| Accounting Policies, by Policy (Policies) | 6 Months Ended | 9 Months Ended | 12 Months Ended |
| Dec. 31, 2020 | Sep. 30, 2021 | Dec. 31, 2020 |
| Accounting Policies, by Policy (Policies) [Line Items] | | | |
| Basis of Presentation | Basis of Presentation The financial statements of the Company are presented in U.S. dollars in conformity with accounting principles generally accepted in the United States of America (“GAAP”). | Basis of Presentation The financial statements of the Company are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non -emerging This may make comparison of the Company’s financial statement with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. The Company’s unaudited condensed interim financial statements have been prepared in accordance with U.S. GAAP and the rules and regulations of the SEC for interim financial information and the instructions to Form 10 -Q -K -Q | |
| Loss Per Common Share | Net Loss Per Common Share The Company complies with accounting and disclosure requirements of ASC Topic 260, “Earnings Per Share.” Net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding for the period, excluding shares of common stock subject to forfeiture. Net loss per common share is computed by dividing net gain/(loss) applicable to common stockholders by the weighted average number of common shares outstanding during the period, plus, to the extent dilutive, the incremental number of shares of common stock to settle warrants, as calculated using the treasury stock method. At December | Earnings (Loss) Per Common Share The Company has two classes of shares, which are referred to as Class A common stock and Class B common stock (the “Founder Shares”). Earnings and losses are shared pro rata between the two classes of shares. Private and public Warrants to purchase 5,923,333 shares of common stock at $11.50 per share were issued on February 23, 2021 in connection with the IPO. As of September 30, 2021, no Warrants have been exercised. The 5,923,333 potential common shares for outstanding Warrants to purchase the Company’s stock were excluded from diluted earnings per share for the three and nine months ended September 30, 2021 because the Warrants are contingently exercisable, and the contingencies have not yet been met. As a result, diluted net income (loss) per common share is the same as basic net income (loss) per common share for the period. The table below presents a reconciliation of the numerator and denominator used to compute basic and diluted net income (loss) per share for each class of common stock:
Three Months
Nine Months
Redeemable common stock
Net income (loss) attributable to redeemable common stock
$ 1,016,518
$ (826,342
)
Basic and diluted weighted average shares of redeemable common stock
17,250,000
13,837,912
Basic and diluted net income (loss) per share of redeemable common stock
$ 0.06
$ (0.06
)
Non-redeemable common stock
Net income (loss) attributable to non-redeemable common stock
$ 284,772
$ (282,434
)
Basic and diluted weighted average shares of non-redeemable common stock
4,832,500
4,729,644
Basic and diluted net income (loss) per share of non-redeemable common stock
$ 0.06
$ (0.06
) | |
| Cash | | Cash and Cash Equivalents The Company considers all short -term | |
| Concentrations of Risks | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times, may exceed the Federal Depository Insurance Coverage of $250,000. The Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts. | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times, may exceed the Federal Depository Insurance Coverage of $250,000. The Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts. | |
| Financial Instruments | Financial Instruments The fair value of the Company’s assets and liabilities, which qualify as financial instruments under the FASB ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the balance sheet, primarily due to their short -term | Fair Value of Financial Instruments The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the balance sheet, primarily due to their short -term | |
| Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | Use of Estimates The preparation of financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | |
| Deferred Offering Costs | Deferred Offering Costs The Company complies with the requirements of the FASB ASC 340 -10-S99-1 | Deferred Offering Costs The Company complies with the requirements of the FASB ASC 340 -10-S99-1 | |
| Income Taxes | Income Taxes The Company is included in the consolidated tax return of B. Riley Financial the parent (the “Parent”). The Company calculates the provision for income taxes by using a “separate return” method. Under this method the Company is assumed to file a separate return with the tax authority, thereby reporting its taxable income or loss and paying the applicable tax to, or receiving the appropriate refund from, the Parent. The Company’s current provision is the amount of tax payable or refundable on the basis of a hypothetical, current year, separate return. Any difference between the tax provision (or benefit) allocated to the Company under the separate return method and payments to be made to (or received from) the Parent for tax expense are treated as either dividends or capital contribution. Accordingly, the amount by which the Company’s tax liability under the separate return method exceeds the amount of tax liability ultimately settled as a result of using incremental expenses of the Parent is periodically settled as a capital contribution from the Parent to the Company. The Company complies with the accounting and reporting requirements of ASC Topic 740 “Income Taxes,” which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more -likely-than-not The Company may be subject to potential examination by federal, state and city taxing authorities in the areas of income taxes since inception. