Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2023 | May 12, 2023 | |
Document Information Line Items | ||
Entity Registrant Name | Mobile Global Esports, Inc. | |
Trading Symbol | MGAM | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 20,421,593 | |
Amendment Flag | false | |
Entity Central Index Key | 0001886362 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Mar. 31, 2023 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Shell Company | false | |
Entity Ex Transition Period | true | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-41458 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 86-2684455 | |
Entity Address, Address Line One | 500 Post Road East | |
Entity Address, City or Town | Westport | |
Entity Address, State or Province | CT | |
Entity Address, Postal Zip Code | 06880 | |
City Area Code | (475) | |
Local Phone Number | 666-8401 | |
Title of 12(b) Security | Common stock, $0.001 par value per share | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | Yes |
Condensed Statements of Operati
Condensed Statements of Operations (Unaudited) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash | $ 6,771,168 | $ 7,539,674 |
Prepaid expenses | 92,995 | 113,247 |
Other current assets | 580,000 | 480,000 |
Total current assets | 7,444,163 | 8,132,921 |
Restricted cash | 23,305 | 20,000 |
Property and equipment, net | 29,399 | 16,822 |
Advance to supplier | 1,041,074 | 1,025,000 |
Operating lease right of use asset | 141,495 | 54,634 |
Other long-term assets | 19,853 | 7,424 |
Total assets | 8,699,289 | 9,256,801 |
Current liabilities: | ||
Accounts payable and accrued expenses | 222,846 | 80,960 |
Related party payable | 18,536 | 17,763 |
Operating lease liabilities, current | 48,405 | 16,786 |
Note payable | 44,762 | 92,307 |
Total current liabilities | 334,549 | 207,816 |
Operating lease liabilities, long term | 93,868 | 38,452 |
Total liabilities | 428,417 | 246,268 |
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, 20,421,593 shares issued and outstanding | 2,042 | 2,042 |
Additional paid-in capital | 10,629,616 | 10,557,136 |
Accumulated deficit | (2,360,480) | (1,549,388) |
Accumulated other comprehensive income | 1,342 | 1,399 |
Total stockholders’ equity – Mobile Global Esports Inc. | 8,272,520 | 9,011,189 |
Non-controlling interest | (1,648) | (656) |
Total stockholders’ equity | 8,270,872 | 9,010,533 |
Total liabilities and stockholders’ equity | $ 8,699,289 | $ 9,256,801 |
Condensed Statements of Opera_2
Condensed Statements of Operations (Unaudited) (Parentheticals) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 |
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 | 20,421,593 |
Common stock, shares outstanding | 20,421,593 | 20,421,593 |
Condensed Statements of Opera_3
Condensed Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Statement [Abstract] | ||
Revenue | ||
Cost of revenue | ||
Gross profit | ||
Operating expenses: | ||
General and administrative expenses | 815,731 | 91,482 |
Total operating expenses | 815,731 | 91,482 |
Loss from operations | (815,731) | (91,482) |
Interest income | 3,647 | |
Net loss before income taxes | (812,084) | (91,482) |
Income tax expense | ||
Net loss | (812,084) | (91,482) |
Net loss – non-controlling interest | (992) | |
Net loss attributable to Mobile Global Esports Inc. | $ (811,092) | $ (91,482) |
Net loss per share attributable to common stockholders, basic and diluted (in Dollars per share) | $ (0.04) | $ (0.01) |
Weighted average common shares outstanding, basic and diluted (in Shares) | 20,421,593 | 16,809,800 |
Comprehensive loss: | ||
Net loss | $ (812,084) | $ (91,482) |
Unrealized loss on foreign currency translation | (57) | |
Total comprehensive loss | (812,141) | (91,482) |
Comprehensive loss attributable to non-controlling interest | (992) | |
Comprehensive loss – Mobile Global Esports Inc. | $ (811,149) | $ (91,482) |
Condensed Statements of Opera_4
Condensed Statements of Operations (Unaudited) (Parentheticals) - $ / shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Statement [Abstract] | ||
Net loss per share attributable to common stockholders, diluted | $ (0.04) | $ (0.01) |
Weighted average common shares outstanding, diluted | 20,421,593 | 16,809,800 |
Condensed Statements of Stockho
