Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2022 | Jun. 15, 2022 | |
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 | 39,116,907 | |
Amendment Flag | false | |
Entity Central Index Key | 0001708341 | |
Entity Current Reporting Status | No | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Mar. 31, 2022 | |
Document Fiscal Year Focus | 2022 | |
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 | 745 Fifth Ave | |
Entity Address, Address Line Two | Suite 500 | |
Entity Address, City or Town | New York | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10151 | |
City Area Code | (646) | |
Local Phone Number | 768-4240 | |
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, 2022 | Dec. 31, 2021 |
Current Assets | ||
Cash | $ 90,728,536 | $ 92,887,030 |
Accounts receivable | 889,929 | 389,040 |
Prepaid expenses and other current assets | 802,317 | 984,777 |
Total Current Assets | 92,420,782 | 94,260,847 |
Restricted cash | 5,000,000 | 5,000,000 |
Property and equipment, net | 5,334,573 | 6,136,893 |
Digital assets | 218,785 | |
Intangible assets, net | 25,829 | 26,827 |
Deposits | 379,105 | 379,105 |
Total Assets | 103,379,074 | 105,803,672 |
Current Liabilities | ||
Accounts payable | 388,209 | 341,161 |
Accrued expenses and other current liabilities, current portion | 3,415,998 | 2,966,245 |
Accrued expenses - related party | 1,800,000 | 1,800,000 |
Deferred revenue | 365,537 | 141,825 |
Total Current Liabilities | 5,969,744 | 5,249,231 |
Deferred rent | 1,891,127 | 1,907,634 |
Accrued expenses, non-current portion | 208,333 | |
Total Liabilities | 8,069,204 | 7,156,865 |
Commitments and Contingencies (Note 4) | ||
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, 39,116,907 shares issued and outstanding at March 31, 2022 and December 31, 2021 | 3,912 | 3,912 |
Additional paid in capital | 198,186,268 | 197,784,972 |
Accumulated deficit | (103,162,880) | (99,411,683) |
Accumulated other comprehensive income | 282,570 | 269,606 |
Total Stockholders’ Equity | 95,309,870 | 98,646,807 |
Total Liabilities and Stockholders’ Equity | $ 103,379,074 | $ 105,803,672 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares | Mar. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 39,116,907 | 39,116,907 |
Common stock, shares outstanding | 39,116,907 | 39,116,907 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Revenues: | ||
In-person | $ 2,203,066 | $ 501,028 |
Multiplatform content | 208,988 | |
Total Revenues | 2,412,054 | 501,028 |
Costs and Expenses: | ||
In-person (exclusive of depreciation and amortization) | 1,810,353 | 537,867 |
Multiplatform content (exclusive of depreciation and amortization) | 21,133 | |
Selling and marketing expenses | 69,038 | 43,934 |
General and administrative expenses | 3,451,870 | 3,913,022 |
Depreciation and amortization | 808,612 | 881,959 |
Total Costs and Expenses | 6,161,006 | 5,376,782 |
Loss From Operations | (3,748,952) | (4,875,754) |
Other Expense: | ||
Other (expense) income, net | (6,707) | 55,142 |
Interest income (expense), net | 4,462 | (153,106) |
Total Other Expense | (2,245) | (97,964) |
Loss from continuing operations | (3,751,197) | (4,973,718) |
Income from discontinued operations, net of tax provision | 1,637,042 | |
Net loss | $ (3,751,197) | $ (3,336,676) |
Basic and Diluted Net Loss (Income) per Common Share | ||
Continuing operations (in Dollars per share) | $ (0.1) | $ (0.13) |
Discontinued operations, net of tax (in Dollars per share) | $ 0.04 | |
Weighted Average Number of Common Shares Outstanding: | ||
Basic and Diluted (in Shares) | 39,064,463 | 38,963,668 |
Comprehensive Loss | ||
Net Loss | $ (3,751,197) | $ (3,336,676) |
Other comprehensive (loss) income: | ||
Foreign currency translation adjustments | 12,964 | 25,336 |
Total Comprehensive Loss | $ (3,738,233) | $ (3,311,340) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) - USD ($) | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income | Accumulated Deficit | Total |
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 | |||
Stock options | 282,999 | 282,999 | |||
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 (loss) | 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 | ||||
Balance at Dec. 31, 2021 | $ 3,912 | 197,784,972 | 269,606 | (99,411,683) | 98,646,807 |
Balance (in Shares) at Dec. 31, 2021 | 39,116,907 | ||||
Stock-based compensation: | |||||
Restricted common stock | 82,345 | 82,345 | |||
Stock options | 318,951 | 318,951 | |||
Net loss | (3,751,197) | (3,751,197) | |||
Other comprehensive income (loss) | 12,964 | 12,964 | |||
Balance at Mar. 31, 2022 | $ 3,912 | $ 198,186,268 | $ 282,570 | $ (103,162,880) | $ 95,309,870 |
Balance (in Shares) at Mar. 31, 2022 | 39,116,907 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash Flows From Operating Activities | ||
Net loss | $ (3,751,197) | $ (3,336,676) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Income from discontinued operations, net of tax provision | (1,637,042) | |
Stock-based compensation | 401,296 | 643,148 |
Digital currency received as revenue | (177,946) | |
Change in fair value of warrant liabilities | 1,300 | 36,300 |
Amortization of debt discount | 3,646 | |
Expenses paid on behalf on WPT | (136,329) | |
Depreciation and amortization | 808,612 | 881,959 |
Deferred rent | (16,507) | (14,076) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (501,657) | 207,921 |
Prepaid expenses and other current assets | 180,703 | 286,932 |
Accounts payable | 47,343 | 190,440 |
Accrued expenses and other current liabilities | 658,810 | 235,544 |
Accrued interest | 149,460 | |
Due to affiliates | 2,534,402 | |
Deferred revenue | 224,498 | 41,885 |
Total Adjustments | 1,626,452 | 3,424,190 |
Net Cash (Used In) Provided By Operating Activities | (2,124,745) | 87,514 |
Cash Flows From Investing Activities | ||
Deposit for sale of WPT | 10,000,000 | |
Investment in digital assets | (41,026) | |
Purchases of property and equipment | (9,446) | (10,203) |
Net Cash (Used In) Provided By Investing Activities | (50,472) | 9,989,797 |
Cash Flows From Discontinued Operations | ||
Operating activities | (974,601) | |
Investing activities | 1,013,683 | |
Financing activities | (685,300) | |
Change in cash balance of discontinued operations | 646,218 | |
Net Cash Provided By Discontinued Operations | ||
Effect of Exchange Rate Changes on Cash | 16,723 | 41,482 |
Net (Decrease) Increase In Cash And Restricted Cash | (2,158,494) | 10,118,793 |
Cash and restricted cash - Beginning of period | 97,887,030 | 5,424,222 |
Cash and restricted cash - End of period | 95,728,536 | 15,543,015 |
Cash and restricted cash consisted of the following: | ||
Cash | 90,728,536 | 10,543,015 |
Restricted cash | 5,000,000 | 5,000,000 |
Total | 95,728,536 | 15,543,015 |
Non-Cash Investing and 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, 2022 | |
Background [Abstract] | |