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal, state and city tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. The provision for income taxes was deemed to be immaterial at December | Income Taxes Prior to the change in ownership on February 23, 2021 as a result of the Public Offering, the Company was included in the consolidated tax return of B. Riley Financial (the “Parent”). During this period, the Company calculated the provision for income taxes by using a “separate return” method. Under this method the Company is assumed to file a separate return with the tax authority, thereby reporting its taxable income or loss and paying the applicable tax to, or receiving the appropriate refund from, the Parent. The current provision was the amount of tax payable or refundable on the basis of a hypothetical, current year, separate return. Following changes in ownership on February 23, 2021, the Company deconsolidated from the Parent for tax purposes. Beginning February 23, 2021, the Company files separate corporate federal and state and local income tax returns. Any differences between the tax provision (or benefit) allocated to the Company under the separate return method and payments to be made by (or received from) the Parent for tax expense are treated as either dividends or capital contribution. Accordingly, the amount by which the Company’s tax liability under the separate return method exceeds the amount of tax liability ultimately settled as a result of using incremental expenses of the Parent is periodically settled as a capital contribution from the Parent to the Company. The Company complies with the accounting and reporting requirements of ASC Topic 740 “Income Taxes,” which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of September 30, 2021, there were no unrecognized tax benefits and no amounts accrued for interest and penalties. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company may be subject to potential examination by federal, state and city taxing authorities in the areas of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal, state and city tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. The provision for income taxes was deemed to be immaterial. | |
| Unrecognized Tax Benefits | Unrecognized Tax Benefits The Company recognizes tax positions in the financial statements only when it is more likely than not that the position will be sustained on examination by the relevant taxing authority based on the technical merits of the position. A position that meets this standard is measured at the largest amount of benefit that will more likely than not be realized on settlement. A liability is established for differences between positions taken in a tax return and amounts recognized in the financial statements. There were no unrecognized tax benefits as of December | Unrecognized Tax Benefits The Company recognizes tax positions in its financial statements only when it is more likely than not that the position will be sustained on examination by the relevant taxing authority based on the technical merits of the position. A position that meets this standard is measured at the largest amount of benefit that will more likely than not be realized on settlement. A liability is established for differences between positions taken in a tax return and amounts recognized in the financial statements. There were no unrecognized tax benefits as of September 30, 2021. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued for interest expense and penalties related to income tax matters as of September 30, 2021. The Company is subject to income tax examinations by major taxing authorities since inception. | |
| Warrant Liability | | Warrant Liability The Company accounts for warrants for shares of the Company’s common stock that are not indexed to its own stock as liabilities at fair value on the balance sheet. The warrants will be re -evaluated -in | |
| Note Payable — Related Party | | Note Payable — Related Party The Company had a Note Payable to the Sponsor which allowed the Company to borrow up to $300,000 without interest to be used for a portion of the expenses associated with the Public Offering. The Note Payable was payable on the earlier of: (i) December 31, 2021 or (ii) the date on which the Company consummated an initial public offering of its securities. At February 23, 2021, the Note Payable balance was $40,000. The Note Payable was paid in full using proceeds from the Public Offering and the Private Placement on March 1, 2021. | |
| Common Stock Subject to Possible Redemption | | Common Stock Subject to Possible Redemption All of the 17,250,000 Class A Common Stock sold as part of the Units in the Public Offering contain a redemption feature which allows for the redemption of such public shares in connection with the Company’s liquidation, if there is a stockholder vote or tender offer in connection with the Initial Business Combination. In accordance with SEC and its staff’s guidance on redeemable equity instruments, which has been codified in ASC 480 -10-S99 -10-S99 The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable common stock to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable common stock are affected by charges against additional paid in capital and accumulated deficit. | |
