Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Mar. 27, 2024 | Jun. 30, 2023 | |
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2023 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2023 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity File Number | 001-41556 | ||
Entity Registrant Name | SNAIL, INC. | ||
Entity Central Index Key | 0001886894 | ||
Entity Tax Identification Number | 88-4146991 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Address, Address Line One | 12049 Jefferson Blvd | ||
Entity Address, City or Town | Culver City | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 90230 | ||
City Area Code | (310) | ||
Local Phone Number | 988-0643 | ||
Title of 12(b) Security | Class A common stock, par value $0.0001 per share | ||
Trading Symbol | SNAL | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Elected Not To Use the Extended Transition Period | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 12,562,821 | ||
Documents Incorporated by Reference [Text Block] | Part III of this Annual Report on Form 10-K incorporates certain information by reference from the definitive proxy statement for the Registrant’s 2024 Annual Meeting of Stockholders to be filed within 120 days of the Registrant’s fiscal year ended December 31, 2023 (the “Proxy Statement”). Except with respect to information specifically incorporated by reference in this Form 10-K, the Proxy Statement is not deemed to be filed as part of this Form 10-K | ||
ICFR Auditor Attestation Flag | false | ||
Document Financial Statement Error Correction [Flag] | true | ||
Document Financial Statement Restatement Recovery Analysis [Flag] | false | ||
Auditor Firm ID | 243 | ||
Auditor Name | BDO USA, P.C. | ||
Auditor Location | Costa Mesa, California | ||
Common Class A [Member] | |||
Entity Common Stock, Shares Outstanding | 8,007,474 | ||
Common Class B [Member] | |||
Entity Common Stock, Shares Outstanding | 28,748,580 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Current Assets: | ||
Cash and cash equivalents | $ 15,198,123 | $ 12,863,817 |
Restricted escrow deposit | 1,003,804 | |
Prepaid expenses - related party | 6,044,404 | |
Prepaid expenses and other current assets | 10,169,448 | 10,565,141 |
Total current assets | 56,650,536 | 42,636,723 |
Restricted cash and cash equivalents | 1,116,196 | 6,374,368 |
Prepaid expenses - related party, net of current portion | 7,784,062 | 5,582,500 |
Property, plant and equipment, net | 4,682,066 | 5,114,799 |
Deferred income taxes | 10,247,500 | 7,602,536 |
Other noncurrent assets | 164,170 | 198,668 |
Operating lease right-of-use assets, net | 2,440,690 | 3,606,398 |
Total assets | 90,857,529 | 72,772,571 |
Current Liabilities: | ||
Accrued expenses and other liabilities | 2,887,193 | 1,474,088 |
Interest payable - related parties | 527,770 | 527,770 |
Revolving loan | 6,000,000 | 9,000,000 |
Notes payable | 2,333,333 | 5,416,666 |
Convertible notes, net of discount | 797,361 | |
Current portion of long-term promissory note | 2,811,923 | 86,524 |
Current portion of deferred revenue | 19,252,628 | 4,335,404 |
Current portion of operating lease liabilities | 1,505,034 | 1,371,227 |
Total current liabilities | 71,312,607 | 51,582,329 |
Accrued expenses | 254,731 | 457,024 |
Promissory note, net of current portion | 3,221,963 | |
Deferred revenue, net of current portion | 15,064,078 | 5,216,042 |
Operating lease liabilities, net of current portion | 1,425,494 | 2,930,529 |
Total liabilities | 88,056,910 | 63,407,887 |
Commitments and contingencies | ||
Stockholders’ Equity: | ||
Common stock, value | ||
Additional paid-in capital | 26,171,575 | 23,436,942 |
Accumulated other comprehensive loss | (254,383) | (307,200) |
Accumulated deficit | (13,949,325) | (4,863,250) |
Stockholders Equity Excluding Treasury Stock | 11,971,669 | 18,270,292 |
Treasury stock at cost (1,350,275 and 1,197,649 shares as of December 31, 2023 and 2022, respectively) | (3,671,806) | (3,414,713) |
Total Snail, Inc. equity | 8,299,863 | 14,855,579 |
Noncontrolling interests | (5,499,244) | (5,490,895) |
Total stockholders’ equity | 2,800,619 | 9,364,684 |
Total liabilities, noncontrolling interests and stockholders’ equity | 90,857,529 | 72,772,571 |
Common Class A [Member] | ||
Stockholders’ Equity: | ||
Common stock, value | 927 | 925 |
Common Class B [Member] | ||
Stockholders’ Equity: | ||
Common stock, value | 2,875 | 2,875 |
License Rights, Related Parties [Member] | ||
Current Assets: | ||
Intangible assets, net - other | 1,384,058 | |
Other Intangible Assets [Member] | ||
Current Assets: | ||
Intangible assets, net - other | 271,717 | 272,521 |
Nonrelated Party [Member] | ||
Current Assets: | ||
Accounts receivable | 25,134,808 | 6,758,024 |
Current Liabilities: | ||
Accounts payable | 12,102,929 | 9,452,391 |
Related Party [Member] | ||
Current Assets: | ||
Accounts receivable | 11,344,184 | |
Loan and interest receivable - related party | 103,753 | 101,753 |
Accounts receivable – related party, net of current portion | 7,500,592 | |
Current Liabilities: | ||
Accounts payable | $ 23,094,436 | $ 19,918,259 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Accounts receivable, allowance for credit loss, current | $ 523,500 | $ 19,929 |
Treasury stock, shares | 1,350,275 | 1,197,649 |
Common Class A [Member] | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 9,275,420 | 9,251,420 |
Common stock, shares outstanding | 7,925,145 | 8,053,771 |
Treasury stock, shares | 1,350,275 | 1,197,649 |
Common Class B [Member] | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 28,748,580 | 28,748,580 |
Common stock, shares outstanding | 28,748,580 | 28,748,580 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | ||
Defined Benefit Plan Disclosure [Line Items] | |||
Revenues, net | $ 60,902,098 | $ 74,444,141 | |
Cost of revenues | 48,306,403 | 53,121,676 | |
Gross profit | 12,595,695 | 21,322,465 | |
Operating expenses: | |||
General and administrative | 15,816,088 | 18,713,958 | |
Research and development | 5,057,421 | 2,955,592 | |
Advertising and marketing | 1,582,464 | 714,492 | |
Depreciation and amortization | 432,306 | 565,906 | |
Loss (gain) on disposal of fixed assets | 427 | (17,067) | |
Total operating expenses | 22,888,706 | 22,932,881 | |
Loss from operations | (10,293,011) | (1,610,416) | |
Other income (expense): | |||
Interest expense | (1,500,000) | ||
Other income | 265,980 | 302,086 | |
Foreign currency transaction loss | (68,180) | (1,945) | |
Total other income (expense), net | (1,202,065) | 158,171 | |
Loss before benefit from income taxes | (11,495,076) | (1,452,245) | |
Benefit from income taxes | (2,400,652) | (2,446,423) | |
Net (loss) income | (9,094,424) | 994,178 | |
Net (loss) income attributable to non-controlling interests | (8,349) | 46,371 | |
Net (loss) income attributable to Snail, Inc. and Snail Games USA Inc. | (9,086,075) | 947,807 | |
Comprehensive income (loss) statement: | |||
Net (loss) income | (9,094,424) | 994,178 | |
Other comprehensive income (loss) related to foreign currency translation adjustments, net of tax | 52,817 | (40,643) | |
Total comprehensive (loss) income | (9,041,607) | 953,535 | |
Common Class A [Member] | |||
Net (loss) income attributable to Class A common stockholders: | |||
Net (loss) income attributable to common stockholders - basic | (1,960,813) | 228,482 | |
Net (loss) income attributable to common stockholders - diluted | $ (1,960,813) | $ 228,482 | |
Common stock earnings par share - basic | $ (0.25) | $ 0.03 | |
Common stock earnings par share - diluted | $ (0.25) | $ 0.03 | |
Weighted average shares used to compute income per share attributable to common stockholders - basic | [1] | 7,911,369 | 9,131,512 |
Weighted average shares used to compute income per share attributable to common stockholders - diluted | [1] | 7,911,369 | 9,131,512 |
Common Class B [Member] | |||
Net (loss) income attributable to Class A common stockholders: | |||
Net (loss) income attributable to common stockholders - basic | $ (7,125,262) | $ 719,325 | |
Net (loss) income attributable to common stockholders - diluted | $ (7,125,262) | $ 719,325 | |
Common stock earnings par share - basic | $ (0.25) | $ 0.03 | |
Common stock earnings par share - diluted | $ (0.25) | $ 0.03 | |
Weighted average shares used to compute income per share attributable to common stockholders - basic | [1] | 28,748,580 | 28,748,580 |
Weighted average shares used to compute income per share attributable to common stockholders - diluted | [1] | 28,748,580 | 28,748,580 |
Nonrelated Party [Member] | |||
Other income (expense): | |||
Interest income | $ 129,854 | $ 200,913 | |
Interest expense | (1,531,719) | (922,293) | |
Related Party [Member] | |||
Other income (expense): | |||
Interest income | 2,000 | 582,632 | |
Interest expense | $ (3,222) | ||
[1]The shares used for the denominator in the calculation of EPS are presented as if the IPO occurred on January 1, 2022 for comparative purposes. |
Consolidated Statements of Equi
Consolidated Statements of Equity - USD ($) | Total | Common Stock [Member] Common Class A [Member] | Common Stock [Member] Common Class B [Member] | Additional Paid-in Capital [Member] | Due From Shareholder Loan And Interest Receivable [Member] | AOCI Attributable to Parent [Member] | Retained Earnings [Member] | Treasury Stock, Common [Member] | Parent [Member] | Noncontrolling Interest [Member] | Subsidiaries [Member] Common Stock [Member] |
Balance, value at Dec. 31, 2021 | $ 10,052,053 | $ 94,159,167 | $ (94,353,522) | $ (266,557) | $ 16,045,231 | $ 15,589,319 | $ (5,537,266) | $ 5,000 | |||
Balance, shares at Dec. 31, 2021 | 500,000 | ||||||||||
Loan to shareholder | (580,878) | (580,878) | (580,878) | ||||||||
Dividend Distribution | (73,078,112) | 94,934,400 | (21,856,288) | ||||||||
Withholding tax distribution | (8,200,000) | (8,200,000) | (8,200,000) | ||||||||
Reclass of common stock due to IPO reorganization | $ 625 | $ 2,875 | 1,500 | $ (5,000) | |||||||
Reclass of common stock due to IPO reorganization, shares | 6,251,420 | 28,748,580 | (500,000) | ||||||||
Warrants issued to underwriters | 193,927 | 193,927 | 193,927 | ||||||||
IPO, net of offering costs | 10,137,510 | $ 300 | 10,137,210 | 10,137,510 | |||||||
IPO, net of offering costs, shares | 3,000,000 | ||||||||||
Stock based compensation related to restricted stock units | 223,250 | 223,250 | 223,250 | ||||||||
Repurchase of common stock | (3,414,713) | $ (3,414,713) | (3,414,713) | ||||||||
Repurchase of common stock, shares | (1,197,649) | ||||||||||
Foreign currency translation | (40,643) | (40,643) | (40,643) | ||||||||
Net income (loss) | 994,178 | 947,807 | 947,807 | 46,371 | |||||||
Balance, value at Dec. 31, 2022 | 9,364,684 | $ 925 | $ 2,875 | 23,436,942 | (307,200) | (4,863,250) | $ (3,414,713) | 14,855,579 | (5,490,895) | ||
Balance, shares at Dec. 31, 2022 | 9,251,420 | 28,748,580 | (1,197,649) | ||||||||
Return of dividend distribution tax withholding payment | 1,886,600 | 1,886,600 | 1,886,600 | ||||||||
Stock based compensation related to restricted stock units | 848,035 | 848,035 | 848,035 | ||||||||
Common stock issued for service | $ 2 | (2) | |||||||||
Common stock issued for service, shares | 24,000 | ||||||||||
Repurchase of common stock | (257,093) | (257,093) | (257,093) | ||||||||
Foreign currency translation | 52,817 | 52,817 | 52,817 | ||||||||
Net income (loss) | (9,094,424) | (9,086,075) | (9,086,075) | (8,349) | |||||||
Balance, value at Dec. 31, 2023 | $ 2,800,619 | $ 927 | $ 2,875 | $ 26,171,575 | $ (254,383) | $ (13,949,325) | $ (3,671,806) | $ 8,299,863 | $ (5,499,244) | ||
Balance, shares at Dec. 31, 2023 | 9,275,420 | 28,748,580 | (1,350,275) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Cash flows from operating activities: | ||
Net (loss) income | $ (9,094,424) | $ 994,178 |
Adjustments to reconcile net (loss) income to net cash used in operating activities: | ||
Amortization - loan origination fees and debt discounts | 124,595 | 26,514 |
Accretion – convertible notes | 306,664 | |
Depreciation and amortization - property and equipment | 432,306 | 565,906 |
Stock-based compensation expense | 848,035 | 223,250 |
Gain on lease termination | (122,533) | |
Gain on paycheck protection program and economic injury disaster loan forgiveness | (174,436) | |
Loss (gain) on disposal of fixed assets | 427 | (17,067) |
Interest income from shareholder loan | (580,878) | |
Interest income from restricted escrow deposit | (3,804) | |
Credit losses | 581,498 | |
Deferred taxes, net | (2,644,964) | 588,478 |
Changes in assets and liabilities: | ||
Accounts receivable | (18,939,465) | 5,486,716 |
Accounts receivable - related party | 3,824,775 | (2,908,361) |
Prepaid expenses - related party | (8,245,966) | (2,437,500) |
Prepaid expenses and other current assets | 501,104 | (1,875,919) |
Other noncurrent assets | (26,052) | |