Business Organization and Nature of Operations | Note 1 – Business Organization and Nature of Operations Allied Esports Entertainment Inc. (“AESE” and together with its subsidiaries, “the Company”) operates a public esports and entertainment company, consisting of the Allied Esports business and, until the sale of World Poker Tour (“WPT”) on July 12, 2021, the World Poker Tour business. 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., operated the poker-related business of AESE and are collectively referred to herein as “World Poker Tour” or “WPT”. 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 (as amended and restated, 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 World Poker Tour. On July 12, 2021, the Company consummated the sale of the World Poker Tour business. As the result of the Company’s sale of WPT, the condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2021, and the condensed consolidated statements of cash flows for the three months ended March 31, 2021, present the results and accounts of World Poker Tour as discontinued operations. COVID-19 Pandemic. |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2022 | |
Background [Abstract] | |
Significant Accounting Policies | Note 2 – 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, 2021. 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. 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, 2022, and for the three months ended March 31, 2022 and 2021. The results of operations for the three months ended March 31, 2022 are not necessarily indicative of the operating results for the full year ending December 31, 2022 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 consolidated financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission (“SEC”) on May 26, 2022. Fair Value of Financial Instruments The Company measures the fair value of financial assets and liabilities based on the guidance of ASC 820 “Fair Value Measurements and Disclosures” (“ASC 820”). ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value: Level 1 - quoted prices in active markets for identical assets or liabilities. Level 2 - quoted prices for similar assets and liabilities in active markets or inputs that are observable. Level 3 - inputs that are unobservable (for example, cash flow modeling inputs based on assumptions). Warrants previously issued to the Company’s sponsor (the “Sponsor Warrants”) are classified as a liability measured at fair value. As March 31, 2022 and December 31, 2021, the fair value of warrant liabilities related to our Sponsor Warrants totaled $4,500 and $3,200, respectively, which is included in accrued expenses and other current liabilities in the accompanying condensed consolidated balance sheet. See Note 3 – Accrued Expenses and Other Current Liabilities. The Sponsor Warrants are valued using level 3 inputs. The fair value of the Sponsor Warrants is estimated using the Black-Scholes option pricing method. 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, January 1, 2022 $ 3,200 Change in fair value of sponsor warrants 1,300 Balance, March 31, 2022 $ 4,500 The key inputs into the Black-Scholes model at the relevant measurement dates were as follows: March 31, December 31, Input 2022 2021 Risk-free rate 2.44 % 0.97 % Remaining term in years 2.36 2.61 Expected volatility 51.0 % 46.0 % Exercise price $ 11.50 $ 11.50 Fair value of common stock $ 1.73 $ 1.81 Net (Loss) Income per Common Share Basic (loss) income per common share is computed by dividing net (loss) income attributable to the Company by the weighted average number of common shares outstanding during the period. Diluted (loss) income per common share is computed by dividing net (loss) income attributable to common stockholders by the weighted average number of common shares outstanding, plus the impact of common shares, if dilutive, resulting from the potential (a) exercise of outstanding stock options, warrants and equity purchase options; (b) the conversion of convertible instruments; (c) vesting of restricted stock awards; (d) and receipt of contingent consideration shares. The following table presents the computation of basic and diluted net loss per common share: For the Three Months Ended March 31, 2022 2021 Numerator: Net loss - continuing operations $ (3,751,197 ) $ (4,973,718 ) Net income - discontinued operations $ - $ 1,637,042 Denominator: Weighted-average common shares outstanding 39,116,907 39,162,811 Less: weighted-averages unvested restricted shares (52,444 ) (199,143 ) Denominator for basic and diluted net loss per share $ 39,064,463 $ 38,963,668 Basic and Diluted Net (Loss) Income per Common Share Continuing operations $ (0.10 ) $ (0.13 ) Discontinued operations, net of tax $ - $ 0.04 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 March 31, 2022 2021 Restricted common shares - 199,143 Options 2,415,000 2,430,000 Warrants 20,091,549 20,091,549 Convertible debt - 235,294 Equity purchase options 600,000 600,000 Contingent consideration shares (1) 192,308 269,231 23,298,857 23,825,217 (1) Holders who elected to convert their Bridge Note into common stock are entitled to receive 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. 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. The Company recognizes revenue from continuing operations primarily from the following sources: In-person revenue 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 a 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 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. In-person revenue was comprised of the following for the three months ended March 31, 2022 and 2021: For the Three Months Ended March 31, 2022 2021 Event revenue $ 536,597 $ 110,441 Sponsorship revenue 1,326,250 244,294 Food and beverage revenue 201,318 70,704 Ticket and gaming revenue 117,779 68,644 Merchandising revenue 21,122 6,945 Total in-person revenue $ 2,203,066 $ 501,028 Multiplatform revenue Multiplatform revenue was comprised of the following for the three months ended March 31, 2022 and 2021: For the Three Months Ended March 31, 2022 2021 NFT revenue $ 208,758 $ - Distribution revenue 230 - Total multiplatform revenue $ 208,988 $ - The Company’s NFT revenue was generated from the sale of non-fungible tokens (NFTs). The Company’s NFTs exist on the Ethereum Blockchain under the Company’s EPICBEAST brand, a digital art collection of 1,958 unique beasts inspired by past and present e-sport games. The Company uses the NFT exchange, OpenSea, to facilitate its sales of NFTs. The Company, through OpenSea, has custody and control of the NFT prior to the delivery to the customer and records revenue at a point in time when the NFT is delivered to the customer and the customer pays. The Company has no obligations for returns, refunds or warranty after the NFT sale. The Company also earns a royalty of up to 10% of the sale price when an NFT is resold by its owner in a secondary market transaction. The Company recognizes this royalty as revenue when the sale is consummated, consideration for which is payable as Ether cryptocurrency. The Company’s distribution revenue is generated primarily through the distribution of content to online channels. Any advertising revenue earned by online channels is shared with the Company. The Company recognizes online advertising revenue at the point in time when the advertisements are placed in the video