Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2021 | May 19, 2021 | |
Document Information Line Items | ||
Entity Registrant Name | ALLIED ESPORTS ENTERTAINMENT INC. | |
Trading Symbol | AESE | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 39,162,811 | |
Amendment Flag | false | |
Entity Central Index Key | 0001708341 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Mar. 31, 2021 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Shell Company | false | |
Entity Ex Transition Period | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-38226 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 82-1659427 | |
Entity Address, Address Line One | 17877 Von Karman Avenue, | |
Entity Address, Address Line Two | Suite 300 | |
Entity Address, City or Town | Irvine | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92614 | |
City Area Code | (949) | |
Local Phone Number | 225-2600 | |
Title of 12(b) Security | Common Stock | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | Yes |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Current Assets | ||
Cash | $ 10,543,015 | $ 424,223 |
Restricted cash | 5,000,000 | 5,000,000 |
Accounts receivable | 62,297 | 271,142 |
Prepaid expenses and other current assets | 618,876 | 909,766 |
Current assets held for sale | 47,286,263 | 45,363,817 |
Total Current Assets | 63,510,451 | 51,968,948 |
Property and equipment, net | 8,386,189 | 9,275,729 |
Intangible assets, net | 29,820 | 30,818 |
Deposits | 625,000 | 625,000 |
Total Assets | 72,551,460 | 61,900,495 |
Current Liabilities | ||
Accounts payable | 1,090,025 | 901,353 |
Deposit for sale of WPT | 10,000,000 | |
Accrued expenses and other current liabilities | 2,254,191 | 1,987,017 |
Accrued interest, current portion | 256,249 | 152,899 |
Due to affiliates | 11,968,377 | 9,433,975 |
Deferred revenue | 98,903 | 57,018 |
Bridge note payable | 1,421,096 | 1,421,096 |
Convertible debt, net of discount, current portion | 1,000,000 | 1,000,000 |
Convertible debt, related party, net of discount, current portion | 1,000,000 | 1,000,000 |
Loans payable, current portion | 814,960 | 539,055 |
Current liabilities held for sale | 9,248,465 | 9,169,247 |
Total Current Liabilities | 39,152,266 | 25,661,660 |
Deferred rent | 1,827,909 | 1,693,066 |
Accrued interest, non-current portion | 193,939 | |
Convertible debt, net of discount, non-current portion | 578,172 | |
Loans payable, non-current portion | 92,169 | 368,074 |
Total Liabilities | 41,072,344 | 28,494,911 |
Commitments and Contingencies | ||
Stockholders’ Equity | ||
Preferred stock, $0.0001 par value, 1,000,000 shares authorized, none issued and outstanding | ||
Common stock, $0.0001 par value; 100,000,000 shares authorized, 39,162,811 and 38,506,844 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively | 3,917 | 3,851 |
Additional paid in capital | 196,872,987 | 195,488,181 |
Accumulated deficit | (165,614,090) | (162,277,414) |
Accumulated other comprehensive income | 216,302 | 190,966 |
Total Stockholders’ Equity | 31,479,116 | 33,405,584 |
Total Liabilities and Stockholders’ Equity | $ 72,551,460 | $ 61,900,495 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares | Mar. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, authorized shares | 1,000,000 | 1,000,000 |
Preferred stock, issued shares | ||
Preferred stock, outstanding shares | ||
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, authorized shares | 100,000,000 | 100,000,000 |
Common stock, issued shares | 39,162,811 | 38,506,844 |
Common stock, outstanding shares | 39,162,811 | 38,506,844 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Revenues: | ||
In-person | $ 501,028 | $ 1,057,741 |
Total Revenues | 501,028 | 1,057,741 |
Costs and Expenses: | ||
In-person (exclusive of depreciation and amortization) | 537,867 | 987,443 |
Online operating expenses | 40,319 | 61,707 |
Selling and marketing expenses | 43,934 | 75,727 |
General and administrative expenses | 3,229,555 | 3,453,097 |
Stock-based compensation | 643,148 | 3,946,786 |
Depreciation and amortization | 881,959 | 899,097 |
Total Costs and Expenses | 5,376,782 | 9,423,857 |
Loss From Operations | (4,875,754) | (8,366,116) |
Other Income (Expense): | ||
Other income (expense), net | 55,142 | (2,202) |
Interest expense | (153,106) | (682,940) |
Total Other Expense | (97,964) | (685,142) |
Loss from continuing operations | (4,973,718) | (9,051,258) |
Income from discontinued operations, net of tax provision | 1,637,042 | 274,789 |
Net loss | $ (3,336,676) | $ (8,776,469) |
Basic and Diluted Net (Loss) Income per Common Share | ||
Continuing operations (in Dollars per share) | $ (0.13) | $ (0.38) |
Discontinued operations, net of tax (in Dollars per share) | $ 0.04 | $ 0.01 |
Weighted Average Number of Common Shares Outstanding: | ||
Basic and Diluted (in Shares) | 38,522,107 | 23,818,144 |
Comprehensive Loss | ||
Net Loss | $ (3,336,676) | $ (8,776,469) |
Other comprehensive income: | ||
Foreign currency translation adjustments | 25,336 | |
Total Comprehensive Loss | $ (3,311,340) | $ (8,776,469) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) | Common Stock | Common Stock Subscribed | Additional Paid-in Capital | Subscription Receivable | Accumulated Other Comprehensive Income | Accumulated Deficit | Total |
Balance at Dec. 31, 2019 | $ 2,317 | $ 161,300,916 | $ 136,177 | $ (117,218,584) | $ 44,220,826 | ||
Balance (in Shares) at Dec. 31, 2019 | 23,176,146 | ||||||
Common stock issued for cash | $ 76 | 4,999,924 | 5,000,000 | ||||
Common stock issued for cash (in Shares) | 758,725 | ||||||
Stock-based compensation: | |||||||
Restricted common stock | 113,436 | 113,436 | |||||
Restricted common stock (in Shares) | |||||||
Stock options | 240,399 | 240,399 | |||||
Stock options (in Shares) | |||||||
Subscription of common stock in connection with exercise of put option | $ 102 | 1,999,898 | $ (2,000,000) | ||||
Subscription of common stock in connection with exercise of put option (in Shares) | 1,018,848 | ||||||
Net loss | (8,776,469) | (8,776,469) | |||||
Balance at Mar. 31, 2020 | $ 2,393 | $ 102 | 168,654,573 | (2,000,000) | 136,177 | (125,995,053) | 40,798,192 |
Balance (in Shares) at Mar. 31, 2020 | 23,934,871 | 1,018,848 | |||||
Balance at Dec. 31, 2020 | $ 3,851 | 195,488,181 | 190,966 | (162,277,414) | 33,405,584 | ||
Balance (in Shares) at Dec. 31, 2020 | 38,506,844 | ||||||
Stock-based compensation: | |||||||
Common stock | $ 13 | 199,987 | 200,000 | ||||
Common stock (in Shares) | 126,584 | ||||||
Restricted common stock | 80,006 | 80,006 | |||||
Restricted common stock (in Shares) | |||||||
Stock options | 282,999 | 282,999 | |||||
Stock options (in Shares) | |||||||
Shares issued for redemption of debt and accrued interest | $ 53 | 821,814 | 821,867 | ||||
Shares issued for redemption of debt and accrued interest (in Shares) | 529,383 | ||||||
Net loss | (3,336,676) | (3,336,676) | |||||
Other comprehensive income | 25,336 | 25,336 | |||||
Balance at Mar. 31, 2021 | $ 3,917 | $ 196,872,987 | $ 216,302 | $ (165,614,090) | $ 31,479,116 | ||
Balance (in Shares) at Mar. 31, 2021 | 39,162,811 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash Flows From Operating Activities | ||
Net loss | $ (3,336,676) | $ (8,776,469) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Income from discontinued operations, net of tax provision | (1,637,042) | (274,789) |
Stock-based compensation | 643,148 | 3,946,786 |
Change in fair value of warrant liabilities | 36,300 | 0 |
Amortization of debt discount | 3,646 | 64,192 |
Expenses paid on behalf of WPT | (136,329) | (110,898) |
Depreciation and amortization | 965,217 | 899,097 |
Deferred rent | (14,076) | 5,683 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 207,921 | 501,586 |
Prepaid expenses and other current assets | 286,932 | 278,742 |
Accounts payable | 190,440 | 579,628 |
Accrued expenses and other current liabilities | 235,544 | (102,037) |
Accrued interest | 149,460 | 618,748 |
Due to affiliates | 2,534,402 | 1,432,526 |
Deferred revenue | 41,885 | 231,071 |
Total Adjustments | 3,507,448 | 8,070,335 |
Net Cash Provided by (Used In) Operating Activities | 170,772 | (706,134) |
Cash Flows From Investing Activities | ||
Deposit for sale of WPT | 10,000,000 | |
Return of Simon investment | (3,650,000) | |
Investment in TV Azteca | (1,500,000) | |
Purchases of property and equipment | (10,203) | (225,007) |
Net Cash Provided By (Used in) Investing Activities | 9,989,797 | (5,375,007) |
Cash Flows From Financing Activities | ||
Proceeds from sale of common stock | 5,000,000 | |
Net Cash Provided By Financing Activities | 5,000,000 | |
Cash Flows From Discontinued Operations | ||
Operating activities | (974,601) | (2,392,099) |
Investing activities | 1,013,683 | 734,301 |
Financing activities | (685,300) | |
Change in cash included in discontinued operations | 646,218 | 1,657,798 |
Net Cash Provided By Discontinued Operations | ||
Effect of Exchange Rate Changes on Cash | (41,776) | |
Net Increase (Decrease) In Cash And Restricted Cash | 10,118,793 | (1,081,141) |
Cash and restricted cash - Beginning of period | 5,424,222 | 6,927,417 |
Cash and restricted cash - End of period | 15,543,015 | 5,846,276 |
Cash and restricted cash consisted of the following: | ||
Cash | 10,543,015 | 846,276 |
Restricted cash | 5,000,000 | 5,000,000 |
Total | 15,543,015 | 5,846,276 |
Non-Cash Financing Activities | ||
Shares issued for redemption of debt and accrued interest | $ 821,867 |
Business Organization and Natur
Business Organization and Nature of Operations | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Business Organization and Nature of Operations | Note 1 – Business Organization and Nature of Operations Allied Esports Entertainment Inc., (“AESE” or “the Company”), operates a public esports and entertainment company, consisting of the Allied Esports and World Poker Tour businesses. Allied Esports operates through its wholly owned subsidiaries Allied Esports International, Inc., (“AEII”), Esports Arena Las Vegas, LLC (“ESALV”) and ELC Gaming GMBH (“ELC Gaming”). AEII operates global competitive esports properties designed to connect players and fans via a network of connected arenas. ESALV operates a flagship gaming arena located at the Luxor Hotel in Las Vegas, Nevada. ELC Gaming operates a mobile esports truck that serves as both a battleground and content generation hub and also operates a studio for recording and streaming gaming events. AESE’s wholly owned subsidiaries, Peerless Media Limited, Club Services, Inc. (“CSI”) and WPT Enterprises, Inc., operate the poker-related business of AESE and are collectively referred to herein as “World Poker Tour” or “WPT”. The World Poker Tour is an internationally televised gaming and entertainment company that has been involved in the sport of poker since 2002 and created a television show based on a series of high-stakes poker tournaments. On January 19, 2021, the Company entered into a stock purchase agreement (the “SPA”) for the sale of 100% of the capital stock of its wholly-owned subsidiary, CSI. CSI owns 100% of each of the legal entities which comprise the World Poker Tour. As the result of the Company’s entry into the SPA, the Consolidated Balance Sheets as of March 31, 2021 and December 31, 2020, the Consolidated Statements of Operations for the three months ended March 31, 2021 and 2020, and the Consolidated Statements of Cash Flows for the three months ended March 31, 2021 and 2020, present the results and accounts of World Poker Tour as discontinued operations and the related assets and liabilities are presented as held for sale. See Note 4 – Discontinued Operations. |