| Accounting Pronouncements Recently Adopted | Recent Accounting Pronouncements Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s financial statements. | Recent Accounting Pronouncements In August 2020, the FASB issued Accounting Standards Update (“ASU”) No. 2020 -06 -20 -40 -linked | |
| Emerging Growth Company | Emerging Growth Company Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non -emerging This may make comparison of the Company’s financial statement with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. | | |
| FaZe Clan Inc. [Member] | | | |
| Accounting Policies, by Policy (Policies) [Line Items] | | | |
| Basis of Presentation | | Basis of Presentation The accompanying condensed consolidated financial statements include the accounts and operations of the Company. All intercompany accounts and transactions have been eliminated. The condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from these estimates and assumptions. | Basis of Presentation The accompanying consolidated financial statements include the accounts and operations of the Company. All intercompany accounts and transactions have been eliminated. The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of the consolidated financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from these estimates and assumptions. |
| Loss Per Common Share | | Loss Per Common Share In accordance with the provisions of ASC 260, Earnings Per Share, -average -vested -average The results of operations were net losses for the nine months ended September 30, 2021 and 2020. Therefore, the basic and diluted weighted -average
Nine Months Ended
2021
2020
Warrants 292,700 292,700
Stock options 8,942,575 5,765,000
Unvested restricted stock awards 22,197
—
Convertible preferred stock 3,237,800 3,237,800
Total potentially dilutive common stock equivalents 12,495,272 9,295,500 | Loss Per Common Share In accordance with the provisions of ASC 260, Earnings Per Share, -average Company issued 718,631 and 36,202 fully vested warrants in which common shares are issuable for little to no consideration for the years ended December -average The results of operations were a net loss for the years ended December 31, 2020 and 2019. Therefore, the basic and diluted weighted -average
Year Ended December 31,
2020
2019
Warrants 292,790 292,790
Stock options 5,340,000 5,765,000
Convertible preferred stock 3,237,800 3,237,800
Total potentially dilutive common stock equivalents 8,870,590 9,295,590 |
| Cash | | | Cash The Company considers all highly liquid instruments with an original maturity of 90 days or less at the date of acquisition to be cash equivalents. The Company did not have any cash equivalents as of December 31, 2020 and 2019. |
| Concentrations of Risks | | | Concentrations of Risks The Company maintains its cash in institutions insured by the Federal Deposit Insurance Corporation (“FDIC”). Cash balances at financial institutions are insured by the FDIC up to statutory levels. At times, cash may be uninsured or in deposit accounts that exceed the FDIC insurance limits. Periodically, the Company evaluates the creditworthiness of these financial institutions and has determined that the credit exposure is not significant. The Company grants credit in the normal course of business to its customers. Periodically, the Company reviews past due accounts and makes decisions about future credit on a customer -by-customer The Company had outstanding receivables from two customers that collectively represented 45% of accounts receivable as of December 31, 2020, and one customer that represented 10% of accounts receivable as of December 31, 2019. The Company had revenues from one customer that represented 10% of revenues for the year ended December 31, 2020, and no customers that represented greater than 10% of revenues for the year ended December 31, 2019. For the years ended December 31, 2020 and 2019, one vendor accounted for 20% and 12% of the Company’s total purchases, respectively. The Company had outstanding payables to one vendor that represented 23% of accounts payable as of December 31, 2020, and two vendors that collectively represented 33% of accounts payable as of December 31, 2019. The Company had one independent contractor that generated 16% and 14% of our total revenues for the years ended December 31, 2020 and 2019, respectively. |
| Use of Estimates | | Use of Estimates The preparation of the Company’s condensed consolidated financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of income and expenses during the reporting period. These estimates are based on information available as of the date of the condensed consolidated financial statements. The inputs into certain of these estimates and assumptions include the consideration of the economic impact of the COVID -19 -based | Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of income and expenses during the reporting period. These estimates are based on information available as of the date of the consolidated financial statements. The inputs into certain of these estimates and assumptions include the consideration of the economic impact of the COVID -19 recognition, allowance for doubtful accounts, valuation of our common stock, stock -based |
