GGC Purchase Agreement”) among the Company, ggCircuit LLC, an Indiana limited liability company (“GGC”) and the equity holders of GGC (the “GGC Equity Holders”), the principal terms of which are described below. The Closing is also subject to (i) the completion of an opinion (the “Fairness Opinion”) respecting the fairness of the consideration to be paid by the Company and received by the Helix Equity Holders and the GGC Equity Holders pursuant to the Helix Purchase Agreement and the GGC Purchase Agreement from a financial point of view; (ii) an audit, as of and for the two years ending December 31, 2019, and a financial review, for the nine month periods ended September 30, 2019 and 2020, of Helix and affiliated entities; and (iii) the approval of the Company’s shareholders to the issuance of the Helix Share Consideration and GGC Share Consideration (as defined below) in satisfaction of NASDAQ Rule 5635(a). The parties to the Helix Purchase Agreement may terminate the Helix Purchase Agreement, among other reasons, if (i) the Fairness Opinion does not support an aggregate purchase price for Helix and GGC of $43,000,000 and, based thereon, the Company is no longer willing to pay the Helix Purchase Price, or (ii) the Closing has not occurred on or before May 14, 2021 or such later date as may be mutually agreed to by the parties. The Company can also terminate the Helix Purchase Agreement if (i) upon completion of its legal, financial, tax and commercial due diligence of Helix and affiliated entities, it is not satisfied, with the results thereof; (ii) the audit and/or review of Helix and affiliated entities cannot be completed due to fraud, material accounting errors or otherwise or if the results of the audit or the review are materially and adversely different from the financial information provided by Helix and the Helix Equity Holders to the Company prior to the execution of the Helix Purchase Agreement. In connection with the negotiation of the Helix Purchase Agreement, the Company advanced an aggregate of $400,000 to Helix during 2020 in the form of loans (the “Helix Loans”). Upon execution of the Helix Purchase Agreement, the Company paid Helix an additional $400,000 to be used for operating expenses pending the Closing (the “Operating Expense Payments”). If the Closing takes place on or prior to May 14, 2021, the Company will receive a full credit against the Helix Purchase Price for the Helix Loans and if the Closing takes place prior to April 30, 2021 the Company will receive a full credit against the Helix Purchase Price for the Operating Expense Payments. If Closing takes place after April 30, 2021, but on or prior to May 14, 2021, the Company shall receive a credit against the Helix Purchase Price for 60% of the Operating Expense Payments. If the transaction does not close, depending on the reason, a portion of the Helix Loans and the Operating Expense Payments may be forgiven. The Helix Purchase Agreement contains customary representations, warranties, covenants, indemnification and other terms for transactions of a similar nature. ggCIRCUIT LLC Purchase Agreement On January 22, 2021, the Company entered into the GGC Purchase Agreement whereby the Company can acquire from the GGC Equity Holders all of the issued and outstanding membership units of GGC (the “GGC Units”), making GGC a wholly owned subsidiary of the Company. As consideration for the GGC Units, the Company agreed to pay the GGC Equity Holders $26,000,000 (the “GGC Purchase Price”) to be paid fifty percent (50%) in shares of Common Stock (the “GGC Share Consideration”), and fifty percent (50%) in cash (the “GGC Cash Consideration”) The per share price of the Common Stock issuable as GGC Share Consideration shall be the Closing Base Price minus the Discount. “Closing Base Price” means the volume weighted average price (“VWAP”) of the Common Stock during the thirty (30) trading days immediately preceding the date of the closing under the GGC Purchase Agreement (the “Closing”). “Discount” equals the greater of (A) and (B) minus the lesser of (A) and (B) multiplied by 0.25 where (A) is the VWAP of the common stock during the thirty (30) trading days immediately preceding October 26, 2020 (which was $4.54 per share) multiplied by 1.25(which is $5.675); and (B) is the Closing Base Price. The Closing under the GGC Purchase Agreement is subject to the simultaneous closing under the Helix Purchase Agreement. The Closing is also subject to (i) the completion of the Fairness Opinion; (ii) an audit, as of and for the two years ending December 31, 2019, and a financial review, for the nine month periods ended September 30, 2019 and 2020, of GGC and affiliated entities; and (iii) the approval of the Company’s shareholders to the issuance of the GGC Share Consideration and Helix Share Consideration in satisfaction of NASDAQ Rule 5635(a). The parties to the GGC Purchase Agreement may terminate the GGC Purchase Agreement, among other reasons, if (i) the Fairness Opinion does not support an aggregate purchase price for Helix and GGC of $43,000,000 and, based thereon, the Company is no longer willing to pay the GGC Purchase Price, or (ii) the Closing has not occurred on or before May 14, 2021 or such later date as may be mutually agreed to by the parties. The Company can also terminate the GGC Purchase Agreement if (i) upon completion of its legal, financial, tax and commercial due diligence of GGC and affiliated entities, it is not satisfied, with the results thereof; (ii) the audit and/or review of GGC and affiliated entities cannot be completed due to fraud, material accounting errors or otherwise or if the results of the audit or the review are materially and adversely different from the financial information provided by GGC and the GGC Equity Holders to the Company prior to the execution of the GGC Purchase Agreement. In connection with the negotiation of the GGC Purchase Agreement, the Company advanced an aggregate of $600,000 to GGC during 2020 in the form of loans (the “GGC Loans”). Upon execution of the GGC Purchase Agreement, the Company paid GGC an additional $600,000 to be used for operating expenses pending the Closing (the “Operating Expense Payments’). If the Closing takes place on or prior to May 14, 2021, the Company will receive a full credit against the GGC Purchase Price for the GGC Loans and if the Closing takes place prior to April 30, 2021 the Company will receive a full credit against the GGC Purchase Price for the Operating Expense Payments. If Closing takes place after April 30, 2021, but on or prior to May 14, 2021, the Company shall receive a credit against the GGC Purchase Price for 60% of the Operating Expense Payments. If the transaction does not close, depending on the reason, a portion of the GGC Loans and the Operating Expense Payments may be forgiven. The GGC Purchase Agreement contains customary representations, warranties, covenants, indemnification and other terms for transactions of a similar nature. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of presentation and principles of consolidation The accompanying unaudited condensed consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) set forth in Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete consolidated financial statements. The unaudited condensed consolidated financial statements reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Unaudited interim results are not necessarily indicative of the results for the full fiscal year. These unaudited condensed consolidated financial statements should be read along with the Annual Report filed on Form 10-K of the Company for the annual period ended June 30, 2020. The consolidated balance sheet as of June 30, 2020 was derived from the audited consolidated financial statements as of and for the year then ended. The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All material intercompany transactions and balances have been eliminated on consolidation. |
Reportable Segment | Reportable Segment The Company determined it has one reportable segment. This determination considers the organizational structure of the Company and the nature of financial information available and reviewed by the chief operating decision maker to assess performance and make decisions about resource allocations. |