Going Concern and Management's
Going Concern and Management's Plans | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern and Management’s Plans | Note 2 – Going Concern and Management’s Plans As of March 31, 2021, the Company had cash of $10.5 million (not including approximately $5.0 million of restricted cash and approximately $2.9 million of cash held for sale and included in current assets of discontinued operations) and a working capital deficit (defined as total current assets of continuing operations less total current liabilities of continuing operations) of approximately $13.6 million. For the three months ended March 31, 2021 and 2020, the Company incurred net losses from continuing operations of approximately $5.0 million and $9.1 million, respectively, and has cash flows provided by (used in) continuing operations of approximately $0.2 million and $(0.7) million, respectively. As of March 31, 2021, the Company has convertible debt and bridge note obligations in the aggregate gross principal amount of $3.4 million (see Note 6 - Convertible Debt and Note 7 – Bridge Note Payable) which mature on February 23, 2022 but will be paid upon the closing of the sale of WPT (see Note 4 – Discontinued Operations). In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (“COVID-19”) as a pandemic which continues to spread throughout the United States. As a global entertainment company that hosts numerous live events with spectators and participants in destination cities, the outbreak has caused people to avoid traveling to and attending these events. Allied Esports’ has cancelled or postponed live events, and before the reopening of Allied Esports’ flagship gaming arena located at the Luxor Hotel in Las Vegas, Nevada on June 25, 2020 the business was operating online only. The arena is currently running under a modified schedule and limited capacity (up to 80% capacity depending on the event) for daily play and weekly tournaments. The Company is continuing to monitor the outbreak of COVID-19 and the related business and travel restrictions, and changes to behavior intended to reduce its spread, and the related impact on the Company’s operations, financial position and cash flows, as well as the impact on its employees. Due to the rapid development and fluidity of this situation, the magnitude and duration of the pandemic and its impact on the Company’s future operations and liquidity is uncertain as of the date of this report. While there could ultimately be a material impact on operations and liquidity of the Company, at the time of issuance, the extent of the impact cannot be determined. The aforementioned factors raise substantial doubt about the Company’s ability to continue as a going concern within one year after the issuance date of these condensed consolidated financial statements. The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which contemplate continuation of the Company as a going concern and the realization of assets and the satisfaction of liabilities in the normal course of business. The condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset amounts or the classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company’s continuation is dependent upon attaining and maintaining profitable operations and, until that time, raising additional capital as needed, but there can be no assurance that it will be able to close on sufficient financing. The Company’s ability to generate positive cash flow from operations is dependent upon generating sufficient revenues. To date, the Company’s operations have been funded through the issuance of debt and equity securities, by its former parent, and with cash acquired in the merger with Black Ridge Acquisition Corp on August 9, 2019. The Company expects to receive cash in connection with the sale of the WPT business, which is expected to close late in the second quarter of 2021 or early in the third quarter of 2021 (see Note 4 – Discontinued Operations). The Company cannot provide any assurances that it will be able to secure additional funding, either from equity offerings or debt financings, on terms acceptable to the Company, if at all, or that the sale of the WPT business will close as planned. If the Company is unable to obtain the requisite amount of financing needed to fund its planned operations, including the repayment of convertible debt, it would have a material adverse effect on its business and ability to continue as a going concern, and it may have to explore the sale of, or curtail or even cease, certain operations. |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Note 3 – Significant Accounting Policies There have been no material changes to the Company’s significant accounting policies as set forth in the Company’s audited consolidated financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2020, except as disclosed in this note. Basis of Presentation and Principles of Consolidation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information. Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for annual consolidated financial statements. For additional information, these condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements of and notes thereto included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on April 13, 2021. In the opinion of management, the accompanying condensed consolidated financial statements include all adjustments which are considered necessary for a fair presentation of the unaudited condensed consolidated financial statements of the Company as of March 31, 2021, and for the three months ended March 31, 2021 and 2020. The results of operations for the three months ended March 31, 2021 are not necessarily indicative of the operating results for the full year ending December 31, 2021 or any other period. These unaudited condensed consolidated financial statements have been derived from the accounting records of AESE, WPT and Allied Esports and should be read in conjunction with the accompanying notes thereto. Net Loss per Common Share Basic loss per common share is computed by dividing net loss attributable to the Company by the weighted average number of common shares outstanding during the period. Diluted loss per common share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding, plus the impact of common shares, if dilutive, resulting from the exercise of outstanding stock options and warrants and the conversion of convertible instruments. The following securities are excluded from the calculation of weighted average dilutive common shares because their inclusion would have been anti-dilutive: For the Three Months Ended 2021 2020 Restricted common shares 199,143 - Common shares subscribed - 1,018,848 Options 2,430,000 2,360,000 Warrants 20,091,549 18,637,003 Convertible debt 235,294 1,647,058 Equity purchase options 600,000 600,000 Contingent consideration shares 269,231 3,846,153 23,825,217 28,109,062 Warrant Liabilities Entities must consider whether to classify contracts that may be settled in its own stock, such as warrants, as equity of the entity or as an asset or liability. If an event that is not within the entity’s control could require net cash settlement, then the contract should be classified as an asset or a liability rather than as equity. ● Management has determined that its publicly-traded warrants (the “public warrants” are of a form that qualify for equity classification. ● Management has determined that the warrants previously issued to the Company’s sponsor (the “sponsor warrants”) contain provisions that change depending on who holds the sponsor warrant. If the sponsor warrants are held by someone other than the initial purchasers or their permitted transferees, the sponsor warrants will be redeemable by the Company and exercisable by such holders on the same basis as the public warrants. This feature precludes the sponsor warrants from being indexed to the Company’s common stock, and thus the sponsor warrants are classified as a liability measured at fair value, with changes in fair value each period reported in earnings. ● Management has determined that the common stock purchase warrants issued by the Company on June 8, 2020 in connection with the issuance of convertible notes (the ”convertible note warrants”) are of a form that qualify for equity classification. As of March 31, 2021 and December 31, 2020, the fair value of our warrant liabilities totaled $39,300 and $3,000, respectively, which are included in accrued expenses and other current liabilities in the accompanying condensed consolidated balance sheet. Financial Instruments and Fair Value Fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, there exists a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1 Unadjusted quoted market prices for identical assets or liabilities; Level 2 Quoted market prices for identical assets or liabilities in an active market that have been adjusted for items such as effects of restrictions for transferability and those that are not quoted but are observable through corroboration with observable market data, including quoted market prices for similar assets or liabilities; and Level 3 Unobservable inputs for the asset or liability only used when there is little, if any, market activity for the asset or liability at the measurement date. This hierarchy requires management to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. The carrying amounts of the Company’s financial instruments, such as accounts receivable, accounts payable and accrued liabilities approximate fair value due to the short-term nature of these instruments. The Company’s convertible debt, bridge notes and loans payable approximates fair value due to its short-term nature and market rate of interest. The sponsor warrants are carried at fair value as of March 31, 2021 and December 31, 2020. The sponsor warrants are valued using level 3 inputs. The fair value of the sponsor warrants is estimated using a modified version of the Black-Scholes option pricing formula for European calls. Specifically, we assumed a term for the sponsor warrants equal to the contractual term from the August 9, 2019 business combination date. Significant level 3 inputs used to calculate the fair value of the sponsor warrants include the share price on the valuation date, expected volatility, expected term and the risk-free interest rate. The following is a roll forward of the Company’s Level 3 instruments: Balance, December 31, 2020 $ 3,000 Change in fair value of sponsor warrants 36,300 Balance, March 31, 2021 $ 39,300 The key inputs into the Black-Scholes model at the relevant measurement dates were as follows: March 31, December 31, Input 2021 2020 Risk-free rate 0.35 % 0.27 % Remaining term in years 3.36 3.61 Expected volatility 45.0 % 42.0 % Exercise price $ 11.50 $ 11.50 Fair value of common stock $ 2.88 $ 1.58 Revenue Recognition To determine the proper revenue recognition method, the Company evaluates each of its contractual arrangements to identify its performance obligations. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. The majority of the Company’s contracts have a single performance obligation because the promise to transfer the individual good or service is not separately identifiable from other promises within the contract and is therefore not distinct. Some of the Company’s contracts have multiple performance obligations, primarily related to the provision of multiple goods or services. For contracts with more than one performance obligation, the Company allocates the total transaction price in an amount based on the estimated relative standalone selling prices underlying each performance obligation. Revenue recognized from continuing operations during the three months ended March 31, 2021 and 2020 was from in-person revenue sources. The Company’s in-person revenue is comprised of event revenue, sponsorship revenue, merchandising revenue and other revenue. Event revenue is generated through Allied Esports events held at the Company’s esports properties. Event revenues recognized from the rental of the Allied Esports arena and gaming trucks are recognized at the point in time when the event occurs. In-person revenue also includes revenue from ticket sales, admission fees and food and beverage sales for events held at the Company’s esports properties. Ticket revenue is recognized at the completion of the applicable event. Point of sale revenues, such as food and beverage, gaming and merchandising revenues, are recognized when control of the related goods are transferred to the customer. The Company also generates sponsorship revenues for naming rights for, and rental of, the Company’s arena and gaming trucks. Sponsorship revenues from naming rights of the Company’s Las Vegas esports arena and from sponsorship arrangements are recognized on a straight-line basis over the contractual term of the agreement. The Company records deferred revenue to the extent that payment has been received for services that have yet to be performed. The following table summarizes our revenue recognized in our condensed consolidated statements of operations: For the Three Months Ended March 31, 2021 2020 Revenues Recognized at a Point in Time: Event revenue $ 110,441 $ 223,447 Food and beverage revenue 70,704 232,299 Ticket and gaming revenue 68,644 138,687 Sponsorship revenue - 2,502 Merchandising revenue 6,945 18,049 Other revenue - 104 Total Revenues Recognized at a Point in Time 256,734 615,088 Revenues Recognized Over a Period of Time: Sponsorship revenue 244,294 442,653 Total Revenues Recognized Over a Period of Time 244,294 442,653 Total Revenues $ 501,028 $ 1,057,741 The timing of the Company’s revenue recognition may differ from the timing of payment by its customers. A receivable is recorded when revenue is recognized prior to payment and the Company has an unconditional right to payment. Alternatively, when payment precedes the provision of the related services, the Company records deferred revenue until the performance obligations are satisfied. Concentration Risks Financial instruments that potentially subject the Company to concentration of credit risk consist of cash accounts in a financial institution which, at times, may exceed Federal Deposit Insurance Corporation insured limits. The Company has not experienced any losses in such accounts, periodically evaluates the creditworthiness of the financial institutions and has determined the credit exposure to be negligible. During the three months ended March 31, 2021 and 2020, 10% and 11%, respectively, of the Company’s revenues from continuing operations were from customers in foreign countries. During the three months ended March 31, 2021, the Company’s two largest customers accounted for 31% and 16% of the Company’s consolidated revenues from continuing operations. During the three months ended March 31, 2020, the Company’s largest customer accounted for 37% of the Company’s consolidated revenues from continuing operations. Foreign Currency Translation The Company’s reporting currency is the United States Dollar. The functional currencies of the Company’s operating subsidiaries are their local currencies (United States Dollar and Euro). Euro-denominated assets and liabilities are translated into the United States Dollar using the exchange rate at the balance sheet date (1.1727 and 1.2264, at March 31, 2021 and December 31, 2020, respectively), and revenue and expense accounts are translated using the weighted average exchange rate in effect for the period (1.2053 and 1.1033 for the three months ended March 31, 2021 and 2020, respectively). Resulting translation adjustments are made directly to accumulated other comprehensive (loss) income. Subsequent Events The Company evaluates events that have occurred after the balance sheet date but before the financial statements are issued. Based upon the evaluation, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the condensed consolidated financial statements, except as disclosed. Discontinued Operations The assets and liabilities of WPT are classified as “held for sale” as of March 31, 2021 and December 31, 2020 and are reflected in the accompanying condensed consolidated balance sheets as “Current assets held for sale” and “Current liabilities held for sale.” The results of operations of WPT are included in “Income (loss) from discontinued operations, net of tax provision” in the accompanying condensed consolidated statements of operations and comprehensive loss. For comparative purposes, all prior periods presented have been reclassified to reflect the classifications on a consistent basis. Reclassifications Certain prior year balances have been reclassified in order to conform to current year presentation. These reclassifications have no effect on previously reported results of operations or loss per share. Recently Adopted Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes,” which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. The Company adopted ASU 2019-12 effective for January 1, 2021 and its adoption did not have a material impact on the Company’s condensed consolidated financial statements and related disclosures. |
Discontinued Operations
Discontinued Operations | 3 Months Ended |
Mar. 31, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Note 4 – Discontinued Operations Transaction During the first quarter of 2021, AESE entered into the SPA to sell the equity interests of its subsidiaries that own and operate its WPT business (the “Sale Transaction”), subject to shareholder and regulatory approvals, for a total purchase price of $105 million. This base purchase price will be adjusted to reflect the amount of CSI’s cash, indebtedness and accrued and unpaid transaction expenses as of the closing of the Sale Transaction. Prior to December 31, 2020, management committed to a plan to sell the WPT business. Accordingly, the WPT business has been recast as discontinued operations, and the assets and liabilities of WPT are classified as held for sale. See Note 1 – Business Organization and Nature of Operations. In reaching its decision to enter into the SPA, the Company’s Board of Directors, in consultation with management as well as its financial and legal advisors, considered a number of factors, including the risks and challenges facing the WPT business in the future as compared to the opportunities available to the WPT business in the future, and the availability of strategic alternatives. After careful consideration, the Board of Directors unanimously approved the Stock Purchase Agreement and determined that the Sale Transaction is in the best interests of the Company and its stockholders, and that the Sale Transaction and the Stock Purchase Agreement reflect the highest value for the WPT business reasonably attainable for the Company’s stockholders. About WPT WPT is an internationally televised gaming and entertainment company with brand presence in land-based tournaments, television, online and mobile applications. WPT has been involved in the sport of poker since 2002 and created a television show based on a series of high-stakes poker tournaments. WPT has broadcasted globally in more than 150 countries and territories and its shows are sponsored by established brands in many areas, including watches, crystal, playing cards and online social poker operators. WPT also operates ClubWPT.com, a subscription-based site that offers its members inside access to the WPT content database, as well as sweepstakes-based poker product that allows members to play for real cash and prizes in 43 states and territories across the United States, Australia, Canada, France and the United Kingdom. WPT also participates in strategic brand licensing, partnership, and sponsorship opportunities. Results of Discontinued Operations Net income from discontinued operations details are as follows: For the Three Months Ended March 31, 2021 2020 Revenues $ 5,334,010 $ 4,987,312 Operating costs and expenses 4,386,493 4,715,266 Income from operations 947,517 272,046 Other income 689,525 2,743 Net income from discontinued operations, before tax 1,637,042 274,789 Income tax - - Income from discontinued operations, net of tax provision $ 1,637,042 $ 274,789 Other income for the three months ended March 31, 2021 consists primarily of income recognized upon the forgiveness of a loan received pursuant to the Paycheck Protection Program (“PPP”) under the CARES Act which was included in Loans Payable in the table below at December 31, 2020. Assets and liabilities held for sale are classified as current because the Sale Transaction is expected to close during 2021. The details are as follows: March 31, December 31, 2021 2020 Assets Cash $ 2,917,217 $ 3,633,292 Accounts receivable 2,009,129 1,804,627 Prepaid expenses and other assets 255,843 289,968 Property and equipment, net 1,554,769 1,674,355 Goodwill 4,083,621 4,083,621 Intangible assets, net 11,690,264 12,305,887 Deposits 79,500 79,500 Deferred production costs 12,727,543 12,058,592 Due from affiliates 11,968,377 9,433,975 Current assets held for sale $ 47,286,263 $ 45,363,817 Liabilities Accounts payable $ 504,801 $ 211,228 Accrued expenses and other liabilities 3,858,076 3,804,301 Accrued interest - 4,224 Deferred revenue 2,278,172 1,970,668 Deferred rent 2,607,416 2,493,526 Loans payable - 685,300 Current liabilities held for sale $ 9,248,465 $ 9,169,247 |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 3 Months Ended |
