Document And Entity Information
Document And Entity Information | 9 Months Ended |
Sep. 30, 2022 | |
Document Information Line Items | |
Entity Registrant Name | MOBILE GLOBAL ESPORTS INC. |
Document Type | S-1/A |
Amendment Flag | true |
Amendment Description | AMENDMENT 1 |
Entity Central Index Key | 0001886362 |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Entity Incorporation, State or Country Code | DE |
Balance Sheet
Balance Sheet - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Current Assets: | ||
Cash and cash equivalents | $ 9,469,521 | $ 238,202 |
Deferred offering costs | 62,998 | |
Total current assets | 9,635,546 | 301,200 |
TOTAL ASSETS | 9,935,546 | 301,200 |
Current Liabilities: | ||
Accounts payable | 10,000 | 31,814 |
Total current liabilities | 188,146 | 31,814 |
Commitments and contingencies | ||
STOCKHOLDERS’ EQUITY | ||
Preferred stock; $0.0001 par value; 10,000,000 shares authorized; nil shares issued and outstanding | ||
Common stock; $0.0001 par value; 100,000,000 shares authorized; 16,809,800 shares issued and outstanding | 2,042 | 1,681 |
Additional paid-in capital | 10,555,607 | 530,065 |
Accumulated deficit | (810,249) | (262,360) |
Total stockholders’ equity | 9,747,400 | 269,386 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | 9,935,546 | 301,200 |
Current Assets: | ||
Prepaid expenses | 166,025 | |
Advances to supplier | 300,000 | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||
Accrued expenses | 38,295 | |
Note payable | $ 139,851 |
Balance Sheet (Parentheticals)
Balance Sheet (Parentheticals) - USD ($) | Sep. 30, 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 | 10,000,000 | 10,000,000 |
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 | 20,421,593 | 16,809,800 |
Common stock, shares outstanding | 20,421,593 | 16,809,800 |
Accounts payable, including related party (in Dollars) | $ 0 | $ 30,000 |
Statements of Operations (Unaud
Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 7 Months Ended | 9 Months Ended | 10 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | |||||
Revenue | |||||
Cost of revenue | |||||
Gross profit | |||||
Operating expenses: | |||||
General and administrative expenses | 369,302 | 28,835 | 28,985 | 546,567 | 76,438 |
Research and development expenses | 185,922 | ||||
Total operating expenses | 369,302 | 28,835 | 28,985 | 546,567 | 262,360 |
Loss from operations | (369,302) | (28,835) | (28,985) | (546,567) | (262,360) |
Interest expense | (1,322) | (1,322) | |||
Net loss before income tax | (370,624) | (28,835) | (28,985) | (547,889) | |
Income tax expense | |||||
Net loss | $ (370,624) | $ (28,835) | $ (28,985) | $ (547,889) | $ (262,360) |
Weighted average common shares outstanding, basic and diluted (in Shares) | 18,134,610 | 14,759,745 | 12,449,807 | 17,256,256 | 12,125,464 |
Net loss per share attributable to common stockholders, basic and diluted (in Dollars per share) | $ (0.02) | $ 0 | $ 0 | $ (0.03) | $ (0.02) |
Statements of Operations (Una_2
Statements of Operations (Unaudited) (Parentheticals) - $ / shares | 3 Months Ended | 7 Months Ended | 9 Months Ended | 10 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | |||||
Weighted average common shares outstanding, basic and diluted | 18,134,610 | 14,759,745 | 12,449,807 | 17,256,256 | 12,125,464 |
Net loss per share attributable to common stockholders, basic and diluted | $ (0.02) | $ 0 | $ 0 | $ (0.03) | $ (0.02) |
Statements of Stockholders_ Equ
Statements of Stockholders’ Equity (Unaudited) - USD ($) | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Stock Subscription Receivable | Total | ||
Balance at Mar. 10, 2021 | |||||||
Balance (in Shares) at Mar. 10, 2021 | |||||||
Net loss | |||||||
Balance at Mar. 31, 2021 | |||||||
Balance (in Shares) at Mar. 31, 2021 | |||||||
Balance at Mar. 10, 2021 | |||||||
Balance (in Shares) at Mar. 10, 2021 | |||||||
Net loss | (28,985) | ||||||
Balance at Sep. 30, 2021 | $ 1,681 | 344,143 | (28,985) | 316,839 | |||
Balance (in Shares) at Sep. 30, 2021 | 16,809,800 | ||||||
Balance at Mar. 10, 2021 | |||||||
Balance (in Shares) at Mar. 10, 2021 | |||||||
Common stock issued to founders | $ 530 | 530 | |||||
Common stock issued to founders (in Shares) | 5,300,000 | ||||||
Common stock issued for cash | $ 1,151 | 344,143 | 345,294 | ||||
Common stock issued for cash (in Shares) | 11,509,800 | ||||||
Fair value of warrants issued for services | 185,922 | 185,922 | |||||
Net loss | (262,360) | (262,360) | |||||
Balance at Dec. 31, 2021 | $ 1,681 | 530,065 | (262,360) | 269,386 | |||
Balance (in Shares) at Dec. 31, 2021 | 16,809,800 | ||||||
Balance at Mar. 31, 2021 | |||||||
Balance (in Shares) at Mar. 31, 2021 | |||||||
Issuance of common stock | $ 620 | 35,880 | (30,400) | 6,100 | |||
Issuance of common stock (in Shares) | 6,195,000 | ||||||
Net loss | (150) | (150) | |||||
Balance at Jun. 30, 2021 | $ 620 | 35,880 | (150) | (30,400) | 5,950 | ||
Balance (in Shares) at Jun. 30, 2021 | 6,195,000 | ||||||
Issuance of common stock | $ 1,061 | 338,663 | 339,724 | ||||
Issuance of common stock (in Shares) | 10,614,800 | ||||||
Payment of stock subscription receivable | (30,400) | 30,400 | |||||
Payment of stock subscription receivable (in Shares) | |||||||
Net loss | (28,835) | (28,835) | |||||
Balance at Sep. 30, 2021 | $ 1,681 | 344,143 | (28,985) | 316,839 | |||
Balance (in Shares) at Sep. 30, 2021 | 16,809,800 | ||||||
Balance at Dec. 31, 2021 | $ 1,681 | 530,065 | (262,360) | 269,386 | |||
Balance (in Shares) at Dec. 31, 2021 | 16,809,800 | ||||||
Fair value of warrants issued for services | 46,480 | 46,480 | |||||
Fair value of warrants issued for services (in Shares) | |||||||
Net loss | (91,482) | (91,482) | |||||
Balance at Mar. 31, 2022 | $ 1,681 | 576,545 | (353,842) | 224,384 | |||
Balance (in Shares) at Mar. 31, 2022 | 16,809,800 | ||||||
Balance at Dec. 31, 2021 | $ 1,681 | 530,065 | (262,360) | 269,386 | |||
Balance (in Shares) at Dec. 31, 2021 | 16,809,800 | ||||||
Net loss | (547,889) | ||||||
Balance at Sep. 30, 2022 | $ 2,042 | 10,555,607 | (810,249) | 9,747,400 | |||
Balance (in Shares) at Sep. 30, 2022 | 20,421,593 | ||||||
Balance at Mar. 31, 2022 | $ 1,681 | 576,545 | (353,842) | 224,384 | |||
Balance (in Shares) at Mar. 31, 2022 | 16,809,800 | ||||||
Fair value of warrants issued for services | 46,480 | 46,480 | |||||
Fair value of warrants issued for services (in Shares) | |||||||
Net loss | (85,783) | (85,783) | |||||
Balance at Jun. 30, 2022 | $ 1,681 | 623,025 | (439,625) | 185,081 | |||
Balance (in Shares) at Jun. 30, 2022 | 16,809,800 | ||||||
Fair value of warrants issued for services | 46,480 | 46,480 | |||||
Fair value of warrants issued for services (in Shares) | |||||||
Issuance of common stock from initial public offering, net of stock issuance costs | [1] | $ 172 | 5,464,760 | $ 5,464,932 | |||
Issuance of common stock from initial public offering, net of stock issuance costs (in Shares) | 1,725,000 | [1] | 1,725,000 | ||||
Issuance of common stock from private placement, net of stock issuance costs | [1] | $ 189 | 2,328,342 | $ 2,328,531 | |||
Issuance of common stock from private placement, net of stock issuance costs (in Shares) | 1,886,793 | [1] | 1,886,793 | ||||
Fair value of warrants issued with common stock | [1] | 2,093,000 | $ 2,093,000 | ||||
Fair value of warrants issued with common stock (in Shares) | [1] | ||||||
Net loss | (370,624) | (370,624) | |||||
Balance at Sep. 30, 2022 | $ 2,042 | $ 10,555,607 | $ (810,249) | $ 9,747,400 | |||
Balance (in Shares) at Sep. 30, 2022 | 20,421,593 | ||||||
[1]See Note 4 |
Statements of Cash Flows (Unaud
Statements of Cash Flows (Unaudited) - USD ($) | 7 Months Ended | 9 Months Ended | 10 Months Ended |
Sep. 30, 2021 | Sep. 30, 2022 | Dec. 31, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net loss | $ (28,985) | $ (547,889) | $ (262,360) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Fair value of warrants issued for services | 139,440 | 185,922 | |