Reclassifications | Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications had no effect on the reported results of operations. The Company reclassified taxes payable on its unaudited condensed consolidated balance sheet from accounts payable and accrued expenses. The Company also reclassified sales and marketing expenses on its unaudited condensed consolidated statements of operations and comprehensive loss from general and administrative expenses. |
Use of Estimates | Use of estimates The preparation of unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, as of the date of the unaudited condensed consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include the valuation and accounting for equity awards related to warrants and stock-based compensation, determination of fair value for derivative instruments, the accounting for business combinations and allocating purchase price, estimating the useful life of fixed assets and intangible assets, as well as the estimates related to accruals and contingencies. |
Liquidity and Going Concern | Liquidity and Going Concern The Company has historically incurred losses and negative cash flows as it prepared to grow its esports business through acquisitions and new venture opportunities. As of December 31, 2020, the Company had approximately $5.6 million of available cash on-hand and has raised additional funding of $10.7 million subsequent to December 31, 2020 from the exercise of certain warrants. The Company also raised aggregate gross proceeds of $30.0 million from an equity offering on February 16, 2021. Considering the cash on-hand as well as these additional sources of financing, the Company currently expects that its cash will be sufficient to fund its operating expenses and capital expenditure requirements for at least 12 months after February 16, 2021. While the Company expects revenues and cash flows to increase related to current and planned acquisitions, the Company expects to incur an annual operating loss and annual negative operating cash flows during the growth phase of the business. In December 2019, a novel strain of coronavirus (COVID-19) emerged in Wuhan, Hubei Province, China. While initially the outbreak was largely concentrated in China and caused significant disruptions to its economy, it has now spread to several other countries and infections have been reported globally. Due to the outbreak of Covid-19, almost all major sports events and leagues were postponed or put-on hold, for the period of Apr 2020-June 2020. The cancelation of major sports events had a significant short-term negative effect on betting activity globally. As a result, iGaming operators faced major short-term losses in betting volumes. Online casino operations have generally continued as normal without any noticeable disruption due to the Covid-19 outbreak. The virus’s expected effect on online casino activity globally is expected to be overall positive or neutral. Travel restrictions and border closures have not materially impacted the Company’s ability to manage and operate the day-to-day functions of the business. Management has been able to operate in a virtual setting. However, if such restrictions become more severe, they could negatively impact those activities in a way that would harm the business over the long term. Travel restrictions impacting people can restrain the ability to operate, but at present we do not expect these restrictions on personal travel to be material to the Company’s operations or financial results. The ultimate impact of the COVID-19 pandemic on the Company’s operations is unknown and will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the COVID-19 outbreak, new information which may emerge concerning the severity of the COVID-19 pandemic, and any additional preventative and protective actions that governments, or the Company, may direct, which may result in an extended period of continued business disruption and reduced operations. Any resulting financial impact cannot be reasonably estimated at this time but may have a material adverse impact on our business, financial condition and results of operations. |
Cash | Cash Cash includes cash on hand. Cash equivalents consist of highly liquid debt instruments purchased with an original maturity of three months or less. As of December 31, 2020 and June 30, 2020 there were no cash equivalents. At times, cash deposits inclusive of restricted cash may exceed FDIC-insured limits. At December 31, 2020 and June 30, 2020, the amount the Company had on deposit funds that exceeded the FDIC-insured limits were approximately $7,250,000 and $12,000,000, respectively. |
Restricted Cash | Restricted Cash Restricted cash includes cash reserves maintained by the Company in satisfaction of regulatory requirements related to user account balances. The Company presents 90% of its liabilities to customer as restricted cash. |
Receivables Reserved for Users | Receivables Reserved for Users User deposit receivables are stated at the amount the Company expects to collect from a payment processor. These arise due to the timing differences between a user’s deposit and the receipt of the payment into the Company’s bank accounts. Receivables also arise as the result of the securitization policies of certain payment processors. |
Equipment | Equipment Equipment is stated at cost less accumulated depreciation. Cost includes expenditures that are directly attributable to the acquisition of the asset. Additions and improvements that significantly extend the useful lives of assets are capitalized. Repairs and maintenance costs are charged to expense during the year in which they are incurred. Depreciation is provided for over the estimated useful life of the asset as follows: Furniture and equipment 5 years Computer equipment 3 years Useful lives and residual values are reviewed and adjusted, if appropriate, at the end of each reporting period. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. The cost and accumulated depreciation of assets retired or sold are removed from the respective accounts and any gain or loss is recognized in operations. |
Business Acquisition Accounting | Business Acquisition Accounting The Company applies the acquisition method of accounting for business acquisitions. The Company allocates the purchase price of its business acquisitions based on the fair value of identifiable tangible and intangible assets. The difference between the total cost of the acquisition and the sum of the fair values of acquired tangible and identifiable intangible assets less liabilities is recorded as goodwill. Transaction costs are expensed as incurred in general and administrative expenses. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets The Company has recorded intangible assets, including goodwill, in connection with business acquisitions. Estimated useful lives of amortizable intangible assets are determined by management based on an assessment of the period over which the asset is expected to contribute to future cash flows. In accordance with U.S. GAAP for goodwill and other indefinite-lived intangibles, the Company tests these assets for impairment annually and whenever events or circumstances make it more likely than not that impairment may have occurred. For the purposes of that assessment, the Company has determined to assign assets acquired in business combinations to a single reporting unit including all goodwill and indefinite-lived intangible assets acquired in business combinations. The Company did not record any impairment of goodwill or intangible assets during the six months ending December 31, 2020. The Company recorded an impairment of intangible assets of $67,131 during the six months ending December 31, 2019. |
Leases | Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases using the cumulative-effect adjustment transition method, which applies the provisions of the standard at the effective date without adjusting the comparative periods presented. The Company adopted the following practical expedients and elected the following accounting policies related to this standard update: ● Short-term lease accounting policy election allowing lessees to not recognize right-of-use assets and liabilities for leases with a term of 12 months or less. ● The option to not separate lease and non-lease components. ● The package of practical expedients applied to all of its leases, including (i) not reassessing whether any expired or existing contracts are or contain leases, (ii) not reassessing the lease classification for any expired or existing leases, and (iii) not reassessing initial direct costs for any existing leases. As a result of the above, the adoption of ASC 842 did not have a material effect on the unaudited condensed consolidated financial statements. Upon the acquisition of LHE Enterprises Limited, the Company recognized an operating lease right-of-use asset of $367,513 and lease liabilities of $236,807 on the unaudited condensed consolidated balance sheet . Disclosures related to the amount, timing and uncertainty of cash flows arising from leases are included in Note 11. |