Condensed Statements of Stockholders' Equity (Unaudited) - USD ($) | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Gain (Loss) | Non-controlling Interest | Total |
Balance at Dec. 31, 2021 | $ 1,681 | $ 530,065 | $ (262,360) | $ 269,386 | ||
Balance (in Shares) at Dec. 31, 2021 | 16,809,000 | |||||
Fair value of warrants issued for services | 46,480 | 46,480 | ||||
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 | 16,809,000 | |||||
Balance at Dec. 31, 2022 | $ 2,042 | 10,557,136 | (1,549,388) | 1,399 | (656) | 9,010,533 |
Balance (in Shares) at Dec. 31, 2022 | 20,421,593 | |||||
Fair value of warrants issued for services | 72,480 | 72,480 | ||||
Other comprehensive loss | (57) | (57) | ||||
Net loss | (811,092) | (992) | (812,084) | |||
Balance at Mar. 31, 2023 | $ 2,042 | $ 10,629,616 | $ (2,360,480) | $ 1,342 | $ (1,648) | $ 8,270,872 |
Balance (in Shares) at Mar. 31, 2023 | 20,421,593 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash flows from operating activities | ||
Net loss | $ (812,084) | $ (91,482) |
Adjustments to reconcile net loss to net cash provided (used) by operating activities: | ||
Depreciation | 991 | |
Amortization of right of use assets | 8,999 | |
Fair value of warrants issued for services | 72,480 | 46,480 |
Changes in operating assets and liabilities: | ||
Prepaid expenses | 20,602 | |
Other current assets | (100,000) | |
Other assets | (12,347) | |
Accounts payable and accrued expenses | 141,808 | (31,814) |
Related party payable | 613 | |
Operating lease liabilities | (8,829) | |
Net cash used by operating activities | (687,767) | (76,816) |
Cash flows from investing activities | ||
Payments for property and equipment | (13,410) | |
Advances to supplier for software | (16,074) | |
Net cash used by investing activities | (29,484) | |
Cash flows from financing activities | ||
Payment of deferred offering costs | (47,500) | |
Principal payment of note payable | (47,545) | |
Net cash used by financing activities | (47,545) | (47,500) |
Effect of exchange rate changes on cash and restricted cash | (405) | |
Net decrease in cash and restricted cash | (765,201) | (124,316) |
Cash and cash equivalents as of beginning of period | 7,559,674 | 238,202 |
Cash and cash equivalents as of end of period | 6,794,473 | 113,886 |
Supplemental disclosure of cash flow information | ||
Right of use assets obtained on operating lease commencement | $ 95,264 |
Organization and Basis of Prese
Organization and Basis of Presentation | 3 Months Ended |
Mar. 31, 2023 | |
Organization and Basis of Presentation [Abstract] | |
Organization and Basis of Presentation | Note 1 – Organization and Basis of Presentation Organization Mobile Global Esports Inc. (“MOGO Inc”) 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. MOGO Inc has been assigned certain limited rights to commercialize university esports events for 92 universities in India. The unique advantage of esports is that the events can be virtual, and virtual events bypass any Covid-19 or other pandemic restrictions on in-person events. During July 2022, MOGO Esports Private Limited (“MOGO Pvt Ltd”) was established and incorporated in India by certain shareholders of MOGO Inc. During November 2022, MOGO Inc acquired approximately 99% of MOGO Pvt Ltd. Prior to October 2022, MOGO Pvt Ltd had limited activity. During October 2022, MOGO Pvt Ltd increased its activity and began operating for the benefit of the Company. The Company determined that MOGO Pvt Ltd was a variable interest entity and it was the primary beneficiary of MOGO Pvt Ltd prior to acquiring 99% of MOGO Pvt Ltd in November 2022. Therefore, the Company has included the results of MOGO Pvt Ltd in its consolidated financial statements from July 13, 2022 (inception of MOGO Pvt Ltd) through March 31, 2023. MOGO Pvt Ltd comprised approximately 2.7% and 1.4% of the Company’s total assets as of March 31, 2023 and December 31, 2022, and 10.2% and nil Basis of Presentation The accompanying consolidated financial statements were prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The consolidated financial statements include the accounts of MOGO Inc and MOGO Pvt Ltd (collectively, the “Company”). MOGO Inc owns a 99% controlling interest in MOGO Pvt Ltd. The value of the non-controlling interest in MOGO Pvt Ltd is immaterial. The functional currency of MOGO Pvt Ltd is the Indian Rupee (“INR”). The assets and liabilities of MOGO Pvt Ltd are translated to United States Dollars (“USD”) at period end exchange rates, while statements of operations accounts are translated at the average exchange rate during the period. The effects of foreign currency translation adjustments are included in other comprehensive loss, which is a component of accumulated other comprehensive loss in stockholders’ equity. All significant intercompany accounts and transactions have been eliminated in consolidation. 