Changes in operating assets and liabilities: | |||
Accounts payable | 3,750 | 16,481 | 31,814 |
Prepaid expenses | 20,083 | ||
Net cash used by operating activities | (25,235) | (371,885) | (44,624) |
Cash flows from investing activities | |||
Advances to supplier for software | (300,000) | ||
Net cash used by investing activities | (300,000) | ||
Advance payments for future issuance of common stock | |||
Issuance of common stock | 345,824 | 11,900,001 | |
Payment of stock issuance costs | (1,950,540) | ||
Principal payment of note payable | (46,257) | ||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from the sale of common stock | 345,824 | ||
Payment of deferred offering costs | (35,000) | (62,998) | |
Net cash provided by financing activities | 310,824 | 9,903,204 | 282,826 |
Net increase in cash and cash equivalents | 285,589 | 9,231,319 | 238,202 |
Cash and cash equivalents as of beginning of period | 238,202 | ||
Cash and cash equivalents as of end of period | 285,589 | 9,469,521 | 238,202 |
Supplemental disclosure of cash flow information | |||
Cash paid for interest | 1,322 | ||
Supplemental disclosure of non-cash investing and financing activity | |||
Deferred offering costs reclassified to stock issuance costs | 62,998 | ||
Note payable issued for prepaid insurance policy | $ 186,108 | ||
CASH PAID FOR: | |||
Interest | |||
Income taxes |
Organization and Basis of Prese
Organization and Basis of Presentation | 9 Months Ended | 10 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Organization and Basis of Presentation [Abstract] | ||
Organization and Basis of Presentation | Note 1 – Organization and Basis of Presentation Organization Mobile Global Esports Inc. (the “Company”) was incorporated on March 11, 2021 under the laws of the State of Delaware. The Company was originally named Elite Esports, Inc. but changed its name to Mobile Global Esports Inc. on April 21, 2021. The Company has been assigned certain limited rights to commercialize university esports events for 76 universities in India. The unique advantage of esports is that the events can be virtual, and virtual events bypass any Covid-19 restrictions on in-person events. Basis of Presentation The accompanying financial statements were prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Coronavirus (COVID-19) The Company’s business could be adversely impacted by the effects of the Coronavirus (COVID-19). In addition to global macroeconomic effects, the COVID-19 outbreak and any other related adverse public health developments could cause disruption to our operations. COVID-19 or other disease outbreaks could in the short-run and may over the longer term adversely affect the economies and financial markets of many countries, resulting in an economic downturn that could impact the Company’s operating results. Although the magnitude of the impact of the COVID-19 outbreak on the Company’s business and operations remains uncertain, the continued spread of COVID-19 or the occurrence of other epidemics and the imposition of related public health measures and travel and business restrictions could adversely impact the Company’s business, financial condition, operating results and cash flows. In addition, the Company could experience disruptions to its business operations resulting from quarantines, self-isolations, or other movement and restrictions on the ability of its employees to perform their jobs that may impact the Company’s ability to develop and grow its business. Interim financial statements The unaudited condensed financial statements are prepared by the Company, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). The information furnished herein reflects all adjustments, consisting only of normal recurring adjustments, which in the opinion of management, are necessary to fairly state the Company’s financial position, the results of its operations, and cash flows for the periods presented. Certain information and footnote disclosures normally present in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America were omitted pursuant to such rules and regulations. The results of operations for the nine months ended September 30, 2022 are not necessarily indicative of the results expected for the year ending December 31, 2022. | Note 1 - Organization and Basis of Presentation Organization Mobile Global Esports Inc. (the “Company”) was incorporated on March 11, 2021 under the laws of the State of Delaware. The Company was originally named Elite Esports, Inc. but changed its name to Mobile Global Esports Inc. on April 21, 2021. The Company has been assigned certain limited rights to commercialize university esports events for 73 universities in India and 90 leading universities in Pakistan. The unique advantage of esports is that the events can be virtual, and virtual events bypass any Covid-19 restrictions on in-person events. Basis of Presentation The accompanying financial statements were prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Coronavirus (COVID-19) The Company’s business could be adversely impacted by the effects of the Coronavirus (COVID-19). In addition to global macroeconomic effects, the COVID-19 outbreak and any other related adverse public health developments could cause disruption to our operations. COVID-19 or other disease outbreaks could in the short-run and may over the longer term adversely affect the economies and financial markets of many countries, resulting in an economic downturn that could impact the Company’s operating results. Although the magnitude of the impact of the COVID-19 outbreak on the Company’s business and operations remains uncertain, the continued spread of COVID-19 or the occurrence of other epidemics and the imposition of related public health measures and travel and business restrictions could adversely impact the Company’s business, financial condition, operating results and cash flows. In addition, the Company could experience disruptions to its business operations resulting from quarantines, self-isolations, or other movement and restrictions on the ability of its employees to perform their jobs that may impact the Company’s ability to develop and grow its business. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Accounting Policies [Abstract] | ||
Summary of Significant Accounting Policies | Note 2 – Summary of Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. Significant estimates in the accompanying financial statements include valuation allowance on deferred tax assets and the estimated value of warrants issued for services. Cash Equivalents For the purpose of the statement of cash flows, cash equivalents include time deposits, certificate of deposits, amounts held in escrow and all highly- liquid debt instruments with original maturities of three months or less. As of September 30, 2022 and December 31, 2021, the Company did not have any cash equivalents. Deferred Offering Costs Deferred offering costs are amounts incurred that are directly related to the offering of the Company’s common stock and approximated $63,000 as of December 31, 2022. Upon the consummation of the Company’s initial public offering in July 2022, these costs and additional costs of approximately $53,000 were offset against the proceeds from the Company’s equity offering and included as part of the total stock issuance costs of approximately $1,435,000. See Note 4. Long-Lived Assets The Company reviews long-lived assets for realizability on an ongoing basis. Changes in depreciation and amortization, generally accelerated depreciation and variable amortization, are determined and recorded when estimates of the remaining useful lives or residual values of long-term assets change. The Company also reviews for impairment when conditions exist that indicate the carrying amount of the assets