Internal-Use Software | Internal-Use Software Capitalized internal-use software costs include external consulting fees, payroll and payroll-related costs and stock-based compensation for employees in the Company’s development and information technology groups who are directly associated with, and who devote time to, the Company’s internal-use software projects. Capitalization begins when the planning stage is complete and the Company commits resources to the software project, and continues during the application development stage. Capitalization ceases when the software has been tested and is ready for its intended use. Costs incurred during the planning, training and post-implementation stages of the software development life-cycle are expensed as incurred. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company reviews its long-lived assets, including definite-lived intangible assets for impairment whenever events and circumstances indicate that the carrying value of an asset might not be recoverable. An impairment loss, measured as the amount by which the carrying amount exceeds the fair value, is recognized if the carrying amount exceeds estimated undiscounted future cash flows. There were no long-lived asset impairment charges recorded during the three and six months periods ended December 31, 2020 and 2019. |
Income Taxes | Income Taxes The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the unaudited condensed consolidated financial statements or in the Company’s tax returns. Deferred tax assets and liabilities are determined on the basis of the differences between U.S. GAAP treatment and tax treatment of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. The Company assesses the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely than not that all or a portion of the deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense. Potential for recovery of deferred tax assets is evaluated by considering taxable income in carryback years, existing taxable temporary differences, prudent and feasible tax planning strategies and estimated future taxable profits. The Company accounts for uncertainty in income taxes recognized in the unaudited condensed consolidated financial statements by applying a twostep process to determine the amount of tax benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination by the taxing authorities. If the tax position is deemed more-likely-than-not to be sustained, the tax position is then assessed to determine the amount of benefit to recognize in the unaudited condensed consolidated financial statements. The amount of the benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. The provision for income taxes includes the effects of any resulting tax reserves, or unrecognized tax benefits, that are considered appropriate, as well as the related net interest and penalties. |
Derivative Instruments | Derivative Instruments The Company evaluates its convertible notes and warrants to determine if those contracts or embedded components of those contracts qualify as derivatives. The result of this accounting treatment is that the fair value of the embedded derivative is marked-to-market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statements of operations as other income or expense. In circumstances where the embedded conversion option in a convertible instrument is required to be bifurcated and there are also other embedded derivative instruments in the convertible instrument that are required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Equity instruments that are initially classified as equity that become subject to reclassification are reclassified to liability at the fair value of the instrument on the reclassification date. Derivative instrument liabilities are classified in the balance sheet as current or non-current to correspond with its host instrument. The Company marks to market the fair value of the remaining embedded derivative warrants at each balance sheet date and records the change in the fair value of the remaining embedded derivative warrants as other income or expense in the statements of operations. The Company utilizes the Monte Carlo Method that values the liability of the debt conversion feature derivative financial instruments and utilizes the Black-Scholes valuation model to value the derivative warrants. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts reported in the unaudited condensed consolidated balance sheets for cash, other receivables, loans receivable, receivables reserved for users, prepaid expenses and other current assets, accounts payable and accrued expenses, and liabilities to customers approximate fair value because of the immediate or short-term maturity of the financial instruments. The Company believes that its indebtedness approximates fair value based on current yields for debt instruments with similar terms. |
Income (Loss) Per Share | Income (Loss) Per Share Basic income (loss) per share is computed by dividing net income (loss) attributable to common shareholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) for the period. In periods of losses, diluted loss per share is computed on the same basis as basic loss per share as the inclusion of any other potential shares outstanding would be anti-dilutive. The following securities were excluded from weighted average diluted common shares outstanding for the three and six months ended December 31, 2020 and 2019 because their inclusion would have been antidilutive. As of December 31, 2020 2019 Common stock equivalents: Common stock options 457,009 51,942 Common stock warrants 5,156,722 807,717 Convertible notes - 375,834 Contingently issuable shares 15,667 2,667 Total 5,629,398 1,238,160 |
Comprehensive Loss | Comprehensive Loss Comprehensive loss consists of foreign currency translation adjustments related to the effect of foreign exchange on the value of our assets and liabilities. The cumulative net translation loss is included in the unaudited condensed consolidated statements of comprehensive loss |
Foreign Currency Translation | Foreign Currency Translation The functional currencies of the Company include the U.S. dollar, British Pounds Sterling, Euros, and Canadian dollar. The reporting currency of the Company is the U.S. Dollar. Assets and liabilities of the Company’s foreign operations with functional currencies other than the US dollar are translated at the exchange rate in effect at the balance sheet date, while revenues and expenses are translated at average rates prevailing during the periods. Translation adjustments are reported in accumulated other comprehensive loss, a separate component of stockholders’ equity. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. |
Stock-based Compensation | Stock-based Compensation The Company applies ASC 718-10, “ Share-Based Payments ASC 718-10 requires companies to estimate the fair value of equity-based payment awards on the date of grant using an option-pricing model. The fair value of the award is recognized as an expense on a straight-line basis over the requisite service periods in the Company’s consolidated statements of operations and comprehensive loss. The Company recognizes share-based award forfeitures as they occur rather than estimating by applying a forfeiture rate due to lack of historical experience. All issuances of stock options or other equity instruments to non-employees as consideration for goods or services received by the Company are accounted for based on the fair value of the equity instruments issued. The Company recognizes compensation expense for the fair value of non-employee awards based on the straight-line method over the requisite service period of each award. The Company estimates the fair value of stock options granted as equity awards using a Black-Scholes options pricing model. |