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 three months ended March 31, 2023 are not necessarily indicative of the results expected for the year ending December 31, 2023. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2023 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 – Summary of Significant Accounting Policies Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated 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 consolidated financial statements include the 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 March 31, 2023 and December 31, 2022, the Company did not have any cash equivalents. Restricted Cash As of March 31, 2023 and December 31, 2022, the Company has $23,305 and $20,000 of the funds received from the initial public offering held in an escrow account, which is included in Restricted Cash on the consolidated balance sheet. Property and Equipment Property and equipment, net, is stated at cost. Depreciation is computed over the estimated useful lives of the assets, generally three to five years, using the straight-line method. Expenditures for maintenance and repairs are charged to operations; major expenditures for renewals and betterments are capitalized and depreciated over their useful lives. Leasehold improvements are amortized over the lesser of the asset life or the life of the lease. Leases The Company leases office and warehouse space in India under non-cancelable lease arrangements through MOGO Pvt Ltd. The Company applies the accounting guidance in Accounting Standards Codification (“ASC”) 842, Leases Fixed lease payments on operating leases are recognized over the expected term of the lease on a straight-line basis. Variable lease expenses that are not considered fixed are expensed as incurred. Fixed and variable lease expense on operating leases is recognized within operating expenses within the accompanying consolidated statements of operations and comprehensive loss. The interest rate implicit in the Company’s lease contracts is typically not readily determinable and as such, the Company uses its incremental borrowing rate based on the information available at the lease commencement date, which represents an internally developed rate that would be incurred to borrow, on a collateralized basis, over a similar term, an amount equal to the lease payments in a similar economic environment. 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 March 31, 2023 and December 31, 2022, 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 restricted cash. 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 |
Other Current Assets
Other Current Assets | 3 Months Ended |
Mar. 31, 2023 | |
Other Current Assets [Abstract] | |
Other Current Assets | Note 3 – Other Current Assets Other current assets consist of $480,000 paid to a party as advance payment for potential future services and a deposit of $100,000 paid to a party for the potential acquisition of an intangible asset. No services had been provided by the party as of March 31, 2023, and the amounts paid are refundable if services are not performed on our behalf in the future. |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Note 4 – Property and Equipment Property and equipment consisted of the following as of: March 31, December 31, Furniture, fixtures and equipment 30,425 16,857 Accumulated depreciation (1,026 ) (35 ) Property and equipment, net 29,399 16,822 Depreciation expense was approximately $1,000 for the three months ended March 31, 2023 and was nil |
Advance to Supplier
Advance to Supplier | 3 Months Ended |
Mar. 31, 2023 | |
Advance to Supplier [Abstract] | |
Advance to Supplier | Note 5 – Advance to Supplier As of March 31, 2023 and December 31, 2022, the Company paid funds to a supplier for the development of a software platform, which is still under development and has not been placed in service. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2023 | |