may not be fully recoverable. In those circumstances, the Company performs undiscounted operating cash flow analyses to determine if an impairment exists. When testing for asset impairment, the Company groups assets and liabilities at the lowest level for which cash flows are separately identifiable. Any impairment loss is calculated as the excess of the asset’s carrying value over its estimated fair value. Fair value is estimated based on the discounted cash flows for the asset group over the remaining useful life or based on the expected cash proceeds for the asset less costs of disposal. Any impairment losses would be recorded in the consolidated statements of operations. To date, no such impairments have occurred. Fair Value of Financial Instruments For certain of the Company’s financial instruments, including cash and accounts payable, the carrying amounts approximate their fair values due to their short maturities. ASC Topic 820, Fair Value Measurements and Disclosures Financial Instruments ● Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets. ● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in inactive markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. ● Level 3 inputs to the valuation methodology us one or more unobservable inputs which are significant to the fair value measurement. The Company analyzes all financial instruments with features of both liabilities and equity under Accounting Standards Codification (“ASC”) Topic 480, Distinguishing Liabilities from Equity Derivatives and Hedging As of September 30, 2022 and December 31, 2021, the Company did not identify any assets or liabilities required to be presented on the balance sheet at fair value. Concentration of credit risk Financial instruments, which potentially subject the Company to concentrations of credit risk, consist of cash and cash equivalents. The Company places its cash with high quality financial institutions and at times may exceed the Federal Deposit Insurance Corporation $250,000 insurance limit. The Company has not and does not anticipate incurring any losses related to this credit risk. Income Taxes The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The Company has no material uncertain tax positions for any of the reporting periods presented. Basic and Diluted Earnings Per Share Earnings per share is calculated in accordance with ASC Topic 260, Earnings Per Share Recent Accounting Pronouncements In December 2019, the Financial Accounting Standards Board (“FASB”) issued ASU 2019-12, Simplifying the Accounting for Income Taxes Income Taxes Subsequent Events During October 2022, the Company established a subsidiary in India, MOGO Esports Pvt Ltd. Operations for this subsidiary have not yet commenced. Management has evaluated events that occurred subsequent to the end of the reporting period and there are no other subsequent events to report. | Note 2 – Summary of Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. Significant estimates in the accompanying financial statements include valuation allowance on deferred tax assets. Cash Equivalents For the purpose of the statement of cash flows, cash equivalents include time deposits, certificate of deposits, and all highly-liquid debt instruments with original maturities of three months or less. As of December 31, 2021, the Company did not have any cash equivalents. Deferred Offering Costs Deferred offering costs are amounts incurred that are directly related to the offering of the Company’s common stock. These costs will be offset against the proceeds from the Company’s equity offering. Fair Value of Financial Instruments For certain of the Company’s financial instruments, including cash and accounts payable, the carrying amounts approximate their fair values due to their short maturities. FASB ASC Topic 820, Fair Value Measurements and Disclosures Financial Instruments ● Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets. ● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in inactive markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. ● Level 3 inputs to the valuation methodology us one or more unobservable inputs which are significant to the fair value measurement. The Company analyzes all financial instruments with features of both liabilities and equity under FASB ASC Topic 480, Distinguishing Liabilities from Equity Derivatives and Hedging As of December 31, 2021, the Company did not identify any assets and liabilities required to be presented on the balance sheet at fair value. Concentration of credit risk Financial instruments, which potentially subject the Company to concentrations of credit risk, consist of cash and cash equivalents. The Company places its cash with high quality financial institutions and at times may exceed the FDIC $250,000 insurance limit. The Company has not and does not anticipate incurring any losses related to this credit risk. Revenue Recognition Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers Topic 606 Topic 606. Topic 605, Revenue Recognition Revenue from product sales is recognized under Topic 606 ● executed contracts with the Company’s customers that it believes are legally enforceable; ● identification of performance obligations in the respective contract; ● determination of the transaction price for each performance obligation in the respective contract; ● allocation the transaction price to each performance obligation; and ● recognition of revenue only when the Company satisfies each performance obligation. These five elements, as applied to each of the Company’s revenue category, is summarized below: ● Product sales - revenue is recorded when the product is purchased by the customer. Income Taxes The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The Company has no material uncertain tax positions for any of the reporting periods presented. Basic and Diluted Earnings Per Share Earnings per share is calculated in accordance with ASC Topic 260, Earnings Per Share At December 31, 2021, there were 1,000,000 warrants outstanding. Due to the net loss incurred potentially dilutive instruments would be anti-dilutive. Accordingly, diluted loss per share is the same as basic loss for all periods presented. Recent Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes Income Taxes 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)—Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. Derivatives and Hedging Derivatives and Hedging—Contracts in Entity’s Own Equity Management does not believe that any recently issued, but not yet effective, accounting standards could have a material effect on the accompanying financial statements. As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances. |
Stockholders_ Equity
Stockholders’ Equity | 9 Months Ended | 10 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Stockholders' Equity Note [Abstract] | ||