| Income Taxes | | | Income Taxes We record a tax provision for the anticipated tax consequences of the reported results of operations. In accordance with ASC 740, Income Taxes, Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities due to a change in tax rates is recognized in income in the period that includes the enactment date. We evaluate deferred tax assets each period for recoverability. For those assets that do not meet the threshold of “more likely than not” that they will be realized in the future, a valuation allowance is recorded. We report a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. We recognize interest and penalties, if any, related to unrecognized tax benefits in income tax expense, if applicable income tax returns remain open for examination by applicable authorities, generally three years from filing for federal and four years for state. The Company is not currently under examination by any taxing authority nor has it been notified of an impending examination. |
| Accounting Pronouncements Recently Adopted | | Accounting Pronouncements Not Yet Adopted As an emerging growth company, the JOBS Act allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are applicable to private companies. The Company elected to use this extended transition period under the JOBS Act until such time the Company is no longer considered to be an emerging growth company. The adoption dates discussed below reflect this election. In February 2016, the FASB issued ASU 2016 -02 Leases (Topic 842) -of-use -02 In September 2016, the FASB issued ASU 2016 -13 Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In August 2018, the FASB issued ASU 2018 -15 Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangements that is a Service Contract. -use -use In December 2019, the FASB issued ASU 2019 -12 Income Taxes (Topic -740 ): Simplifying the Accounting for Income Taxes -12 In August 2020, the FASB issued ASU 2020 -06 Debt — Debt with Conversion and Other Options (Subtopic 470 -20 ) and Derivatives and Hedging -Contracts in Entity’s Own Equity (Subtopic 815 -40 ) -over-substance-based In May 2021, the FASB issued 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. -classified -classified -based -04 | Accounting Pronouncements Recently Adopted In May 2014, the FASB issued ASU 2014 -09 Revenue from Contracts with Customers (Topic 606). Revenue Recognition, -specific In June 2018, the FASB issued ASU 2018 -07 Improvements to Nonemployee Share -Based Payment Accounting. -07 -based -based -07 -07 In August 2018, the FASB issued ASU 2018 -13 Fair Value Measurement (Topic 820). -13 -13 |
| Emerging Growth Company | | Emerging Growth Company Section 102(b)(1) of the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non -emerging This may make comparison of the Company’s condensed consolidated financial statements with another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. | Emerging Growth Company Section 102(b)(1) of the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non -emerging This may make comparison of the Company’s consolidated financial statement with another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. |
| Unaudited Interim Condensed Consolidated Financial Information | | Unaudited Interim Condensed Consolidated Financial Information The accompanying Condensed Consolidated Balance Sheet as of September 30, 2021, Condensed Consolidated Statements of Operations for the nine months ended September 30, 2021 and 2020, Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2021 and 2020 and Condensed Consolidated Statements of Stockholders’ Deficit for the nine months ended September 30, 2021 and 2020 are unaudited. The financial data and other information contained in the notes thereto as of and for the nine months ended September 30, 2021 and 2020 are also unaudited. The Condensed Consolidated Balance Sheet as of December 31, 2020 was derived from the Company’s audited consolidated financial statements included elsewhere in this registration statement. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited annual consolidated financial statements, and in the opinion of management, reflect all normal recurring adjustments necessary for the fair presentation of the Company’s financial position as of September 30, 2021, the results of its operations for the nine months ended September 30, 2021 and 2020 and its cash flows for the nine months ended September 30, 2021 and 2020. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of and for the years ended December 31, 2020 and 2019, and the notes thereto. The results for the nine months ended September 30, 2021 are not necessarily indicative of results to be expected for the year ended December 31, 2021, or any other interim periods, or any future year or period. The significant accounting policies used in preparation of these unaudited interim condensed consolidated financial statements are consistent with those described in the Company’s audited consolidated financial statements as of and for the years ended December 31, 2020 and 2019. | |
| Going Concern | | Going Concern The accompanying consolidated financial statements have been prepared assuming that we will continue as a going concern. In an effort to achieve liquidity that would be sufficient to meet all of our commitments, we have undertaken a number of actions, including minimizing capital expenditures and reducing recurring expenses. However, we believe that even after taking these actions, we will not have sufficient liquidity to satisfy all of our future financial obligations. The risks and uncertainties surrounding our ability to raise capital and our limited capital resources raises substantial doubt as to our ability to continue as a going concern. See Note 12 , Going Concern | |