Mar. 31, 2021 | |
Accrued Expenses and Other Current Liabilities [Abstract] | |
Accrued Expenses and Other Current Liabilities | Note 5 – Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consist of the following: March 31, December 31, 2021 2020 Compensation expense $ 1,356,094 (1) $ 1,010,734 (1) Rent 336,632 148,919 Event costs - 26,926 Legal and professional fees 354,350 307,135 Unclaimed player prizes 14,425 45,171 Other accrued expenses 90,545 265,751 Warrant liabilities 39,300 3,000 Other current liabilities 62,845 179,381 $ 2,254,191 $ 1,987,017 (1) Accrued compensation expense as of March 31, 2021 and December 31, 2020 includes approximately $571,000 which is payable to the employees of the Company’s continuing operations for their 2020 services, contingent upon the closing of the sale of WPT. |
Convertible Debt and Convertibl
Convertible Debt and Convertible Debt, Related Party | 3 Months Ended |
Mar. 31, 2021 | |
Convertible Debt And Convertible Debt Related Party [Abstract] | |
Convertible Debt and Convertible Debt, Related Party | Note 6 – Convertible Debt and Convertible Debt, Related Party March 31, 2021 December 31, 2020 Gross Debt Convertible Gross Debt Convertible Convertible debt $ 1,000,000 $ - $ 1,000,000 $ 1,000,000 $ - $ 1,000,000 Convertible debt, related party 1,000,000 - 1,000,000 1,000,000 - 1,000,000 Senior secured convertible notes - - - 581,818 (3,646 ) 578,172 Total 2,000,000 - 2,000,000 2,581,818 (3,646 ) 2,578,172 Less: current portion (2,000,000 ) - (2,000,000 ) (2,000,000 ) - (2,000,000 ) Convertible debt, non-current $ - $ - $ - $ 581,818 $ (3,646 ) $ 578,172 Convertible Debt and Convertible Debt, Related Party Convertible bridge notes (the “Convertible Bridge Notes”) are secured by the assets of WPT and mature on February 23, 2022 (the “Maturity Date”). Further, the minimum interest to be paid under each Convertible Bridge Note shall be the greater of (a) 18 months of accrued interest at 12% per annum; or (b) the sum of the actual interest accrued plus 6 months of additional interest at 12% per annum. In the event of default, the Convertible Bridge Notes shall become immediately due and payable upon the written notice of the holder. The Company intends to repay the Convertible Bridge Notes from the proceeds of the Sale Transaction. The Convertible Bridge Notes are convertible into shares of AESE common stock at any time at a conversion price of $8.50 per share. If any holder elects to convert their Convertible Bridge Note into common stock, they would also be entitled to receive additional shares of common stock (“Contingent Consideration Shares”) equal to the product of (i) 3,846,153 shares, multiplied by (ii) that holder’s investment amount, divided by (iii) $100,000,000, if at any time within five years after the August 9, 2019 closing date, the last exchange-reported sale price of common stock trades at or above $13.00 for thirty (30) consecutive calendar days. The Company recorded interest expense of $59,138 related to the Convertible Bridge Notes during the three months ended March 31, 2021 and recorded interest expense of $682,940 (including amortization of debt discount of $64,193) during the three months ended March 31, 2020. As of March 31, 2021, all debt discount on the Convertible Bridge Notes has been fully amortized. Senior Secured Convertible Notes During the three months ended March 31, 2021, the Company issued 529,383 shares of its common stock, as Monthly Redemption Payments in satisfaction of aggregate amount of $581,818 of principal and $93,091 of interest payable owed on the Senior Notes as well as $146,958 of non-cash interest accrued on the Senior Notes. Of the 529,383 shares issued, 132,346 shares were issued in connection with accelerated Monthly Redemption Payments in the aggregate amount of $168,727 (representing $145,454 and $23,273 of principal and interest, respectively). The Company recorded additional non-cash interest expense in the amount of $46,110 in connection with Monthly Redemption Payments during the three months ended March 31, 2021. As of March 31, 2021 all principal and interest owed in connection with the Senior Notes has been repaid in full. |
Bridge Note Payable
Bridge Note Payable | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Bridge Note Payable | Note 7 – Bridge Note Payable The bridge note payable (the “Bridge Note”) matures on February 23, 2022 and bears interest at 12% per annum (increasing to 15% per annum upon an event of default as defined in the Bridge Note agreement). Principal ($1,421,096) and interest owed under the Bridge Note is not convertible into shares of the Company’s common stock. During the three months ended March 31, 2021 and 2020, the Company recorded interest expense of $42,020 and $0, respectively, in connection with the Bridge Note. The Company intends to repay the Bridge Note from the proceeds of the Sale Transaction. |
Loans Payable
Loans Payable | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Loans Payable | Note 8 – Loans Payable During May 2020, the Company’s continuing operations received aggregate cash proceeds of $907,129 pursuant to two loans (the “PPP Loans”) provided in connection with the Paycheck Protection Program (“PPP”) under the CARES Act. The PPP Loans bear interest at 0.98% per annum. Monthly amortized principal and interest payments begin in July 2021 and the notes mature in April 2022. While the PPP Loans currently have two-year maturities, the amended law permits the borrower to request five-year maturities from its lenders. The Company has not yet applied for forgiveness on the PPP Loans. The Company recorded interest expense of $2,192 related to the PPP Loans three months ended March 31, 2021. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 9 – Commitments and Contingencies Litigations, Claims, and Assessments The Company is involved in various disputes, claims, liens and litigation matters arising out of the normal course of business. While the outcome of these disputes, claims, liens and litigation matters cannot be predicted with certainty, after consulting with legal counsel, management does not believe that the outcome of these matters will have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. Operating Leases On November 5, 2020, Allied Esports entered into an amendment of its lease of event space in Las Vegas Nevada (the “Amended Las Vegas Lease”), pursuant to which (i) $299,250 of deferred minimum monthly rent and additional rent due under the lease for the period from April 1, 2020 through June 3, 2020 must be paid in its entirety by December 31, 2021; (ii) the monthly rent to be paid for the period from June 25 through December 31, 2020 (the “Rent Relief Period) was reduced to an amount equal to 20% of gross sales (excluding food sales) at the event space (the “Percentage Rent”), (iii) the initial term of the lease was extended for two additional months until May 31, 2023, and (iv) the option period to extend the lease was extended to between April 1, 2022 and September 30, 2022. Pursuant to the Amended Las Vegas Lease, if the aggregate Percentage Rent during the Rent Relief Period is less than $194,000, Allied Esports must pay the shortfall no later than December 31, 2021. The Company and the landlord of the event space have verbally agreed to extend the Rent Relief Period through the first quarter of 2021. The Company’s aggregate rent expense incurred during the three months ended March 31, 2021 and 2020 amounted to $351,699 and $384,101, respectively, of which $263,550 and $312,501, respectively, is included within in-person costs and $146,941 and $71,600, respectively, is included in general and administrative expenses on the accompanying condensed consolidated statements of operations. AESE is currently the guarantor of WPT’s lease of Irvine, California office space (the “Irvine Lease”). The lease expires on October 1, 2033. Current base rent pursuant to the Irvine Lease is $41,027 per month, increasing to $58,495 per month over the term of the lease. It is anticipated that AESE will no longer act as guarantor of the Irvine Lease, effective upon the closing of the Sale Transaction. See Note 4 – Discontinued Operations. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