content. Revenue recognition The following table summarizes our revenue recognized under ASC 606 in our condensed consolidated statements of operations: For the Three Months Ended March 31, 2022 2021 Revenues Recognized at a Point in Time: Event revenue $ 536,597 $ 110,441 NFT revenue 208,758 - Food and beverage revenue 201,318 70,704 Ticket and gaming revenue 117,779 68,644 Merchandising revenue 21,122 6,945 Sponsorship revenue - 2,502 Distribution revenue 230 - Total Revenues Recognized at a Point in Time 1,085,804 259,236 Revenues Recognized Over a Period of Time: Sponsorship revenue 1,326,250 241,792 Total Revenues Recognized Over a Period of Time 1,326,250 241,792 Total Revenues $ 2,412,054 $ 501,028 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. As of March 31, 2022 and December 31, 2021, the Company had contract liabilities of $365,537 and $141,825, respectively, which is included in deferred revenue on the condensed consolidated balance sheet. Digital Assets The Company purchases Ether cryptocurrency and accepts Ether as a form of payment for NFT sales. The Company accounts for these digital assets held as the result of the purchase or receipt of Ether, as indefinite-lived intangible assets in accordance with ASC 350, Intangibles—Goodwill and Other. We have ownership of and control over our digital assets and we may use third-party custodial services to secure them. The digital assets are initially recorded at cost and are subsequently remeasured, net of any impairment losses incurred since acquisition. We determine the fair value of our digital assets on a nonrecurring basis in accordance with ASC 820, Fair Value Measurement, based on quoted prices on the active exchange(s) that we have determined is the principal market for Ether (Level 1 inputs). We perform an analysis each quarter to identify whether events or changes in circumstances, principally decreases in the quoted prices on active exchanges, indicate that it is more likely than not that our digital assets are impaired. In determining if an impairment has occurred, we consider the lowest market price quoted on an active exchange since acquiring the respective digital asset. If the then current carrying value of a digital asset exceeds the fair value, an impairment loss has occurred with respect to those digital assets in the amount equal to the difference between their carrying values and the fair value. The impaired digital assets are written down to their fair value at the time of impairment and this new cost basis will not be adjusted upward for any subsequent increase in fair value. Gains are not recorded until realized upon sale, at which point they are presented net of any impairment losses for the same digital assets held. In determining the gain or loss to be recognized upon sale, we calculate the difference between the sales price and carrying value of the digital assets sold immediately prior to sale. Impairment losses and gains or losses on sales are recognized within other expense in our condensed consolidated statements of operations and comprehensive loss. There were no impairment losses for the three months ended March 31, 2022 and we did not sell any digital assets during the same time period. The following table sets forth changes in our Ether holdings: Balance, December 31, 2021 $ - Purchases 36,746 Received from customers 177,946 Impairment loss - Foreign currency translation 4,093 Balance, March 31, 2022 $ 218,785 Concentration Risks During the three months ended March 31, 2022 and 2021, 3% and 10%, respectively, of the Company’s revenues from continuing operations were from customers in foreign countries. During the three months ended March 31, 2022, the Company’s two largest customers accounted for 41%, and 12% of the Company’s consolidated revenues from continuing operations. 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. 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 (1.1114 and 1.1342 at March 31, 2022 and December 31, 2021, respectively), and revenue and expense accounts are translated using the weighted average exchange rate in effect for the period (1.1165 and 1.1829 for the three months ended March 31, 2022 and 2021, respectively). Resulting translation adjustments are made directly to accumulated other comprehensive income. Losses of $1,890 and $324 arising from exchange rate fluctuations on transactions denominated in a currency other than the reporting currency for the three months ended March 31, 2022 and 2021, respectively, are recognized in operating results in the accompanying condensed consolidated statements of operations. The Company engages in foreign currency denominated transactions with customers and suppliers, as well as between subsidiaries with different functional currencies. 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 results of operations of WPT for the three months ended March 31, 2021 are included in “Income from discontinued operations, net of tax provision” in the accompanying condensed consolidated statements of operations. Reclassifications Certain prior year balances have been reclassified in order to conform to current year presentation. These reclassifications had no effect on previously reported results of operations or loss per share. Recently Adopted Accounting Pronouncements On May 3, 2021, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. This new standard provides clarification and reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (such as warrants) that remain equity classified after modification or exchange. This standard is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Issuers should apply the new standard prospectively to modifications or exchanges occurring after the effective date of the new standard. Early adoption is permitted, including adoption in an interim period. If an issuer elects to early adopt the new standard in an interim period, the guidance should be applied as of the beginning of the fiscal year that includes that interim period. This standard was adopted on January 1, 2022 and did not have a material impact on the Company’s condensed consolidated financial statements. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 3 Months Ended |
Mar. 31, 2022 | |
Accrued Expenses and Other Current Liabilities [Abstract] | |