Advertising | Advertising Advertising costs consist primarily of online search advertising and placement, trade shows, advertising fees, and other promotional expenses. Advertising costs are expensed as incurred and are included in sales and marketing on the unaudited condensed consolidated statements of operations. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue in accordance with ASC Topic 606 – Revenue from Contracts with Customers i. Identification of the contract, or contracts, with a customer ii. Identification of the performance obligations in the contract iii. Determination of the transaction price iv. Allocation of the transaction price to the performance obligations in the contract v. Recognition of revenue, when, or as, the Company satisfies the performance obligation The Company generates revenue from end-users (“customers”) placing bets on its online gambling sites it operates for its brands. The performance obligations in the contract are the settlements of each individual bet. The Company offers a loyalty program that includes free play, cash bonuses, and loyalty points awarded based on individual play. The loyalty program is considered a nondiscretionary incentive available to the customer. The transaction price is the amount wagered by the customer less the amounts returned to, or won by, the customer. This is commonly referred to as the win or Gross Gaming Revenue (“GGR”). Management allocates the transaction price or the GGR to the performance obligations using relative standalone selling price. The Company’s performance obligations are as follows: 1. Settlement of each individual bet 2. Honoring of nondiscretionary incentives available to the customer as a result of the loyalty program. The Company records revenue as Net Gaming Revenue (“NGR”), which is the difference between the amount of money players wager minus the amount that they win, less any nondiscretionary incentives awarded. The Company records liabilities for amounts due to users of which the balance consists of user deposits, user winnings and nondiscretionary incentives awarded less user withdrawals and user losses. The Company applies a practical expedient by accounting for its performance obligations on a portfolio basis as these bets have similar characteristics and the Company reasonably expects the effects on the financial statements of applying the revenue recognition guidance to the portfolio will not differ materially from that which would result if applying the guidance to an individual bet placed. The Company grants three types of incentives that are standard in the gaming industry: (i) free bet whereby upon making a deposit and get another free bet regardless of the outcome of the first bet (ii) deposit match bonus in which the Company will match the player’s deposit up to a certain specified percentage or amount and (iii) loyalty points are earned based on the customers level of play which can be exchanged for free bets or cash. The incentives typically expire 3-6 months after they are granted and represent consideration payable to a customer that are included as a reduction of the transaction price for the wagering transaction. The transaction price for the bonus is variable based on the percentage of rewards expected to expire. We evaluate bets that users place on websites owned by third party brands in order to determine whether we are acting as the principal or as the agent when providing services, which we consider in determining if revenue should be reported gross or net. An entity is a principal if it has the ability to direct the use of and obtain substantially all the remaining benefits from, the asset. Control includes the ability to prevent other entities from directing the use of, and obtaining the benefits from, an asset. For these arrangements, we are the principal as we control the wagering service; therefore, any charges, including any applicable simulcast fees, we incur for delivering the wagering service are presented as operating expenses. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In August 2018, the FASB issued ASU 2018-15 , Intangibles-Goodwill and Other- Internal-Use Software (Subtopic 350-40 In October 2018, the FASB issued ASU 2018-17, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740) In June 2020, the FASB issued ASU No. 2020-06, Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40). From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that the Company adopts as of the specified effective date. The Company does not believe that the impact of recently issued standards that are not yet effective will have a material impact on the Company’s financial position or results of operations upon adoption. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Estimated Useful Life of Asset | Depreciation is provided for over the estimated useful life of the asset as follows: Furniture and equipment 5 years Computer equipment 3 years |
Schedule of Weighted Average Diluted Common Shares Outstanding | The following securities were excluded from weighted average diluted common shares outstanding for the three and six months ended December 31, 2020 and 2019 because their inclusion would have been antidilutive. As of December 31, 2020 2019 Common stock equivalents: Common stock options 457,009 51,942 Common stock warrants 5,156,722 807,717 Convertible notes - 375,834 Contingently issuable shares 15,667 2,667 Total 5,629,398 1,238,160 |
Business Acquisitions (Tables)
Business Acquisitions (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
AHG Entertainment, LLC [Member] | |
Schedule of Preliminary Purchase Price Allocation of Acquisition | The preliminary purchase price and purchase price allocation as of the acquisition completion date follows: Purchase price: Cash $ 1,250,000 Value of common stock issued 3,802,500 Value of warrant issued 5,488,171 Total purchase price consideration $ 10,540,671 Allocation of the purchase price: Current assets $ 833,769 Long-term assets 1,385,274 Player relationships 2,460,798 Betting platform software 2,698,968 Tradenames 839,189 Gaming licenses 144,000 Goodwill 6,358,592 Less: Current liabilities assumed (3,721,573 ) Non-current liabilities assumed (458,346 ) Total allocation of purchase price consideration $ 10,540,671 |
Schedule of Unaudited Pro Forma Operating Results | The following table provides unaudited pro forma results for the three months ended December 31, 2019, as if the Argyll Purchase Agreement consummated on July 1, 2019. The pro forma results of operations for these three months ended were prepared for comparative purposes only and do not purport to be indicative of what would have occurred had the Argyll Purchase Agreement been made as of July 1, 2019 or results that may occur in the future. Net revenue $ 2,944,522 Net loss $ (4,089,348 ) Net loss per common share, basic and diluted $ (0.62 ) The following table provides unaudited pro forma results for the six months ended December 31, 2020 and 2019, as if the Argyll Purchase Agreement consummated on July 1, 2019. The pro forma results of operations for these six month periods ended were prepared for comparative purposes only and do not purport to be indicative of what would have occurred had the Argyll Purchase Agreement been made as of July 1, 2019 or results that may occur in the future. Pro Forma (Unaudited) for the six months ended December 31, 2020 2019 Net revenue $ 2,725,840 $ 5,889,043 Net loss $ (9,985,552 ) $ (7,303,115 ) Net loss per common share, basic and diluted $ (0.76 ) $ (1.12 ) |
Flip Sports Limited [Member] | |
Schedule of Preliminary Purchase Price Allocation of Acquisition | The preliminary purchase price allocation of $1,100,000 as of the acquisition completion date of September 3, 2020 is as follows: Purchase price: Cash $ 100,000 Value of common stock issued 500,000 Value of contingent consideration 500,000 Total purchase price consideration $ 1,100,000 Allocation of the purchase price: Rewards platform software $ 550,000 Goodwill 550,000 Total allocation of purchase price consideration $ 1,100,000 |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets as of December 31, 2020 and June 30, 2020 consists of the following December 31, 2020 June 30, 2020 Loan receivable from Phoenix Games Network Limited $ 274,067 $ - Other receivable 132,769 - Prepaid insurance 60,206 159,941 Prepaid service contract 84,052 - Prepaid equity 50,000 100,000 Marketing expenses 34,129 - Licenses and fees 29,487 - Other prepaid operating costs 226,571 3,404 Prepaid expenses and other current assets $ 891,281 $ 263,345 |
Equipment (Tables)