Lease [Abstract] | |
Leases | Note 6 – Leases The Company has office leases in India that are classified as operating leases. These office leases commenced in October 2022 and have a term of three years. During January 2023, the Company leased a godown (which is a warehouse) in Borivali (East), Mumbai. This lease has a term of 33 months. The Company used its expected incremental borrowing rate of 10.0% in determining the value of the right-of-use asset and lease liability associated with these leases. The cash paid for operating leases for the three months ended March 31, 2023 approximated $11,700 and the operating lease cost recorded in the Consolidated Statements of Operations and Comprehensive Loss approximated $12,300. The weighted average remaining lease term for the operating leases was 2.6 years and the weighted average discount rate was 10.0%. The maturities of the operating lease liabilities as of March 31, 2023 are as follows: April 1, 2023 – December 31, 2023 $ 46,736 2024 61,007 2025 54,721 Total 162,464 Less imputed interest (20,191 ) Present value of operating lease liabilities $ 142,273 |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 3 Months Ended |
Mar. 31, 2023 | |
Accounts Payable and Accrued Expenses [Abstract] | |
Accounts Payable and Accrued Expenses | Note 7 – Accounts Payable and Accrued Expenses Accounts payable and accrued expenses consist of the following as of: March 31, December 31, Accounts payable $ 36,407 $ 453 Accrued consulting and professional fees 122,562 60,937 Other accrued expenses 63,877 19,570 Total $ 222,846 $ 80,960 |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 8 – Related Party Transactions Included in related party payable at March 31, 2023 and December 31, 2022 $18,536 and $17,763, respectively, due to Sports Industry of India, Inc., a stockholder of the Company. During the three months ended March 31, 2023, the Company paid its Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) compensation totaling $52,500. The CEO and CFO are shareholders of the Company. During the three months ended March 31, 2023, the Company accrued a total of $18,000 for the quarterly board stipend payable to the Board of Directors for services provided in the first quarter of 2023. |
Note Payable
Note Payable | 3 Months Ended |
Mar. 31, 2023 | |
Note Payable [Abstract] | |
Note Payable | Note 9 – 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 March 31, 2023 and December 31, 2022, approximately $45,000 and $92,000, respectively, of principal is outstanding under this agreement, and the same amount is included in prepaid expenses. |
Stockholders_ Equity
Stockholders’ Equity | 3 Months Ended |
Mar. 31, 2023 | |
Stockholders' Equity Note [Abstract] | |
Stockholders’ Equity | Note 10 – Stockholders’ Equity Preferred Stock The Company has authorized the issuance of 10,000,000 shares of $0.0001 par value preferred stock. At March 31, 2023 and December 31, 2022, there were nil Common Stock The Company has authorized the issuance of 100,000,000 shares of $0.0001 par value common stock. At March 31, 2023 and December 31, 2022, there were 20,421,593 shares issued and outstanding. Warrants During the three months ended March 31, 2023, the Company issued warrants (“2023 Consultant Warrants”) to purchase up to 170,000 shares of the Company’s common stock in exchange for the provision of services. The 2023 Consultant Warrants have an exercise price of $3.00 per share, expire 6 years from the date of issuance, with 25% vested in the first quarter of 2023 and the remaining shares vest quarterly through December 31, 2023. The Company utilized the Black-Scholes option-pricing model to value the warrants issued and the estimated fair value of the 2023 Consultant Warrants was $91,000, with $26,000 recognized as expense for the three months ended March 31, 2023. The following table summarizes the assumptions used for estimating the fair value of the 2023 Consultant Warrants issued: Expected dividend yield - Risk-free interest rate 3.99 % Expected volatility 100 % Expected life (years) 6 As of March 31, 2023, the Company also had the following warrants outstanding: Outstanding Ex Price Exercisable Ex Price 