| COVID-19 | | COVID-19 The continuing spread of COVID -19 -19 -19 -19 -term -term -19 As COVID -19 -19 | |
| Restricted cash | | Restricted cash Restricted cash consists of funds held in a restricted account for payment of upfront rental lease deposits. | |
| Revenue Recognition and Contract Balances | | Revenue Recognition and Contract Balances Revenues are recognized when control of the promised goods or services is transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Our payment terms and conditions vary by customer and contract type. In instances where the timing of revenue recognition differs from the timing of invoicing, we do not adjust the promised amount of consideration for the effects of a significant financing component when we expect, at contract inception, that the period between our transfer of a promised product or service to our customer and payment for that product or service will be one year or less. We generally record a receivable related to revenue when we have an unconditional right to invoice and receive payment. Contract assets arise from contracts when revenue is recognized over time and the amount of revenue recognized, including our estimate of variable consideration that has been included in the transaction price, exceeds the amount billed to the customer. These amounts are included in contract assets until the right to payment is no longer conditional on events other than the passage of time. These contract assets are reclassified to receivables when the right to consideration becomes unconditional. For the nine months ended September 30, 2021 and 2020, no impairment was recorded from contract assets. Our allowances for doubtful accounts are typically immaterial and, if required, are based on our best estimate of expected credit losses inherent in our accounts receivable balance. Contract liabilities are recorded in the event that the Company bills for services in advance of the time the services are performed, or when cash payments are received or due in advance of satisfying our performance obligations, even if amounts are refundable. Contract liabilities recorded at September 30, 2021 and December 31, 2020 represents the Company’s accounting for the timing difference between when funds are received and when the performance obligation is satisfied. Revenue recognized for the nine months ended September 30, 2021 relating to the contract liability balances as of January 1, 2021 was $0.8 million. The following table disaggregates the Company’s revenue by major type for the nine months ended September 30, 2021 and 2020:
(in thousands)
2021
2020
Brand Sponsorships
$ 17,080
$ 11,466
Content
13,826
7,871
Consumer Products
5,053
5,197
Esports
2,651
1,259
Other
198
132
Total Revenue
$ 38,808
$ 25,925 The section below describes our revenue recognition policies and significant judgments in further detail for each major revenue source of the Company. Brand Sponsorships The Company offers advertisers a full range of promotional vehicles, including but not limited to online advertising, livestream announcements, content generation, social media posts, logo placement on the Company’s official merchandise and special appearances of members of the Company’s talent roster. Our brand sponsorship agreements may include multiple services that are capable of being individually distinct, however the intended benefit is an association with the Company’s brand and the services are not distinct within the context of the contracts. Revenues from brand sponsorship agreements are recognized ratably over the contract term. Payment terms and conditions vary, but payments are generally due periodically throughout the term of the contract. In instances where the timing of revenue recognition differs from the timing of billing, we have determined the brand sponsorship agreements generally do not include a significant financing component. Content We generate and produce original content which we monetize through Google’s AdSense service. Revenue is variable and is earned when the visitor “clicks through” on the advertisement. The amount of revenue earned is reported to us monthly and is recognized upon receipt of the report of viewership activity. Payment terms and conditions vary, but payments are generally due within 30 to 45 days after the end of each month. Principal Versus Agent Considerations A significant amount of our brand sponsorship and content revenues are generated from our talent, who are under exclusive, multi -year -sharing Consumer Products The Company earns consumer products revenue from sales of our consumer products on our website or at live or virtual events. Revenues are recognized at a point in time, as control is transferred to the customer upon shipment. The Company does not offer returns, discounts, loyalty programs or other sales incentive programs that are material to revenue recognition. Payment is due at the time of sale. We have outsourced the design, manufacturing, fulfillment, distribution, and sale of our consumer products to a third party, in exchange for royalties based on the amount of revenue generated. We evaluated the terms of the agreement to determine whether our consumer products revenues should be reported gross, or net of royalties paid. Key indicators that we evaluate in determining whether we are the principal in the sale (gross reporting), or an agent (net reporting) include, but are not limited to: • • • Based on our evaluation of the above indicators, we report consumer products revenues on a gross