Equipment (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Fixed Assets | Fixed assets as of December 31, 2020 and June 30, 2020 consists of the following: December 31, 2020 June 30, 2020 Computer equipment $ 100,944 $ 14,450 Furniture and equipment 152,320 20,241 253,264 34,691 Accumulated depreciation (185,794 ) (26,650 ) Equipment, net $ 67,470 $ 8,041 During the six months ended December 31, 2020 and 2019, the Company recorded total depreciation expense of $159,144 and $4,432, respectively. During the three months ended December 31, 2020 and 2019, the Company recorded total depreciation expense of $110,048 and $2,216, respectively. |
Intangible Assets (Tables)
Intangible Assets (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangible assets as of December 31, 2020 and June 30, 2020 consists of the following: December 31, 2020 June 30, 2020 Intangible assets not subject to amortization: Tradename $ 839,189 $ - Intangible assets subject to amortization: Player relationships 2,460,798 - Betting platform 2,698,968 - Rewards platform 887,827 - Licenses 144,000 - Online gaming website 6,000 6,000 7,036,782 6,000 Accumulated amortization (562,746 ) (4,000 ) Intangible assets, net $ 6,474,036 $ 2,000 |
Other Receivables (Tables)
Other Receivables (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Other Receivables | Other receivables as of December 31, 2020 consists of the following: December 31, 2020 Marketing advances to revenue partners $ 466,740 Other 342,206 Other receivables $ 808,946 |
Other Non-Current Assets (Table
Other Non-Current Assets (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
Other Assets, Noncurrent Disclosure [Abstract] | |
Schedule of Other Non-Current Assets | Other non-current assets as of December 31, 2020 and June 30, 2020 consists of the following : December 31, 2020 June 30, 2020 Deposits reserved for users $ 293,509 $ - Deposits for gaming duties 747,286 - Other deposits 128,610 6,833 Other non-current assets $ 1,169,405 $ 6,833 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Schedule of Maturity of Operating Lease Liability | The following table presents information about the amount, timing and uncertainty of cash flows arising from the Company’s operating leases as of December 31, 2020. Maturity of Lease Liability: Remainder of 2021 $ 75,227 Year ending 2022 150,455 Total undiscounted operating lease payments 225,682 Less: imputed interest (7,789 ) Present value of operating lease liabilities $ 217,893 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregated by Revenue | The following table presents revenues from contracts with customers disaggregated by revenue source: For the three months ended December 31, 2020 For the six months ended December 31, 2020 Online betting and casino revenues $ 1,823,579 $ 1,891,791 Revenue sharing arrangements 416,609 533,996 Other services 122,005 158,798 Total $ 2,362,193 $ 2,584,585 |
Schedule of Revenues from Contracts with Customers Disaggregated by Geographical Area | The following table presents revenues from contracts with customers disaggregated by geographical area: For the three months ended For the six months ended United States $ 117,933 $ 156,915 Foreign 2,244,260 2,427,670 Total $ 2,362,193 $ 2,584,585 |
Equity (Tables)
Equity (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Schedule of Warrant Activities | A summary of the Company’s warrant activities is as follows: Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Life (Years) Intrinsic Value Outstanding and Exercisable, June 30, 2020 5,276,592 $ 4.28 0.86 $ 14,654,296 Issued 1,000,000 8.00 3.00 - Exercised (1,119,871 ) 3.85 2,694,041 Expired - Outstanding and Exercisable, December 31, 2020 5,156,722 $ 5.09 0.77 $ 8,561,967 |
Schedule of Stock Option Activity | A summary of the Company’s stock option activity is as follows: Number of Options Weighted Average Exercise Price Outstanding, June 30, 2020 51,942 10.50 Granted 408,400 4.82 Exercised - - Cancelled (3,333 ) Outstanding, December 31, 2020 457,009 $ 5.42 |
Schedule of Weighted Average Assumptions Valued Using Black-Scholes Option Pricing Model | The options granted during the six months ended December 31, 2020 were valued using the Black-Scholes option pricing model using the following weighted average assumptions: Six Months Ended December 31, 2020 Expected term, in years 2.63 Expected volatility 128.5 % Risk-free interest rate 0.33 % Dividend yield - Grant date fair value $ 4.60 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) | 2 Months Ended | 3 Months Ended | 6 Months Ended | ||||
Feb. 16, 2021USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2020USD ($)Segment | Dec. 31, 2019USD ($) | Jun. 30, 2020USD ($) | Feb. 29, 2016USD ($) | |
Number of reportable segment | Segment | 1 | ||||||
Cash on hand | $ 5,600,000 | $ 5,600,000 | |||||
Proceeds from warrant exercise | 4,258,042 | $ 10,000 | |||||
Aggregate gross proceeds from equity offering | 30,000,000 | ||||||
Cash equivalents | |||||||
Deposit funds exceeded FDIC insured limits amount | 7,250,000 | $ 7,250,000 | 12,000,000 | ||||
Restricted cash description | The Company presents 90% of its liabilities to customer as restricted cash. | ||||||
Good will and intangible asset impairment | $ 67,131 | 67,131 | |||||
Operating lease right-of-use assets | 302,534 | 302,534 | |||||
Operating lease liabilities | $ 217,893 | 217,893 | |||||
Long-lived asset impairment charges | |||||||
Accounting Standards Update 2016-02 [Member] | |||||||
Operating lease right-of-use assets | $ 367,513 | ||||||
Operating lease liabilities | $ 236,807 | ||||||
Subsequent Event [Member] | |||||||
Proceeds from warrant exercise | $ 10,700,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Estimated Useful Life of Asset (Details) | 6 Months Ended |
Dec. 31, 2020 | |
Furniture and Equipment [Member] | |
Estimated useful life | 5 years |
Computer Equipment [Member] | |
Estimated useful life | 3 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Weighted Average Diluted Common Shares Outstanding (Details) - shares | 6 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Weighted average diluted common shares outstanding for antidilutive | 5,629,398 | 1,238,160 |
Common Stock Options [Member] | ||
Weighted average diluted common shares outstanding for antidilutive | 457,009 | 51,942 |
Common Stock Warrants [Member] | ||
Weighted average diluted common shares outstanding for antidilutive | 5,156,722 | 807,717 |
Convertible notes [Member] | ||
Weighted average diluted common shares outstanding for antidilutive | 375,834 | |
Contingently Issuable Shares [Member] | ||
Weighted average diluted common shares outstanding for antidilutive | 15,667 | 2,667 |
Business Acquisitions (Details
Business Acquisitions (Details Narrative) - LHE Enterprises Limited [Member] - USD ($) | Sep. 03, 2020 | Jul. 31, 2020 | Dec. 31, 2020 |
Stock issued during the period, shares | 650,000 | ||
Argyll Purchase Agreement [Member] | |||
Agreed to pay seller, description | Acquired Companies, the Company (i) paid AHG $1,250,000 in cash (the "Cash Purchase Price") of which $500,000 was previously paid; (ii) issued to AHG 650,000 shares of common stock of the Company (the "Consideration Shares"); and (iii) issued to AHG warrants to purchase up to 1,000,000 shares of common stock of the Company at an exercise price of $8.00 per share (the "Consideration Warrants" together with the Cash Purchase Price and the Consideration Shares the "Purchase Price"). The Consideration Warrants are exercisable for a term of three (3) years. | ||
Cash purchase price | $ 1,250,000 | ||
Cash purchase price previously paid | $ 500,000 | ||
Stock issued during the period, shares | 650,000 | ||
Consideration warrants price | $ 8 | ||
Warrants exercisable term | 3 years | ||
Total purchase price consideration | $ 10,540,671 | ||
Estimated useful life of identifiable intangible assets | 5 years | ||
Business acquisition transaction costs | $ 77,113 | ||
Argyll Purchase Agreement [Member] | Maximum [Member] | |||
Consideration shares issued | 1,000,000 | ||
Assignment of Intellectual Property Rights Agreement [Member] | |||
Cash purchase price | $ 100,000 | ||
Consideration shares issued | 93,808 | ||
Total purchase price consideration | $ 1,100,000 | ||
Estimated useful life of identifiable intangible assets | 5 years | ||