Accounts payable | 2,992,856 | 4,976,192 |
Accounts payable - related parties | 3,176,177 | (3,815,313) |
Accrued expenses and other liabilities | 659,647 | (1,039,927) |
Interest receivable - related party | (2,000) | |
Interest payable - related parties | 986 | |
Lease liabilities | (205,520) | (145,949) |
Deferred revenue | 24,765,261 | (10,729,488) |
Net cash provided by (used in) operating activities | 465,868 | (3,357,338) |
Cash flows from investing activities: | ||
Repayment on loan provided by related party | (300,000) | |
Purchases of property and equipment | (5,256) | |
Proceeds from sale of property and equipment | 19,500 | |
Repayment on Pound Sand note | 1,496,063 | |
Net cash provided by investing activities | 1,210,307 | |
Cash flows from financing activities: | ||
Repayments on promissory note | (79,897) | (70,961) |
Repayments on notes payable | (6,500,000) | (4,166,667) |
Repayments on revolving loan | (3,000,000) | |
Borrowings on notes payable | 3,000,000 | |
Borrowings on short-term note | 10,000,000 | |
Proceeds from issuance of convertible notes | 847,500 | |
Refund of dividend withholding tax overpayment | 1,886,600 | |
Payments on paycheck protection program and economic injury disaster loan | (90,198) | |
Refund of payments on paycheck protection program and economic injury disaster loan | 48,305 | |
Cash dividend declared and paid | (8,200,000) | |
Purchase of treasury stock | (257,093) | (3,414,713) |
Proceeds from initial public offering, net of offering costs | 11,791,705 | |
Warrants issued to underwriters | 193,927 | |
Payments of capitalized offering costs | (1,247,567) | |
Payments of offering costs in accounts payable | (342,318) | |
Release of restricted escrow deposit | 1,003,804 | |
Net cash (used in) provided by financing activities | (3,441,404) | 4,843,831 |
Effect of foreign currency translation on cash and cash equivalents | 51,670 | (12,730) |
Net (decrease) increase in cash and cash equivalents, and restricted cash and cash equivalents | (2,923,866) | 2,684,070 |
Cash and cash equivalents, and restricted cash and cash equivalents - beginning of the year | 19,238,185 | 16,554,115 |
Cash and cash equivalents, and restricted cash and cash equivalents – end of the year | 16,314,319 | 19,238,185 |
Cash paid during the year for: | ||
Interest | 934,523 | 788,063 |
Income taxes | 248,388 | 888,303 |
Noncash transactions during the year for: | ||
Loan and interest payable - related parties | 103,890 | |
Loan and interest receivable - related parties | (103,890) | |
Loan and interest from shareholder | 94,934,400 | |
Dividend distribution | (94,934,400) | |
Noncash finance activity during the year for: | ||
Issuance of warrants in connection with the equity line of credit | (105,411) | |
Gain on paycheck protection program and economic injury disaster loan forgiveness | (174,436) | |
Snail Games USA common stock transferred due to reorganization | (5,000) | |
Snail, Inc. common stock and additional paid-in capital transferred due to reorganization | 5,000 | |
Offering costs included in accounts payable | 605,295 | |
Funding of the escrow deposit | (1,000,000) | |
License [Member] | ||
Adjustments to reconcile net (loss) income to net cash used in operating activities: | ||
Amortization - intangible assets | 250,000 | |
License Rights, Related Parties [Member] | ||
Adjustments to reconcile net (loss) income to net cash used in operating activities: | ||
Amortization - intangible assets | 1,384,058 | 7,403,918 |
Other Intangible Assets [Member] | ||
Adjustments to reconcile net (loss) income to net cash used in operating activities: | ||
Amortization - intangible assets | $ 804 | $ 3,751 |
PRESENTATION AND NATURE OF OPER
PRESENTATION AND NATURE OF OPERATIONS | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
PRESENTATION AND NATURE OF OPERATIONS | NOTE 1 – PRESENTATION AND NATURE OF OPERATIONS Snail, Inc. was incorporated under the laws of Delaware in January 2022. The terms “Snail, Inc,” “Snail Games,” “our” and the “Company” are used to refer collectively to Snail, Inc. and its subsidiaries. The Company’s fiscal year end is December 31. The Company was formed for the purpose of completing an initial public offering (“IPO”) and related transactions to carry on the business of Snail Games USA Inc. and its subsidiaries. Snail Games USA Inc. was founded in 2009 as a wholly owned subsidiary of Suzhou Snail Digital Technology Co., Ltd. (“Suzhou Snail”) located in Suzhou, China and is the operating entity that continues post IPO. Snail Games USA Inc. is devoted to researching, developing, marketing, publishing, and distributing games, content and support that can be played on a variety of platforms including game consoles, PCs, mobile phones and tablets. On July 13, 2022, Suzhou Snail transferred all of its right, title, and interest to all of the 500,000 Reorganization Transaction and IPO On September 16, 2022, Snail, Inc., filed a Registration Statement on Form S-1 with the United States Securities and Exchange Commission in connection with its IPO. On November 9, 2022, effective as of the IPO pricing, Snail Games USA Inc.’s existing shareholders transferred their 500,000 6,251,420 28,748,580 3,000,000 5.00 12.0 3.0 12 Basis of Presentation and Consolidation The accompanying consolidated financial statements have been prepared in accordance with the rules and regulations of the SEC and generally accepted accounting principles as promulgated in the United States of America (“U.S. GAAP”). In the opinion of management, all adjustments considered necessary for the fair presentation of the Company’s financial position and its results of operations in accordance with U.S. GAAP (consisting of normal recurring adjustments) have been included in the accompanying consolidated financial statements. Snail Inc. and Subsidiaries Notes to Consolidated Financial Statements During the year ended December 31, 2023, certain comparative amounts have been reclassified due to immaterial errors identified by the Company in its presentation of certain server hosting costs. During the three months ended June 30, 2023, the Company began reporting all of its server hosting costs as costs of revenue whereas they were previously reported within both cost of sales and general and administrative expenses. The Company has assessed the materiality of these errors on its prior annual and interim financial statements, assessing materiality both quantitatively and qualitatively, in accordance with the SEC’s Staff Accounting Bulletin (“SAB”) No. 99 and SAB No. 108 and concluded that the errors were not material to those consolidated financial statements. However, to correctly present cost of revenues, gross profit and general and administrative expenses, the reclassifications have been made throughout this report and accompanying note disclosures. The effects on the related captions in the consolidated statements of operations and comprehensive income (loss) for all previously reported periods were as follows: SCHEDULE OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) For the twelve months ended As reported Adjustment As adjusted Cost of revenues $ 49,507,888 $ 3,613,788 $ 53,121,676 Gross profit 24,936,253 (3,613,788 ) 21,322,465 General and administrative 22,327,746 (3,613,788 ) 18,713,958 For the three months ended As reported Adjustment As adjusted Cost of revenues $ 9,816,397 $ 1,044,540 $ 10,860,937 Gross profit 3,642,091 (1,044,540 ) 2,597,551 General and administrative 5,570,291 (1,044,540 ) 4,525,751 Snail Inc. and Subsidiaries Notes to Consolidated Financial Statements The consolidated financial statements include the accounts of Snail, Inc. and the following subsidiaries: SCHEDULE OF SUBSIDIARIES INCLUDED IN THE CONSOLIDATED FINANCIAL STATEMENTS Equity % Subsidiary Name Owned Snail Games USA Inc. 100 % Snail Innovation Institute 70 % Frostkeep Studios, Inc. 100 % Eminence Corp 100 % Wandering Wizard, LLC 100 % Donkey Crew, LLC 99 % Interactive Films, LLC 100 % Project AWK Productions, LLC 100 % BTBX.IO, LLC 70 % All intercompany accounts, transactions, and profits have been eliminated upon consolidation. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the amounts reported in our consolidated financial statements and the accompanying notes. Such estimates include revenue recognition, see Note 2 – Revenue Recognition Segment Reporting The Company has one Revenue from Contracts with Customers Liquidity For the first three quarters of the fiscal year 2023 the Company had a net loss, net cash used in operations, debt obligations coming due in less than 12 months, a potential need for additional capital, and had uncertainties surrounding its ability to raise additional capital and renegotiate its debt arrangements. In the fourth quarter of fiscal year 2023 the Company released ARK: Survival Ascended During the year ended December 31, 2023, the Company renewed its 2021 Revolving Loan (as defined below) which will become due and mature at the end of 2024. The Company paid $ 3.0 0.8 0.3 1.5 million short term note was paid off in the first quarter of 2024. The Company paid an additional $ 0.3 6.0 2.8 Snail Inc. and Subsidiaries Notes to Consolidated Financial Statements From time to time, the Company could be required, or may otherwise attempt, to seek additional sources of capital, including, but not limited to, equity and/or debt financings. The need for additional capital depends on many factors, including, among other things, whether the Company can successfully renegotiate the terms of its debt arrangements, the rate at which the Company’s business grows, demands for working capital, revenue generated from existing downloadable content (“DLCs”) and game titles, launches of new DLCs and new game titles, and any acquisitions that the Company may pursue. Our current unrestricted cash position of approximately $ 15.2 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Revenue Recognition The Company’s revenue is generated from the publishing of software games sold digitally and through physical discs (e.g., packaged goods), the publishing of separate downloadable content that are new feature releases to existing digital full-game downloads, and in-app purchases of virtual goods used by players of its free-to-play mobile games. When control of the promised products and services is transferred to the end users, the Company recognizes revenue in the amount that reflects the consideration it expects to receive in exchange for these products and services. Revenue from delivery of products is recognized at a point in time when the end consumers purchase the games, and the control of the license is transferred to them. The virtual goods that the Company sells to players of our free-to-play mobile-games, include virtual currency or in-game purchases of additional game play functionality. For virtual goods, the satisfaction of our performance obligation is dependent on the nature of the virtual good purchased and as a result, the Company categorizes its virtual goods as follows: ● Consumable: c onsumable virtual items represent items that can be consumed by a specific player action. Consumable virtual items do not result in a direct benefit that the player keeps or provide the player any continuing benefit following consumption, and they often enable a player to perform an in-game action immediately. For the sale of consumable virtual items, the Company recognizes revenue as the items are consumed (i.e., over time) ● Durable: d urable virtual items represent items that are accessible to the player over an extended period of time. The Company For the ARK: Survival Ascended ● Reasonably available data points, including third party or industry pricing, and contractually stated prices. ● Market conditions such as market demand, competition, market constraints, awareness of the product and market trends. ● Entity-specific factors including pricing strategies and objectives, market share and pricing practices for bundled arrangements. The Company recognizes revenue using the following five steps as provided by Accounting Standards Codification (“ASC”) Topic 606 Revenue from Contracts with Customers 30 75 Principal vs. Agent Consideration The Company offers certain software products via third-party digital storefronts, such as Microsoft’s Xbox Live, Sony’s PlayStation Network, Valve’s Steam, Epic Games Store, My Nintendo Store, Apple’s App Store, the Google Play Store, and retail distributors. For sales of our software products via third-party digital storefronts and retail distributor, the Company determines whether or not it is acting as the principal in the sale to the end user, which the Company considers in determining if revenue should be reported based on the gross transaction price to the end user or based on the transaction price net of fees retained by the third-party digital storefront. An entity is the