Stockholders’ Equity | Note 10 – Stockholders’ Equity Common Stock On January 4, 2021, Company issued to its non-executive directors an aggregate of 126,584 shares of common stock from its 2019 Equity Incentive Plan for their director services to the Company. The Company recognized stock-based compensation of $200,000 in connection with the issuance of these shares. Stock Options A summary of the option activity during the three months ended March 31, 2021 is presented below: Weighted Weighted Average Average Number of Exercise Remaining Intrinsic Options Price Term (Yrs) Value Outstanding, January 1, 2021 2,430,000 $ 4.15 8.92 $ - Granted - - Exercised - - Expired - - Forfeited - - Outstanding, March 31, 2021 2,430,000 $ 4.15 8.67 $ 146,800 Exercisable, March 31, 2021 557,500 $ 4.33 8.62 $ - Options outstanding and exercisable as of March 31, 2021 are as follows: Options Outstanding Options Exercisable Weighted Outstanding Average Exercisable Exercise Number of Remaining Life Number of Price Options In Years Options $ 2.11 80,000 - - $ 2.17 120,000 - - $ 4.09 1,890,000 8.64 472,500 $ 5.66 340,000 8.47 85,000 2,430,000 8.62 557,500 For the three months ended March 31, 2021 and 2020, the Company recorded $282,999 and $240,399, respectively, of stock-based compensation expense related to stock options issued as compensation, of which $56,296 and $50,816, respectively, was included in net income of discontinued operations on the accompanying condensed consolidated statements of operations. As of March 31, 2021, there was $1,722,027 of unrecognized stock-based compensation expense related to the stock options that will be recognized over the weighted average remaining vesting period of 2.6 years. Restricted Common Stock A summary of the non-vested restricted common stock activity during the three months ended March 31, 2021 is presented below: Number of Weighted Non-vested balance, January 1, 2021 199,143 $ 2.03 Granted - - Vested - - Forfeited - - Outstanding, March 31, 2021 199,143 $ 2.03 For the Restricted Stock Units On January 19, 2021, the Company entered into a Restricted Stock Unit Agreement with its Chief Executive Officer (“CEO”), pursuant to which the CEO received restricted stock units having a stated value equal to $1,000,000. The restricted stock units represent the right to receive $1,000,000, contingent upon the closing of the Sale Transaction, which is payable upon the earlier of the two-year anniversary of the closing date of the Sale Transaction (provided that the CEO remains continuously employed by the Company through such date), or the termination of the CEO’s employment without cause after the closing of the Sale Transaction (as defined in his employment agreement) (as applicable, the “Vesting Date”). At the time of payment, the Company may elect to pay the $1,000,000 award in cash or in shares of common stock valued at the fair market value of our common stock on the Vesting Date, or any combination thereof. All issuances of common stock will be issued from our 2019 Equity Incentive Plan. If payments or benefits provided or to be provided by the Company or its affiliates to the CEO pursuant to the agreement or otherwise (“Covered Payments”) constitute “parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986 (the “Code”) that would be subject to the excise tax imposed under Section 4999 of the Code (collectively, the “Excise Tax”), payments to be made under the agreement will be reduced to the minimum extent necessary to ensure that no portion of the Covered Payments is subject to the Excise Tax. On March 22, 2021, the agreement was amended to provide that the Vesting Date would apply after the two-year anniversary of the sale of CSI to Element Partners, LLC, Bally’s Corporation, or their affiliates (provided that the CEO remains continuously employed by the Company through such date). The Company recorded a charge to stock-based compensation and a corresponding credit to accrued compensation expense in the amount of $100,000 representing the amortization of this award during the three months ended March 31, 2021. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 11 – Subsequent Events On May 6, 2021, the Company granted ten-year stock options to purchase 160,000 shares of common stock to its directors. The shares vest in equal annual installments over four years and have an exercise price of $2.48 per share, which represents the Company’s closing stock price on the day prior to the date of grant. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information. Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for annual consolidated financial statements. For additional information, these condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements of and notes thereto included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on April 13, 2021. In the opinion of management, the accompanying condensed consolidated financial statements include all adjustments which are considered necessary for a fair presentation of the unaudited condensed consolidated financial statements of the Company as of March 31, 2021, and for the three months ended March 31, 2021 and 2020. The results of operations for the three months ended March 31, 2021 are not necessarily indicative of the operating results for the full year ending December 31, 2021 or any other period. These unaudited condensed consolidated financial statements have been derived from the accounting records of AESE, WPT and Allied Esports and should be read in conjunction with the accompanying notes thereto. |
Net Loss per Common Share | Net Loss per Common Share Basic loss per common share is computed by dividing net loss attributable to the Company by the weighted average number of common shares outstanding during the period. Diluted loss per common share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding, plus the impact of common shares, if dilutive, resulting from the exercise of outstanding stock options and warrants and the conversion of convertible instruments. The following securities are excluded from the calculation of weighted average dilutive common shares because their inclusion would have been anti-dilutive: For the Three Months Ended 2021 2020 Restricted common shares 199,143 - Common shares subscribed - 1,018,848 Options 2,430,000 2,360,000 Warrants 20,091,549 18,637,003 Convertible debt 235,294 1,647,058 Equity purchase options 600,000 600,000 Contingent consideration shares 269,231 3,846,153 23,825,217 28,109,062 |
Warrant Liabilities | Warrant Liabilities Entities must consider whether to classify contracts that may be settled in its own stock, such as warrants, as equity of the entity or as an asset or liability. If an event that is not within the entity’s control could require net cash settlement, then the contract should be classified as an asset or a liability rather than as equity. ● Management has determined that its publicly-traded warrants (the “public warrants” are of a form that qualify for equity classification. ● Management has determined that the warrants previously issued to the Company’s sponsor (the “sponsor warrants”) contain provisions that change depending on who holds the sponsor warrant. If the sponsor warrants are held by someone other than the initial purchasers or their permitted transferees, the sponsor warrants will be redeemable by the Company and exercisable by such holders on the same basis as the public warrants. This feature precludes the sponsor warrants from being indexed to the Company’s common stock, and thus the sponsor warrants are classified as a liability measured at fair value, with changes in fair value each period reported in earnings. ● Management has determined that the common stock purchase warrants issued by the Company on June 8, 2020 in connection with the issuance of convertible notes (the ”convertible note warrants”) are of a form that qualify for equity classification. As of March 31, 2021 and December 31, 2020, the fair value of our warrant liabilities totaled $39,300 and $3,000, respectively, which are included in accrued expenses and other current liabilities in the accompanying condensed consolidated balance sheet. |
Financial Instruments and Fair Value | Financial Instruments and Fair Value Fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, there exists a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1 Unadjusted quoted market prices for identical assets or liabilities; Level 2 Quoted market prices for identical assets or liabilities in an active market that have been adjusted for items such as effects of restrictions for transferability and those that are not quoted but are observable through corroboration with observable market data, including quoted market prices for similar assets or liabilities; and Level 3 Unobservable inputs for the asset or liability only used when there is little, if any, market activity for the asset or liability at the measurement date. This hierarchy requires management to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. The carrying amounts of the Company’s financial instruments, such as accounts receivable, accounts payable and accrued liabilities approximate fair value due to the short-term nature of these instruments. The Company’s convertible debt, bridge notes and loans payable approximates fair value due to its short-term nature and market rate of interest. The sponsor warrants are carried at fair value as of March 31, 2021 and December 31, 2020. The sponsor warrants are valued using level 3 inputs. The fair value of the sponsor warrants is estimated using a modified version of the Black-Scholes option pricing formula for European calls. Specifically, we assumed a term for the sponsor warrants equal to the contractual term from the August 9, 2019 business combination date. Significant level 3 inputs used to calculate the fair value of the sponsor warrants include the share price on the valuation date, expected volatility, expected term and the risk-free interest rate. The following is a roll forward of the Company’s Level 3 instruments: Balance, December 31, 2020 $ 3,000 Change in fair value of sponsor warrants 36,300 Balance, March 31, 2021 $ 39,300 The key inputs into the Black-Scholes model at the relevant measurement dates were as follows: March 31, December 31, Input 2021 2020 Risk-free rate 0.35 % 0.27 % Remaining term in years 3.36 3.61 Expected volatility 45.0 % 42.0 % Exercise price $ 11.50 $ 11.50 Fair value of common stock $ 2.88 $ 1.58 |