Stockholders’ Equity | Note 4 – Stockholders’ Equity Preferred Stock The Company has authorized the issuance of 10,000,000 shares of $0.0001 par value preferred stock. At September 30, 2022 and December 31, 2021, there were nil Common Stock The Company has authorized the issuance of 100,000,000 shares of $0.0001 par value common stock. At September 30, 2022 and December 31, 2021, there were 20,421,593 and 16,809,800 shares issued and outstanding. During the period from March 11, 2021 (Inception) to September 30, 2021, the Company had the following transactions in its common stock: ● issued 5,300,000 shares to founders of the Company for cash proceeds of $530. ● issued 11,509,800 shares to investors at a price per share of $0.03 for cash proceeds of approximately $345,000. During the three months ended September 30, 2022, the Company had the following transactions in its common stock: ● issued 1,725,000 shares of common stock for total gross proceeds of $6,900,000 through an initial public offering (“IPO”). Commissions, fees and expenses associated with the IPO totaled approximately $1,435,000 and were recorded as stock issuance costs upon consummation of the IPO. The net proceeds after commissions, fees and expenses was approximately $5,465,000, with $500,000 of these funds currently held in an escrow account for the benefit of the Company. As a result of the IPO, deferred offering costs of approximately $116,000 were reclassified from deferred offering costs to a reduction of additional paid-in capital and are included in the total $1,435,000 of stock issuance costs from the IPO. ● issued 1,886,793 units, each consisting of one share of common stock and one warrant for a total of 1,886,793 shares of common stock, and 1,886,793 warrants to acquire the Company’s common stock in the future, for total gross proceeds of $5,000,001 through a private equity placement agreement (“PIPE”). The Company allocated the estimated fair value of the common stock and PIPE Warrants on a relative fair value basis. Commissions, fees and expenses associated with the PIPE totaled approximately $578,000. The net proceeds, after commissions, fees and expenses was approximately $4,422,000. The 1,886,793 PIPE Warrants have an exercise price of $2.90 per share, expire 5 years from the date of issuance, and are fully exercisable upon issuance. The estimated fair value of the PIPE Warrants approximated $2,093,000. Additionally, 339,623 warrants (“Placement Agent Warrants”) were issued to the placement agent as a part of their fee. The Placement Agent warrants have an exercise price of $2.915 per share, expire 5 years from the date of issuance, and are fully exercisable upon issuance. The estimated fair value of the Placement Agent Warrants approximated $516,000. The Placement Agent Warrants are recorded as stock issuance costs but the net impact to the Company’s equity from the issuance of these warrants is nil since these warrants are classified as equity. The PIPE Warrants and Placement Agent Warrants also include certain anti-dilution adjustments and potential adjustments upon the occurrence of certain change of control transactions. In October 2021, the Company issued an aggregate of 1,000,000 warrants (“Consultant Warrants”) to three individuals (“Consultants”) that are advising the Company on developing, establishing, operating, commercializing, marketing, promoting, and expanding the Company’s esports business with an aim to commercialize esports tournaments, esports sponsorships, esports advertising revenues, esports merchandise revenues, esports broadcast revenues, esports video revenues, esports game development and marketing and distribution revenues, and all other manner of esports revenue streams for the benefit of the Company. The Consultant Warrants have an exercise price of $1.00 share and expire in five years with 250,000 of these warrants vested immediately and the balance of 750,000 warrants having provisions making the vesting contingent on the Consultants’ performance in meeting goals and milestones set quarterly by the Company. Specifically, the Company will consult with the Consultants and reach agreement on the Consultants’ goals and milestones at the beginning of each calendar quarter. Out of the 750,000 unvested warrants, 62,500 warrants vest at the end of each quarter, beginning with the quarter ended March 31, 2022, provided in the Company’s judgement the Consultants have made satisfactory progress over the course of the quarter in meeting set goals and milestones. 62,500 of these warrants vested on March 31, 2022, 62,500 warrants vested on June 30, 2022, and 62,500 of these warrants vested on September 30, 2022. Consultant Warrants not vested on their designated end of quarter vesting date expire. The fair value of the Consultant Warrants is being amortized to expense over the vesting period. The Company recorded an expense of approximately $139,000 and $46,000 during the nine months and three months ended September 30, 2022. At September 30, 2022, the unamortized warrant expense was approximately $419,000, which will be amortized into expense through December 2024. Warrants The following is a summary of the Consultant Warrants: Weighted Weighted Warrants Average Remaining Aggregate Outstanding Price Life Value Outstanding, December 31, 2021 1,000,000 1.00 4.79 $ - Granted - Forfeited - Exercised - Outstanding, September 30, 2022 1,000,000 1.00 4.04 $ - Exercisable, September 30, 2022 437,500 $ 1.00 4.04 $ - The exercise price for all warrants outstanding and exercisable at September 30, 2022: Outstanding Exercisable Number of Exercise Number of Exercise 1,000,000 $ 1.00 437,500 $ 1.00 1,886,793 $ 2.90 1,886,793 $ 2.90 339,623 $ 2.92 339,623 $ 2.92 3,226,416 2,663,916 The Company utilized the Black-Scholes option-pricing model to value the warrants issued. There were no warrants issued for the period from March 11, 2021 (Inception) to September 30, 2021. The following table summarizes the assumptions used for estimating the fair value of the PIPE Warrants and Placement Agent Warrants issued for the nine months ended September 30,2022: Expected dividend yield - Risk-free interest rate 3.96 % Expected volatility 100.00 % Expected life (years) 5.0 | Note 3 - Stockholders’ Equity Preferred Stock The Company has authorized the issuance of 10,000,000 shares of $0.0001 par value preferred stock. At December 31, 2021, there were nil Common Stock The Company has authorized the issuance of 100,000,000 shares of $0.0001 par value common stock. At December 31, 2021, there were 16,809,800 shares issued and outstanding. During the period from inception (March 11, 2021) to December 31, 2021, the Company had the following transactions in its common stock: ● Issued 5,300,000 shares to founders of the Company for cash proceeds of $530; ● Issued 11,509,800 shares to investors for cash proceeds of $345,294. Warrants The following is a summary of warrant activity: Weighted Weighted Average Average Remaining Aggregate Warrants Exercise Contractual Intrinsic Outstanding Price Life Value Outstanding, March 11, 2021 - Granted 1,000,000 1.00 Forfeited - Exercised - Outstanding, December 31, 2021 1,000,000 1.00 4.79 $ - Exercisable, December 31, 2021 250,000 $ 1.00 4.79 $ - The exercise price for warrants outstanding at December 31, 2021: Outstanding Exercisable Number of Exercise Number of Exercise Warrants Price Warrants Price 1,000,000 $ 1.00 250,000 $ 1.00 1,000,000 250,000 On October 21, 2021, the Company issued an aggregate of 1,000,000 warrants to three individuals (“Consultants”) that will advising the Company on developing, establishing, operating, commercializing, marketing, promoting, and expanding the Company’s esports business with an aim to commercialize esports tournaments, esports sponsorships, esports advertising revenues, esports merchandise revenues, esports broadcast revenues, esports video revenues, esports game development and marketing and distribution revenues, and all other manner of esports revenue streams for the benefit of the Company. The warrants have an exercise price of $1.00 share and expire in five years. 250,000 of these warrants vested immediately and the balance of 750,000 warrants have provisions making the vesting contingent on the Consultants’ performance in meeting goals and milestones set quarterly by the Company. Specifically, the Company will consult with the Consultants and reach agreement on the Consultants’ goals and milestones at the beginning of each calendar quarter. Out of the 750,000 unvested warrants, 62,500 warrants will vest at the end of each quarter, beginning with the quarter ending March 31, 2022, provided in the Company’s judgement the Consultants have made satisfactory progress over the course of the quarter in meeting set goals and milestones. Warrants not vested on their designated end of quarter vesting date expire. The fair value of the warrants is being amortized to expense over the vesting period. The Company recorded an expense of $185,922 during the period from inception (March 11, 2021) to December 31, 2021. At December 31, 2021, the unamortized warrant expense was $557,765, which will be amortized into expense through December 2024. The assumptions used in calculating the fair value of warrants granted using the Black-Scholes option-pricing model for warrants granted are as follows for the warrants granted during the period from inception (March 11, 2021) to December 31, 2021: Risk-free interest rate 1.09 % Expected life of the options 5 years Expected volatility 100 % Expected dividend yield 0 % |