principal if it controls a good or service before it is transferred to the customer. Key indicators that the Company uses in evaluating these sales transactions include, but are not limited to, the following: ● The underlying contract terms and conditions between the various parties to the transaction; ● Which party is primarily responsible for fulfilling the promise to provide the specified good or service; and ● Which party has discretion in establishing the price for the specified good or service. Snail Inc. and Subsidiaries Notes to Consolidated Financial Statements Based on our evaluation of the above indicators, for sales arrangements via Microsoft’s Xbox Live, Sony’s PlayStation Network, Valve’s Steam, Epic Games Store, My Nintendo Store, and our retail distributor, the digital platforms and distributors have discretion in establishing the price for the specified good or service and the Company has determined it is the agent in the sales transaction to the end user and therefore the Company reports revenue on a net basis based on the consideration received from the digital storefront. For sales arrangements via Apple’s App Store and the Google Play Store, the Company has discretion in establishing the price for the specified good or service and it has determined that the Company is the principal to the end user and thus reports revenue on a gross basis and mobile platform fees charged by these digital storefronts are expensed as incurred and reported within cost of revenues. Contract Balance The Company records deferred revenue when cash payments are received or due in advance of its performance, even if amounts are refundable. Deferred revenue is comprised of the transaction price allocable to the Company’s performance obligation on technical support and the sale of virtual goods available for in-app purchase, and payments received from customers prior to launching the games on the platforms. The Company recognizes revenues from the sale of virtual goods ratably over their estimated service period. The Company’s estimated service period is generally 30 to 100 days from the date of purchase. The Company has a long-term title license agreement with a platform. The agreement was initially made between the parties in November 2018 and valid through December 31, 2021. The agreement was subsequently amended in June 2020 to extend the ARK 1 ARK II 2.5 ARK 1’s 2.3 ARK II ARK II In November 2021, the Company entered an agreement with a platform to make ARK 1 3.5 The Company entered into a non-exclusive license agreement with a platform in February 2020 to make ARK 1 8.0 ARK 1 4.0 4.0 In July 2023, the Company entered into a distribution agreement with its retail distribution partner for the distribution of ARK: Survival Ascended ARK II. 0.5 1.3 ARK: Survival Ascended ARK II, Estimated Service Period For certain performance obligations satisfied over time, the Company has determined that the estimated service period is the time period in which an average user plays our software games (“user life”) which most faithfully depicts the timing of satisfying our performance obligation. The Company considers a variety of data points when determining and subsequently reassessing the estimated service period for players of our software games. Primarily, the Company reviews the weighted average number of days between players’ first day play online or the subscription trend. The Company also considers publicly available online trends. The Company believes this provides a reasonable depiction of the transfer of our game related services to our players, as it is the best representation of the period during which our players play our software games. Determining the estimated service period is subjective and requires significant management judgment and estimates. Future usage patterns may differ from historical usage patterns, and therefore the estimated service period may change in the future. The estimated service periods for players of our current software games are generally between 30 and 100 days depending on the software games. Shipping, Handling and Value Added Taxes (“VAT”) The distributor, as the principal, is responsible for the shipping of the game discs to retail stores and incurring the shipping and VAT costs. The Company is paid the net sales amount after deducting shipping costs, VAT and other related expenses by the distributor. Snail Inc. and Subsidiaries Notes to Consolidated Financial Statements Cost of Revenues Cost of revenues include software license royalty fees, merchant fees, server and database center costs, game localization costs, game licenses, engine fees and amortization costs. Cost of revenues for the years ended December 31, 2023 and 2022 were comprised of the following: SCHEDULE OF COST OF REVENUES 2023 2022 Software license royalties – related parties $ 14,398,482 $ 16,963,388 Software license royalties 1,128,517 145,055 License and amortization – related parties 20,496,961 25,407,002 License and amortization 804 250,876 Game localization - 840 Merchant fees 1,369,595 2,424,832 Engine fees 4,301,104 1,972,126 Internet, server and data center 6,487,340 5,792,967 Costs related to advertising revenue 123,600 164,590 Total: $ 48,306,403 $ 53,121,676 General and Administrative Costs General and administrative costs include rent, salaries, stock-based compensation, legal and professional expenses, administrative internet and server, contractor costs, insurance expense, licenses and permits, other taxes and travel expenses. These costs are expensed as they are incurred. For the years ended December 31, 2023 and 2022, general and administrative expenses totaled $ 15,816,088 18,713,958 799,955 223,250 Advertising and Marketing Costs The Company expenses advertising and marketing costs as incurred. For the years ended December 31, 2023 and 2022, advertising and marketing expenses totaled $ 1,582,464 714,492 Research and Development Research and development costs are expensed as incurred. Research and development costs include travel, payroll, and other general expenses specific to research and development activities. Research and development costs for the years ended December 31, 2023 and 2022 were $ 5,057,421 2,955,592 48,080 no Non-controlling Interests Non-controlling interests on the consolidated balance sheets and consolidated statements of operations and comprehensive income (loss) include the equity allocated to non-controlling interest holders. As of December 31, 2023 and 2022, there were non-controlling interests with the following subsidiaries: SCHEDULE OF EQUITY INTEREST AND NON CONTROLLING INTEREST IN SUBSIDIARIES Subsidiary Name Equity % Owned Non-Controlling % Snail Innovative Institute 70 % 30 % BTBX.IO, LLC 70 % 30 % Donkey Crew, LLC 99 % 1 % Snail Inc. and Subsidiaries Notes to Consolidated Financial Statements Cash and Cash Equivalents and Restricted Cash and Cash Equivalents Cash is available for use in current operations or other activities such as capital expenditures and business combinations. Restricted cash and cash equivalents are time deposits, that are currently provided as a standby letter of credit to landlords. The Company’s policy for determining whether an item is treated as cash, or a cash equivalent, is based on its original maturity, liquidity, and risk profile. Investments with maturities of three months or less, are highly liquid and have insignificant risk are considered to be cash equivalents. Restricted Escrow Deposits Our restricted deposits held in escrow are to provide a source of funding for certain indemnification obligations of Snail, Inc. to our underwriters in connection with our IPO. The deposit and related interest earnings were restricted for one year from the IPO date and were released from restrictions in November 2023. Accounts Receivable The Company generally records a receivable related to revenue when it has an unconditional right to invoice and receive payment. Accounts receivable are carried at original invoice amount less an allowance made for credit losses. The Company uses a combination of quantitative and qualitative factors to estimate the allowance, including an analysis of the customers’ creditworthiness, historical experience, age of current accounts receivable balances, changes in financial condition or payment terms of our customers, and reasonable forecasts of the collectability of the accounts receivable. The Company evaluates the allowance for credit losses on a periodic basis and adjusts it as necessary based on the risk factors mentioned above. Any increase in the provision for credit losses is recorded as a charge to general and administrative expense in the current period. Any amounts deemed uncollectible are written off against the allowance for credit losses. Management judgment is required to estimate our allowance for credit losses in any accounting period. The amount and timing of our credit losses and cash collection could change significantly because of a change in any of the risk factors mentioned above. During the year ended December 31, 2023, the Company’s allowance for credit losses increased from $ 19,929 523,500 77,928 Property, Plant and Equipment, Net Property, plant and equipment, net, are stated at cost. Depreciation is calculated using the straight-line method over the following useful lives: SCHEDULE OF USEFUL LIVES OF PROPERTY, PLANT AND EQUIPMENT Buildings 39 years Building improvements 7 years Leasehold improvements Lesser of the lease term or the estimated useful lives of the improvements, generally 5 15 years Computer equipment and software 3 5 years Furniture and fixtures 3 years Auto and trucks 5 years When assets are retired or disposed of, the cost and accumulated depreciation thereon are removed, and any resulting gains or losses are included in the consolidated statements of operations and comprehensive income (loss). Leasehold improvements are amortized using the straight-line method over the estimated life of the asset, not to exceed the length of the lease. Repairs and maintenance costs are expensed as incurred. Foreign Currency The functional currency for our foreign operations is primarily the applicable local currency. Accounts of foreign operations are translated into U.S. dollars using exchange rates for assets and liabilities at the balance sheet date and average prevailing exchange rates for the period for revenue and expense accounts. Adjustments resulting from the translation are included in accumulated other comprehensive loss. Realized and unrealized transaction gains and losses arising from transactions denominated in foreign currencies different than the relevant functional currency are included in our consolidated statements of operations and comprehensive income (loss) in the period in which they occur. Intangible Assets – License Usage Rights The Company enters into license agreements with third-party developers and related party developers that require the Company to make payments for license usage rights and game development and production services. These license agreements grant the Company the exclusive publishing and distribution rights to game titles as well as, in some cases, the underlying intellectual property rights. These license agreements also specify the payment schedules, royalty rates and the relevant licensing period. The Company capitalizes the cost of license usage rights as intangible assets and amortizes them over the terms of the respective licensing rights. Fair Value Measurements The Company follows Financial Accounting Standards Board (“FASB”) ASC Topic 820, Fair Value Measurements. ASC 820 defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles and enhances disclosures about fair value measurements. Fair value is defined under ASC 820 as the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. ASC 820 establishes a hierarchy of valuation inputs based on the extent to which the inputs are observable in the marketplace. Observable inputs reflect market data obtained from sources independent of the reporting entity and unobservable inputs reflect the entity’s own assumptions about how market participants would value an asset or liability based on the best information available. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value. The following describes the hierarchy of inputs used to measure fair value and the primary valuation methodologies used by the Company for financial instruments measured at fair value. The three levels of inputs are as follows: ● Level 1 ● Level 2 ● Level 3 Snail Inc. and Subsidiaries Notes to Consolidated Financial Statements A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Our financial instruments include cash and cash equivalents, restricted cash and cash equivalents, short-term financial instruments, derivative instruments, short-term loans, accounts receivable and accounts payable. The carrying values of these financial instruments approximate their fair value due to their short maturities. The carrying amount of our debt approximates fair value because the interest rates on these instruments approximate the interest rate on debt with similar terms available to us for a similar duration except for the Company’s promissory note which has a fixed rate for 5 years 0.50 Amortizable Intangibles and Other Long-lived Assets The Company’s long-lived assets and other assets consisting of property, plant and equipment and purchased intangible assets, are reviewed for impairment in accordance with the guidance of FASB Topic ASC 360, Property, Plant, and Equipment. Intangible assets subject to amortization are carried at cost less accumulated amortization and amortized over the estimated useful life in proportion to the economic benefits received. The Company evaluates the recoverability of definite-lived intangible assets and other long-lived assets in accordance with ASC Subtopic 360-10, which generally requires the assessment of these assets for recoverability when events or circumstances indicate a potential impairment exists. The Company considers certain events and circumstances in determining whether the carrying value of identifiable intangible assets and other long-lived assets, other than indefinite lived intangible assets, may not be recoverable including, but not limited to: significant changes in performance relative to expected operating results; significant changes in the use of the assets; significant negative industry or economic trends; and changes in the Company’s business strategy. If the Company determines that the carrying value may not be recoverable, the Company estimates the undiscounted cash flows to be generated from the use and ultimate disposition of the asset group to determine whether an impairment exists. If an impairment is indicated based on a comparison of the asset groups’ carrying values and the undiscounted cash flows, the impairment loss is measured as the amount by which the carrying amount of the asset group exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. There can be no assurance, however, that market conditions will not change or demand for the Company’s products under development will continue. Either of these could result in future impairment of long-lived assets. Actual useful lives and cash flows could be different from those estimated by management which could have a material effect on our consolidated reporting results and financial positions. Income Taxes Income taxes are provided for the tax effects of transactions reported in the consolidated financial statements and consisted of taxes currently due and deferred taxes. Deferred taxes are recognized for the differences between the basis of assets and liabilities for financial statement and income tax purposes. The Company follows FASB Topic ASC 740, Income Taxes, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates, applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. FASB ASC 740-10-25 provides criteria for the recognition, measurement, presentation, and disclosure of uncertain tax positions. The Company must recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. The Company recognizes liabilities for uncertain tax positions pursuant to FASB ASC 740-10-25. Such amounts are included in the long-term accrued expenses on the accompanying consolidated balance sheets in the amount of $ 254,731 457,024 Snail Inc. and Subsidiaries Notes to Consolidated Financial Statements Concentration of Credit Risk and Significant Customers The Company maintains cash balances at several major financial institutions. While the Company attempts to limit credit exposure with any single institution, balances often exceed insurable amounts. As of December 31, 2023 and 2022, the Company had deposits of $ 14,716,652 17,929,308 The Company extends credit to various digital resellers and partners. Collection of trade receivables may be affected by changes in economic or other industry conditions and may, accordingly, impact our overall credit risk. The Company does not require collateral or other security to support financial instruments subject to credit risk. The Company performs ongoing credit evaluations of customers and maintains reserves for potentially uncollectible accounts. The Company had four customers as of December 31, 2023, and two customers as of December 31, 2022, who accounted for approximately 95 57 43 20 16 16 29 28 80 54 42 18 11 30 23 12 As of December 31, 2023 and 2022, the Company had one vendor who accounted for approximately 69 % and two vendors who accounted for approximately 43 % and 12 The Company had one vendor, SDE, a related party, that accounted for 51 47 Leases The Company has a lease relating primarily to office facilities. The Company determines if an arrangement is or contains a lease at contract inception. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. The lease liability is measured as the present value of the unpaid lease payments, and the right-of-use asset value is derived from the calculation of the lease liability. Lease payments include fixed and in-substance fixed payments, variable payments based on an index or rate, variable payments based on the level of services provided by the landlords of our leases, reasonably certain purchase options, and termination penalties. Variable lease payments related to the services provided by the landlords are non-lease components that are recognized as rent expenses as incurred. For leased assets with similar lease terms and asset types, the Company applied a portfolio approach in determining a single incremental borrowing rate for the leased assets. The Company uses its estimated incremental borrowing rate, which is derived from information available at the lease commencement date, in determining the present value of lease payments because the Company does not have the information necessary to determine the rate implicit in the lease. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. The Company’s lease term includes any option to extend the lease when it is reasonably certain to be exercised based on considering all relevant factors. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheets and the Company recognizes lease expense for these leases on a straight-line basis over the lease term. Operating leases are included in operating lease right-of-use assets, net, current portion of operating lease liabilities, and operating lease liabilities, net of current portion on the consolidated balance sheets. Recently Issued Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses In August 2020, the FASB issued ASU 2020-06, Contracts in Entity’s Own Equity (Subtopic 815-40) – Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity In October 2023, the FASB issued ASU 2023-06, Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative, In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosure (Topic 280), In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, Snail Inc. and Subsidiaries Notes to Consolidated Financial Statements Employee Savings Plans The Company maintains a 401(k) for its United States based employees. The plan is offered to all eligible employees to make voluntary contributions. Employer contributions to the plan are reported under general and administrative costs in the amounts of $ 88,756 65,908 Stock-Based Compensation The Company recognizes compensation cost for stock-based awards to employees based on the awards’ estimated grant-date fair value using a straight-line approach over the service period for which such awards are expected to vest. The Company accounts for forfeitures as they occur. The Company issued restricted stock units (“Restricted Stock Units” or “restricted stock units”) during the years ended December 31, 2023, and 2022. The fair value of Restricted Stock Units is determined based on the quoted market price of our common stock on the date of grant. The Company’s 2022 Omnibus Incentive Plan (the “2022 Plan”) became effective upon the consummation of the IPO. The 2022 Omnibus Incentive allows us to grant options to purchase our common stock and to grant stock options, stock appreciation rights, restricted stock, restricted stock units and performance awards and other cash-based awards and other stock-based awards to our employees, officers, and directors, up to a maximum of 5,718,000 5,718,000 1 4,485,275 Restricted Stock Units The Company granted restricted stock units under our 2022 Omnibus Incentive Plan to employees and directors. Restricted stock units are unfunded, unsecured rights to receive common stock upon the satisfaction of certain vesting criteria. Upon vesting, a number of shares of common stock equivalent to the number of restricted stock units is typically issued net of required tax withholding requirements, if any. Restricted stock units are subject to forfeiture and transfer restrictions. For the years ended December 31, 2023 and 2022, stock-based compensations expenses amounted to $ 848,035 223,250 Warrants In connection with the IPO, offering costs related to legal, accounting, and underwriting costs were net with the proceeds and recorded as a reduction in additional paid in capital, in the stockholders’ equity section of the consolidated balance sheets. The Company also issued Underwriters Warrants (as defined below) for services provided during the IPO to purchase 120,000 On August 24, 2023, the Company issued warrants in connection with its convertible debt for the purchase of 714,285 Equity On August 24, 2023, the Company issued a warrant to an investor (the “Equity Line Warrant”) for the purchase of 367,647 Equity. Share Repurchase Program On November 10, 2022, the Company’s board of directors authorized a share repurchase program under which the Company may repurchase up to $ 5 No 1,350,275 3.7 2.72 1.3 Snail Inc. and Subsidiaries Notes to Consolidated Financial Statements Earnings (Loss) Per Share Earnings (loss) per share (“EPS”) is calculated by dividing the net income (loss) that is applicable to the common stockholders for the period by the weighted average number of shares of common stock during that period. The diluted EPS for the period is calculated by dividing the net income (loss) applicable to common stockholders for the period by the weighted average number of shares of common stock and common stock equivalents outstanding during the period. The Company’s common stock equivalents are measured using the treasury stock method and represent unvested restricted stock units and warrants. The Company issues two classes of common stock with differing voting rights, and as such, reports EPS using the dual class method. For comparative purposes, the Company has presented EPS for the year ended December 31, 2022 assuming the number of shares exchanged in the reorganization and issued in the IPO of the Company were outstanding at the start of the year. For more information see Note 19 – Earnings (Loss) Per Share. Dividend Restrictions Our ability to pay cash dividends is currently restricted by the terms of our credit facilities. |
REVENUE FROM CONTRACTS WITH CUS