Business acquisition, description of acquired entity | The Company agreed to pay AHG an aggregate of $1,100,000 (the "Flip Purchase Price") payable as follows: (a) $100,000 in cash on the Effective Date ("Cash Consideration"); and (b) that certain number of shares the Company's restricted common stock, equal to $1,000,000 (the "Share Consideration") at a price per share equal to the 30-day weighted average of the Company's common stock immediately prior to the effective date, September 3, 2020, in accordance with the following payment schedule (i) that certain number of shares equal to $500,000 issued to AHG on the Effective Date ("Closing Shares"); and (ii) that certain number of shares equal to $500,000 of restricted common stock (the "Post Closing Shares") issued to AHG on the sixth (6) month anniversary of the Effective Date ("Final Payment Date"), subject to the continued employment of certain key employees of Flip as identified in the IP Assignment Agreement (the "Key Employees"). The cash equivalent amount of the Post Closing Shares shall be reducedby $100,000 per Key Employee no longer with the Company on the Final Payment Date. |
Business Acquisitions - Schedul
Business Acquisitions - Schedule of Preliminary Purchase Price Allocation of Acquisition (Details) - USD ($) | Sep. 03, 2020 | Jul. 31, 2020 | Dec. 31, 2020 | Jun. 30, 2020 |
Goodwill | $ 6,908,592 | |||
LHE Enterprises Limited [Member] | Argyll Purchase Agreement [Member] | ||||
Cash | $ 1,250,000 | |||
Total purchase price consideration | 10,540,671 | |||
Current assets | 833,769 | |||
Long-term assets | 1,385,274 | |||
Player relationships | 2,460,798 | |||
Betting platform software | 2,698,968 | |||
Tradenames | 839,189 | |||
Gaming licenses | 144,000 | |||
Goodwill | 6,358,592 | |||
Current liabilities assumed | (3,721,573) | |||
Non-current liabilities assumed | (458,346) | |||
Total allocation of purchase price consideration | 10,540,671 | |||
LHE Enterprises Limited [Member] | Argyll Purchase Agreement [Member] | Common Stock [Member] | ||||
Value of stock issued | 3,802,500 | |||
LHE Enterprises Limited [Member] | Argyll Purchase Agreement [Member] | Warrant [Member] | ||||
Value of stock issued | $ 5,488,171 | |||
LHE Enterprises Limited [Member] | Assignment of Intellectual Property Rights Agreement [Member] | ||||
Cash | $ 100,000 | |||
Total purchase price consideration | 1,100,000 | |||
Player relationships | 550,000 | |||
Goodwill | 550,000 | |||
Total allocation of purchase price consideration | 1,100,000 | |||
LHE Enterprises Limited [Member] | Assignment of Intellectual Property Rights Agreement [Member] | Common Stock [Member] | ||||
Value of stock issued | 500,000 | |||
LHE Enterprises Limited [Member] | Assignment of Intellectual Property Rights Agreement [Member] | Warrant [Member] | ||||
Value of stock issued | $ 500,000 |
Business Acquisitions - Sched_2
Business Acquisitions - Schedule of Unaudited Pro Forma Operating Results (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Business Combinations [Abstract] | |||
Net revenue | $ 2,944,522 | $ 2,725,840 | $ 5,889,043 |
Net loss | $ (4,089,348) | $ (9,985,552) | $ (7,303,115) |
Net loss per common share, basic and diluted | $ (0.62) | $ (0.76) | $ (1.12) |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets (Details) - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Loan receivable from Phoenix Games Network Limited | $ 274,067 | |
Other receivable | 132,769 | |
Prepaid insurance | 60,206 | 159,941 |
Prepaid service contract | 84,052 | |
Prepaid equity | 50,000 | 100,000 |
Marketing expenses | 34,129 | |
Licenses and fees | 29,487 | |
Other prepaid operating costs | 226,571 | 3,404 |
Prepaid expenses and other current assets | $ 891,281 | $ 263,345 |
Equipment (Details Narrative)
Equipment (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expenses | $ 110,048 | $ 2,216 | $ 159,144 | $ 4,432 |
Equipment - Schedule of Fixed A
Equipment - Schedule of Fixed Assets (Details) - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 |
Total | $ 253,264 | $ 34,691 |
Accumulated depreciation | (185,794) | (26,650) |
Equipment, net | 67,470 | 8,041 |
Computer Equipment [Member] | ||
Total | 100,944 | 14,450 |
Furniture and Equipment [Member] | ||
Total | $ 152,320 | $ 20,241 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Total amortization expense | $ 341,394 | $ 501 | $ 558,746 | $ 11,095 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 |
Intangible assets subject to amortization | $ 7,036,782 | $ 6,000 |
Accumulated amortization | (562,746) | (4,000) |
Intangible assets, net | 6,474,036 | 2,000 |
Player Relationships [Member] | ||
Intangible assets subject to amortization | 2,460,798 | |
Betting Platform [Member] | ||
Intangible assets subject to amortization | 2,698,968 | |
Rewards Platform [Member] | ||
Intangible assets subject to amortization | 887,827 | |
Licenses [Member] | ||
Intangible assets subject to amortization | 144,000 | |
Online Gaming Website [Member] | ||
Intangible assets subject to amortization | 6,000 | 6,000 |
Trade Name [Member] | ||
Intangible assets not subject to amortization | $ 839,189 |
Loans Receivable (Details Narra
Loans Receivable (Details Narrative) - USD ($) | Sep. 22, 2020 | Dec. 31, 2020 | Jun. 30, 2020 |
Loans receivable in relation to credit facility | $ 1,000,000 | ||
Two Credit Facility Agreements [Member] | |||
Line of credit facility, maximum borrowing capacity | $ 1,000,000 | ||
Line of credit facility, interest rate | 0.00% |
Other Receivables - Schedule of
Other Receivables - Schedule of Other Receivables (Details) - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Marketing advances to revenue partners | $ 466,740 | |
Other | 342,206 | |
Other receivables | $ 808,946 |
Other Non-Current Assets - Sche
Other Non-Current Assets - Schedule of Other Non-Current Assets (Details) - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 |
Other Assets, Noncurrent Disclosure [Abstract] | ||
Deposits reserved for users | $ 293,509 | |
Deposits for gaming duties | 747,286 | |
Other deposits | 128,610 | 6,833 |
Other non-current assets | $ 1,169,405 | $ 6,833 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Dec. 31, 2020USD ($) | Dec. 31, 2020USD ($) | Jun. 30, 2020USD ($) | Dec. 31, 2020EUR (€) | |
Related party charges | $ 17,192 | $ 68,577 | ||
Consultant Agreements [Member] | ||||
Monthly consultancy payments | 25,000 | 25,000 | ||
Employment Agreement [Member] | ||||
Monthly employee payroll | 500 | |||
Euro [Member] | Consultant Agreements [Member] | ||||
Monthly consultancy payments | € | € 18,000 | |||
Chief Executive Officer [Member] | ||||
Charges incurred | $ 1,200 | $ 2,400 | ||
Rent payments | $ 21,658 |
Leases (Details Narrative)
Leases (Details Narrative) | 3 Months Ended | 6 Months Ended |
Dec. 31, 2020USD ($) | Dec. 31, 2020USD ($) | |
Lessee, operating lease, remaining lease term upon acquisition | 2 years | 2 years |
Short-term lease, initial term of contract | 12 months | 12 months |
Operating leases, weighted-average remaining lease term | 1 year 5 months 1 day | 1 year 5 months 1 day |
Operating leases, weighted-average discount rate | 5.00% | 5.00% |
Operating leases right-of-use asset gross | $ 388,854 | $ 388,854 |
Operating leases, accumulated amortization | 86,320 | 86,320 |
General and Administrative Expense [Member] | ||
Operating lease expenses | $ 53,363 | $ 87,868 |
Leases - Schedule of Maturity o
Leases - Schedule of Maturity of Operating Lease Liability (Details) | Dec. 31, 2020USD ($) |
Leases [Abstract] | |
Remainder of 2021 | $ 75,227 |
Year ending 2022 | 150,455 |
Total undiscounted operating lease payments | 225,682 |
Less: imputed interest | (7,789) |
Present value of operating lease liabilities | $ 217,893 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - 6 months ended Dec. 31, 2020 | USD ($) | GBP (£) |
Notes payable | $ 341,290 | |
HSBC [Member] | Term Loan Facility [Member] | ||
Term loan limit, amount | $ 340,000 | |
Credit facility interest rate | 3.49% | |
HSBC [Member] | Term Loan Facility [Member] | GBP [Member] | ||
Term loan limit, amount | £ | £ 250,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | Feb. 03, 2021 | Aug. 17, 2020 | Aug. 06, 2020 | Oct. 02, 2019 | Feb. 12, 2021 | Sep. 30, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Sep. 18, 2018 | Jun. 03, 2016 |
Cost and expenses | $ 8,131,481 | $ 668,878 | $ 12,211,480 | $ 1,361,812 | ||||||||
Convertible promissory note percentage | 8.00% | |||||||||||
Subsequent Event [Member] | ||||||||||||
Stock issued during the period, shares | 1,672,159 | |||||||||||
Boustead Securities, LLC [Member] | Placement Agent [Member] | ||||||||||||