2021 Consultant Warrants 1,000,000 $ 1.00 562,500 $ 1.00 IPO Warrants 172,500 $ 6.60 172,500 $ 6.60 PIPE Warrants 1,886,793 $ 2.90 1,886,793 $ 2.90 Placement Agent Warrants 339,623 $ 2.92 339,623 $ 2.92 2023 Consultant Warrants 170,000 $ 3.00 42,500 $ 3.00 Total Warrants 3,568,916 3,003,916 The 2021 Consultant Warrants were granted 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, 62,500 of these warrants vested on September 30, 2022, 62.500 of these warrants vested on December 31, 2022, and 62,500 of these warrants vested on March 31, 2023. Any 2021 Consultant Warrants not vested on their designated end of quarter vesting date expire. In conjunction with the Company’s initial public offering (“IPO”) in July 2022, the Company issued warrants (“IPO Warrants”) to purchase up to 172,500 shares of common stock to the underwriters of the IPO. These IPO Warrants have an exercise price of $6.60 per share, expire 5 years from the date of issuance, and are fully exercisable six months after their issuance. The estimated fair value of the IPO Warrants approximated $474,000. The IPO 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. In conjunction with a financing in September 2022, the Company issued 1,886,793 PIPE Warrants to investors with an exercise price of $2.90 per share, which 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. The fair value of the 2023 Consultant Warrants and 2021 Consultant Warrants are being amortized to expense over their vesting period. The Company recorded total expense of approximately $72,000 and $46,000 during the three months ended March 31, 2023 and 2022, respectively. At March 31, 2023, the unamortized warrant expense was approximately $576,000, which will be amortized into expense through a weighted-average period of 1.6 years. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | Note 11 – Commitments and Contingencies Legal 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. Advance 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 March 31, 2023 and December 31, 2022, the Company had paid the supplier $1,041,074 and $1,025,000, respectively, with the remaining amount due periodically until the expected completion date in 2023. As of March 31, 2023, the supplier had not completed the work on the software and the payments have been recorded as advance to supplier. |
General and Administrative Expe
General and Administrative Expense | 3 Months Ended |
Mar. 31, 2023 | |
General and Administrative Expense [Abstract] | |
General and Administrative Expense | Note 12 – General and Administrative Expense General and administrative costs are expensed as incurred and primarily include personnel costs in the U.S. and India, public filing fees, travel expenses, contractor fees, and professional fees. The Company expenses advertising costs as incurred. Advertising expense was immaterial for the three months ended March 31, 2023 and 2022. |
Net Loss Per Share
Net Loss Per Share | 3 Months Ended |
Mar. 31, 2023 | |
Net Loss Per Share [Abstract] | |
Net Loss Per Share | Note 13 – Net Loss Per Share Basic net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted-average number of common shares outstanding during the periods. Fully diluted net loss per common share is computed using the weighted-average number of common and dilutive common equivalent shares outstanding during the periods. Common equivalent shares consist of warrants that are computed using the treasury stock method. At March 31, 2023 and December 31, 2022, there were 3,568,916 and 3,398,916 warrants outstanding. Due to the net loss incurred potentially dilutive instruments would be anti-dilutive. Accordingly, diluted net loss per share is the same as basic net loss per share for all periods presented. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 14 – Subsequent Events Management has evaluated events that occurred subsequent to the end of the reporting period and there are no subsequent events to report. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Summary of Significant Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated 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 consolidated financial statements include the valuation allowance on deferred tax assets and the estimated value of warrants issued for services. |