REVENUE FROM CONTRACTS WITH CUSTOMERS | 12 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | NOTE 3 – REVENUE FROM CONTRACTS WITH CUSTOMERS Disaggregation of revenue Timing of recognition The Company recognizes revenue at a point in time for performance obligations that are met at the time of sale or over a period based on the estimated service period of the product, additional performance obligations, or timing of releases. Net revenue by timing of recognition during the years ended December 31, 2023 and 2022 were as follows: SCHEDULE OF DISAGGREGATION OF REVENUE 2023 2022 Over time $ 6,437,618 $ 18,832,396 Point in time 54,464,480 55,611,745 Total revenue from contracts with customers: $ 60,902,098 $ 74,444,141 Geography The Company attributes net revenue to geographic regions based on customer location. Net revenue by geographic region for the years ended December 31, 2023 and 2022 were as follows: 2023 2022 United States $ 53,577,666 $ 69,977,621 International 7,324,432 4,466,520 Total revenue from contracts with customers: $ 60,902,098 $ 74,444,141 Platform Net revenue by platform for the years ended December 31, 2023 and 2022 were as follows: 2023 2022 Console $ 26,628,037 $ 32,382,088 PC 26,402,330 31,592,858 Mobile 5,830,671 9,506,777 Other 2,041,060 962,418 Total revenue from contracts with customers: $ 60,902,098 $ 74,444,141 Distribution channel Our products are delivered through digital online services (digital download, online platforms, and cloud streaming), mobile, and retail distribution and other. Net revenue by distribution channel for the years ended December 31, 2023 and 2022 was as follows: 2023 2022 Digital $ 53,030,367 $ 63,974,946 Mobile 5,830,671 9,506,777 Physical retail and other 2,041,060 962,418 Total revenue from contracts with customers: $ 60,902,098 $ 74,444,141 Snail Inc. and Subsidiaries Notes to Consolidated Financial Statements Deferred Revenue The Company records deferred revenue when payments are due or received in advance of the fulfillment of our associated performance obligations; reductions to deferred revenue balance were primarily due to the recognition of revenue upon fulfillment of its performance obligations, which were in the ordinary course of business. As of December 31, 2023, the balance of deferred revenue was $ 34.3 million, of which $ 32.5 million is due to non-refundable payments. The Company is expecting to recognize $ 13.7 million of the non-refundable payments in the next 12 months through the platform releases of certain DLCs, $ 1.2 Myth of Empires 11.1 million of non-refundable payments in the next 12 to 24 months through the release of DLC’s ARK IP. 3.8 million of current non-refundable deferred revenues and $ 2.7 million of long term non-refundable deferred revenue will be recognized as revenue primarily on a straight-line basis over the next 60 months, based on our estimates of technical support obligations, the usage of consumable virtual goods and estimated period of time an end user will play the game. The Company’s refundable deferred revenue consists of the advance payments received in accordance with the agreement the Company has made with its retail distributor. The Company expects to recognize $ 0.5 1.3 SCHEDULE OF DEFERRED REVENUE 2023 2022 Deferred revenue, beginning balance in advance of revenue recognition billing $ 9,551,446 $ 20,280,934 Revenue recognized (6,437,618 ) (18,832,396 ) Revenue deferred 31,202,878 8,102,908 Deferred revenue, ending balance 34,316,706 9,551,446 Less: current portion (19,252,628 ) (4,335,404 ) Deferred revenue, long term $ 15,064,078 $ 5,216,042 |
CASH AND CASH EQUIVALENTS, AND
CASH AND CASH EQUIVALENTS, AND RESTRICTED CASH AND CASH EQUIVALENTS | 12 Months Ended |
Dec. 31, 2023 | |
Cash And Cash Equivalents And Restricted Cash And Cash Equivalents | |
CASH AND CASH EQUIVALENTS, AND RESTRICTED CASH AND CASH EQUIVALENTS | NOTE 4 – CASH AND CASH EQUIVALENTS, AND RESTRICTED CASH AND CASH EQUIVALENTS Cash equivalents are valued using quoted market prices or other readily available market information. The Company has restricted cash and cash equivalents of $ 1,116,196 6,374,368 Revolving Loan, Short Term Note, and Long-Term Debt 5,273,391 SUMMARY OF COMPONENTS OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AND CASH EQUIVALENTS 2023 2022 Cash and cash equivalents $ 15,198,123 $ 12,863,817 Restricted cash and cash equivalents 1,116,196 6,374,368 Cash and cash equivalents, and restricted cash and cash equivalents $ 16,314,319 $ 19,238,185 |
ACCOUNTS RECEIVABLE (PAYABLE) _
ACCOUNTS RECEIVABLE (PAYABLE) – RELATED PARTY | 12 Months Ended |
Dec. 31, 2023 | |
Accounts Receivable Payable Related Party | |
ACCOUNTS RECEIVABLE (PAYABLE) – RELATED PARTY | NOTE 5 – ACCOUNTS RECEIVABLE (PAYABLE) – RELATED PARTY Accounts receivable — related party represents receivables in the ordinary course of business attributable to certain mobile game revenues that, for administrative reasons, were collected by a related party and that the related party has not yet remitted back to the Company. Accounts receivable — related party is non-interest bearing and due on demand. The related party, SDE Inc. (“SDE”), is 100 % owned and controlled by the wife of the Founder, Chief Strategy Officer and Chairman of the Company. In January 2024, the Company entered into an offset agreement with SDE. The Company has the right to offset payables due to the related party for royalties, IDC and marketing costs as they are determinable, mutual, and the right is enforceable by law. The Company will offset $ 0.5 million per month, or $ 6.0 million annually, beginning in January 2024, until the receivable has been collected or offset in full. To reflect the timing of the offset agreement, a portion of the SDE receivable has been reclassified as a long-term asset. The Company’s current SDE payable is greater than its current SDE receivable and has reclassified the net SDE payable to accounts payable – related parties as of December 31, 2023. During the year ended December 31, 2023, the Company made cash payments to SDE in the amount of $ 33.1 million and anticipates continuing to make cash payment to SDE in future years. As of December 31, 2023 and 2022, the outstanding balance of net accounts receivable from related party was as follows: SCHEDULE OF ACCOUNTS RECEIVABLE RELATED PARTY 2023 2022 Accounts receivable – related party $ 13,500,592 $ 13,519,409 Less: accounts payable – related party – SDE (10,946,478 ) (2,175,225 ) Net accounts receivable, related party - SDE 2,554,114 11,344,184 Less: accounts receivable – related party, net of current portion 7,500,592 - Net accounts receivable (payable), related party, current - SDE $ (4,946,478 ) $ 11,344,184 Snail Inc. and Subsidiaries Notes to Consolidated Financial Statements |
DUE FROM SHAREHOLDER
DUE FROM SHAREHOLDER | 12 Months Ended |
Dec. 31, 2023 | |
Due From Shareholder | |
DUE FROM SHAREHOLDER | NOTE 6 – DUE FROM SHAREHOLDER Other receivables from related party consisted of monies that the Company loaned to the Company’s Founder, Chief Strategy Officer and Chairman, who is also the majority shareholder of Suzhou Snail. The loan bore 2.0 – 94,934,400 94,934,400 – Dividend Distribution 0 no 580,878 |
DIVIDEND DISTRIBUTION
DIVIDEND DISTRIBUTION | 12 Months Ended |
Dec. 31, 2023 | |
Dividend Distribution | |
DIVIDEND DISTRIBUTION | NOTE 7 – DIVIDEND DISTRIBUTION On April 26, 2022, the Company declared an in-kind dividend of $ 94,934,400 8,200,000 Due from Shareholder. no 1,886,600 |
PREPAID EXPENSES - RELATED PART
PREPAID EXPENSES - RELATED PARTY | 12 Months Ended |
Dec. 31, 2023 | |
Prepaid Expenses - Related Party | |
PREPAID EXPENSES - RELATED PARTY | NOTE 8 – PREPAID EXPENSES - RELATED PARTY On March 10, 2023, the Company amended its exclusive software license agreement with SDE relating to the ARK 5.0 5.0 During the year ended December 31, 2023, the Company prepaid $ 2.5 ARK: Survival Ascended 5.5 ARK: Survival Ascended 5.0 ARK sequel SCHEDULE OF PREPAID EXPENSES - RELATED PARTY 2023 2022 Prepaid royalties $ 6,086,406 $ 582,500 Prepaid licenses 7,500,000 5,000,000 Other prepaids 242,060 - Prepaid expenses - related party, ending balance 13,828,466 5,582,500 Less: short-term portion (6,044,404 ) — Total prepaid expenses - related party, long-term $ 7,784,062 $ 5,582,500 The amount classified as short-term, as of December 31, 2023, includes the prepaid license for the ARK: Survival Ascended ARK: Survival Ascended |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 12 Months Ended |
Dec. 31, 2023 | |
Prepaid Expenses And Other Current Assets | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | NOTE 9 – PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets consisted of the following as of December 31, 2023, and 2022: SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS 2023 2022 Prepaid income taxes $ 9,529,755 $ 9,822,603 Deferred offering costs 105,411 — Other prepaids 70,967 80,271 Other current assets 463,315 662,267 Total prepaid expenses and other current assets $ 10,169,448 $ 10,565,141 Snail Inc. and Subsidiaries Notes to Consolidated Financial Statements |
PROPERTY, PLANT AND EQUIPMENT,
PROPERTY, PLANT AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT, NET | NOTE 10 – PROPERTY, PLANT AND EQUIPMENT, NET Property, plant and equipment, net consisted of the following as of December 31, 2023 and 2022: SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT, NET 2023 2022 Building $ 1,874,049 $ 1,874,049 Land 2,700,000 2,700,000 Building improvements 1,010,218 1,010,218 Leasehold improvements 1,537,775 1,537,775 Autos and trucks 178,695 178,695 Computer and equipment 1,809,214 1,821,819 Furniture and fixtures 411,801 411,801 Property, plant and equipment, gross 9,521,752 9,534,357 Accumulated depreciation (4,839,686 ) (4,419,558 ) Property, plant and equipment, net $ 4,682,066 $ 5,114,799 Depreciation and amortization expense was $ 432,306 565,906 12,605 12,178 427 99,811 97,421 19,500 88,398 17,067 3,045 13,569 |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | NOTE 11 – INTANGIBLE ASSETS Intangible assets consist of game licenses, game software underlying intellectual property rights, game trademarks and other branding items. The Company amortizes the intangible assets over its useful life. The following tables reflect all the intangible assets presented on the consolidated balance sheets as of December 31, 2023 and 2022: SCHEDULE OF INTANGIBLE ASSETS December 31, 2023 Gross Weighted Carrying Accumulated Impairment Net Book Average Amount Amortization Loss Value Useful Life License rights from related parties $ 136,665,000 $ (136,665,000 ) $ — $ — 3 5 License rights $ 3,000,000 $ (3,000,000 ) $ — $ — 5 Intangible assets - other: Software $ 51,784 $ (51,784 ) $ — $ — 3 Trademark 10,745 (9,914 ) — 831 12 In-progress patent 270,886 — — 270,886 Total: $ 333,415 $ (61,698 ) $ — $ 271,717 Snail Inc. and Subsidiaries Notes to Consolidated Financial Statements December 31, 2022 Gross Weighted Carrying Accumulated Impairment Net Book Average Amount Amortization Loss Value Useful Life License rights from related parties $ 136,665,000 $ (135,280,942 ) $ — $ 1,384,058 3 5 License rights $ 3,000,000 $ (3,000,000 ) $ — $ — 5 Intangible assets - other: Software $ 51,784 $ (51,784 ) $ — $ — 3 Trademark 10,745 (9,110 ) — 1,635 12 In-progress patent 270,886 — — 270,886 Total: $ 333,415 $ (60,894 ) $ — $ 272,521 Amortization expense was $ 1,384,862 7,657,669 1.0 SCHEDULE OF FUTURE AMORTIZATION EXPENSE OF INTANGIBLE ASSETS Years ending December 31, Amount 2024 $ 804 2025 27 2026 — 2027 — 2028 — Thereafter 270,886 Total $ 271,717 |
ACCOUNTS PAYABLE _ RELATED PART
ACCOUNTS PAYABLE — RELATED PARTIES | 12 Months Ended |
Dec. 31, 2023 | |
Accounts Payable Related Parties | |
ACCOUNTS PAYABLE — RELATED PARTIES | NOTE 12 – ACCOUNTS PAYABLE — RELATED PARTIES Accounts payable due to related parties represents payables in the ordinary course of business primarily for purchases of game distribution licenses and also the royalties due to Suzhou Snail and SDE. As of December 31, 2023 and 2022, the Company had $ 18,147,958 and $ 19,918,259 , respectively, as accounts payable due to Suzhou Snail; and $ 4,946,478 Accounts Receivable (Payable) — Related Parties 279,699 404,347 2,050,000 4,219,660 SCHEDULE OF ACCOUNTS PAYABLE- RELATED PARTIES 2023 2022 Accounts payable - Suzhou $ 55,762,870 $ 57,533,171 Less: accounts receivable - Suzhou (37,614,912 ) (37,614,912 ) Accounts payable - SDE 4,946,478 - Total accounts payable – related parties $ 23,094,436 $ 19,918,259 |
LOAN AND INTEREST RECEIVABLE _
LOAN AND INTEREST RECEIVABLE — RELATED PARTY | 12 Months Ended |
Dec. 31, 2023 | |
Loan And Interest Receivable Related Party | |
LOAN AND INTEREST RECEIVABLE — RELATED PARTY | NOTE 13 – LOAN AND INTEREST RECEIVABLE — RELATED PARTY In February 2021, the Company loaned $ 200,000 2.0 203,890 103,890 Loan Payable and Interest Payable — Related Parties 103,753 101,753 2,000 1,753 |
LOAN PAYABLE AND INTEREST PAYAB
LOAN PAYABLE AND INTEREST PAYABLE — RELATED PARTIES | 12 Months Ended |
Dec. 31, 2023 | |
Loan Payable And Interest Payable Related Parties | |
LOAN PAYABLE AND INTEREST PAYABLE — RELATED PARTIES | NOTE 14 – LOAN PAYABLE AND INTEREST PAYABLE — RELATED PARTIES The Company had a loan amount due to related parties of $ 400,000 2.0 300,000 100,000 100,000 3,890 Loan and Interest Receivable — Related Party 300,000 Snail Inc. and Subsidiaries Notes to Consolidated Financial Statements As of December 31, 2023 and 2022, the total loan payable — related parties amounted to $ 0 and total unpaid interest amounted to $ 527,770 , as of December 31, 2023 and 2022. Interest expense for the loans payable to related parties were $ 0 3,222 |
REVOLVING LOAN, SHORT TERM NOTE
REVOLVING LOAN, SHORT TERM NOTES AND LONG - TERM DEBT | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