Sale of transaction for stock | $ 192,664 | |||||||||||
Warrants to purchase common stock | 1,417,909 | |||||||||||
Petitioner Boustead Securities, LLC [Member] | ||||||||||||
Description of loss contingency damages sought | Prior to the Arbitration hearing, Petitioner Boustead Securities, LLC offered a demand of nearly $500,000 to resolve the dispute. The offer was declined. The Arbitration hearing took place on December 7, 2020 through December 11, 2020. At the end of the Arbitration, Petitioner, Boustead Securities, LLC sought over $1.5 million in damages. | |||||||||||
Loss contingency damages sought value | $ 1,500,000 | |||||||||||
Petitioner Boustead Securities, LLC [Member] | Subsequent Event [Member] | ||||||||||||
Description of loss contingency actions taken by arabitrator | The Arbitrator awarded Petitioner, Boustead Securities, LLC significantly less in damages. In total, the Arbitrator awarded Petitioner Boustead Securities, LLC $289,874.14 in damages and allowable costs (not attorneys' fees) with interest accruing $20.78 per day | |||||||||||
Loss contingency damages awarded value | $ 289,874 | |||||||||||
One-Year Anniversary [Member] | ||||||||||||
Stock issued during the period, shares | 10,000 | |||||||||||
Stock issued during the period, value | $ 1,250,000 | |||||||||||
Debt instrument, term | 10 years | |||||||||||
Sponsorship Agreement [Member] | ||||||||||||
Consulting agreement description | The term of the contract was from October 1, 2019 to June 30, 2022 | |||||||||||
Consultant for compensation | $ 516,000 | |||||||||||
Stock issued during the period, shares | 33,333 | |||||||||||
Accrued expenses | 196,423 | $ 196,423 | ||||||||||
Cost and expenses | 418,954 | 649,833 | ||||||||||
Stock issued during the period, value | 21,000 | |||||||||||
Estimated commitment amount year 2021 | 1,250,000 | 1,250,000 | ||||||||||
Estimated commitment amount year 2022 | 1,500,000 | 1,500,000 | ||||||||||
Sponsorship Agreement [Member] | Common Stock [Member] | ||||||||||||
Consultant for compensation | $ 230,000 | |||||||||||
Amended and Restated Sponsorship Agreement [Member] | ||||||||||||
Consultant for compensation | $ 2,545,000 | |||||||||||
Termination of contract | Jan. 31, 2023 | |||||||||||
Amended and Restated Sponsorship Agreement [Member] | Common Stock [Member] | ||||||||||||
Consultant for compensation | $ 825,000 | |||||||||||
Twin River Agreement [Member] | ||||||||||||
Stock issued during the period, shares | 50,000 | |||||||||||
Stock issued during the period, value | $ 1,500,000 | |||||||||||
Multi-year Agreement [Member] | ||||||||||||
Estimated commitment amount year 2021 | 700,000 | 700,000 | ||||||||||
Estimated commitment amount year 2022 | 700,000 | 700,000 | ||||||||||
Estimated commitment amount year 2023 | $ 700,000 | $ 700,000 |
Revenue Recognition (Details Na
Revenue Recognition (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Jul. 31, 2020 | |
Revenues | $ 2,362,193 | $ 2,584,585 | |||
Liabilities To Customers Member] | |||||
Contract liabilities | $ 2,229,724 | 2,229,724 | |||
LHE Enterprises Limited [Member] | Accounting Standards Update 2014-09 [Member] | |||||
Contract liabilities, revenues recognized | $ 117,229 | ||||
LHE Enterprises Limited [Member] | Argyll Purchase Agreement [Member] | |||||
Contract liabilities | $ 1,737,106 |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Disaggregated by Revenue (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Total | $ 2,362,193 | $ 2,584,585 | ||
Online Betting and Casino Revenues [Member] | ||||
Total | 1,823,579 | 1,891,791 | ||
Revenue Sharing Arrangements [Member] | ||||
Total | 416,609 | 533,996 | ||
Other Services [Member] | ||||
Total | $ 122,005 | $ 158,798 |
Revenue Recognition - Schedul_2
Revenue Recognition - Schedule of Revenues from Contracts with Customers Disaggregated by Geographical Area (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Total | $ 2,362,193 | $ 2,584,585 | ||
U.S [Member] | ||||
Total | 117,933 | 156,915 | ||
Foreign [Member] | ||||
Total | $ 2,244,260 | $ 2,427,670 |
Equity (Details Narrative)
Equity (Details Narrative) | Sep. 14, 2020USD ($)shares | Sep. 10, 2020shares | Aug. 01, 2020shares | Oct. 09, 2019shares | Oct. 08, 2019shares | Dec. 31, 2020USD ($)$ / sharesshares | Sep. 30, 2020USD ($) | Dec. 31, 2019USD ($)$ / shares | Dec. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2019USD ($)$ / sharesshares | Jul. 31, 2020$ / shares | Jun. 30, 2020USD ($)$ / sharesshares |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | 10,000,000 | |||||||||
Preferred stock, par value | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||
Preferred stock, shares issued | 0 | 0 | 0 | |||||||||
Preferred stock, shares outstanding | 0 | 0 | 0 | |||||||||
Number of shares issued for service, value | $ | $ 982,771 | $ 1,873,842 | $ 58,000 | |||||||||
Warrant liability | $ | 4,859,782 | $ 4,859,782 | ||||||||||
Change in fair market value of warrant liability | $ | $ (1,472,564) | $ 628,389 | ||||||||||
Stock option term | 4 years 11 months 8 days | |||||||||||
Stock options shares issuable | 457,009 | 457,009 | 51,942 | |||||||||
Consultant Agreements [Member] | ||||||||||||
Stock issued during the period, shares | 16,667 | |||||||||||
Waiver Agreements [Member] | ||||||||||||
Warrants exercise price | $ / shares | $ 11.25 | $ 11.25 | ||||||||||
Stock issued during the period, shares | 5,435 | |||||||||||
Percentage for warrant issue | 5.00% | 5.00% | ||||||||||
LHE Enterprises Limited [Member] | ||||||||||||
Fair value of options | $ | $ 3,802,500 | |||||||||||
Stock issued during the period, shares | 650,000 | |||||||||||
Flip Sports Limited [Member] | ||||||||||||
Fair value of options | $ | $ 500,000 | |||||||||||
Stock issued during the period, shares | 93,808 | |||||||||||
Stock Options [Member] | ||||||||||||
Stock option term | 1 year 26 days | |||||||||||
Stock options available for exercise | 48,609 | |||||||||||
Stock-based compensation | $ | $ 2,311,591 | $ 329,960 | ||||||||||
Unamortized stock compensation | $ | $ 1,051,455 | $ 1,051,455 | ||||||||||
Stock Options [Member] | 2017 Stock Incentive Plan [Member] | ||||||||||||
Stock options shares issuable | ||||||||||||
Stock Options [Member] | 2017 Stock Incentive Plan [Member] | Employees, Officers, and Directors [Member] | ||||||||||||
Stock options award shares | 166,667 | |||||||||||
Stock options percentage | 100.00% | |||||||||||
Stock option term | 10 years | |||||||||||
Stock Options [Member] | 2020 Equity and Incentive Plan [Member] | ||||||||||||
Stock options award shares | 1,500,000 | |||||||||||
Stock options shares issuable | 683,854 | 683,854 | ||||||||||
Common Stock One [Member] | ||||||||||||
Number of shares issued for service, shares | 482,992 | 8,889 | ||||||||||
Share price | $ / shares | $ 5.91 | $ 6.52 | $ 5.91 | $ 6.52 | ||||||||
Number of shares issued for service, value | $ | $ 2,856,613 | $ 58,000 | ||||||||||
Warrant [Member] | ||||||||||||
Share of exercise of warrants, value | $ | $ 4,258,042 | $ 10,000 | ||||||||||
Share of exercise of warrants | 79,444 | 21,389 | 1,119,871 | |||||||||
Warrants exercise price | $ / shares | 3.85 | $ 2.25 | $ 3.85 | $ 2.25 | ||||||||
Stock issued during the period, shares | 41,779 | 11,248 | 4,444 | |||||||||
Warrant [Member] | LHE Enterprises Limited [Member] | ||||||||||||
Warrants exercise price | $ / shares | $ 8 | $ 8 | ||||||||||
Warrants to purchase | 1,000,000 | 1,000,000 | ||||||||||
Warrants expiration date | Jul. 31, 2023 | Jul. 31, 2023 | ||||||||||
Fair value of warrants | $ | $ 5,488,171 | |||||||||||
Warrant description | The warrant issued to LHE Enterprises Limited has a call feature where the Company shall have the right to cause the exercise of the warrant (the “Forced Exercise”) if the volume weighted average price of the common stock of the Company shall equal or exceed 125% of the $8.00 exercise price of the warrant. For twenty consecutive trading days. | |||||||||||
Warrant [Member] | LHE Enterprises Limited [Member] | Exercise Price [Member] | ||||||||||||
Warrants exercise price | $ / shares | $ 8 | $ 8 | $ 8 | |||||||||
Warrant [Member] | LHE Enterprises Limited [Member] | Volatility Rate [Member] | ||||||||||||
Warrants measurement input | 156.04 | 156.04 | 223.33 | |||||||||
Warrant [Member] | LHE Enterprises Limited [Member] | Discount Rate [Member] | ||||||||||||
Warrants measurement input | 0.17 | 0.17 | 0.11 | |||||||||
Warrant [Member] | LHE Enterprises Limited [Member] | Expected Term [Member] | ||||||||||||