Income Taxes
Income Taxes | 10 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 4 - Income Taxes At December 31, 2021, the significant components of the deferred tax assets are summarized below: Deferred income tax asset Net operation loss carryforwards $ 40,436 Total deferred income tax asset 40,436 Less: valuation allowance (40,436 ) Total deferred income tax asset $ - The valuation allowance increased by $40,436 in 2021 as a result of the Company generating net operating losses. The Company’s net operating loss carryforward of approximately $139,000 begin to expire in 2036. No income tax expense is reflected in the statements of operations for the period from inception (March 11, 2021) to December 31, 2021. The reconciliation of the effective income tax rate to the federal statutory rate for the period from inception (March 11, 2021) to December 31, 2021 is as follows: 2021 Amount Percent Federal statutory rates $ (55,095 ) 21.0 % State income taxes (20,989 ) 8.0 % Permanent differences 35,648 -13.6 % Valuation allowance against net deferred tax assets 40,436 -15.4 % Effective rate $ - 0.0 % The Company periodically evaluates the likelihood of the realization of deferred tax assets, and adjusts the carrying amount of the deferred tax assets by the valuation allowance to the extent the future realization of the deferred tax assets is not judged to be more likely than not. The Company considers many factors when assessing the likelihood of future realization of its deferred tax assets, including its recent cumulative earnings experience by taxing jurisdiction, expectations of future taxable income or loss, the carryforward periods available to the Company for tax reporting purposes, and other relevant factors. Future changes in the unrecognized tax benefit will have no impact on the effective tax rate due to the existence of the valuation allowance. The Company estimates that the unrecognized tax benefit will not change significantly within the next twelve months. The Company will continue to classify income tax penalties and interest as part of general and administrative expense in its statements of operations. There were no interest or penalties accrued as of December 31, 2021. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended | 10 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Commitments and Contingencies | Note 6 – Commitments and Contingencies From time to time, the Company may be involved in various litigation matters, which arise in the ordinary course of business. There is currently no litigation that management believes will have a material impact on the financial position of the Company. | Note 5 – Commitments and Contingencies From time to time, the Company may be involved in various litigation matters, which arise in the ordinary course of business. There is currently no litigation that management believes will have a material impact on the financial position of the Company. |
Related Party Transactions
Related Party Transactions | 9 Months Ended | 10 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Related Party Transactions [Abstract] | ||
Related Party Transactions | Note 7 – Related Party Transactions Included in accounts payable at September 30, 2022 and December 31, 2021 is $0 and $30,000, respectively, due to Sports Industry of India, Inc., a stockholder of the Company. During the three and nine months ended September 30, 2022, the Company paid its Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) compensation totaling $35,000. The CEO and CFO are shareholders of the Company. | Note 6 – Related Party Transactions Included in accounts payable is $30,000 due to Sports Industry of India, Inc., a stockholder of the Company. |
Subseqent Events
Subseqent Events | 10 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
Subseqent Events | Note 7 - Subsequent Events There are no other significant subsequent events. |
Advances to Supplier
Advances to Supplier | 9 Months Ended |
Sep. 30, 2022 | |
Advance To Suppliers [Abstract] | |
Advances to Supplier | Note 3 – Advances to Supplier The Company entered into a commitment with a supplier for the development of an Esports Platform for total cost of $1,200,000. As of September 30, 2022, advances to this supplier consisted of payments totaling $300,000 with the remaining $900,000 due periodically until the expected completion date in March 2023. As of September 30, 2022, the supplier had not completed the work on the software. |
Note Payable
Note Payable | 9 Months Ended |
Sep. 30, 2022 | |
Note Payable [Abstract] | |
Note Payable | Note 5 – Note Payable During July 2022, the Company entered into an agreement with a financing institution for payment of certain of the Company’s insurance policies. The financing agreement is payable over a twelve-month period ending June 2023 with monthly payments of principal and interest totaling $15,848 per month. As of September 30, 2022, approximately $140,000 of principal is outstanding under this agreement, and the same amount is included in prepaid expenses. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 9 Months Ended | 10 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Accounting Policies [Abstract] | ||
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. Significant estimates in the accompanying financial statements include valuation allowance on deferred tax assets and the estimated value of warrants issued for services. | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. Significant estimates in the accompanying financial statements include valuation allowance on deferred tax assets. |
Cash Equivalents | Cash Equivalents For the purpose of the statement of cash flows, cash equivalents include time deposits, certificate of deposits, amounts held in escrow and all highly- liquid debt instruments with original maturities of three months or less. As of September 30, 2022 and December 31, 2021, the Company did not have any cash equivalents. | Cash Equivalents For the purpose of the statement of cash flows, cash equivalents include time deposits, certificate of deposits, and all highly-liquid debt instruments with original maturities of three months or less. As of December 31, 2021, the Company did not have any cash equivalents. |