REVOLVING LOAN, SHORT TERM NOTES AND LONG - TERM DEBT | NOTE 15 – REVOLVING LOAN, SHORT TERM NOTES AND LONG - TERM DEBT SCHEDULE OF LONG TERM DEBT December 31, 2023 December 31, 2022 2021 Revolving Loan 9,000,000 6,000,000 December 31, 2024 0.25 8.25 5,262,627 1.5 to 1 $ 6,000,000 $ 9,000,000 2021 Promissory Note 10 3.5 5 6 to 10 4.2 5.3 June 30, 2031 1.5 to 1 2,811,923 2,891,820 2022 Short Term Note 10,000,000 January 26, 2023 3.75 0.50 5 1.5 to 1 0.25 5.75 8.25 833,333 5,833,333 2023 Convertible Notes 7.4 1,080,000 7.5 February 24, 2024 May 24, 2024 16 678,254 109.7 797,361 - 2023 Note Payable – Ark: Survival Evolved 7 years . In return the vendor has agreed to provide the Company with funds in cash of up to $ 3.0 million without discount and free of charges and costs to the Company. The Company drew on the full $ 3.0 The funds are repaid in monthly installments starting in November 2023 and are to be based on 20% of the gross monthly ARK: Survival Ascended The Company has imputed interest at 8.0 % on draws made. If in default, the interest rate is levied on the outstanding balances at a rate of 12.0 % per annum. 1,500,000 - Total debt of $ 12,225,256 282,639 11,942,617 17,725,153 Total debt 11,942,617 17,725,153 Less: current portion of promissory note 2,811,923 86,524 Less: revolving loan 6,000,000 9,000,000 Less: notes payable 2,333,333 5,416,666 Less: convertible notes, net of discount 797,361 - Total long-term debt $ - $ 3,221,963 Total interest expense for the above debt and revolver loan amounted to $ 1,485,241 895,761 462,284 26,514 2,903 8.1 6.9 12,002,949 11,898,434 959,359 244,399 Snail Inc. and Subsidiaries Notes to Consolidated Financial Statements The following table provides future minimum payments of its long-term debt as of December 31: SCHEDULE OF FUTURE MINIMUM PAYMENTS OF LONG TERM DEBT Years ending December 31, Amount 2024 $ 9,502,708 2025 86,013 2026 89,115 2027 92,329 2028 95,414 Thereafter 2,359,677 Long term debt $ 12,225,256 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 16 – INCOME TAXES The components of income (loss) before income taxes for the years ended December 31, 2023 and 2022 are as follows: SCHEDULE OF INCOME (LOSS) BEFORE INCOME TAXES 2023 2022 United States $ (11,666,676 ) $ (1,587,477 ) Foreign 171,600 135,232 Total $ (11,495,076 ) $ (1,452,245 ) The income tax benefit for the years ended December 31, 2023 and 2022 are as follows: SCHEDULE OF INCOME TAX (BENEFIT) PROVISION 2023 2022 Current: U.S. federal $ 112,344 $ (499,784 ) U.S. State 82,595 (2,535,117 ) Foreign 49,373 — Total current income taxes 244,312 (3,034,901 ) Deferred: U.S. federal (2,577,737 ) 602,102 U.S. State (67,227 ) (11,686 ) Foreign — (1,938 ) Total deferred income taxes (2,644,964 ) 588,478 Income tax benefit $ (2,400,652 ) $ (2,446,423 ) The benefits for income taxes differs from the amounts computed by applying the federal statutory tax rate of 21.0 SCHEDULE OF PROVISION (BENEFITS) FOR INCOME TAXES RATE RECONCILIATION 2023 2022 Federal statutory income tax rate 21.00 % 21.00 % Valuation allowance (1.21 )% 58.33 % FIN 48 1.13 % 5.21 % Return to provision (0.78 )% 17.27 % State refund benefit — 130.84 % Change in subsidiary tax status — (73.52 )% PPP loan — 2.45 % GILTI (0.43 )% (1.80 )% State taxes (0.10 )% 2.94 % Foreign withholding tax (0.43 )% — R&D credit true-up 1.76 % 2.84 % Rate change (0.02 )% 1.82 % Other (0.04 )% 1.10 % Effective tax rate 20.88 % 168.48 % The Company recognized an income tax benefit of $ 2,400,652 2,446,423 20.9 168.5 21 The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities consisted of the following as of December 31, 2023 and 2022: SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES 2023 2022 Deferred tax assets (noncurrent): Net operating losses $ 9,941,478 $ 6,884,595 Deferred revenue 1,564,708 2,003,812 Research and development credit 664,877 494,777 Book lease liability (ASC 842) 640,414 937,968 Fixed assets and intangibles 286,902 1,959,679 Section 174 capitalized research and experimental expenditures 2,101,923 825,394 Interest limitation carryforward 329,383 30,944 Stock based compensation 234,110 48,678 Other 960,471 1,006,040 Total deferred tax assets 16,724,266 14,191,887 Deferred tax liabilities (noncurrent): Book ROU assets (ASC 842) (533,369 ) (786,350 ) Basis difference in subsidiary (799,595 ) (797,806 ) Total deferred tax liabilities: (1,332,964 ) (1,584,156 ) Long-term deferred tax asset 15,391,302 12,607,731 Valuation allowance (5,143,802 ) (5,005,195 ) Net deferred tax asset $ 10,247,500 $ 7,602,536 Snail Inc. and Subsidiaries Notes to Consolidated Financial Statements Included in these consolidated financial statements are two 2,884,392 11,498,479 14,345,028 26,508,814 1,539,810 5,453,676 The Company maintained a total valuation allowance of $ 5,143,802 and $ 5,005,195 as of December 31, 2023 and 2022, respectively, the valuation allowance relates primarily to the NOL of the non-includable entities mentioned above, which have had historical losses, and which management has assessed are not more likely than not to be able to realize those NOLs. The non-includable entities had a valuation allowance of $ 4,022,729 4,057,479 686,808 and $ 683,552 as of December 31, 2023 and 2022, respectively. The Company had a foreign valuation allowance of $ 434,265 264,165 as of December 31, 2023 and 2022, respectively. As of December 31, 2023, the Company has no remaining foreign net operating loss carryforwards. The Company has assessed all positive and negative evidence of whether sufficient future taxable income will be generated to realize the deferred tax assets, including the level of historical taxable income and projections of future taxable income over the periods during which the deferred tax assets are deductible. After evaluating the positive and negative evidence, management believes it is more likely than not that the Company will realize the benefits of these deductible differences, except as noted above. As of December 31, 2023, the Company has foreign tax credit carryforwards of $ 192,180 434,265 expire in 2027. The Company has booked an uncertain tax position reserve on the entire amount of foreign tax credit and a valuation allowance on its R&D credit carryforwards due to uncertainty regarding their nature and future utilization. The Company also has California R&D credit carryforwards of $ 343,428 The Company and its subsidiaries currently file tax returns in the United States (federal and state) and Poland. The statute of limitations for its consolidated federal income tax returns are open for tax years ended December 31, 2020 and after. The statute of limitations for its consolidated state income tax returns are open for tax years ended December 31, 2019 and after. All tax periods for its Polish subsidiary are currently subject to examination since its inception in 2018. While the Company has historically only filed a state tax return in California, it filed in 10 states in 2022 and it also has completed the Voluntary Disclosure Agreement process in additional states. After enactment of the Tax Cuts and Jobs Act (“TCJA”) in 2017, any current earnings of a foreign subsidiary are subject to the Global Intangible Low-Taxed Income (“GILTI”) tax and any future repatriation of foreign earnings back to the U.S. would be subject to a 100% dividends-received deduction, thus, not subject to additional federal taxes. The Company owns one foreign corporation, Donkey Crew, which is subject to the GILTI tax and will have a GILTI inclusion during the year ended December 31, 2023. It is Management’s intent to permanently reinvest any future foreign earnings to support operations and business growth of its affiliated company in Poland. As such, no 977,166 The following table reflects changes in gross unrecognized tax benefits for the years ended December 31, 2023 and 2022: SCHEDULE OF UNRECOGNIZED TAX BENEFITS 2023 2022 Unrecognized tax benefits at beginning of year $ 696,895 $ 693,913 Gross Increases – current year positions — — Gross Increases – prior year positions — 72,177 Gross Decreases – expiration of statute of limitation (37,550 ) — Gross Decreases – settlements (171,737 ) (69,195 ) Unrecognized tax benefits at end of year $ 487,608 $ 696,895 As of December 31, 2023 and 2022, the Company had $ 295,428 and $ 497,720 , respectively, of unrecognized tax benefits that if recognized would impact the Company’s effective tax rate. The Company accrued and recognized interest and penalties related to unrecognized tax benefits in operating expense. As of December 31, 2023 and 2022, the Company had accrued $ 0 of interest and penalties, respectively. The Company does not expect the amount to change within 12 months and is currently not under audit by any taxing jurisdictions. The Company was notified of an audit starting by the state of Washington for Business and Occupation tax, and is working with the state to conduct a managed audit. Snail Inc. and Subsidiaries Notes to Consolidated Financial Statements |
OPERATING LEASE RIGHT-OF-USE AS
OPERATING LEASE RIGHT-OF-USE ASSETS | 12 Months Ended |
Dec. 31, 2023 | |
Operating Lease Right-of-use Assets | |
OPERATING LEASE RIGHT-OF-USE ASSETS | NOTE 17 – OPERATING LEASE RIGHT-OF-USE ASSETS The Company’s right-of-use assets represent arrangements related primarily to office facilities used in the ordinary business operations of the Company and its subsidiaries. In April 2018, a commercial bank issued an irrevocable standby letter of credit on behalf of the Company to the landlord for $ 1,075,000 2,440,690 3,606,398 125,207 77,385 122,533 SCHEDULE OF TERMINATIONS OPERATING LEASE Right of Accumulated Lease Liability Gain on Use Asset Amortization Current Long Term Termination Lease Terminations $ (1,301,571 ) $ 907,370 $ 442,704 $ 74,030 $ 122,533 Operating lease costs included in the general and administrative expenses in our consolidated statements of operations and comprehensive income (loss) for the years ended December 31, 2023 and 2022, are as follows: SCHEDULE OF OPERATING LEASE COSTS 2023 2022 Operating lease costs $ 1,578,751 $ 1,590,872 Supplemental information related to operating leases for lease liabilities as of December 31, 2023 and 2022, is as follows: SCHEDULE OF SUPPLEMENTAL INFORMATION RELATED TO OPERATING LEASES 2023 2022 Cash paid for amounts included in the measurement of lease liabilities $ 1,548,889 $ 1,489,396 Weighted average remaining lease term 1.9 2.9 Weighted average discount rate 5.00 % 5.00 % Future undiscounted lease payments for operating leases and a reconciliation of these payments to our operating lease liabilities as of December 31, 2023 are as follows: SCHEDULE OF FUTURE UNDISCOUNTED LEASE PAYMENTS FOR OPERATING LEASES AND RECONCILIATION OF THESE PAYMENTS TO OUR OPERATING LEASE LIABILITIES Years ending December 31, Future lease payments Imputed Interest Amount Lease Liabilities 2024 $ 1,610,844 $ 105,810 $ 1,505,034 2025 1,453,784 28,290 1,425,494 2026 — — — Thereafter — — — Total future lease payments $ 3,064,628 $ 134,100 $ 2,930,528 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 18 – COMMITMENTS AND CONTINGENCIES Litigation The Company is subject to claims and contingencies related to lawsuits and other matters arising out of the normal course of business. In addition, the Company may receive notifications alleging infringement of patent or other intellectual property rights. The Company has elected to expense legal costs associated with legal contingencies as incurred. On December 1, 2021, the Company and Studio Wildcard sent a notice of claimed infringement (the “DCMA Takedown Notice”) to Valve Corporation, which operates the Steam platform, pursuant to the Digital Millennium Copyright Act (“DCMA”). The DCMA Takedown Notice concerned a videogame titled Myth of Empires Snail Inc. and Subsidiaries Notes to Consolidated Financial Statements On December 9, 2021, Angela Game and Imperium sued the Company and Studio Wildcard in the United States District Court for the Central District of California (the “District Court”) in response to the DCMA Takedown Notice. The lawsuit sought a declaratory judgment on non-liability for copyright infringement and non-liability for trade secret misappropriation, as well as unspecified damages for alleged misrepresentations in the DCMA Takedown Notice. Angela Game and Imperium also filed an application for a temporary restraining order asking the court to order us and Studio Wildcard to rescind the DCMA Takedown Notice so that Steam could reinstate Myth of Empires for download. On December 20, 2021, the Company and Studio Wildcard filed an answer to the complaint, which included counterclaims against Angela Game and Imperium and a third-party complaint against Tencent seeking unspecified damages resulting from the alleged copyright infringement and misappropriation of trade secrets in connection with the ARK: Survival Evolved On September 8, 2023, the Company entered into a settlement agreement with Angela Game. The settlement agreement includes an upfront payment from Angela Game to the Company plus ongoing payments. The upfront payment of $ 1.5 0.3 On March 14, 2023, Bel Air Soto, LLC (“Plaintiff”) filed suit in the Superior Court of California, County of Los Angeles, against Snail Games USA Inc. and INDIEV, an affiliate company that is owned by Mr. Hai Shi, the Company’s Founder, Chief Strategy Officer, and Chairman, for breach of contract and related claims arising out of a commercial lease for premises located in Los Angeles County. Plaintiff alleges that the defendants exercised an option to extend the lease and was harmed when defendants instead terminated the lease and vacated the premises. The complaint seeks damages in excess of $ 3 130,000 On April 21, 2023, Snail Games USA Inc. entered into an indemnity and reimbursement agreement with INDIEV, dated as of April 1, 2023, pursuant to which INDIEV agrees to assume all obligations and liabilities pursuant to the lease and indemnify and reimburse Snail Games USA Inc. for any amounts, damages, expenses, costs or other liability incurred by Snail Games USA Inc. arising under or pursuant to the lease or relating to the premises. In October 2023, INDIEV has filed for bankruptcy and the Company does not expect to recover its costs from INDIEV. At this time, the Company is unable to quantify the magnitude of the potential loss should the plaintiffs’ lawsuit succeed and accordingly no accrual for loss has been recorded in the accompanying financial statements. Snail Inc. and Subsidiaries Notes to Consolidated Financial Statements |