Warrants term | 2 years 7 months 6 days | 2 years 7 months 6 days | 3 years | |||||||||
Warrant [Member] | LHE Enterprises Limited [Member] | Dividend Rate [Member] | ||||||||||||
Warrants measurement input | 0 | 0 | 0 | |||||||||
Common Stock Warrants [Member] | ||||||||||||
Warrant liability | $ | $ 4,859,752 | $ 4,859,752 | ||||||||||
Change in fair market value of warrant liability | $ | $ (1,472,564) | $ (628,389) |
Equity - Schedule of Warrant Ac
Equity - Schedule of Warrant Activities (Details) | 6 Months Ended |
Dec. 31, 2020USD ($)$ / sharesshares | |
Equity [Abstract] | |
Number of Warrants, Outstanding and Exercisable, Beginning Balance | 5,276,592 |
Number of Warrants, Issued | 1,000,000 |
Number of Warrants, Exercised | (1,119,871) |
Number of Warrants, Expired | |
Number of Warrants, Outstanding and Exercisable, Ending Balance | 5,156,722 |
Weighted Average Exercise Price, Outstanding and Exercisable, Beginning Balance | $ / shares | $ 4.28 |
Weighted Average Exercise Price, Issued | $ / shares | 8 |
Weighted Average Exercise Price, Exercised | $ / shares | 3.85 |
Weighted Average Exercise Price, Outstanding and Exercisable, Ending Balance | $ / shares | $ 5.09 |
Weighted Average Remaining Life (Years), Outstanding and Exercisable, Beginning Balance | 10 months 10 days |
Weighted Average Remaining Life (Years), Outstanding and Exercisable, Issued | 3 years |
Weighted Average Remaining Life (Years), Outstanding and Exercisable, Ending Balance | 9 months 7 days |
Intrinsic Value, Outstanding and Exercisable, Beginning Balance | $ | $ 14,654,296 |
Intrinsic Value, Exercised | $ | 2,853,035 |
Intrinsic Value, Outstanding and Exercisable, Ending Balance | $ | $ 8,561,967 |
Equity - Schedule of Stock Opti
Equity - Schedule of Stock Option Activity (Details) | 6 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Equity [Abstract] | |
Number of Options, Outstanding, Beginning Balance | 51,942 |
Number of Options, Granted | 408,400 |
Number of Options, Exercised | |
Number of Options, Cancelled | (3,333) |
Number of Options, Outstanding, Ending Balance | 457,009 |
Weighted Average Exercise Price, Outstanding, Beginning Balance | $ / shares | $ 10.50 |
Weighted Average Exercise Price, Granted | $ / shares | 4.82 |
Weighted Average Exercise Price, Exercised | $ / shares | |
Weighted Average Exercise Price, Outstanding, Ending Balance | $ / shares | $ 5.42 |
Equity - Schedule of Weighted A
Equity - Schedule of Weighted Average Assumptions Valued Using Black-Scholes Option Pricing Model (Details) | 6 Months Ended |
Dec. 31, 2020$ / shares | |
Equity [Abstract] | |
Expected term, in years | 2 years 7 months 17 days |
Expected volatility | 128.50% |
Risk-free interest rate | 0.33% |
Dividend yield | |
Grant date fair value | $ 4.60 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) | Feb. 11, 2021USD ($)$ / sharesshares | Jan. 22, 2021USD ($) | Jan. 21, 2021USD ($)$ / sharesshares | Jan. 21, 2021GBP (£)shares | Dec. 14, 2020USD ($)$ / shares | Dec. 14, 2020EUR (€) | Dec. 14, 2020GBP (£) | Feb. 12, 2021$ / sharesshares | Dec. 31, 2020USD ($)$ / sharesshares | Jun. 30, 2020$ / sharesshares |
Aggregate gross proceeds from equity offering | $ 30,000,000 | |||||||||
Common stock, shares issued | shares | 13,579,894 | 11,233,223 | ||||||||
Common stock par value | $ / shares | $ 0.001 | $ 0.001 | ||||||||
Lucky Dino Purchase Agreement [Member] | ||||||||||
Payments for sale of stock | $ 30,000,000 | |||||||||
Lucky Dino Purchase Agreement [Member] | Euro [Member] | ||||||||||
Payments for sale of stock | € | € 25,000,000 | |||||||||
Phoenix Purchase Agreement [Member] | ||||||||||
Common stock par value | $ / shares | $ 0.001 | |||||||||
Payments for sale of stock | $ 1,370,000 | |||||||||
Stock issued during the period | $ 4,100,600 | |||||||||
Phoenix Purchase Agreement [Member] | GBP [Member] | ||||||||||
Payments for sale of stock | £ | £ 1,000,000 | |||||||||
Stock issued during the period | £ | £ 3,000,000 | |||||||||
Helix Holdings, LLC Purchase Agreement [Member] | ||||||||||
Payments of common stock | $ 43,000,000 | |||||||||
Loans advanced | 400,000 | |||||||||
Operating expenses | $ 400,000 | |||||||||
Expected full credit, description | If the Closing takes place on or prior to May 14, 2021, the Company will receive a full credit against the Helix Purchase Price for the Loans and if the Closing takes place prior to April 30, 2021 the Company will receive a full credit against the Helix Purchase Price for the Operating Expense Payments. If Closing takes place after April 30, 2021, but on or prior to May 14, 2021, the Company shall receive a credit against the Helix Purchase Price for 60% of the Operating Expense Payments. If the transaction does not close, depending on the reason, a portion of the Loans and the Operating Expense Payments may be forgiven. | |||||||||
Helix Holdings, LLC Purchase Agreement [Member] | GGC Equity Holders [Member] | ||||||||||
Payments of common stock | $ 43,000,000 | |||||||||
Subsequent Event [Member] | ||||||||||
Stock issued during the period, shares | shares | 1,672,159 | |||||||||
Excerise price of warrants | $ / shares | $ 6.48 | |||||||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | ||||||||||
Aggregate gross proceeds from equity offering | $ 30,000,000 | |||||||||
Common stock, shares issued | shares | 2,000,000 | |||||||||
Common stock par value | $ / shares | $ 0.0001 | |||||||||
Shares issued price per share | $ / shares | $ 15 | |||||||||
Subsequent Event [Member] | Phoenix Purchase Agreement [Member] | ||||||||||
Common stock par value | $ / shares | $ 0.001 | |||||||||
Stock issued during the period, shares | shares | 292,211 | 292,211 | ||||||||
Payments for sale of stock | $ 493,495 | |||||||||
Stock issued during the period | 1,927,647 | |||||||||
Subsequent Event [Member] | Phoenix Purchase Agreement [Member] | Selling Parties [Member] | ||||||||||
Payments for sale of stock | 2,700,000 | |||||||||
Subsequent Event [Member] | Phoenix Purchase Agreement [Member] | GBP [Member] | ||||||||||
Payments for sale of stock | $ 350,000 | |||||||||
Subsequent Event [Member] | Phoenix Purchase Agreement [Member] | GBP [Member] | Selling Parties [Member] | ||||||||||
Payments for sale of stock | £ | £ 2,000,000 | |||||||||
Subsequent Event [Member] | Helix Holdings, LLC Purchase Agreement [Member] | Helix Equity Holders [Member] | ||||||||||
Payments of common stock | $ 17,000,000 | |||||||||
Common stock description | To be paid fifty percent (50%) in shares of common stock of the Company, par value $0.001 per share (the "Common Stock") (the "Helix Share Consideration"), and fifty percent (50%) in cash (the "Helix Cash Consideration". The per share price of the Common Stock issuable as Helix Share Consideration shall be the Closing Base Price minus the Discount. "Closing Base Price" means the volume weighted average price ("VWAP") of the Common Stock during the thirty (30) trading days immediately preceding the date of the closing under the Helix Purchase Agreement (the "Closing"). "Discount" equals the greater of (A) and (B) minus the lesser of (A) and (B) multiplied by 0.25 where (A) is the VWAP of the common stock during the thirty (30) trading days immediately preceding October 26, 2020 (which was $4.54 per share) multiplied by 1.25 (which is $5.675); and (B) is the Closing Base Price. | |||||||||
Subsequent Event [Member] | Helix Holdings, LLC Purchase Agreement [Member] | GGC Equity Holders [Member] | ||||||||||
Payments of common stock | $ 26,000,000 | |||||||||
Common stock description | To be paid fifty percent (50%) in shares of Common Stock (the "GGC Share Consideration"), and fifty percent (50%) in cash (the "GGC Cash Consideration") The per share price of the Common Stock issuable as GGC Share Consideration shall be the Closing Base Price minus the Discount. "Closing Base Price" means the volume weighted average price ("VWAP") of the Common Stock during the thirty (30) trading days immediately preceding the date of the closing under the GGC Purchase Agreement (the "Closing"). "Discount" equals the greater of (A) and (B) minus the lesser of (A) and (B) multiplied by 0.25 where (A) is the VWAP of the common stock during the thirty (30) trading days immediately preceding October 26, 2020 (which was $4.54 per share) multiplied by 1.25(which is $5.675); and (B) is the Closing Base Price. | |||||||||
Debt aggregate amount in advance | $ 600,000 | |||||||||
Percentage of purchase price | 60.00% |