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 March 31, 2023 and December 31, 2022, the Company did not have any cash equivalents. |
Restricted Cash | Restricted Cash As of March 31, 2023 and December 31, 2022, the Company has $23,305 and $20,000 of the funds received from the initial public offering held in an escrow account, which is included in Restricted Cash on the consolidated balance sheet. |
Property and Equipment | Property and Equipment Property and equipment, net, is stated at cost. Depreciation is computed over the estimated useful lives of the assets, generally three to five years, using the straight-line method. Expenditures for maintenance and repairs are charged to operations; major expenditures for renewals and betterments are capitalized and depreciated over their useful lives. Leasehold improvements are amortized over the lesser of the asset life or the life of the lease. |
Leases | Leases The Company leases office and warehouse space in India under non-cancelable lease arrangements through MOGO Pvt Ltd. The Company applies the accounting guidance in Accounting Standards Codification (“ASC”) 842, Leases Fixed lease payments on operating leases are recognized over the expected term of the lease on a straight-line basis. Variable lease expenses that are not considered fixed are expensed as incurred. Fixed and variable lease expense on operating leases is recognized within operating expenses within the accompanying consolidated statements of operations and comprehensive loss. The interest rate implicit in the Company’s lease contracts is typically not readily determinable and as such, the Company uses its incremental borrowing rate based on the information available at the lease commencement date, which represents an internally developed rate that would be incurred to borrow, on a collateralized basis, over a similar term, an amount equal to the lease payments in a similar economic environment. |
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. |
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 March 31, 2023 and December 31, 2022, the Company did not identify any assets or 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 restricted cash. 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 | 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 |
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 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | March 31, December 31, Furniture, fixtures and equipment 30,425 16,857 Accumulated depreciation (1,026 ) (35 ) Property and equipment, net 29,399 16,822 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Schedule of maturities of the operating lease liabilities | April 1, 2023 – December 31, 2023 $ 46,736 2024 61,007 2025 54,721 Total 162,464 Less imputed interest (20,191 ) Present value of operating lease liabilities $ 142,273 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Expenses (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Accounts Payable and Accrued Expenses [Abstract] | |
Schedule of accounts payable and accrued expenses | March 31, December 31, Accounts payable $ 36,407 $ 453 Accrued consulting and professional fees 122,562 60,937 Other accrued expenses 63,877 19,570 Total $ 222,846 $ 80,960 |
Stockholders_ Equity (Tables)
Stockholders’ Equity (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Stockholders' Equity Note [Abstract] | |
Schedule of assumptions used for estimating the fair value | Expected dividend yield - Risk-free interest rate 3.99 % Expected volatility 100 % Expected life (years) 6 |
Schedule of warrants outstanding and exercisable | Outstanding Ex Price Exercisable Ex Price 2021 Consultant Warrants 1,000,000 $ 1.00 562,500 $ 1.00 IPO Warrants 172,500 $ 6.60 172,500 $ 6.60 PIPE Warrants 1,886,793 $ 2.90 1,886,793 $ 2.90 Placement Agent Warrants 339,623 $ 2.92 339,623 $ 2.92 2023 Consultant Warrants 170,000 $ 3.00 42,500 $ 3.00 Total Warrants 3,568,916 3,003,916 |
Organization and Basis of Pre_2
Organization and Basis of Presentation (Details) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Nov. 30, 2022 | |
Organization and Basis of Presentation (Details) [Line Items] | ||||
Net loss percentage | 2.70% | |||
Asset percentage | 1.40% | |||
Company’s net loss percentage | 10.20% | |||
Interest rate | 99% | |||
Business Acquisition [Member] | ||||