EARNINGS (LOSS) PER SHARE
EARNINGS (LOSS) PER SHARE | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
EARNINGS (LOSS) PER SHARE | NOTE 19 – EARNINGS (LOSS) PER SHARE The Company uses the two class method to compute its basic earnings (loss) per share (“Basic EPS”) and diluted earnings (loss) per share (“Diluted EPS”). The following table summarizes the computations of basic EPS and diluted EPS. The allocation of earnings between Class A and Class B shares is based on their respective economic rights to the undistributed earnings of the Company. Basic EPS is computed as net income (loss) divided by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur using the treasury stock and if-converted methods. The restricted stock units, underwriters warrants and warrants issued in connection with the convertible debt and equity line of credit were excluded from the treasury stock method computation of diluted shares as their inclusion would have had an antidilutive effect for the year ended December 31, 2023. The convertible notes were excluded from the if-converted method computation of diluted shares as their inclusion would have had an antidilutive effect for the year ended December 31, 2023. There were no such exclusions made in the 2022 calculation. In performing the calculation of Basic and Diluted EPS for the year ended December 31, 2022, the Company has treated the number of shares transferred in the reorganization transaction as having been issued at the start of the year. The following table provides a reconciliation of the weighted average number of shares used in the calculation of Basic and Diluted EPS. SCHEDULE OF EARNINGS PER SHARE 2023 2022 For the year ended 2023 2022 Basic Earnings (Loss) Per Share: Net (loss) income attributable to Class A common stockholders $ (1,960,813 ) $ 228,482 Net (loss) income attributable to Class B common stockholders (7,125,262 ) 719,325 Net (loss) income attributable to common stockholders (7,125,262 ) 719,325 Total net (loss) income attributable to Snail Inc and Snail Games USA Inc. $ (9,086,075 ) $ 947,807 Class A weighted average shares outstanding – basic 7,911,369 9,131,512 Class B weighted average shares outstanding – basic 28,748,580 28,748,580 weighted average shares outstanding - basic 28,748,580 28,748,580 Class A and B basic (loss) earnings per share $ (0.25 ) $ 0.03 Diluted Earnings (Loss) Per Share: Net (loss) income attributable to Class A common stockholders $ (1,960,813 ) $ 228,482 Net (loss) income attributable to Class B common stockholders $ (7,125,262 ) $ 719,325 Net (loss) attributable to common stockholders $ (7,125,262 ) $ 719,325 Class A weighted average shares outstanding - basic 7,911,369 9,131,512 Dilutive effects of common stock equivalents - - Class A weighted average shares outstanding - diluted 7,911,369 9,131,512 Class B weighted average shares outstanding - basic 28,748,580 28,748,580 weighted average shares outstanding - basic 28,748,580 28,748,580 Dilutive effects of common stock equivalents - - Class B weighted average shares outstanding - diluted 28,748,580 28,748,580 weighted average shares outstanding - diluted 28,748,580 28,748,580 Diluted (loss) earnings per Class A and B share $ (0.25 ) $ 0.03 |
EQUITY
EQUITY | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
EQUITY | NOTE 20 – EQUITY The Company has authorized two one ten one On November 9, 2022, in connection with the IPO, the Company entered into an underwriting agreement (the “Underwriting Agreement” with the underwriters (the “Underwriters”), pursuant to which the Company agreed to issue and sell 3,000,000 4.675 450,000 4.675 In connection with the Underwriting Agreement, on November 9, 2022, the Company also issued to the Underwriters warrants to purchase such number of shares of the Company’s Class A common stock in an amount equal to four 120,000 125 6.25 three Snail Inc. and Subsidiaries Notes to Consolidated Financial Statements The Underwriters Warrants and Over-Allotment Option are legally detachable and separately exercisable from each other and from the Firm Shares; therefore, they meet the definition of freestanding and are not considered embedded in the Firm Shares. The Underwriters Warrants are considered indexed to the Company’s own stock. Additionally, the Company concludes that the Underwriters Warrants meet all requirements for equity classification. Because the Underwriters Warrants are issued to the Underwriters for their services and can be exercised immediately (subject to certain transfer conditions) they will be measured at their fair value on their date of issuance and recorded within stockholders’ equity. As long as the Underwriters Warrants remain classified as equity, they shall not be revalued. The fair value of the Underwriters Warrants was determined using the Black-Scholes model. The key assumptions used in the valuation were an average expected volatility of 53 4.49 3 The Company allocates all the issuance costs to the firm shares as a reduction of proceeds. Convertible Debt In August 2023, pursuant to a securities purchase agreement (the “SPA”), the Company issued to two accredited investors (the convertible debt “Investors”) convertible notes with an aggregate principal amount of $ 1,080,000 714,285 1,000,000 In connection with the Convertible Notes Financing, the Company also entered into a registration rights agreement with the Investors. So long as the Company complies with certain conditions set forth in the SPA and the registration rights agreement, the Company will sell and the Investors will purchase, an additional $ 1,080,000 The Convertible Notes carry an original issue discount of approximately 7.4 7.5 16 May 24, 2024 The Convertible Notes may be prepaid by the Company upon giving the Investors a fifteen-trading day notice by paying an amount equal to the then outstanding balance. If the Company enters into a qualifying financing it may be required by the Investors to repay part or all of the Convertible Notes at a 112.5% premium (limited to 10% of the proceeds of the qualified financing, if such financing results in gross proceeds to the Company at least $ 5,000,000 Subject to certain ownership limitations, starting three months after their issuance, the Convertible Notes can be converted at the option of the holder at any time into shares of the Company’s Class A common, at a conversion price equal to 90% (85% in case of an event of default) of the average of the three the lowest daily volume weighted average price (“VWAP”) of the Class A common stock during the ten (10) trading days period prior the receipt of the notice of conversion. The conversion price may be adjusted if the Company issues a qualifying security at a lower price than the then conversion price. If, upon receipt of conversion notice, the Company cannot issue shares of Class A common stock for any reason, then it is required to issue as many shares of Class A common stock as it is able to issue and, with respect to the unconverted principle portion, the Noteholder may elect for the Company to pay for each shares of Class A common stock that could not be issued at a price equal to the higher of the then conversion price or the VWAP as of the date of the conversion notice. The Company determined that the Convertible Notes included features that required bifurcation from the debt host and met the criteria to be accounted for as a derivative liability that is accounted for at fair value. On the date of issuance, the compound derivative had an estimated fair value that was not significant due to the remoteness of the events that would trigger the redemption features. The derivative liability uses level 3 inputs, is to be measured at fair value each reporting date with change in fair value being reported in other income. The change in fair value during the year ended December 31, 2023, was not significant and as such, was not recorded. On the date of issuance, the Company allocated the proceeds between the instruments issued using fair value for the derivative liability with the residual amounts allocated to the convertible notes and warrants using relative fair value as follows: SCHEDULE OF PROCEEDS BETWEEN THE INSTRUMENTS Convertible notes $ 554,246 Derivative liability - Warrants 445,754 Total proceeds $ 1,000,000 Snail Inc. and Subsidiaries Notes to Consolidated Financial Statements The difference of $ 525,754 152,500 The following is a summary of the Convertible Notes as of December 31, 2023: SCHEDULE OF CONVERTIBLE NOTES Fair value Principal Amount Unamortized debt discount and issuance costs Net carrying amount Amount Levelling Convertible Notes $ 860,910 $ (63,549 ) $ 797,361 $ 536,170 Level 3 The debt discount is being amortized to interest expense over the maturity period using the effective interest method at a rate of 109.7 424,460 29,025 306,664 88,951 Convertible Note Warrants The convertible note warrants allow the Investors to purchase an aggregate of 714,285 1.89 The exercise price and the number of shares of the warrants are subject to adjustment for standard anti-dilution provisions and also for subsequent issuance at a price lower than the then exercise price and adjustments to the strike price of other equity-linked instruments to a lower price than the then exercise price. Due to their adjustment provisions, the warrants are classified as a liability on the consolidated balance sheet. The fair value of the warrants at issuance has been estimated using a Monte-Carlo model and the following significant inputs: SCHEDULE OF STOCK BASED WARRANTS Issuance December 31, Stock price $ 1.35 $ 1.21 Exercise price $ 1.89 $ 1.89 Contractual term (years) 5.0 4.65 Volatility 60.0 % 50.0 % Risk-free rate 4.39 % 3.87 % The warrant liability, which uses level 3 inputs, is to be measured at fair value each reporting period with the change in fair value being recognized in other income (expense). The measured fair value may be uncertain due to the use of unobservable inputs. At December 31, 2023, the fair value of the warrant liability was $ 480,281 and was included in the accrued expenses and other liabilities in the Company’s consolidated balance sheets. The changes in fair value during the year ended December 31, 2023, amounted to a charge of $ 34,527 included in other income in our consolidated statements of operations and comprehensive income (loss) and in changes in accrued expenses and other liabilities in our consolidated statements of cash flows. Snail Inc. and Subsidiaries Notes to Consolidated Financial Statements Equity Line Purchase Agreement On August 24, 2023, the Company entered into a common stock purchase agreement (the “Equity Line Purchase Agreement”) and a registration rights agreement (the “Registration Rights Agreement”) with an investor, pursuant to which the investor has committed to purchase up to $ 5,000,000 9.99 Under the terms of the Equity Line Purchase Agreement, the Company has the right, but not the obligation, to sell to the investor, shares of Class A common stock over the period commencing on the execution date of the Equity Line Purchase Agreement and ending on the earlier of (i) December 31, 2025, or (ii) the date on which the investor shall have purchased Securities pursuant to the Equity Line Purchase Agreement for an aggregate purchase price of the $ 5,000,000 The registration statement covering the offer and sale of up 15,093,768 was effective on October 10, 2023. The purchase price will be calculated as 92% of the volume weighted average prices of the Company’s common stock during normal trading hours for five business days prior to the closing date with respect of a purchase notice. Concurrently with the signing of the Equity Line Purchase Agreement, the Company issued the equity line warrant to purchase 367,647 105,411 Equity Line Warrants In connection with the equity line of credit the Company issued to the Investors warrants to purchase an aggregate 367,647 1.50 