Accrued Expenses and Other Current Liabilities | Note 3 – Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consist of the following: March 31, December 31, 2022 2021 Compensation expense $ 2,411,357 $ 2,202,621 Current portion of deferred rent 160,993 198,504 Event costs 465,051 8,874 Legal and professional fees 406,027 368,691 Warrant liabilities 4,500 3,200 Other accrued expenses 145,732 172,858 Other current liabilities 30,671 11,497 Total $ 3,624,331 $ 2,966,245 Less: non current portion of accrued compensation expense (208,333 ) - Accrued expenses and other current liabilities $ 3,415,998 $ 2,966,245 Accrued expenses, related party (1) $ 1,800,000 $ 1,800,000 (1) Represents amounts accrued to reimburse a principal shareholder for costs incurred in connection with specified Company transactions, including $1,300,000 incurred in connection with the sale of WPT. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 4 – 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. Resignation of Chief Executive Officer On February 18, 2022, Libing (Claire) Wu resigned as Chief Executive Officer and General Counsel of the Company. In connection with her resignation, the Company entered into a Separation Agreement and Release with Ms. Wu (the “Release”) pursuant to which, among other things, Ms. Wu released the Company from any and all claims she may have against the Company (subject to certain exclusions), and the Company agreed to provide Ms. Wu with certain separation benefits, including $750,000 (gross) in severance pay payable over an 18-month period, accelerated vesting of 200,000 unvested stock options previously granted to Ms. Wu pursuant to an Option Agreement dated effective July 13, 2021, extended the exercise period to exercise such options to July 13, 2031, respectively, and accelerated vesting of 80,000 shares of restricted stock previously granted to Ms. Wu pursuant to an Executive Restricted Stock Agreement dated July 13, 2021. As no future substantive services will be performed by Ms. Wu, the Company immediately recognized stock-based compensation expense of $258,979 related to the modification of these awards. The Release also contains a customary non-disparagement provision. Board of Directors On February 18, 2022, Jerry Lewin resigned as a Class C Director of the Company. In appreciation of Mr. Lewin’s services to the Company as a director, Chair of the Compensation Committee and a member of the Audit Committee, the Company paid to Mr. Lewin $25,000, accelerated vesting of 40,000 unvested stock options previously granted to Mr. Lewin pursuant to an option agreement dated effective May 6, 2021, and extended the exercise period of such options to May 6, 2031. The Company immediately recognized stock-based compensation expense of $32,909 related to the modification of these awards. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2022 | |
Stockholders' Equity Note [Abstract] | |
Stockholders’ Equity | Note 5 – Stockholders’ Equity Stock Options A summary of the option activity during the three months ended March 31, 2022 is presented below: Weighted Weighted Average Average Number of Exercise Remaining Intrinsic Options Price Term (Yrs) Value Outstanding, January 1, 2022 2,415,000 $ 3.73 Granted - - Exercised - - Expired - - Forfeited - - Outstanding, March 31, 2022 2,415,000 $ 3.73 7.27 $ - Exercisable, March 31, 2022 1,600,000 $ 3.80 6.57 $ - Options outstanding and exercisable as of March 31, 2022 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 8.25 20,000 $ 2.17 120,000 8.35 120,000 $ 2.21 350,000 9.29 200,000 $ 2.48 160,000 9.10 40,000 $ 4.09 1,425,000 5.60 1,060,000 $ 5.66 280,000 7.47 160,000 2,415,000 6.57 1,600,000 The expected term used for options is the estimated period of time that options granted are expected to be outstanding. The Company utilizes the “simplified” method to develop an estimate of the expected term of “plain vanilla” option grants. The Company uses a blended volatility calculation, the components of which are the Company’s historical volatility for the period from its initial public offering through the valuation date and the average peer-group data of four comparable entities to supplement the Company’s own historical data for the preceding years in computing the expected volatility. Accordingly, the Company is utilizing an expected volatility figure based on a review of the historical volatility of comparable entities over a period of time equivalent to the expected life of the instrument being valued. The risk-free interest rate was determined from the implied yields from U.S. Treasury zero-coupon bonds with a remaining term consistent with the expected term of the instrument being valued. For the three months ended March 31, 2022 and 2021, the Company recorded $318,951 and $282,999, respectively, of stock-based compensation expense related to stock options, of which $0 and $56,296, respectively, was included in income from discontinued operations before the sale of WPT on the accompanying condensed consolidated statement of operations. As of March 31, 2022, there was $901,830 of unrecognized stock-based compensation expense related to the stock options that will be recognized over the weighted average remaining vesting period of 2.10 years. Restricted Common Stock A summary of the non-vested restricted common stock activity during the three months ended March 31, 2022 is presented below: Weighted Number of Average Restricted Grant Date Stock Fair Value Non-vested balance, January 1, 2022 80,000 $ 2.00 Vested (80,000 ) 2.00 Non-vested balance, March 31, 2022 - $ - For the three months ended March 31, 2022 and 2021, the Company recorded $82,345 and $80,006, respectively, of stock-based compensation expense related to restricted stock of which $0 and $13,561, respectively, was included in income from discontinued operations before the sale of WPT on the accompanying condensed consolidated statement of operations. As of December 31, 2021, all restricted common stock was fully vested. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Background [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. 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, 2022, and for the three months ended March 31, 2022 and 2021. The results of operations for the three months ended March 31, 2022 are not necessarily indicative of the operating results for the full year ending December 31, 2022 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 consolidated financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission (“SEC”) on May 26, 2022. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company measures the fair value of financial assets and liabilities based on the guidance of ASC 820 “Fair Value Measurements and Disclosures” (“ASC 820”). ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value: Level 1 - quoted prices in active markets for identical assets or liabilities. Level 2 - quoted prices for similar assets and liabilities in active markets or inputs that are observable. Level 3 - inputs that are unobservable (for example, cash flow modeling inputs based on assumptions). Warrants previously issued to the Company’s sponsor (the “Sponsor Warrants”) are classified as a liability measured at fair value. As March 31, 2022 and December 31, 2021, the fair value of warrant liabilities related to our Sponsor Warrants totaled $4,500 and $3,200, respectively, which is included in accrued expenses and other current liabilities in the accompanying condensed consolidated balance sheet. See Note 3 – Accrued Expenses and Other Current Liabilities. The Sponsor Warrants are valued using level 3 inputs. The fair value of the Sponsor Warrants is estimated using the Black-Scholes option pricing method. 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, January 1, 2022 $ 3,200 Change in fair value of sponsor warrants 1,300 Balance, March 31, 2022 $ 4,500 The key inputs into the Black-Scholes model at the relevant measurement dates were as follows: March 31, December 31, Input 2022 2021 Risk-free rate 2.44 % 0.97 % Remaining term in years 2.36 2.61 Expected volatility 51.0 % 46.0 % Exercise price $ 11.50 $ 11.50 Fair value of common stock $ 1.73 $ 1.81 |