Organization and Basis of Presentation (Details) [Line Items] | ||||
Business acquired percentage | 99% | |||
Business Acquisition [Member] | Mogo Pvt Ltd [Member] | ||||
Organization and Basis of Presentation (Details) [Line Items] | ||||
Business acquired percentage | 99% |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Summary of Significant Accounting Policies (Details) [Line Items] | ||
Federal deposit insurance corporation | $ 250,000 | |
Tax benefit percentage | 50% | |
Initial Public Offering [Member] | ||
Summary of Significant Accounting Policies (Details) [Line Items] | ||
Proceeds from issuance of offering cost | $ 23,305 | $ 20,000 |
Minimum [Member] | ||
Summary of Significant Accounting Policies (Details) [Line Items] | ||
Estimated useful lives | 3 years | |
Maximum [Member] | ||
Summary of Significant Accounting Policies (Details) [Line Items] | ||
Estimated useful lives | 5 years |
Other Current Assets (Details)
Other Current Assets (Details) | Mar. 31, 2023 USD ($) |
Other Current Assets [Abstract] | |
Other current assets | $ 480,000 |
Deposit amount | $ 100,000 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 1,000 |
Property and Equipment (Detai_2
Property and Equipment (Details) - Schedule of property and equipment - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Schedule of Property and Equipment [Abstract] | ||
Furniture, fixtures and equipment | $ 30,425 | $ 16,857 |
Accumulated depreciation | (1,026) | (35) |
Property and equipment, net | $ 29,399 | $ 16,822 |
Leases (Details)
Leases (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2023 | Jan. 31, 2023 | Oct. 31, 2022 | |
Lease [Abstract] | |||
Leases commenced term | 33 months | 3 years | |
Expected incremental borrowing rate | 10% | ||
Operating leases paid | $ 11,700 | ||
Comprehensive loss | $ 12,300 | ||
Operating lease term | 2 years 7 months 6 days | ||
Weighted average discount rate | 10% |
Leases (Details) - Schedule of
Leases (Details) - Schedule of maturities of the operating lease liabilities | Mar. 31, 2023 USD ($) |
Schedule of Maturities of the Operating Lease Liabilities [Abstract] | |
April 1, 2023 – December 31, 2023 | $ 46,736 |
2024 | 61,007 |
2025 | 54,721 |
Total | 162,464 |
Less imputed interest | (20,191) |
Present value of operating lease liabilities | $ 142,273 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Expenses (Details) - Schedule of accounts payable and accrued expenses - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Schedule of accounts payable and accrued expenses [Abstract] | ||
Accounts payable | $ 36,407 | $ 453 |
Accrued consulting and professional fees | 122,562 | 60,937 |
Other accrued expenses | 63,877 | 19,570 |
Total | $ 222,846 | $ 80,960 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Related Party Transactions (Details) [Line Items] | ||
Related party payable | $ 18,536 | $ 17,763 |
Board of directors payable | $18,000 | |
Chief Financial Officer [Member] | ||
Related Party Transactions (Details) [Line Items] | ||
Compensation paid | $ 52,500 |
Note Payable (Details)
Note Payable (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Note Payable (Details) [Line Items] | ||
Prepaid expenses | $ 45,000 | $ 92,000 |
June 2023 [Member] | ||
Note Payable (Details) [Line Items] | ||
Interest amount | $ 15,848 |
Stockholders_ Equity (Details)
Stockholders’ Equity (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Sep. 30, 2022 | Jul. 31, 2022 | Jun. 30, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Stockholders’ Equity (Details) [Line Items] | ||||||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | ||||
Preferred stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 | ||||
Prefered stock, shares issued | ||||||
Preferred stock, shares outstanding | ||||||
Common stock shares authorized | 100,000,000 | |||||
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 | ||||
Common stock shares outstanding | 20,421,593 | 20,421,593 | ||||
Common stock shares issued | 20,421,593 | |||||
Purchased shares | 170,000 | |||||
Exercise price (in Dollars per share) | $ 1 | |||||
Expire date | 5 years | 5 years | ||||
Warrants percentage | 25% | |||||
Warrants recognized issued value (in Dollars) | $ 91,000 | |||||
Warrants expenses (in Dollars) | $ 26,000 | |||||
Warrants vested shares | 62,500 | 62,500 | 62,500 | 62,500 | 62.5 | |