Deferred Offering Costs | Deferred Offering Costs Deferred offering costs are amounts incurred that are directly related to the offering of the Company’s common stock and approximated $63,000 as of December 31, 2022. Upon the consummation of the Company’s initial public offering in July 2022, these costs and additional costs of approximately $53,000 were offset against the proceeds from the Company’s equity offering and included as part of the total stock issuance costs of approximately $1,435,000. See Note 4. | Deferred Offering Costs Deferred offering costs are amounts incurred that are directly related to the offering of the Company’s common stock. These costs will be offset against the proceeds from the Company’s equity offering. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments For certain of the Company’s financial instruments, including cash and accounts payable, the carrying amounts approximate their fair values due to their short maturities. ASC Topic 820, Fair Value Measurements and Disclosures Financial Instruments ● Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets. ● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in inactive markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. ● Level 3 inputs to the valuation methodology us one or more unobservable inputs which are significant to the fair value measurement. The Company analyzes all financial instruments with features of both liabilities and equity under Accounting Standards Codification (“ASC”) Topic 480, Distinguishing Liabilities from Equity Derivatives and Hedging As of September 30, 2022 and December 31, 2021, the Company did not identify any assets or liabilities required to be presented on the balance sheet at fair value. | Fair Value of Financial Instruments For certain of the Company’s financial instruments, including cash and accounts payable, the carrying amounts approximate their fair values due to their short maturities. FASB ASC Topic 820, Fair Value Measurements and Disclosures Financial Instruments ● Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets. ● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in inactive markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. ● Level 3 inputs to the valuation methodology us one or more unobservable inputs which are significant to the fair value measurement. The Company analyzes all financial instruments with features of both liabilities and equity under FASB ASC Topic 480, Distinguishing Liabilities from Equity Derivatives and Hedging As of December 31, 2021, the Company did not identify any assets and liabilities required to be presented on the balance sheet at fair value. |
Concentration of credit risk | Concentration of credit risk Financial instruments, which potentially subject the Company to concentrations of credit risk, consist of cash and cash equivalents. The Company places its cash with high quality financial institutions and at times may exceed the Federal Deposit Insurance Corporation $250,000 insurance limit. The Company has not and does not anticipate incurring any losses related to this credit risk. | Concentration of credit risk Financial instruments, which potentially subject the Company to concentrations of credit risk, consist of cash and cash equivalents. The Company places its cash with high quality financial institutions and at times may exceed the FDIC $250,000 insurance limit. The Company has not and does not anticipate incurring any losses related to this credit risk. |
Revenue Recognition | Revenue Recognition Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers Topic 606 Topic 606. Topic 605, Revenue Recognition Revenue from product sales is recognized under Topic 606 ● executed contracts with the Company’s customers that it believes are legally enforceable; ● identification of performance obligations in the respective contract; ● determination of the transaction price for each performance obligation in the respective contract; ● allocation the transaction price to each performance obligation; and ● recognition of revenue only when the Company satisfies each performance obligation. These five elements, as applied to each of the Company’s revenue category, is summarized below: ● Product sales - revenue is recorded when the product is purchased by the customer. | |
Income Taxes | Income Taxes The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The Company has no material uncertain tax positions for any of the reporting periods presented. | Income Taxes The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The Company has no material uncertain tax positions for any of the reporting periods presented. |
Basic and Diluted Earnings Per Share | Basic and Diluted Earnings Per Share Earnings per share is calculated in accordance with ASC Topic 260, Earnings Per Share | Basic and Diluted Earnings Per Share Earnings per share is calculated in accordance with ASC Topic 260, Earnings Per Share At December 31, 2021, there were 1,000,000 warrants outstanding. Due to the net loss incurred potentially dilutive instruments would be anti-dilutive. Accordingly, diluted loss per share is the same as basic loss for all periods presented. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In December 2019, the Financial Accounting Standards Board (“FASB”) issued ASU 2019-12, Simplifying the Accounting for Income Taxes Income Taxes | Recent Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes Income Taxes 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)—Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. Derivatives and Hedging Derivatives and Hedging—Contracts in Entity’s Own Equity Management does not believe that any recently issued, but not yet effective, accounting standards could have a material effect on the accompanying financial statements. As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances. |
Long-Lived Assets | Long-Lived Assets The Company reviews long-lived assets for realizability on an ongoing basis. Changes in depreciation and amortization, generally accelerated depreciation and variable amortization, are determined and recorded when estimates of the remaining useful lives or residual values of long-term assets change. The Company also reviews for impairment when conditions exist that indicate the carrying amount of the assets may not be fully recoverable. In those circumstances, the Company performs undiscounted operating cash flow analyses to determine if an impairment exists. When testing for asset impairment, the Company groups assets and liabilities at the lowest level for which cash flows are separately identifiable. Any impairment loss is calculated as the excess of the asset’s carrying value over its estimated fair value. Fair value is estimated based on the discounted cash flows for the asset group over the remaining useful life or based on the expected cash proceeds for the asset less costs of disposal. Any impairment losses would be recorded in the consolidated statements of operations. To date, no such impairments have occurred. | |
Subsequent Events | Subsequent Events During October 2022, the Company established a subsidiary in India, MOGO Esports Pvt Ltd. Operations for this subsidiary have not yet commenced. Management has evaluated events that occurred subsequent to the end of the reporting period and there are no other subsequent events to report. |
Stockholders_ Equity (Tables)
Stockholders’ Equity (Tables) | 9 Months Ended | 10 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Stockholders' Equity Note [Abstract] | ||
Schedule of exercise price for warrants outstanding | Weighted Weighted Warrants Average Remaining Aggregate Outstanding Price Life Value Outstanding, December 31, 2021 1,000,000 1.00 4.79 $ - Granted - Forfeited - Exercised - Outstanding, September 30, 2022 1,000,000 1.00 4.04 $ - Exercisable, September 30, 2022 437,500 $ 1.00 4.04 $ - | Weighted Weighted Average Average Remaining Aggregate Warrants Exercise Contractual Intrinsic Outstanding Price Life Value Outstanding, March 11, 2021 - Granted 1,000,000 1.00 Forfeited - Exercised - Outstanding, December 31, 2021 1,000,000 1.00 4.79 $ - Exercisable, December 31, 2021 250,000 $ 1.00 4.79 $ - |
Schedule of exercise price for warrants outstanding | Outstanding Exercisable Number of Exercise Number of Exercise 1,000,000 $ 1.00 437,500 $ 1.00 1,886,793 $ 2.90 1,886,793 $ 2.90 339,623 $ 2.92 339,623 $ 2.92 3,226,416 2,663,916 | Outstanding Exercisable Number of Exercise Number of Exercise Warrants Price Warrants Price 1,000,000 $ 1.00 250,000 $ 1.00 1,000,000 250,000 |
Schedule of black-scholes option-pricing model to value the warrants issued | Expected dividend yield - Risk-free interest rate 3.96 % Expected volatility 100.00 % Expected life (years) 5.0 | Risk-free interest rate 1.09 % Expected life of the options 5 years Expected volatility 100 % Expected dividend yield 0 % |