basis. Esports League Participation -share Player Transfer Fees Licensing of Intellectual Property Transaction Price Allocated to the Remaining Performance Obligations For the estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of September 30, 2021, the Company applies the allowable practical expedient and does not disclose information about remaining performance obligations that have original expected durations of one year or less. Revenue expected to be recognized in the future related to performance obligations that have original expected durations greater than one year that are unsatisfied (or partially unsatisfied) as of September 30, 2021 were not material. | Revenue Recognition and Contract Balances In May 2014, the FASB issued new accounting guidance related to revenue recognition. On January 1, 2019, we adopted the new accounting standard and related amendments using the modified retrospective approach. Based on the Company’s assessment, the adoption of ASC 606, Revenue from Contracts with Customers Revenue Recognition Revenues are recognized when control of the promised goods or services is transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Our payment terms and conditions vary by customer and contract type. In instances where the timing of revenue recognition differs from the timing of invoicing, we do not adjust the promised amount of consideration for the effects of a significant financing component when we expect, at contract inception, that the period between our transfer of a promised product or service to our customer and payment for that product or service will be one year or less. We generally record a receivable related to revenue when we have an unconditional right to invoice and receive payment. Contract assets arise from contracts when revenue is recognized over time and the amount of revenue recognized, including our estimate of variable consideration that has been included in the transaction price, exceeds the amount billed to the customer. These amounts are included in contract assets until the right to payment is no longer conditional on events other than the passage of time. These contract assets are reclassified to receivables when the right to consideration becomes unconditional. For the years ended December 31, 2020 and 2019, no impairment was recorded from contract assets. Our allowances for doubtful accounts are typically immaterial and, if required, are based on our best estimate of expected credit losses inherent in our accounts receivable balance. Contract liabilities are recorded in the event that the Company bills for services in advance of the time the services are performed, or when cash payments are received or due in advance of satisfying our performance obligations, even if amounts are refundable. Contract liabilities recorded at December 31, 2020 and 2019 represents the Company’s accounting for the timing difference between when funds are received and when the performance obligation is satisfied. Revenue recognized for the year ended December 31, 2020 relating to the contract liability balances as of January 1, 2020 was not material. The following table disaggregates the Company’s revenue by major type for the years ended December 31, 2020 and 2019:
(in thousands)
2020
2019
Brand Sponsorships
$ 16,520
$ 8,364
Content
12,077
8,036
Consumer Products
6,605
7,326
Esports
2,860
6,818
Other
149
194
Total Revenue
$ 38,211
$ 30,738 The section below describes our revenue recognition policies and significant judgments in further detail for each major revenue source of the Company. Brand Sponsorships The Company offers advertisers a full range of promotional vehicles, including but not limited to online advertising, livestream announcements, content generation, social media posts, logo placement on the Company’s official merchandise and special appearances of members of the Company’s talent roster. Our brand sponsorship agreements may include multiple services that are capable of being individually distinct, however the intended benefit is an association with the Company’s brand and the services are not distinct within the context of the contracts. Revenues from brand sponsorship agreements are recognized ratably over the contract term. Payment terms and conditions vary, but payments are generally due periodically throughout the term of the contract. In instances where the timing of revenue recognition differs from the timing of billing, we have determined the brand sponsorship agreements generally do not include a significant financing component. Content We generate and produce original content which we monetize through Google’s AdSense service. Revenue is variable and is earned when the visitor “clicks through” on the advertisement. The amount of revenue earned is reported to us monthly and is recognized upon receipt of the report of viewership activity. Payment terms and conditions vary, but payments are generally due within 30 to 45 days after the end of each month. Principal Versus Agent Considerations A significant amount of our brand sponsorship and content revenues are generated from our talent, who are under exclusive, multi -year -sharing Consumer Products The Company earns consumer products revenue from sales of our consumer products on our website or at live or virtual events. Revenues are recognized at a point in time, as control is transferred to the customer upon shipment. The Company does not offer returns, discounts, loyalty programs or other sales incentive programs that are material to revenue recognition. Payment is due at