Revenue Recognition | Revenue Recognition To determine the proper revenue recognition method, the Company evaluates each of its contractual arrangements to identify its performance obligations. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. The majority of the Company’s contracts have a single performance obligation because the promise to transfer the individual good or service is not separately identifiable from other promises within the contract and is therefore not distinct. Some of the Company’s contracts have multiple performance obligations, primarily related to the provision of multiple goods or services. For contracts with more than one performance obligation, the Company allocates the total transaction price in an amount based on the estimated relative standalone selling prices underlying each performance obligation. Revenue recognized from continuing operations during the three months ended March 31, 2021 and 2020 was from in-person revenue sources. The Company’s in-person revenue is comprised of event revenue, sponsorship revenue, merchandising revenue and other revenue. Event revenue is generated through Allied Esports events held at the Company’s esports properties. Event revenues recognized from the rental of the Allied Esports arena and gaming trucks are recognized at the point in time when the event occurs. In-person revenue also includes revenue from ticket sales, admission fees and food and beverage sales for events held at the Company’s esports properties. Ticket revenue is recognized at the completion of the applicable event. Point of sale revenues, such as food and beverage, gaming and merchandising revenues, are recognized when control of the related goods are transferred to the customer. The Company also generates sponsorship revenues for naming rights for, and rental of, the Company’s arena and gaming trucks. Sponsorship revenues from naming rights of the Company’s Las Vegas esports arena and from sponsorship arrangements are recognized on a straight-line basis over the contractual term of the agreement. The Company records deferred revenue to the extent that payment has been received for services that have yet to be performed. The following table summarizes our revenue recognized in our condensed consolidated statements of operations: For the Three Months Ended March 31, 2021 2020 Revenues Recognized at a Point in Time: Event revenue $ 110,441 $ 223,447 Food and beverage revenue 70,704 232,299 Ticket and gaming revenue 68,644 138,687 Sponsorship revenue - 2,502 Merchandising revenue 6,945 18,049 Other revenue - 104 Total Revenues Recognized at a Point in Time 256,734 615,088 Revenues Recognized Over a Period of Time: Sponsorship revenue 244,294 442,653 Total Revenues Recognized Over a Period of Time 244,294 442,653 Total Revenues $ 501,028 $ 1,057,741 The timing of the Company’s revenue recognition may differ from the timing of payment by its customers. A receivable is recorded when revenue is recognized prior to payment and the Company has an unconditional right to payment. Alternatively, when payment precedes the provision of the related services, the Company records deferred revenue until the performance obligations are satisfied. |
Concentration Risks | Concentration Risks Financial instruments that potentially subject the Company to concentration of credit risk consist of cash accounts in a financial institution which, at times, may exceed Federal Deposit Insurance Corporation insured limits. The Company has not experienced any losses in such accounts, periodically evaluates the creditworthiness of the financial institutions and has determined the credit exposure to be negligible. During the three months ended March 31, 2021 and 2020, 10% and 11%, respectively, of the Company’s revenues from continuing operations were from customers in foreign countries. During the three months ended March 31, 2021, the Company’s two largest customers accounted for 31% and 16% of the Company’s consolidated revenues from continuing operations. During the three months ended March 31, 2020, the Company’s largest customer accounted for 37% of the Company’s consolidated revenues from continuing operations. |
Foreign Currency Translation | Foreign Currency Translation The Company’s reporting currency is the United States Dollar. The functional currencies of the Company’s operating subsidiaries are their local currencies (United States Dollar and Euro). Euro-denominated assets and liabilities are translated into the United States Dollar using the exchange rate at the balance sheet date (1.1727 and 1.2264, at March 31, 2021 and December 31, 2020, respectively), and revenue and expense accounts are translated using the weighted average exchange rate in effect for the period (1.2053 and 1.1033 for the three months ended March 31, 2021 and 2020, respectively). Resulting translation adjustments are made directly to accumulated other comprehensive (loss) income. |
Subsequent Events | Subsequent Events The Company evaluates events that have occurred after the balance sheet date but before the financial statements are issued. Based upon the evaluation, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the condensed consolidated financial statements, except as disclosed. |
Discontinued Operations | Discontinued Operations The assets and liabilities of WPT are classified as “held for sale” as of March 31, 2021 and December 31, 2020 and are reflected in the accompanying condensed consolidated balance sheets as “Current assets held for sale” and “Current liabilities held for sale.” The results of operations of WPT are included in “Income (loss) from discontinued operations, net of tax provision” in the accompanying condensed consolidated statements of operations and comprehensive loss. For comparative purposes, all prior periods presented have been reclassified to reflect the classifications on a consistent basis. |
Reclassifications | Reclassifications Certain prior year balances have been reclassified in order to conform to current year presentation. These reclassifications have no effect on previously reported results of operations or loss per share. |
Recently Issued Accounting Pronouncements | Recently Adopted Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes,” which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. The Company adopted ASU 2019-12 effective for January 1, 2021 and its adoption did not have a material impact on the Company’s condensed consolidated financial statements and related disclosures. |
Significant Accounting Polici_2
Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedule of anti-diluted shares | For the Three Months Ended 2021 2020 Restricted common shares 199,143 - Common shares subscribed - 1,018,848 Options 2,430,000 2,360,000 Warrants 20,091,549 18,637,003 Convertible debt 235,294 1,647,058 Equity purchase options 600,000 600,000 Contingent consideration shares 269,231 3,846,153 23,825,217 28,109,062 |
Schedule of roll forward of the company’s level 3 instruments | Balance, December 31, 2020 $ 3,000 Change in fair value of sponsor warrants 36,300 Balance, March 31, 2021 $ 39,300 |
Schedule of key inputs into the black-scholes model at the relevant measurement dates | March 31, December 31, Input 2021 2020 Risk-free rate 0.35 % 0.27 % Remaining term in years 3.36 3.61 Expected volatility 45.0 % 42.0 % Exercise price $ 11.50 $ 11.50 Fair value of common stock $ 2.88 $ 1.58 |
Schedule of revenue recognition | For the Three Months Ended March 31, 2021 2020 Revenues Recognized at a Point in Time: Event revenue $ 110,441 $ 223,447 Food and beverage revenue 70,704 232,299 Ticket and gaming revenue 68,644 138,687 Sponsorship revenue - 2,502 Merchandising revenue 6,945 18,049 Other revenue - 104 Total Revenues Recognized at a Point in Time 256,734 615,088 Revenues Recognized Over a Period of Time: Sponsorship revenue 244,294 442,653 Total Revenues Recognized Over a Period of Time 244,294 442,653 Total Revenues $ 501,028 $ 1,057,741 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of discontinued operations | For the Three Months Ended March 31, 2021 2020 Revenues $ 5,334,010 $ 4,987,312 Operating costs and expenses 4,386,493 4,715,266 Income from operations 947,517 272,046 Other income 689,525 2,743 Net income from discontinued operations, before tax 1,637,042 274,789 Income tax - - Income from discontinued operations, net of tax provision $ 1,637,042 $ 274,789 March 31, December 31, 2021 2020 Assets Cash $ 2,917,217 $ 3,633,292 Accounts receivable 2,009,129 1,804,627 Prepaid expenses and other assets 255,843 289,968 Property and equipment, net 1,554,769 1,674,355 Goodwill 4,083,621 4,083,621 Intangible assets, net 11,690,264 12,305,887 Deposits 79,500 79,500 Deferred production costs 12,727,543 12,058,592 Due from affiliates 11,968,377 9,433,975 Current assets held for sale $ 47,286,263 $ 45,363,817 Liabilities Accounts payable $ 504,801 $ 211,228 Accrued expenses and other liabilities 3,858,076 3,804,301 Accrued interest - 4,224 Deferred revenue 2,278,172 1,970,668 Deferred rent 2,607,416 2,493,526 Loans payable - 685,300 Current liabilities held for sale $ 9,248,465 $ 9,169,247 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Accrued Expenses and Other Current Liabilities [Abstract] | |
Schedule of accrued expenses and other current liabilities | March 31, December 31, 2021 2020 Compensation expense $ 1,356,094 (1) $ 1,010,734 (1) Rent 336,632 148,919 Event costs - 26,926 Legal and professional fees 354,350 307,135 Unclaimed player prizes 14,425 45,171 Other accrued expenses 90,545 265,751 Warrant liabilities 39,300 3,000 Other current liabilities 62,845 179,381 $ 2,254,191 $ 1,987,017 (1) Accrued compensation expense as of March 31, 2021 and December 31, 2020 includes approximately $571,000 which is payable to the employees of the Company’s continuing operations for their 2020 services, contingent upon the closing of the sale of WPT. |
Convertible Debt and Converti_2
Convertible Debt and Convertible Debt, Related Party (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Convertible Debt And Convertible Debt Related Party [Abstract] | |
Schedule of convertible debt | March 31, 2021 December 31, 2020 Gross Debt Convertible Gross Debt Convertible Convertible debt $ 1,000,000 $ - $ 1,000,000 $ 1,000,000 $ - $ 1,000,000 Convertible debt, related party 1,000,000 - 1,000,000 1,000,000 - 1,000,000 Senior secured convertible notes - - - 581,818 (3,646 ) 578,172 Total 2,000,000 - 2,000,000 2,581,818 (3,646 ) 2,578,172 Less: current portion (2,000,000 ) - (2,000,000 ) (2,000,000 ) - (2,000,000 ) Convertible debt, non-current $ - $ - $ - $ 581,818 $ (3,646 ) $ 578,172 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
Schedule of option activity | Weighted Weighted Average Average Number of Exercise Remaining Intrinsic Options Price Term (Yrs) Value Outstanding, January 1, 2021 2,430,000 $ 4.15 8.92 $ - Granted - - Exercised - - Expired - - Forfeited - - Outstanding, March 31, 2021 2,430,000 $ 4.15 8.67 $ 146,800 Exercisable, March 31, 2021 557,500 $ 4.33 8.62 $ - |
Schedule of options outstanding and exercisable | Options Outstanding Options Exercisable Weighted Outstanding Average Exercisable Exercise Number of Remaining Life Number of Price Options In Years Options $ 2.11 80,000 - - $ 2.17 120,000 - - $ 4.09 1,890,000 8.64 472,500 $ 5.66 340,000 8.47 85,000 2,430,000 8.62 557,500 |
Schedule of non-vested restricted stock activity | Number of Weighted Non-vested balance, January 1, 2021 199,143 $ 2.03 Granted - - Vested - - Forfeited - - Outstanding, March 31, 2021 199,143 $ 2.03 |
Business Organization and Nat_2
Business Organization and Nature of Operations (Details) | Jan. 19, 2021 |
Stock Purchase Agreement [Member] | |
Background and Basis of Presentation (Textual) | |
Subsidiary owned sale of equity, percentage | 100.00% |
CSI [Member] | |
Background and Basis of Presentation (Textual) | |
Subsidiary owned sale of equity, percentage | 100.00% |
Going Concern and Management'_2
Going Concern and Management's Plans (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Going Concern and Management (Textual) | ||
Disposal Group, Including Discontinued Operation, Cash | $ 10.5 | |
Restricted cash | 5 | |