Net (Loss) Income per Common Share | Net (Loss) Income per Common Share Basic (loss) income per common share is computed by dividing net (loss) income attributable to the Company by the weighted average number of common shares outstanding during the period. Diluted (loss) income per common share is computed by dividing net (loss) income attributable to common stockholders by the weighted average number of common shares outstanding, plus the impact of common shares, if dilutive, resulting from the potential (a) exercise of outstanding stock options, warrants and equity purchase options; (b) the conversion of convertible instruments; (c) vesting of restricted stock awards; (d) and receipt of contingent consideration shares. The following table presents the computation of basic and diluted net loss per common share: For the Three Months Ended March 31, 2022 2021 Numerator: Net loss - continuing operations $ (3,751,197 ) $ (4,973,718 ) Net income - discontinued operations $ - $ 1,637,042 Denominator: Weighted-average common shares outstanding 39,116,907 39,162,811 Less: weighted-averages unvested restricted shares (52,444 ) (199,143 ) Denominator for basic and diluted net loss per share $ 39,064,463 $ 38,963,668 Basic and Diluted Net (Loss) Income per Common Share Continuing operations $ (0.10 ) $ (0.13 ) Discontinued operations, net of tax $ - $ 0.04 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 March 31, 2022 2021 Restricted common shares - 199,143 Options 2,415,000 2,430,000 Warrants 20,091,549 20,091,549 Convertible debt - 235,294 Equity purchase options 600,000 600,000 Contingent consideration shares (1) 192,308 269,231 23,298,857 23,825,217 (1) Holders who elected to convert their Bridge Note into common stock are entitled to receive 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. |
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. The Company recognizes revenue from continuing operations primarily from the following sources: In-person revenue 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 a 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 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. In-person revenue was comprised of the following for the three months ended March 31, 2022 and 2021: For the Three Months Ended March 31, 2022 2021 Event revenue $ 536,597 $ 110,441 Sponsorship revenue 1,326,250 244,294 Food and beverage revenue 201,318 70,704 Ticket and gaming revenue 117,779 68,644 Merchandising revenue 21,122 6,945 Total in-person revenue $ 2,203,066 $ 501,028 Multiplatform revenue Multiplatform revenue was comprised of the following for the three months ended March 31, 2022 and 2021: For the Three Months Ended March 31, 2022 2021 NFT revenue $ 208,758 $ - Distribution revenue 230 - Total multiplatform revenue $ 208,988 $ - The Company’s NFT revenue was generated from the sale of non-fungible tokens (NFTs). The Company’s NFTs exist on the Ethereum Blockchain under the Company’s EPICBEAST brand, a digital art collection of 1,958 unique beasts inspired by past and present e-sport games. The Company uses the NFT exchange, OpenSea, to facilitate its sales of NFTs. The Company, through OpenSea, has custody and control of the NFT prior to the delivery to the customer and records revenue at a point in time when the NFT is delivered to the customer and the customer pays. The Company has no obligations for returns, refunds or warranty after the NFT sale. The Company also earns a royalty of up to 10% of the sale price when an NFT is resold by its owner in a secondary market transaction. The Company recognizes this royalty as revenue when the sale is consummated, consideration for which is payable as Ether cryptocurrency. The Company’s distribution revenue is generated primarily through the distribution of content to online channels. Any advertising revenue earned by online channels is shared with the Company. The Company recognizes online advertising revenue at the point in time when the advertisements are placed in the video content. Revenue recognition The following table summarizes our revenue recognized under ASC 606 in our condensed consolidated statements of operations: For the Three Months Ended March 31, 2022 2021 Revenues Recognized at a Point in Time: Event revenue $ 536,597 $ 110,441 NFT revenue 208,758 - Food and beverage revenue 201,318 70,704 Ticket and gaming revenue 117,779 68,644 Merchandising revenue 21,122 6,945 Sponsorship revenue - 2,502 Distribution revenue 230 - Total Revenues Recognized at a Point in Time 1,085,804 259,236 Revenues Recognized Over a Period of Time: Sponsorship revenue 1,326,250 241,792 Total Revenues Recognized Over a Period of Time 1,326,250 241,792 Total Revenues $ 2,412,054 $ 501,028 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. As of March 31, 2022 and December 31, 2021, the Company had contract liabilities of $365,537 and $141,825, respectively, which is included in deferred revenue on the condensed consolidated balance sheet. |
Digital Assets | Digital Assets The Company purchases Ether cryptocurrency and accepts Ether as a form of payment for NFT sales. The Company accounts for these digital assets held as the result of the purchase or receipt of Ether, as indefinite-lived intangible assets in accordance with ASC 350, Intangibles—Goodwill and Other. We have ownership of and control over our digital assets and we may use third-party custodial services to secure them. The digital assets are initially recorded at cost and are subsequently remeasured, net of any impairment losses incurred since acquisition. We determine the fair value of our digital assets on a nonrecurring basis in accordance with ASC 820, Fair Value Measurement, based on quoted prices on the active exchange(s) that we have determined is the principal market for Ether (Level 1 inputs). We perform an analysis each quarter to identify whether events or changes in circumstances, principally decreases in the quoted prices on active exchanges, indicate that it is more likely than not that our digital assets are impaired. In determining if an impairment has occurred, we consider the lowest market price quoted on an active exchange since acquiring the respective digital asset. If the then current carrying value of a digital asset exceeds the fair value, an impairment loss has occurred with respect to those digital assets in the amount equal to the difference between their carrying values and the fair value. The impaired digital assets are written down to their fair value at the time of impairment and this new cost basis will not be adjusted upward for any subsequent increase in fair value. Gains are not recorded until realized upon sale, at which point they are presented net of any impairment losses for the same digital assets held. In determining the gain or loss to be recognized upon sale, we calculate the difference between the sales price and carrying value of the digital assets sold immediately prior to sale. Impairment losses and gains or losses on sales are recognized within other expense in our condensed consolidated statements of operations and comprehensive loss. There were no impairment losses for the three months ended March 31, 2022 and we did not sell any digital assets during the same time period. The following table sets forth changes in our Ether holdings: Balance, December 31, 2021 $ - Purchases 36,746 Received from customers 177,946 Impairment loss - Foreign currency translation 4,093 Balance, March 31, 2022 $ 218,785 |