the time of sale. We have outsourced the design, manufacturing, fulfillment, distribution, and sale of our consumer products to a third party, in exchange for royalties based on the amount of revenue generated. We evaluated the terms of the agreement to determine whether our consumer products revenues should be reported gross, or net of royalties paid. Key indicators that we evaluate in determining whether we are the principal in the sale (gross reporting), or an agent (net reporting) include, but are not limited to: • • • Based on our evaluation of the above indicators, we report consumer products revenues on a gross basis. Esports League Participation: -share Player Transfer Fees: Licensing of Intellectual Property: Transaction Price Allocated to the Remaining Performance Obligations For the estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of December 31, 2020, the Company applies the allowable practical expedient and does not disclose information about remaining performance obligations that have original expected durations of one year or less. Revenue expected to be recognized in the future related to performance obligations that have original expected durations greater than one year that are unsatisfied (or partially unsatisfied) as of December 31, 2020 were not material. |
| Convertible Debt | | Convertible Debt The Company evaluates embedded conversion features within convertible debt under ASC 815, Derivatives and Hedging Debt | Convertible Debt The Company evaluates embedded conversion features within convertible debt under ASC 815, Derivatives and Hedging Debt |
| Stock-Based Compensation | | Stock-Based Compensation The Company accounts for its stock -based Compensation — Stock Compensation -based Given the absence of an active market for the Company’s common stock, the Board of Directors (the “Board”) was required to estimate the fair value of the Company’s common stock at the time of each award. The Board considered numerous objective and subjective factors in determining the value of the Company’s common stock at each grant date, including the following: (1) the per -share -length -length -based For stock options, the Company estimates the fair value using the Black -Scholes-Merton -pricing -Scholes one four -free The Black -Scholes -based -based -based | |
| Fair Value Measurement | | Fair Value Measurement The fair value hierarchy requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The fair value hierarchy consists of the following three levels: Level 1: Level 2: Level 3: The carrying amount of the Company’s financial instruments, including cash, accounts receivable, notes receivable, and accounts payable approximate fair value due to their short -term The Company does not have financial assets or liabilities that are required under U.S. GAAP to be measured at fair value on a recurring basis. The Company has not elected to use the fair value measurement option for any assets or liabilities for which fair value measurement is not presently required. | Fair Value Measurement The fair value hierarchy requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The fair value hierarchy consists of the following three levels: Level 1: Level 2: Level 3: The carrying amount of the Company’s financial instruments, including cash, accounts receivable, notes receivable, and accounts payable approximate fair value due to their short -term The Company does not have financial assets or liabilities that are required under U.S. GAAP to be measured at fair value on a recurring basis. The Company has not elected to use the fair value measurement option for any assets or liabilities for which fair value measurement is not presently required. |
| Segment Reporting | | Segment Reporting Operating segments are defined as components of an entity for which separate financial information is available and is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company has determined that its Chief Executive Officer is the CODM. The Company operates and reports financial information in one segment, as the CODM reviews financial information presented on a consolidated basis, at the Company level, for the purposes of making operating decisions, allocation of resources, and evaluating financial performance. As of September 30, 2021 and December 31, 2020 and for the nine months ended September | Segment Reporting Operating segments are defined as components of an entity for which separate financial information is available and is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company has determined that its Chief Executive Officer is the CODM. The Company operates and reports financial information in one segment, as the CODM reviews financial information presented on a consolidated basis, at the Company level, for the purposes of making operating decisions, allocation of resources, and evaluating financial performance. As of and for the years ended December 31, 2020 and 2019, the Company did not have material revenue earned or assets located outside of the United States. |
| Going Concern | | | Going Concern The accompanying consolidated financial statements have been prepared assuming that we will continue as a going concern. In an effort to achieve liquidity that would be sufficient to meet all of our commitments, we have undertaken a number of actions, including minimizing capital expenditures and reducing recurring expenses. However, we believe that even after taking these actions, we will not have sufficient liquidity to satisfy all of our future financial obligations. The risks and uncertainties surrounding our ability to raise capital and our limited capital resources raises substantial doubt as to our ability to continue as a going concern. See Note 15, “ Going Concern |