Income Taxes (Tables)
Income Taxes (Tables) | 10 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of deferred tax assets | Deferred income tax asset Net operation loss carryforwards $ 40,436 Total deferred income tax asset 40,436 Less: valuation allowance (40,436 ) Total deferred income tax asset $ - |
Schedule of reconciliation of effective income tax rate | 2021 Amount Percent Federal statutory rates $ (55,095 ) 21.0 % State income taxes (20,989 ) 8.0 % Permanent differences 35,648 -13.6 % Valuation allowance against net deferred tax assets 40,436 -15.4 % Effective rate $ - 0.0 % |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Details) - USD ($) | 1 Months Ended | 9 Months Ended | 10 Months Ended | |
Jul. 22, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | |
Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Federal deposit insurance corporation | $ 250,000 | $ 250,000 | ||
Tax benefit percentage | 50% | 50% | ||
Warrants outstanding (in Shares) | 3,226,416 | 1,000,000 | ||
Proceeds from issuance of offering cost | $ 1,435,000 | |||
Initial public offering [Member] | ||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Additional deferred costs | $ 53,000 | |||
Forecast [Member] | Common Stock [Member] | ||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Deferred offering costs | $ 63,000 |
Stockholders_ Equity (Details)
Stockholders’ Equity (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended | 10 Months Ended | |||
Oct. 31, 2021 | Oct. 21, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2022 | Dec. 31, 2021 | ||
Stockholders’ Equity (Details) [Line Items] | ||||||||
Preferred stock, share authorized | 10,000,000 | 10,000,000 | 10,000,000 | |||||
Preferred stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||
Preferred stock, shares issued | ||||||||
Preferred stock, shares outstanding | ||||||||
Common stock, shares authorized | 100,000,000 | 100,000,000 | 100,000,000 | |||||
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||
Common stock, shares issued | 20,421,593 | 20,421,593 | 16,809,800 | |||||
Common stock, shares outstanding | 20,421,593 | 20,421,593 | 16,809,800 | |||||
Cash proceed (in Dollars) | $ 345,000 | $ 345,294 | ||||||
Aggregate of warrants | 1,000,000 | 1,000,000 | ||||||
Description of warrants | The Consultant Warrants have an exercise price of $1.00 share and expire in five years with 250,000 of these warrants vested immediately and the balance of 750,000 warrants having provisions making the vesting contingent on the Consultants’ performance in meeting goals and milestones set quarterly by the Company. Specifically, the Company will consult with the Consultants and reach agreement on the Consultants’ goals and milestones at the beginning of each calendar quarter. Out of the 750,000 unvested warrants, 62,500 warrants vest at the end of each quarter, beginning with the quarter ended March 31, 2022, provided in the Company’s judgement the Consultants have made satisfactory progress over the course of the quarter in meeting set goals and milestones. 62,500 of these warrants vested on March 31, 2022, 62,500 warrants vested on June 30, 2022, and 62,500 of these warrants vested on September 30, 2022. Consultant Warrants not vested on their designated end of quarter vesting date expire. | The warrants have an exercise price of $1.00 share and expire in five years. 250,000 of these warrants vested immediately and the balance of 750,000 warrants have provisions making the vesting contingent on the Consultants’ performance in meeting goals and milestones set quarterly by the Company. Specifically, the Company will consult with the Consultants and reach agreement on the Consultants’ goals and milestones at the beginning of each calendar quarter. Out of the 750,000 unvested warrants, 62,500 warrants will vest at the end of each quarter, beginning with the quarter ending March 31, 2022, provided in the Company’s judgement the Consultants have made satisfactory progress over the course of the quarter in meeting set goals and milestones. Warrants not vested on their designated end of quarter vesting date expire. | The 1,886,793 PIPE Warrants have an exercise price of $2.90 per share, expire 5 years from the date of issuance, and are fully exercisable upon issuance. The estimated fair value of the PIPE Warrants approximated $2,093,000. Additionally, 339,623 warrants (“Placement Agent Warrants”) were issued to the placement agent as a part of their fee. The Placement Agent warrants have an exercise price of $2.915 per share, expire 5 years from the date of issuance, and are fully exercisable upon issuance. The estimated fair value of the Placement Agent Warrants approximated $516,000. The Placement Agent Warrants are recorded as stock issuance costs but the net impact to the Company’s equity from the issuance of these warrants is nil since these warrants are classified as equity. | |||||
Recorded expense (in Dollars) | 185,922 | |||||||
Expense amount (in Dollars) | $ 46,000 | $ 139,000 | ||||||
Price per share (in Dollars per share) | $ 0.03 | $ 0.03 | ||||||
Issuance of common stock | 1,725,000 | |||||||
Fees and expenses (in Dollars) | $ 5,465,000 | |||||||
Escrow account (in Dollars) | 500,000 | 500,000 | ||||||
Offering costs (in Dollars) | $ 62,998 | |||||||
Stock issuance costs (in Dollars) | $ 1,950,540 | |||||||
Issued units | 1,886,793 | |||||||
Common Stock [Member] | ||||||||
Stockholders’ Equity (Details) [Line Items] | ||||||||
Common stock, shares issued | 20,421,593 | 20,421,593 | 16,809,800 | |||||
Common stock, shares outstanding | 20,421,593 | 20,421,593 | 16,809,800 | |||||
Issuance of shares | ||||||||
Issuance of common stock | [1] | 1,725,000 | ||||||
Issued units | [1] | 1,886,793 | ||||||
Warrant [Member] | ||||||||
Stockholders’ Equity (Details) [Line Items] | ||||||||
Expense amount (in Dollars) | $ 419,000 | $ 557,765 | ||||||
Minimum [Member] | ||||||||
Stockholders’ Equity (Details) [Line Items] | ||||||||
Fees and expenses (in Dollars) | $ 4,422,000 | |||||||
Common stock, share | 1 | 1 | ||||||
Warrant | 1 | |||||||
Maximum [Member] | ||||||||
Stockholders’ Equity (Details) [Line Items] | ||||||||
Common stock, share | 1,886,793 | 1,886,793 | ||||||
Warrant | 1,886,793 | |||||||
IPO [Member] | ||||||||
Stockholders’ Equity (Details) [Line Items] | ||||||||
Gross proceeds (in Dollars) | $ 6,900,000 | |||||||
Fees and expenses (in Dollars) | 1,435,000 | |||||||
Offering costs (in Dollars) | 116,000 | $ 116,000 | ||||||
Stock issuance costs (in Dollars) | 1,435,000 | |||||||
Private Placement [Member] | ||||||||
Stockholders’ Equity (Details) [Line Items] | ||||||||
Gross proceeds (in Dollars) | 5,000,001 | |||||||
PIPE [Member] | ||||||||
Stockholders’ Equity (Details) [Line Items] | ||||||||
Fees and expenses (in Dollars) | $ 578,000 | |||||||
Founder [Member] | ||||||||
Stockholders’ Equity (Details) [Line Items] | ||||||||
Issuance of shares | 5,300,000 | 5,300,000 | ||||||
Cash (in Dollars) | $ 530 | $ 530 | $ 530 | |||||
Investor [Member] | ||||||||
Stockholders’ Equity (Details) [Line Items] | ||||||||
Issuance of shares | 11,509,800 | 11,509,800 | ||||||
[1]See Note 4 |
Stockholders_ Equity (Details)
Stockholders’ Equity (Details) - Schedule of warrant activity - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Schedule Of Warrant Activity Abstract | ||
Warrants Outstanding, Beginning Balance | 1,000,000 | |
Aggregate Intrinsic Value, Beginning Balance (in Dollars) | ||
Warrants Outstanding, Granted | 1,000,000 | |
Weighted Average Exercise Price, Granted (in Dollars per share) | $ 1 | |
Warrants Outstanding, Forfeited | ||
Warrants Outstanding, Exercised | ||
Warrants Outstanding, Ending Balance | 1,000,000 | 1,000,000 |
Weighted Average Exercise Price, Ending Balance (in Dollars per share) | $ 1 | $ 1 |