Concentration Risks | Concentration Risks During the three months ended March 31, 2022 and 2021, 3% and 10%, respectively, of the Company’s revenues from continuing operations were from customers in foreign countries. During the three months ended March 31, 2022, the Company’s two largest customers accounted for 41%, and 12% of the Company’s consolidated revenues from continuing operations. 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. |
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 (1.1114 and 1.1342 at March 31, 2022 and December 31, 2021, respectively), and revenue and expense accounts are translated using the weighted average exchange rate in effect for the period (1.1165 and 1.1829 for the three months ended March 31, 2022 and 2021, respectively). Resulting translation adjustments are made directly to accumulated other comprehensive income. Losses of $1,890 and $324 arising from exchange rate fluctuations on transactions denominated in a currency other than the reporting currency for the three months ended March 31, 2022 and 2021, respectively, are recognized in operating results in the accompanying condensed consolidated statements of operations. The Company engages in foreign currency denominated transactions with customers and suppliers, as well as between subsidiaries with different functional currencies. |
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 results of operations of WPT for the three months ended March 31, 2021 are included in “Income from discontinued operations, net of tax provision” in the accompanying condensed consolidated statements of operations. |
Reclassifications | Reclassifications Certain prior year balances have been reclassified in order to conform to current year presentation. These reclassifications had no effect on previously reported results of operations or loss per share. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements On May 3, 2021, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. This new standard provides clarification and reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (such as warrants) that remain equity classified after modification or exchange. This standard is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Issuers should apply the new standard prospectively to modifications or exchanges occurring after the effective date of the new standard. Early adoption is permitted, including adoption in an interim period. If an issuer elects to early adopt the new standard in an interim period, the guidance should be applied as of the beginning of the fiscal year that includes that interim period. This standard was adopted on January 1, 2022 and did not have a material impact on the Company’s condensed consolidated financial statements. |
Significant Accounting Polici_2
Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Significant Accounting Policies (Tables) [Line Items] | |
Schedule of roll forward of the company’s level 3 instruments | Balance, January 1, 2022 $ 3,200 Change in fair value of sponsor warrants 1,300 Balance, March 31, 2022 $ 4,500 |
Schedule of key inputs into the black-scholes model at the relevant measurement dates | March 31, December 31, Input 2022 2021 Risk-free rate 2.44 % 0.97 % Remaining term in years 2.36 2.61 Expected volatility 51.0 % 46.0 % Exercise price $ 11.50 $ 11.50 Fair value of common stock $ 1.73 $ 1.81 |
Schedule of basic and diluted net loss per common share | For the Three Months Ended March 31, 2022 2021 Numerator: Net loss - continuing operations $ (3,751,197 ) $ (4,973,718 ) Net income - discontinued operations $ - $ 1,637,042 Denominator: Weighted-average common shares outstanding 39,116,907 39,162,811 Less: weighted-averages unvested restricted shares (52,444 ) (199,143 ) Denominator for basic and diluted net loss per share $ 39,064,463 $ 38,963,668 Basic and Diluted Net (Loss) Income per Common Share Continuing operations $ (0.10 ) $ (0.13 ) Discontinued operations, net of tax $ - $ 0.04 |
Schedule of weighted average dilutive common shares | For the Three Months Ended March 31, 2022 2021 Restricted common shares - 199,143 Options 2,415,000 2,430,000 Warrants 20,091,549 20,091,549 Convertible debt - 235,294 Equity purchase options 600,000 600,000 Contingent consideration shares (1) 192,308 269,231 23,298,857 23,825,217 |
Schedule of multiplatform revenue | For the Three Months Ended March 31, 2022 2021 NFT revenue $ 208,758 $ - Distribution revenue 230 - Total multiplatform revenue $ 208,988 $ - |
Schedule of changes in Ether holdings | Balance, December 31, 2021 $ - Purchases 36,746 Received from customers 177,946 Impairment loss - Foreign currency translation 4,093 Balance, March 31, 2022 $ 218,785 |
In-person [Member] | |
Significant Accounting Policies (Tables) [Line Items] | |
Schedule of revenue recognition | For the Three Months Ended March 31, 2022 2021 Event revenue $ 536,597 $ 110,441 Sponsorship revenue 1,326,250 244,294 Food and beverage revenue 201,318 70,704 Ticket and gaming revenue 117,779 68,644 Merchandising revenue 21,122 6,945 Total in-person revenue $ 2,203,066 $ 501,028 |
Adjustment under 606 [Member] | |
Significant Accounting Policies (Tables) [Line Items] | |
Schedule of revenue recognition | For the Three Months Ended March 31, 2022 2021 Revenues Recognized at a Point in Time: Event revenue $ 536,597 $ 110,441 NFT revenue 208,758 - Food and beverage revenue 201,318 70,704 Ticket and gaming revenue 117,779 68,644 Merchandising revenue 21,122 6,945 Sponsorship revenue - 2,502 Distribution revenue 230 - Total Revenues Recognized at a Point in Time 1,085,804 259,236 Revenues Recognized Over a Period of Time: Sponsorship revenue 1,326,250 241,792 Total Revenues Recognized Over a Period of Time 1,326,250 241,792 Total Revenues $ 2,412,054 $ 501,028 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Accrued Expenses and Other Current Liabilities [Abstract] | |
Schedule of accrued expenses and other current liabilities | March 31, December 31, 2022 2021 Compensation expense $ 2,411,357 $ 2,202,621 Current portion of deferred rent 160,993 198,504 Event costs 465,051 8,874 Legal and professional fees 406,027 368,691 Warrant liabilities 4,500 3,200 Other accrued expenses 145,732 172,858 Other current liabilities 30,671 11,497 Total $ 3,624,331 $ 2,966,245 Less: non current portion of accrued compensation expense (208,333 ) - Accrued expenses and other current liabilities $ 3,415,998 $ 2,966,245 Accrued expenses, related party (1) $ 1,800,000 $ 1,800,000 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