| COVID-19 | | | COVID-19 The continuing spread of COVID -19 -19 -19 -19 -term -term -19 As COVID -19 -19 |
| Trade Receivables, net | | | Trade Receivables, net Accounts receivable represent amounts due from customers. The Company assesses the collectability of receivables on an ongoing basis. A provision for the impairment of receivables involves significant judgement and includes the review of individual receivables based on individual customers, current economic trends, and analysis of historical bad debts. As of December 31, 2020 and 2019, the Company had recorded an allowance for doubtful accounts of $0.4 million and $0.2, respectively. All reserves for doubtful accounts were from contracts with customers. |
| Inventory | | | Inventory Inventory consists of merchandise sold on our website and at live events. All of our inventory is comprised of finished goods. Inventory is stated at the lower of cost or net realizable value. The Company compares the cost of inventories with the net realizable value and an allowance is recorded to write down inventories to net realizable value, if lower. As of December 31, 2020 and 2019, the Company has recorded no valuation allowance. |
| Property, Equipment and Leasehold Improvements | | | Property, Equipment and Leasehold Improvements Property, equipment and leasehold improvements are stated at cost less accumulated depreciation. Depreciation is calculated using the straight -line
Computer Equipment 3 Years
Furniture/Fixtures 3 Years
Vehicles 5 Years
Leasehold Improvements Remaining Lease Term In the event the estimated useful life of a leasehold improvement is shorter than the remaining lease term, the estimated useful life is used. Expenditures for major renewals and improvements are capitalized, while minor replacements, maintenance and repairs, which do not extend the asset lives, are charged to operations as incurred. Upon sale or disposition, the cost and related accumulated depreciation are removed from the accounts and any gain or loss is included in operations. The Company continually monitors events and changes in circumstances that could indicate that the carrying balances of its property, equipment and leasehold improvements may not be recoverable in accordance with the provisions of FASB Accounting Standards Codification Topic (“ASC”) 360, Property, Plant, and Equipment -lived |
| Intangibles, net | | | Intangibles, net Website Development Costs: Intangibles — Goodwill and Other -line three Talent Acquisition Costs: -line The Company accounts for the impairment of intangible assets, under the provisions of ASC 360. ASC 360 establishes the accounting for impairment of long -lived -lived -lived |
| Foreign Currency | | | Foreign Currency The Company’s functional and reporting currency is the U.S. dollar. The Company does not have subsidiaries or significant operations outside of the United States and does not have any translation adjustments related to foreign currencies. Foreign currency transaction gains and losses are a result of the effect of exchange rate changes on transactions denominated in currencies other than the functional currency. Transaction gains and losses are recognized in other income/expense in the consolidated statements of operations. For the years ended December 31, 2020 and 2019, we recorded net foreign currency transaction losses of $0.8 million and $0.1 million, respectively. |
| Advertising Expenses | | | Advertising Expenses The Company expenses advertising costs as incurred in accordance with ASC 720, Other Expenses. |
| Stock-Based Compensation | | | Stock-Based Compensation The Company accounts for its stock -based Compensation — Stock Compensation -based Given the absence of an active market for the Company’s common stock, the Board of Directors (the “Board”) was required to estimate the fair value of the Company’s common stock at the time of each award. The Board considered numerous objective and subjective factors in determining the value of the Company’s common stock at each grant date, including the following: (1) the per -share -length -length -based For stock options, the Company estimates the fair value using the Black -Scholes-Merton -pricing -Scholes -free The Black -Scholes -based -based -based |
| Accounting Pronouncements Not Yet Adopted | | | Accounting Pronouncements Not Yet Adopted As an emerging growth company, the JOBS Act allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are applicable to private companies. The Company elected to use this extended transition period under the JOBS Act until such time the Company is no longer considered to be an emerging growth company. The adoption dates discussed below reflect this election. In February 2016, the FASB issued ASU 2016 -02 Leases (Topic 842) -of-use -02 In September 2016, the FASB issued ASU 2016 -13 Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In August 2018, the FASB issued ASU 2018 -15 Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangements that is a Service Contract. -use -use In December 2019, the FASB issued ASU 2019 -12 Income Taxes (Topic -740 ): Simplifying the Accounting for Income Taxes -12 In August 2020, the FASB issued ASU 2020 -06 Debt — Debt with Conversion and Other Options (Subtopic 470 -20 ) and Derivatives and Hedging -Contracts in Entity’s Own Equity (Subtopic 815 -40 ) -over-substance-based |