Weighted Average Remaining Contractual Life, Ending Balance | 4 years 14 days | 4 years 9 months 14 days |
Aggregate Intrinsic Value, Ending Balance (in Dollars) | ||
Warrants Outstanding, Exercisable | 437,500 | 250,000 |
Weighted Average Exercise Price, Exercisable (in Dollars per share) | $ 1 | $ 1 |
Weighted Average Remaining Contractual Life, Exercisable | 4 years 14 days | 4 years 9 months 14 days |
Aggregate Intrinsic Value, Exercisable (in Dollars) |
Stockholders_ Equity (Details_2
Stockholders’ Equity (Details) - Schedule of exercise price for warrants outstanding - Warrant [Member] - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
Outstanding [Member] | ||
Stockholders’ Equity (Details) - Schedule of exercise price for warrants outstanding [Line Items] | ||
Outstanding, number of warrants | 1,000,000 | 1,000,000 |
Outstanding, exercise price (in Dollars per share) | $ 1 | $ 1 |
Outstanding [Member] | ||
Stockholders’ Equity (Details) - Schedule of exercise price for warrants outstanding [Line Items] | ||
Outstanding, number of warrants | 1,886,793 | 1,000,000 |
Outstanding, exercise price (in Dollars per share) | $ 2.9 | |
Exercisable [Member] | ||
Stockholders’ Equity (Details) - Schedule of exercise price for warrants outstanding [Line Items] | ||
Exercisable, number of warrants | 437,500 | 250,000 |
Exercisable, exercise price (in Dollars per share) | $ 1 | $ 1 |
Exercisable [Member] | ||
Stockholders’ Equity (Details) - Schedule of exercise price for warrants outstanding [Line Items] | ||
Exercisable, number of warrants | 1,886,793 | 250,000 |
Exercisable, exercise price (in Dollars per share) | $ 2.9 |
Stockholders_ Equity (Details_3
Stockholders’ Equity (Details) - Schedule of black-scholes option-pricing model to value the warrants issued | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Schedule Of Black Scholes Option Pricing Model To Value The Warrants Issued Abstract | ||
Risk-free interest rate | 3.96% | 1.09% |
Expected life of the options | 5 years | 5 years |
Expected volatility | 100% | 100% |
Expected dividend yield | 0% |
Income Taxes (Details)
Income Taxes (Details) | 10 Months Ended |
Dec. 31, 2021 USD ($) | |
Income Tax Disclosure [Abstract] | |
Valuation allowance | $ 40,436 |
Net operating loss | $ 139,000 |
Income Taxes (Details) - Schedu
Income Taxes (Details) - Schedule of components of deferred tax assets | Dec. 31, 2021 USD ($) |
Schedule Of Components Of Deferred Tax Assets Abstract | |
Net operation loss carryforwards | $ 40,436 |
Total deferred income tax asset | 40,436 |
Less: valuation allowance | (40,436) |
Total deferred income tax asset |
Income Taxes (Details) - Sche_2
Income Taxes (Details) - Schedule of reconciliation of effective income tax rate | 10 Months Ended |
Dec. 31, 2021 USD ($) | |
Schedule Of Reconciliation Of Effective Income Tax Rate Abstract | |
Federal statutory rates | $ (55,095) |
Federal statutory rates, percent | 21% |
State income taxes | $ (20,989) |
State income taxes, percent | 8% |
Permanent differences | $ 35,648 |
Permanent differences, percent | (13.60%) |
Valuation allowance against net deferred tax assets | $ 40,436 |
Valuation allowance against net deferred tax assets, percent | (15.40%) |
Effective rate | |
Effective rate, percent | 0% |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | |
Related Party Transactions (Details) [Line Items] | |||
Due to sports industry | $ 30,000 | ||
Accounts payable | $ 0 | $ 0 | $ 30,000 |
CEO [Member] | |||
Related Party Transactions (Details) [Line Items] | |||
Compensation | $ 35,000 | ||
CFO [Member] | |||
Related Party Transactions (Details) [Line Items] | |||
Compensation | $ 35,000 |
Advances to Supplier (Details)
Advances to Supplier (Details) | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Advance To Suppliers Abstract | |
Additional accounts payable to suppliers | $ 1,200,000 |
Advances to supplier | 300,000 |
Remaining due | $ 900,000 |
Stockholders_ Equity (Details_4
Stockholders’ Equity (Details) - Schedule of warrant activity - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Schedule Of Warrant Activity Abstract | ||
Warrants Outstanding, Beginning Balance | 1,000,000 | |
Weighted Average Exercise Price,Beginning Balance (in Dollars per share) | $ 1 | |
Weighted Average Remaining Contractual Life, Beginning Balance | 4 years 9 months 14 days | |
Aggregate Intrinsic Value, Beginning Balance (in Dollars) | ||
Warrants Outstanding, Granted | 1,000,000 | |
Warrants Outstanding, Forfeited | ||
Warrants Outstanding, Exercised | ||
Warrants Outstanding, Ending Balance | 1,000,000 | 1,000,000 |
Weighted Average Exercise Price, Ending Balance (in Dollars per share) | $ 1 | $ 1 |
Weighted Average Remaining Contractual Life, Ending Balance | 4 years 14 days | 4 years 9 months 14 days |
Aggregate Intrinsic Value, Ending Balance (in Dollars) | ||
Warrants Outstanding, Exercisable | 437,500 | 250,000 |
Weighted Average Exercise Price, Exercisable (in Dollars per share) | $ 1 | $ 1 |
Weighted Average Remaining Contractual Life, Exercisable | 4 years 14 days | 4 years 9 months 14 days |
Aggregate Intrinsic Value, Exercisable (in Dollars) |
Stockholders_ Equity (Details_5
Stockholders’ Equity (Details) - Schedule of warrants outstanding and exercisable - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
Outstanding [Member] | ||
Stockholders’ Equity (Details) - Schedule of warrants outstanding and exercisable [Line Items] | ||
Outstanding, number of warrants | 3,226,416 | |
Outstanding [Member] | Warrant [Member] | ||
Stockholders’ Equity (Details) - Schedule of warrants outstanding and exercisable [Line Items] | ||
Outstanding, number of warrants | 1,000,000 | 1,000,000 |
Outstanding, exercise price (in Dollars per share) | $ 1 | $ 1 |
Outstanding [Member] | Warrant [Member] | ||
Stockholders’ Equity (Details) - Schedule of warrants outstanding and exercisable [Line Items] | ||
Outstanding, number of warrants | 1,886,793 | 1,000,000 |
Outstanding, exercise price (in Dollars per share) | $ 2.9 | |
Outstanding [Member] | Warrant [Member] | ||
Stockholders’ Equity (Details) - Schedule of warrants outstanding and exercisable [Line Items] | ||
Outstanding, number of warrants | 339,623 | |
Outstanding, exercise price (in Dollars per share) | $ 2.92 | |
Exercisable [Member] | ||
Stockholders’ Equity (Details) - Schedule of warrants outstanding and exercisable [Line Items] | ||
Exercisable, number of warrants | 2,663,916 | |
Exercisable [Member] | Warrant [Member] | ||
Stockholders’ Equity (Details) - Schedule of warrants outstanding and exercisable [Line Items] | ||
Exercisable, number of warrants | 437,500 | 250,000 |
Exercisable, exercise price (in Dollars per share) | $ 1 | $ 1 |
Exercisable [Member] | Warrant [Member] | ||
Stockholders’ Equity (Details) - Schedule of warrants outstanding and exercisable [Line Items] | ||
Exercisable, number of warrants | 1,886,793 | 250,000 |
Exercisable, exercise price (in Dollars per share) | $ 2.9 | |
Exercisable [Member] | Warrant [Member] | ||
Stockholders’ Equity (Details) - Schedule of warrants outstanding and exercisable [Line Items] | ||
Exercisable, number of warrants | 339,623 | |
Exercisable, exercise price (in Dollars per share) | $ 2.92 |
Stockholders_ Equity (Details_6
Stockholders’ Equity (Details) - Schedule of black-scholes option-pricing model to value the warrants issued | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Schedule Of Black Scholes Option Pricing Model To Value The Warrants Issued Abstract | ||
Expected dividend yield | 0% | |
Risk-free interest rate | 3.96% | 1.09% |
Expected volatility | 100% | 100% |
Expected life (years) | 5 years | 5 years |
Note Payable (Details)
Note Payable (Details) | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Note Payable (Details) [Line Items] | |
Prepaid expenses | $ 140,000 |
June 2023 [Member] | |
Note Payable (Details) [Line Items] | |
Interest amount | $ 15,848 |