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, 2022 2,415,000 $ 3.73 Granted - - Exercised - - Expired - - Forfeited - - Outstanding, March 31, 2022 2,415,000 $ 3.73 7.27 $ - Exercisable, March 31, 2022 1,600,000 $ 3.80 6.57 $ - |
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 8.25 20,000 $ 2.17 120,000 8.35 120,000 $ 2.21 350,000 9.29 200,000 $ 2.48 160,000 9.10 40,000 $ 4.09 1,425,000 5.60 1,060,000 $ 5.66 280,000 7.47 160,000 2,415,000 6.57 1,600,000 |
Schedule of non-vested restricted common stock activity | Weighted Number of Average Restricted Grant Date Stock Fair Value Non-vested balance, January 1, 2022 80,000 $ 2.00 Vested (80,000 ) 2.00 Non-vested balance, March 31, 2022 - $ - |
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% |
CSI [Member] | |
Background and Basis of Presentation (Textual) | |
Subsidiary owned sale of equity, percentage | 100% |
Significant Accounting Polici_3
Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Significant Accounting Policies (Textual) | |||
Fair value of warrant liabilities (in Dollars) | $ 4,500 | $ 3,200 | |
Royalty percentage | 10% | ||
Contract liabilities (in Dollars) | $ 365,537 | $ 141,825 | |
Percentage of customers in foreign countries | 3% | 10% | |
Functional currency translation rate for balance sheet (in Dollars per share) | $ 1.1114 | $ 1.1342 | |
Functional currency translation rate for revenue and expense accounts (in Dollars per share) | $ 1.1165 | $ 1.1829 | |
Losses arising from exchange rate fluctuations (in Dollars) | $ 1,890 | $ 324 | |
Customer One [Member] | |||
Significant Accounting Policies (Textual) | |||
Percentage of consolidated revenues from continuing operations | 41% | 31% | |
Customer Two [Member] | |||
Significant Accounting Policies (Textual) | |||
Percentage of consolidated revenues from continuing operations | 12% | 16% |
Significant Accounting Polici_4
Significant Accounting Policies (Details) - Schedule of roll forward of the company’s level 3 instruments - Level 3 [Member] | 3 Months Ended |
Mar. 31, 2022 USD ($) | |
Significant Accounting Policies (Details) - Schedule of roll forward of the company’s level 3 instruments [Line Items] | |
Fair value of beginning balance | $ 3,200 |
Change in fair value of sponsor warrants | 1,300 |
Fair value of ending balance | $ 4,500 |
Significant Accounting Polici_5
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, 2022 | Dec. 31, 2021 | |
Schedule of key inputs into the black-scholes model at the relevant measurement dates [Abstract] | ||
Risk-free rate | 2.44% | 0.97% |
Remaining term in years | 2 years 4 months 9 days | 2 years 7 months 9 days |
Expected volatility | 51% | 46% |
Exercise price | $ 11.5 | $ 11.5 |
Fair value of common stock | $ 1.73 | $ 1.81 |
Significant Accounting Polici_6
Significant Accounting Policies (Details) - Schedule of basic and diluted net loss per common share - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Numerator: | ||
Net loss - continuing operations | $ (3,751,197) | $ (4,973,718) |
Net income - discontinued operations | 1,637,042 | |
Denominator: | ||
Weighted-average common shares outstanding | 39,116,907 | 39,162,811 |
Less: weighted-averages unvested restricted shares | (52,444) | (199,143) |
Denominator for basic and diluted net loss per share | $ 39,064,463 | $ 38,963,668 |
Basic and Diluted Net (Loss) Income per Common Share | ||
Continuing operations (in Dollars per share) | $ (0.1) | $ (0.13) |
Discontinued operations, net of tax (in Dollars per share) | $ 0.04 |
Significant Accounting Polici_7
Significant Accounting Policies (Details) - Schedule of weighted average dilutive common shares - shares | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Securities excluded from calculation of weighted average dilutive common shares | 23,298,857 | 23,825,217 | |
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 | ||
Options [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Securities excluded from calculation of weighted average dilutive common shares | 2,415,000 | 2,430,000 | |
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 | 20,091,549 | |
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 | ||
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 | [1] | 192,308 | 269,231 |
[1]Holders who elected to convert their Bridge Note into common stock are entitled to receive 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 $13.00 for thirty (30) consecutive calendar days. |
Significant Accounting Polici_8
Significant Accounting Policies (Details) - Schedule of revenue recognition - In-person [Member] - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Total in-person revenue | $ 2,203,066 | $ 501,028 |
Event revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total in-person revenue | 536,597 | 110,441 |
Sponsorship revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total in-person revenue | 1,326,250 | 244,294 |
Food and beverage revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total in-person revenue | 201,318 | 70,704 |
Ticket and gaming revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total in-person revenue | 117,779 | 68,644 |
Merchandising revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total in-person revenue | $ 21,122 | $ 6,945 |
Significant Accounting Polici_9
Significant Accounting Policies (Details) - Schedule of multiplatform revenue - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Schedule of multiplatform revenue [Abstract] | ||
NFT revenue | $ 208,758 | |
Distribution revenue | 230 | |
Total multiplatform revenue | $ 208,988 |
Significant Accounting Polic_10
Significant Accounting Policies (Details) - Schedule of revenue recognition - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Revenues Recognized at a Point in Time: | ||
Total Revenues | $ 2,412,054 | $ 501,028 |
Point in Time [Member] | ||
Revenues Recognized at a Point in Time: | ||
Total Revenues | 1,085,804 | 259,236 |
Over a Period of Time [Member] | ||
Revenues Recognized at a Point in Time: | ||
Total Revenues | 1,326,250 | 241,792 |
Event revenue [Member] | Point in Time [Member] | ||
Revenues Recognized at a Point in Time: | ||
Total Revenues | 536,597 | 110,441 |
NFT revenue [Member] | Point in Time [Member] | ||
Revenues Recognized at a Point in Time: | ||
Total Revenues | 208,758 | |
Food and beverage revenue [Member] | Point in Time [Member] | ||
Revenues Recognized at a Point in Time: | ||
Total Revenues | 201,318 | 70,704 |
Ticket and gaming revenue [Member] | Point in Time [Member] | ||
Revenues Recognized at a Point in Time: | ||
Total Revenues | 117,779 | 68,644 |
Merchandising revenue [Member] | Point in Time [Member] | ||
Revenues Recognized at a Point in Time: | ||
Total Revenues | 21,122 | 6,945 |
Sponsorship revenue [Member] | Point in Time [Member] | ||
Revenues Recognized at a Point in Time: | ||
Total Revenues | 2,502 | |
Sponsorship revenue [Member] | Over a Period of Time [Member] | ||
Revenues Recognized at a Point in Time: | ||
Total Revenues | 1,326,250 | 241,792 |
Distribution revenue [Member] | Point in Time [Member] | ||