Outstanding warrants | 750,000 | |||||
Unvested warrants | 750,000 | |||||
Issued units | 1,886,793 | |||||
Expired term | 5 years | |||||
Issued warrants | 3,568,916 | 3,398,916 | ||||
Fees and expenses (in Dollars) | $ 46,000 | |||||
Expense amount (in Dollars) | $ 576,000 | |||||
Weighted-average period term | 1 year 7 months 6 days | |||||
Private equity placement agreement [Member] | ||||||
Stockholders’ Equity (Details) [Line Items] | ||||||
Exercise price (in Dollars per share) | $ 3 | |||||
Expire date | 6 years | |||||
Fair value (in Dollars) | $ 2,093,000 | |||||
IPO [Member] | ||||||
Stockholders’ Equity (Details) [Line Items] | ||||||
Issuance of common stock | 172,500 | |||||
Fees and expenses (in Dollars) | $ 72,000 | |||||
Private Placement [Member] | ||||||
Stockholders’ Equity (Details) [Line Items] | ||||||
Exercise price (in Dollars per share) | $ 2.915 | |||||
Fair value (in Dollars) | $ 516,000 | |||||
Warrant [Member] | ||||||
Stockholders’ Equity (Details) [Line Items] | ||||||
Exercise price (in Dollars per share) | $ 6.6 | |||||
Warrants vested shares | 250,000 | 62,500 | ||||
Fair value (in Dollars) | $ 474,000 | |||||
Issued warrants | 339,623 | |||||
Minimum [Member] | ||||||
Stockholders’ Equity (Details) [Line Items] | ||||||
Common stock, share | 2.9 | |||||
Placement Agent warrants [Member] | ||||||
Stockholders’ Equity (Details) [Line Items] | ||||||
Expired term | 5 years |
Stockholders_ Equity (Details)
Stockholders’ Equity (Details) - Schedule of assumptions used for estimating the fair value - IPO [Member] | 3 Months Ended |
Mar. 31, 2023 | |
Stockholders’ Equity (Details) - Schedule of assumptions used for estimating the fair value [Line Items] | |
Expected dividend yield | |
Risk-free interest rate | 3.99% |
Expected volatility | 100% |
Expected life (years) | 6 years |
Stockholders_ Equity (Details_2
Stockholders’ Equity (Details) - Schedule of warrants outstanding and exercisable | 3 Months Ended |
Mar. 31, 2023 $ / shares shares | |
Stockholders’ Equity (Details) - Schedule of warrants outstanding and exercisable [Line Items] | |
Outstanding, number of warrants | 3,568,916 |
Exercisable, number of warrants | 3,003,916 |
2021 Consultant Warrants [Member] | |
Stockholders’ Equity (Details) - Schedule of warrants outstanding and exercisable [Line Items] | |
Outstanding, number of warrants | 1,000,000 |
Outstanding, ex price (in Dollars per share) | $ / shares | $ 1 |
Exercisable, number of warrants | 562,500 |
Exercisable, ex price (in Dollars per share) | $ / shares | $ 1 |
IPO Warrants [Member] | |
Stockholders’ Equity (Details) - Schedule of warrants outstanding and exercisable [Line Items] | |
Outstanding, number of warrants | 172,500 |
Outstanding, ex price (in Dollars per share) | $ / shares | $ 6.6 |
Exercisable, number of warrants | 172,500 |
Exercisable, ex price (in Dollars per share) | $ / shares | $ 6.6 |
PIPE Warrants [Member] | |
Stockholders’ Equity (Details) - Schedule of warrants outstanding and exercisable [Line Items] | |
Outstanding, number of warrants | 1,886,793 |
Outstanding, ex price (in Dollars per share) | $ / shares | $ 2.9 |
Exercisable, number of warrants | 1,886,793 |
Exercisable, ex price (in Dollars per share) | $ / shares | $ 2.9 |
Placement Agent Warrants [Member] | |
Stockholders’ Equity (Details) - Schedule of warrants outstanding and exercisable [Line Items] | |
Outstanding, number of warrants | 339,623 |
Outstanding, ex price (in Dollars per share) | $ / shares | $ 2.92 |
Exercisable, number of warrants | 339,623 |
Exercisable, ex price (in Dollars per share) | $ / shares | $ 2.92 |
2023 Consultant Warrants [Member] | |
Stockholders’ Equity (Details) - Schedule of warrants outstanding and exercisable [Line Items] | |
Outstanding, number of warrants | 170,000 |
Outstanding, ex price (in Dollars per share) | $ / shares | $ 3 |
Exercisable, number of warrants | 42,500 |
Exercisable, ex price (in Dollars per share) | $ / shares | $ 3 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Development total cost | $ 1,200,000 | |
Cash paid to supplier | $ 1,041,074 | $ 1,025,000 |
Net Loss Per Share (Details)
Net Loss Per Share (Details) - shares | Mar. 31, 2023 | Dec. 31, 2022 |
Net Loss Per Share [Abstract] | ||
Warrants outstanding | 3,568,916 | 3,398,916 |