Cash held for sale | 2.9 | |
Working capital deficit | 13.6 | |
Net loss | (5) | $ (9.1) |
Cash in continuing operations | $ (0.2) | $ (0.7) |
Percentage of capacity | 80.00% | |
Bridge Note Payable [Member] | ||
Going Concern and Management (Textual) | ||
Description of convertible debt | As of March 31, 2021, the Company has convertible debt and bridge note obligations in the aggregate gross principal amount of $3.4 million (see Note 6 - Convertible Debt and Note 7 – Bridge Note Payable) which mature on February 23, 2022 but will be paid upon the closing of the sale of WPT (see Note 4 – Discontinued Operations). |
Significant Accounting Polici_3
Significant Accounting Policies (Details) | 3 Months Ended | ||
Mar. 31, 2021USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2020USD ($) | |
Significant Accounting Policies (Textual) | |||
Fair value of warrant liabilities (in Dollars) | $ 39,300 | $ 3,000 | |
Concentration risk, percentage | 10.00% | 11.00% | |
Number of customers | 2 | ||
Percentage of company's consolidated revenues accounted by largest customer | 37.00% | ||
Functional currencies translation | 1.1727 | 1.2264 | |
Weighted average exchange rate in foreign currency translation (in Dollars) | $ 1.2053 | $ 1.1033 | |
Customer One [Member] | |||
Significant Accounting Policies (Textual) | |||
Percentage of company's consolidated revenues accounted by largest customer | 31.00% | ||
Customer Two [Member] | |||
Significant Accounting Policies (Textual) | |||
Percentage of company's consolidated revenues accounted by largest customer | 16.00% |
Significant Accounting Polici_4
Significant Accounting Policies (Details) - Schedule of anti-diluted shares - shares | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Securities excluded from calculation of weighted average dilutive common shares | 23,825,217 | 28,109,062 |
Restricted common shares [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Securities excluded from calculation of weighted average dilutive common shares | 199,143 | |
Common shares subscribed [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Securities excluded from calculation of weighted average dilutive common shares | 1,018,848 | |
Options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Securities excluded from calculation of weighted average dilutive common shares | 2,430,000 | 2,360,000 |
Warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Securities excluded from calculation of weighted average dilutive common shares | 20,091,549 | 18,637,003 |
Convertible debt [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Securities excluded from calculation of weighted average dilutive common shares | 235,294 | 1,647,058 |
Equity purchase options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Securities excluded from calculation of weighted average dilutive common shares | 600,000 | 600,000 |
Contingent consideration shares [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Securities excluded from calculation of weighted average dilutive common shares | 269,231 | 3,846,153 |
Significant Accounting Polici_5
Significant Accounting Policies (Details) - Schedule of roll forward of the company’s level 3 instruments - Level 3 [Member] | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Significant Accounting Policies (Details) - Schedule of roll forward of the company’s level 3 instruments [Line Items] | |
Balance, December 31, 2020 | $ 3,000 |
Change in fair value of sponsor warrants | 36,300 |
Balance, March 31, 2021 | $ 39,300 |
Significant Accounting Polici_6
Significant Accounting Policies (Details) - Schedule of key inputs into the black-scholes model at the relevant measurement dates - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Schedule of key inputs into the black-scholes model at the relevant measurement dates [Abstract] | ||
Risk-free rate | 0.35% | 0.27% |
Remaining term in years | 3 years 4 months 9 days | 3 years 7 months 9 days |
Expected volatility | 45.00% | 42.00% |
Exercise price | $ 11.50 | $ 11.50 |
Fair value of common stock | $ 2.88 | $ 1.58 |
Significant Accounting Polici_7
Significant Accounting Policies (Details) - Schedule of revenue recognition - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Revenues Recognized at a Point in Time: | ||
Total Revenues | $ 501,028 | $ 1,057,741 |
Point in Time [Member] | ||
Revenues Recognized at a Point in Time: | ||
Total Revenues | 256,734 | 615,088 |
Event revenue [Member] | Point in Time [Member] | ||
Revenues Recognized at a Point in Time: | ||
Total Revenues | 110,441 | 223,447 |
Food and beverage revenue [Member] | Point in Time [Member] | ||
Revenues Recognized at a Point in Time: | ||
Total Revenues | 70,704 | 232,299 |
Ticket and gaming revenue [Member] | Point in Time [Member] | ||
Revenues Recognized at a Point in Time: | ||
Total Revenues | 68,644 | 138,687 |
Distribution revenue [Member] | Point in Time [Member] | ||
Revenues Recognized at a Point in Time: | ||
Total Revenues | 2,502 | |
Merchandising revenue [Member] | Point in Time [Member] | ||
Revenues Recognized at a Point in Time: | ||
Total Revenues | 6,945 | 18,049 |
Other revenue [Member] | Over a Period of Time [Member] | ||
Revenues Recognized at a Point in Time: | ||
Total Revenues | 104 | |
Sponsorship revenue [Member] | Over a Period of Time [Member] | ||
Revenues Recognized at a Point in Time: | ||
Total Revenues | 244,294 | 442,653 |
Revenue Recognized Over a period of Time [Member] | Over a Period of Time [Member] | ||
Revenues Recognized at a Point in Time: | ||
Total Revenues | $ 244,294 | $ 442,653 |
Discontinued Operations (Detail
Discontinued Operations (Details) | 3 Months Ended |
Mar. 31, 2021 | |
Discontinued Operations (Textual) | |
Sale of transaction, description | During the first quarter of 2021, AESE entered into the SPA to sell the equity interests of its subsidiaries that own and operate its WPT business (the “Sale Transaction”), subject to shareholder and regulatory approvals, for a total purchase price of $105 million. |
Discontinued Operations (Deta_2
Discontinued Operations (Details) - Schedule of discontinued operations - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Schedule of discontinued operations [Abstract] | |||
Revenues | $ 5,334,010 | $ 4,987,312 | |
Operating costs and expenses | 4,386,493 | 4,715,266 | |
Income from operations | 947,517 | 272,046 | |
Other income | 689,525 | 2,743 | |
Net income from discontinued operations, before tax | 1,637,042 | 274,789 | |
Income tax | |||
Income from discontinued operations, net of tax provision | 1,637,042 | $ 274,789 | |
Assets | |||
Cash | 2,917,217 | $ 3,633,292 | |
Accounts receivable | 2,009,129 | 1,804,627 | |
Prepaid expenses and other assets | 255,843 | 289,968 | |
Property and equipment, net | 1,554,769 | 1,674,355 | |
Goodwill | 4,083,621 | 4,083,621 | |
Intangible assets, net | 11,690,264 | 12,305,887 | |
Deposits | 79,500 | 79,500 | |
Deferred production costs | 12,727,543 | 12,058,592 | |
Due from affiliates | 11,968,377 | 9,433,975 | |
Current assets held for sale | 47,286,263 | 45,363,817 | |
Liabilities | |||
Accounts payable | 504,801 | 211,228 | |
Accrued expenses and other liabilities | 3,858,076 | 3,804,301 | |
Accrued interest | 4,224 | ||
Deferred revenue | 2,278,172 | 1,970,668 | |
Deferred rent | 2,607,416 | 2,493,526 | |
Loans payable | 685,300 | ||
Current liabilities held for sale | $ 9,248,465 | $ 9,169,247 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Details) | Mar. 31, 2021USD ($) |
Accrued Expenses and Other Current Liabilities [Abstract] | |
Accrued compensation expense | $ 571,000 |
Accrued Expenses and Other Cu_4
Accrued Expenses and Other Current Liabilities (Details) - Schedule of accrued expenses and other current liabilities - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 | |
Schedule of accrued expenses and other current liabilities [Abstract] | |||
Compensation expense | [1] | $ 1,356,094 | $ 1,010,734 |
Rent | 336,632 | 148,919 | |
Event costs | 26,926 | ||
Legal and professional fees | 354,350 | 307,135 | |
Unclaimed player prizes | 14,425 | 45,171 | |
Other accrued expenses | 90,545 | 265,751 | |
Warrant liabilities | 39,300 | 3,000 | |
Other current liabilities | 62,845 | 179,381 | |
Total | $ 2,254,191 | $ 1,987,017 | |
[1] | Accrued compensation expense as of March 31, 2021 and December 31, 2020 includes approximately $571,000 which is payable to the employees of the Company’s continuing operations for their 2020 services, contingent upon the closing of the sale of WPT. |
Convertible Debt and Converti_3
Convertible Debt and Convertible Debt, Related Party (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Convertible Debt and Convertible Debt, Related Party (Textual) | ||
Convertible debt maturity date | Feb. 23, 2022 | |
Amendment and acknowledgement agreement, description | Further, the minimum interest to be paid under each Convertible Bridge Note shall be the greater of (a) 18 months of accrued interest at 12% per annum; or (b) the sum of the actual interest accrued plus 6 months of additional interest at 12% per annum. In the event of default, the Convertible Bridge Notes shall become immediately due and payable upon the written notice of the holder. | |
Note purchase agreements, description | If any holder elects to convert their Convertible Bridge Note into common stock, they would also be entitled to receive additional shares of common stock (“Contingent Consideration Shares”) equal to the product of (i) 3,846,153 shares, multiplied by (ii) that holder’s investment amount, divided by (iii) $100,000,000, if at any time within five years after the August 9, 2019 closing date, the last exchange-reported sale price of common stock trades at or above $13.00 for thirty (30) consecutive calendar days. | |
Interest payable, description | The Company recorded interest expense of $59,138 related to the Convertible Bridge Notes during the three months ended March 31, 2021 and recorded interest expense of $682,940 (including amortization of debt discount of $64,193) during the three months ended March 31, 2020. | |
Amortization of debt discount | $ 3,646 | $ 64,192 |
Monthly redemption payment, description | The Company recorded additional non-cash interest expense in the amount of $46,110 in connection with Monthly Redemption Payments during the three months ended March 31, 2021. | |
Bridge Notes [Member] | ||
Convertible Debt and Convertible Debt, Related Party (Textual) | ||
Interest expense | $ 59,138 | 682,940 |
Amortization of debt discount | $ 64,193 | |