Revenues Recognized at a Point in Time: | ||
Total Revenues | $ 230 |
Significant Accounting Polic_11
Significant Accounting Policies (Details) - Schedule of changes in Ether holdings | 3 Months Ended |
Mar. 31, 2022 USD ($) | |
Schedule of changes in Ether holdings [Abstract] | |
Balance as of December 31, 2021 | |
Purchases | 36,746 |
Received from customers | 177,946 |
Impairment loss | |
Foreign currency translation | 4,093 |
Balance, March 31, 2022 | $ 218,785 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Details) | 3 Months Ended |
Mar. 31, 2022 USD ($) | |
Accrued Expenses and Other Current Liabilities [Abstract] | |
Incurred cost to reimburse principal shareholder | $ 1,300,000 |
Accrued Expenses and Other Cu_4
Accrued Expenses and Other Current Liabilities (Details) - Schedule of accrued expenses and other current liabilities - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 | |
Schedule of accrued expenses and other current liabilities [Abstract] | |||
Compensation expense | $ 2,411,357 | $ 2,202,621 | |
Current portion of deferred rent | 160,993 | 198,504 | |
Event costs | 465,051 | 8,874 | |
Legal and professional fees | 406,027 | 368,691 | |
Warrant liabilities | 4,500 | 3,200 | |
Other accrued expenses | 145,732 | 172,858 | |
Other current liabilities | 30,671 | 11,497 | |
Total | 3,624,331 | 2,966,245 | |
Less: non current portion of accrued compensation expense | (208,333) | ||
Accrued expenses and other current liabilities | 3,415,998 | 2,966,245 | |
Accrued expenses, related party | [1] | $ 1,800,000 | $ 1,800,000 |
[1]Represents amounts accrued to reimburse a principal shareholder for costs incurred in connection with specified Company transactions, including $1,300,000 incurred in connection with the sale of WPT. |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | 1 Months Ended | ||
May 06, 2021 | Feb. 18, 2022 | Jul. 13, 2021 | |
Commitments and Contingencies (Details) [Line Items] | |||
Severance pay payable | $ 750,000 | ||
Severance payable period | 18 months | ||
Unvested stock options granted (in Shares) | 200,000 | ||
Accelerated vesting shares (in Shares) | 80,000 | ||
Stock-based compensation expense | $ 258,979 | ||
Board of Directors [Member] | |||
Commitments and Contingencies (Details) [Line Items] | |||
Unvested stock options granted (in Shares) | 40,000 | ||
Stock-based compensation expense | 32,909 | ||
Amount paid by company | $ 25,000 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Stock Options [Member] | ||
Stockholders' Equity (Textual) | ||
Stock-based compensation expense | $ 318,951 | $ 282,999 |
Stock-based compensation expense included in discontinued operations | 0 | 56,296 |
Unrecognized compensation expense | $ 901,830 | |
Weighted average remaining vesting period | 2 years 1 month 6 days | |
Restricted Stock [Member] | ||
Stockholders' Equity (Textual) | ||
Stock-based compensation expense | $ 82,345 | 80,006 |
Stock-based compensation expense included in discontinued operations | $ 0 | $ 13,561 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - Schedule of option activity - Stock Options [Member] | 3 Months Ended |
Mar. 31, 2022 USD ($) $ / shares shares | |
Stockholders' Equity (Details) - Schedule of option activity [Line Items] | |
Number of Options, Outstanding at beginning | shares | 2,415,000 |
Weighted Average Exercise Price, Outstanding at beginning | $ / shares | $ 3.73 |
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 | 2,415,000 |
Weighted Average Exercise Price, Outstanding at ending | $ / shares | $ 3.73 |
Weighted Average Remaining Term (Yrs), Outstanding at ending | 7 years 3 months 7 days |
Intrinsic Value, Outstanding at ending | $ | |
Number of Options, Exercisable | shares | 1,600,000 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 3.8 |
Weighted Average Remaining Term (Yrs), Exercisable | 6 years 6 months 25 days |
Intrinsic Value, Exercisable | $ |
Stockholders' Equity (Details_2
Stockholders' Equity (Details) - Schedule of options outstanding and exercisable | 3 Months Ended |
Mar. 31, 2022 $ / shares shares | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Outstanding Number of Options, Options Outstanding | 2,415,000 |
Weighted Average Remaining Life In Years, Options Exercisable | 6 years 6 months 25 days |
Exercisable Number of Options, Options Exercisable | 1,600,000 |
2.11 [Member] | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise Price, Options Outstanding (in Dollars per share) | $ / shares | $ 2.11 |
Outstanding Number of Options, Options Outstanding | 80,000 |
Weighted Average Remaining Life In Years, Options Exercisable | 8 years 3 months |
Exercisable Number of Options, Options Exercisable | 20,000 |
2.17 [Member] | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise Price, Options Outstanding (in Dollars per share) | $ / shares | $ 2.17 |
Outstanding Number of Options, Options Outstanding | 120,000 |
Weighted Average Remaining Life In Years, Options Exercisable | 8 years 4 months 6 days |
Exercisable Number of Options, Options Exercisable | 120,000 |
2.21 [Member] | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise Price, Options Outstanding (in Dollars per share) | $ / shares | $ 2.21 |
Outstanding Number of Options, Options Outstanding | 350,000 |
Weighted Average Remaining Life In Years, Options Exercisable | 9 years 3 months 14 days |
Exercisable Number of Options, Options Exercisable | 200,000 |
2.48 [Member] | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise Price, Options Outstanding (in Dollars per share) | $ / shares | $ 2.48 |
Outstanding Number of Options, Options Outstanding | 160,000 |
Weighted Average Remaining Life In Years, Options Exercisable | 9 years 1 month 6 days |
Exercisable Number of Options, Options Exercisable | 40,000 |
4.09 [Member] | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise Price, Options Outstanding (in Dollars per share) | $ / shares | $ 4.09 |
Outstanding Number of Options, Options Outstanding | 1,425,000 |
Weighted Average Remaining Life In Years, Options Exercisable | 5 years 7 months 6 days |
Exercisable Number of Options, Options Exercisable | 1,060,000 |
5.66 [Member] | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise Price, Options Outstanding (in Dollars per share) | $ / shares | $ 5.66 |
Outstanding Number of Options, Options Outstanding | 280,000 |
Weighted Average Remaining Life In Years, Options Exercisable | 7 years 5 months 19 days |
Exercisable Number of Options, Options Exercisable | 160,000 |
Stockholders' Equity (Details_3
Stockholders' Equity (Details) - Schedule of non-vested restricted common stock activity | 3 Months Ended |
Mar. 31, 2022 $ / shares shares | |
Schedule of non-vested restricted common stock activity [Abstract] | |
Number of Restricted Stock, balance at beginning | shares | 80,000 |
Weighted Average Grant Date Fair Value, balance at beginning | $ / shares | $ 2 |
Number of Restricted Stock, Vested | shares | (80,000) |
Weighted Average Grant Date Fair Value, Vested | $ / shares | $ 2 |
Number of Restricted Stock, balance at ending | shares | |
Weighted Average Grant Date Fair Value, balance at ending | $ / shares |