Bridge notes, description | During the three months ended March 31, 2021, the Company issued 529,383 shares of its common stock, as Monthly Redemption Payments in satisfaction of aggregate amount of $581,818 of principal and $93,091 of interest payable owed on the Senior Notes as well as $146,958 of non-cash interest accrued on the Senior Notes. |
Convertible Debt and Converti_4
Convertible Debt and Convertible Debt, Related Party (Details) - Schedule of convertible debt - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Schedule of convertible debt [Abstract] | ||
Convertible debt, Gross Principal Amount | $ 1,000,000 | $ 1,000,000 |
Convertible debt, Debt Discount | ||
Convertible Debt, Net of Debt Discount | 1,000,000 | 1,000,000 |
Convertible debt, related party, Gross Principal Amount | 1,000,000 | 1,000,000 |
Convertible debt, related party, Debt Discount | ||
Convertible debt, related party, Convertible Debt, Net of Debt Discount | 1,000,000 | 1,000,000 |
Senior secured convertible notes, Gross Principal Amount | 581,818 | |
Senior secured convertible notes, Debt Discount | (3,646) | |
Senior secured convertible notes, Convertible Debt, Net of Debt Discount | 578,172 | |
Total, Gross Principal Amount | 2,000,000 | 2,581,818 |
Total, Debt Discount | (3,646) | |
Total, Convertible Debt, Net of Debt Discount | 2,000,000 | 2,578,172 |
Less: current portion, Gross Principal Amount | (2,000,000) | (2,000,000) |
Less: current portion, Debt Discount | ||
Less: current portion, Convertible Debt, Net of Debt Discount | (2,000,000) | (2,000,000) |
Convertible debt, non-current, Gross Principal Amount | 581,818 | |
Convertible debt, non-current, Debt Discount | (3,646) | |
Convertible debt, non-current, Convertible Debt, Net of Debt Discount | $ 578,172 |
Bridge Note Payable (Details)
Bridge Note Payable (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Bridge Note Payable (Textual) | |||
Maturity date | Feb. 23, 2022 | ||
Bridge note payable | $ 1,421,096 | $ 1,421,096 | |
Interest expense | $ 42,020 | $ 0 | |
Bridge Note [Member] | |||
Bridge Note Payable (Textual) | |||
Maturity date | Feb. 23, 2022 | ||
Bridge Note [Member] | Minimum [Member] | |||
Bridge Note Payable (Textual) | |||
Bears interest rate | 12.00% | ||
Bridge Note [Member] | Maximum [Member] | |||
Bridge Note Payable (Textual) | |||
Bears interest rate | 15.00% |
Loans Payable (Details)
Loans Payable (Details) - USD ($) | 1 Months Ended | 3 Months Ended |
May 31, 2020 | Mar. 31, 2021 | |
Loans Payable (Textual) | ||
Aggregate cash proceeds | $ 907,129 | |
Bearing interest percent rate | 0.98% | |
Interest rate, description | Monthly amortized principal and interest payments begin in July 2021 and the notes mature in April 2022. While the PPP Loans currently have two-year maturities, the amended law permits the borrower to request five-year maturities from its lenders. | |
Interest expense | $ 2,192 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | Nov. 05, 2020 | Mar. 31, 2021 | Mar. 31, 2020 |
Commitments and Contingencies (Textual) | |||
Lease and rent description | Allied Esports entered into an amendment of its lease of event space in Las Vegas Nevada (the “Amended Las Vegas Lease”), pursuant to which (i) $299,250 of deferred minimum monthly rent and additional rent due under the lease for the period from April 1, 2020 through June 3, 2020 must be paid in its entirety by December 31, 2021; (ii) the monthly rent to be paid for the period from June 25 through December 31, 2020 (the “Rent Relief Period) was reduced to an amount equal to 20% of gross sales (excluding food sales) at the event space (the “Percentage Rent”), (iii) the initial term of the lease was extended for two additional months until May 31, 2023, and (iv) the option period to extend the lease was extended to between April 1, 2022 and September 30, 2022. | ||
Rent relief | $ 194,000 | ||
Lease description | The lease expires on October 1, 2033. Current base rent pursuant to the Irvine Lease is $41,027 per month, increasing to $58,495 per month over the term of the lease. | ||
With in-person [Member] | |||
Commitments and Contingencies (Textual) | |||
Aggregate rent expense | $ 263,550 | $ 312,501 | |
General and Administrative Expense [Member] | |||
Commitments and Contingencies (Textual) | |||
Aggregate rent expense | 146,941 | 71,600 | |
Aggregate Rent Expense [Member] | |||
Commitments and Contingencies (Textual) | |||
Aggregate rent expense | $ 351,699 | $ 384,101 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | Jan. 04, 2021 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 |
Stockholders' Equity (Textual) | ||||
Stock-based compensation expense | $ 643,148 | $ 3,946,786 | ||
Equity Incentive Plan [Member] | ||||
Stockholders' Equity (Textual) | ||||
Aggregate shares of common stock (in Shares) | 126,584 | |||
Stock based compensation | $ 200,000 | |||
Stock Options [Member] | ||||
Stockholders' Equity (Textual) | ||||
Stock-based compensation expense | 282,999 | 240,399 | ||
Expenses related to stock option | 56,296 | 50,816 | ||
Unrecognized compensation expense | 1,722,027 | |||
Weighted average remaining vesting period | 2 years 7 months 6 days | |||
Restricted Stock [Member] | ||||
Stockholders' Equity (Textual) | ||||
Stock-based compensation expense | 80,006 | 113,436 | ||
Expenses related to stock option | 13,561 | $ 6,233 | ||
Unrecognized compensation expense | $ 173,333 | |||
Weighted average remaining vesting period | 1 year | |||
Restricted Stock Units (RSUs) [Member] | ||||
Stockholders' Equity (Textual) | ||||
Stock-based compensation expense | $ 100,000 | |||
Restricted stock unit agreement, description | pursuant to which the CEO received restricted stock units having a stated value equal to $1,000,000. The restricted stock units represent the right to receive $1,000,000, contingent upon the closing of the Sale Transaction, which is payable upon the earlier of the two-year anniversary of the closing date of the Sale Transaction (provided that the CEO remains continuously employed by the Company through such date), or the termination of the CEO’s employment without cause after the closing of the Sale Transaction (as defined in his employment agreement) (as applicable, the “Vesting Date”). |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - Schedule of option activity - Options [Member] | 3 Months Ended |
Mar. 31, 2021USD ($)$ / sharesshares | |
Stockholders' Equity (Details) - Schedule of option activity [Line Items] | |
Number of Options, Outstanding at beginning | shares | 2,430,000 |
Weighted Average Exercise Price, Outstanding at beginning | $ / shares | $ 4.15 |
Weighted Average Remaining Term (Yrs), Outstanding at beginning | 8 years 11 months 1 day |
Intrinsic Value, Outstanding at beginning | $ | |
Number of Options, Exercisable | shares | 557,500 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 4.33 |
Weighted Average Remaining Term (Yrs), Exercisable | 8 years 7 months 13 days |
Intrinsic Value, Exercisable | $ | |
Number of Options, Granted | shares | |
Weighted Average Exercise Price, Granted | $ / shares | |
Number of Options, Exercised | shares | |
Weighted Average Exercise Price, Exercised | $ / shares | |
Number of Options, Expired | shares | |
Weighted Average Exercise Price, Expired | $ / shares | |
Number of Options, Forfeited | shares | |
Weighted Average Exercise Price, Forfeited | $ / shares | |
Number of Options, Outstanding at ending | shares | 2,430,000 |
Weighted Average Exercise Price, Outstanding at ending | $ / shares | $ 4.15 |
Weighted Average Remaining Term (Yrs), Outstanding at ending | 8 years 8 months 1 day |
Intrinsic Value, Outstanding at ending | $ | $ 146,800 |
Stockholders' Equity (Details_2
Stockholders' Equity (Details) - Schedule of options outstanding and exercisable - $ / shares | 3 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Exercise Price, Options Outstanding (in Dollars per share) | $ 11.50 | $ 11.50 |
Outstanding Number of Options, Options Outstanding | 2,430,000 | |
Weighted Average Remaining Life In Years, Options Exercisable | 8 years 7 months 13 days | |
Exercisable Number of Options, Options Exercisable | 557,500 | |
2.11 [Member] | ||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Exercise Price, Options Outstanding (in Dollars per share) | $ 2.11 | |
Outstanding Number of Options, Options Outstanding | 80,000 | |
Weighted Average Remaining Life In Years, Options Exercisable | ||
Exercisable Number of Options, Options Exercisable | ||
2.17 [Member] | ||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Exercise Price, Options Outstanding (in Dollars per share) | $ 2.17 | |
Outstanding Number of Options, Options Outstanding | 120,000 | |
Weighted Average Remaining Life In Years, Options Exercisable | ||
Exercisable Number of Options, Options Exercisable | ||
4.09 [Member] | ||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Exercise Price, Options Outstanding (in Dollars per share) | $ 4.09 | |
Outstanding Number of Options, Options Outstanding | 1,890,000 | |
Weighted Average Remaining Life In Years, Options Exercisable | 8 years 7 months 20 days | |
Exercisable Number of Options, Options Exercisable | 472,500 | |
5.66 [Member] | ||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Exercise Price, Options Outstanding (in Dollars per share) | $ 5.66 | |
Outstanding Number of Options, Options Outstanding | 340,000 | |
Weighted Average Remaining Life In Years, Options Exercisable | 8 years 5 months 19 days | |
Exercisable Number of Options, Options Exercisable | 85,000 |
Stockholders' Equity (Details_3
Stockholders' Equity (Details) - Schedule of non-vested restricted stock activity | 3 Months Ended |
Mar. 31, 2021$ / sharesshares | |
Schedule of non-vested restricted stock activity [Abstract] | |
Number of Restricted Stock, balance at beginning | shares | 199,143 |
Weighted Average Grant Date Fair Value, balance at beginning | $ / shares | $ 2.03 |
Number of Restricted Stock, balance at ending | shares | 199,143 |
Weighted Average Grant Date Fair Value, balance at ending | $ / shares | $ 2.03 |
Number of Restricted Stock, Granted | shares | |
Weighted Average Grant Date Fair Value, Granted | $ / shares | |
Number of Restricted Stock, Vested | shares | |
Weighted Average Grant Date Fair Value, Vested | $ / shares | |
Number of Restricted Stock, Forfeited | shares | |
Weighted Average Grant Date Fair Value, Forfeited | $ / shares |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] | May 06, 2021$ / sharesshares |
Subsequent Events (Details) [Line Items] | |
Granted term | On May 6, 2021, the Company granted ten-year stock options to purchase 160,000 shares of common stock to its directors. |
Stock options to purchase shares of common stock | shares | 160,000 |
Shares vest period | 4 years |
Exercise price | $ / shares | $ 2.48 |