The exercise price and the number of shares of the warrants are subject to adjustment for standard anti-dilution provisions, for subsequent common share issuance at a price lower than the then exercise price of the warrants and adjustments to the strike price of other equity-linked instruments to a lower price than the then exercise price of the warrants. Due to their adjustment provision, the warrants are classified as a liability on the consolidated balance sheet. The fair value of the warrants at issuance has been estimated using a Monte-Carlo model and the following significant inputs: SCHEDULE OF STOCK BASED WARRANTS Issuance December 31, Stock price $ 1.35 $ 1.21 Exercise price $ 1.50 $ 1.50 Contractual term (years) 5.0 4.65 Volatility 40.0 % 50.0 % Risk-free rate 5.49 % 3.87 % The warrant liability, which uses level 3 inputs, is to be measured at fair value at each reporting period and with the change in fair value being recognized in earnings. The measured fair value may be uncertain due to the use of unobservable inputs. At December 31, 2023, the fair value of the warrant liability was $ 103,767 1,644 Restricted Stock Units (“RSUs”) RSUs granted to directors vest based on the directors’ continued employment with us through each applicable vest date, which is generally over one year SCHEDULE OF RESTRICTED STOCK UNITS ACTIVITY Restricted Stock Units Weighted-Average Grant-Date Fair Values Outstanding as of January 1, 2023 24,000 $ 5.00 Granted 43,478 1.38 Vested (24,000 ) (5.00 ) Forfeited or cancelled — — Outstanding as of December 31, 2023 43,478 $ 1.38 Restricted Stock Units Weighted-Average Grant-Date Fair Values Outstanding as of January 1, 2022 — $ — Granted 24,000 5.00 Vested — — Forfeited or cancelled — — Outstanding as of December 31, 2022 24,000 $ 5.00 The grant date fair value of RSUs granted to directors is based on the quoted market price of our common stock on the date of grant. Snail Inc. and Subsidiaries Notes to Consolidated Financial Statements Our RSUs granted to employees vest upon the achievement of pre-determined performance-based milestones as well as service conditions (“PSUs”). The pre-determined performance-based milestones are based on specified percentages of the PSUs that would vest at each of the first five 5 Each quarter, the Company updates our assessment of the probability that the performance milestones will be achieved. The Company amortizes the fair values of PSUs over the requisite service period. Each performance-based milestone is weighted evenly and the number of shares that vest based on each performance-based milestone is independent from the other. The following table summarizes our PSU activity with employees, presented with the maximum number of shares that could potentially vest, for the years ended December 31, 2023 and 2022. SCHEDULE OF RESTRICTED STOCK UNITS ACTIVITY Restricted Stock Units Weighted-Average Grant-Date Fair Values Outstanding as of January 1, 2023 1,197,552 $ 5.00 Granted — — Vested — — Forfeited or cancelled (32,305 ) 5.00 Outstanding as of December 31, 2023 1,165,247 $ 5.00 Restricted Stock Units Weighted-Average Grant-Date Fair Values Outstanding as of January 1, 2022 — $ — Granted 1,200,960 5.00 Vested — — Forfeited or cancelled (3,408 ) — Outstanding as of December 31, 2022 1,197,552 $ 5.00 The grant date fair value of PSUs granted to employees is based on the quoted market price of our common stock on the date of grant. Repurchase Activity All share repurchases settled in the year ended December 31, 2023 were open market transactions. As of December 31, 2023, 1,350,275 3.7 2.72 1.3 1,197,649 3.4 2.85 Stock-Based Compensation Expense Stock-based compensation expense resulting from RSUs and PSUs of $ 799,955 223,250 48,080 0 During the years ended December 31, 2023 and 2022, the Company recognized approximately $ 185,432 48,678 As of December 31, 2023, our total unrecognized compensation cost related to RSUs and PSUs was approximately $ 1.1 2.6 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 21 – SUBSEQUENT EVENTS ● In January 2024, the Company entered into an offset agreement with its related party, SDE. The offset agreement is effective as of January 1, 2024. In accordance with the agreement the Company will offset $ 0.5 6.0 ● In January 2024, the Company repaid the remaining $ 0.8 ● In January 2024, the Company repaid $ 3.0 ● In February 2024, the Company paid a portion of the convertible notes and accrued interest in the amount of $ 312,075 and the convertible note holders converted 71,460 shares for an aggregate value of $ 60,000 . ● In the first quarter of 2024, the Company repaid the remaining $ 1.5 ● In February 2024, Angela Games launched Myth of Empires 1.2 ● In March 2024, the Company entered into a development agreement with its related party, Suzhou Snail, to outsource the completion of an internal project, Hermes. Under the terms of the agreement, Suzhou Snail will outsource the labor needed to complete the development of project Hermes and provide technical support for a period of twelve months. The Company will retain all rights, title and interest, including the intellectual property for project Hermes. In return, the Company will pay Suzhou Snail $ 3.0 253,000 ● In April 2024, the Company paid $ 0.3 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Revenue Recognition | Revenue Recognition The Company’s revenue is generated from the publishing of software games sold digitally and through physical discs (e.g., packaged goods), the publishing of separate downloadable content that are new feature releases to existing digital full-game downloads, and in-app purchases of virtual goods used by players of its free-to-play mobile games. When control of the promised products and services is transferred to the end users, the Company recognizes revenue in the amount that reflects the consideration it expects to receive in exchange for these products and services. Revenue from delivery of products is recognized at a point in time when the end consumers purchase the games, and the control of the license is transferred to them. The virtual goods that the Company sells to players of our free-to-play mobile-games, include virtual currency or in-game purchases of additional game play functionality. For virtual goods, the satisfaction of our performance obligation is dependent on the nature of the virtual good purchased and as a result, the Company categorizes its virtual goods as follows: ● Consumable: c onsumable virtual items represent items that can be consumed by a specific player action. Consumable virtual items do not result in a direct benefit that the player keeps or provide the player any continuing benefit following consumption, and they often enable a player to perform an in-game action immediately. For the sale of consumable virtual items, the Company recognizes revenue as the items are consumed (i.e., over time) ● Durable: d urable virtual items represent items that are accessible to the player over an extended period of time. The Company For the ARK: Survival Ascended ● Reasonably available data points, including third party or industry pricing, and contractually stated prices. ● Market conditions such as market demand, competition, market constraints, awareness of the product and market trends. ● Entity-specific factors including pricing strategies and objectives, market share and pricing practices for bundled arrangements. The Company recognizes revenue using the following five steps as provided by Accounting Standards Codification (“ASC”) Topic 606 Revenue from Contracts with Customers 30 75 |
Principal vs. Agent Consideration | Principal vs. Agent Consideration The Company offers certain software products via third-party digital storefronts, such as Microsoft’s Xbox Live, Sony’s PlayStation Network, Valve’s Steam, Epic Games Store, My Nintendo Store, Apple’s App Store, the Google Play Store, and retail distributors. For sales of our software products via third-party digital storefronts and retail distributor, the Company determines whether or not it is acting as the principal in the sale to the end user, which the Company considers in determining if revenue should be reported based on the gross transaction price to the end user or based on the transaction price net of fees retained by the third-party digital storefront. An entity is the principal if it controls a good or service before it is transferred to the customer. Key indicators that the Company uses in evaluating these sales transactions include, but are not limited to, the following: ● The underlying contract terms and conditions between the various parties to the transaction; ● Which party is primarily responsible for fulfilling the promise to provide the specified good or service; and ● Which party has discretion in establishing the price for the specified good or service. Snail Inc. and Subsidiaries Notes to Consolidated Financial Statements Based on our evaluation of the above indicators, for sales arrangements via Microsoft’s Xbox Live, Sony’s PlayStation Network, Valve’s Steam, Epic Games Store, My Nintendo Store, and our retail distributor, the digital platforms and distributors have discretion in establishing the price for the specified good or service and the Company has determined it is the agent in the sales transaction to the end user and therefore the Company reports revenue on a net basis based on the consideration received from the digital storefront. For sales arrangements via Apple’s App Store and the Google Play Store, the Company has discretion in establishing the price for the specified good or service and it has determined that the Company is the principal to the end user and thus reports revenue on a gross basis and mobile platform fees charged by these digital storefronts are expensed as incurred and reported within cost of revenues. |
Contract Balance | Contract Balance The Company records deferred revenue when cash payments are received or due in advance of its performance, even if amounts are refundable. Deferred revenue is comprised of the transaction price allocable to the Company’s performance obligation on technical support and the sale of virtual goods available for in-app purchase, and payments received from customers prior to launching the games on the platforms. The Company recognizes revenues from the sale of virtual goods ratably over their estimated service period. The Company’s estimated service period is generally 30 to 100 days from the date of purchase. The Company has a long-term title license agreement with a platform. The agreement was initially made between the parties in November 2018 and valid through December 31, 2021. The agreement was subsequently amended in June 2020 to extend the ARK 1 ARK II 2.5 ARK 1’s 2.3 ARK II ARK II In November 2021, the Company entered an agreement with a platform to make ARK 1 3.5 The Company entered into a non-exclusive license agreement with a platform in February 2020 to make ARK 1 8.0 ARK 1 4.0 4.0 In July 2023, the Company entered into a distribution agreement with its retail distribution partner for the distribution of ARK: Survival Ascended ARK II. 0.5 1.3 ARK: Survival Ascended ARK II, |
Estimated Service Period | Estimated Service Period For certain performance obligations satisfied over time, the Company has determined that the estimated service period is the time period in which an average user plays our software games (“user life”) which most faithfully depicts the timing of satisfying our performance obligation. The Company considers a variety of data points when determining and subsequently reassessing the estimated service period for players of our software games. Primarily, the Company reviews the weighted average number of days between players’ first day play online or the subscription trend. The Company also considers publicly available online trends. The Company believes this provides a reasonable depiction of the transfer of our game related services to our players, as it is the best representation of the period during which our players play our software games. Determining the estimated service period is subjective and requires significant management judgment and estimates. Future usage patterns may differ from historical usage patterns, and therefore the estimated service period may change in the future. The estimated service periods for players of our current software games are generally between 30 and 100 days depending on the software games. |
Shipping, Handling and Value Added Taxes (“VAT”) | Shipping, Handling and Value Added Taxes (“VAT”) The distributor, as the principal, is responsible for the shipping of the game discs to retail stores and incurring the shipping and VAT costs. The Company is paid the net sales amount after deducting shipping costs, VAT and other related expenses by the distributor. Snail Inc. and Subsidiaries Notes to Consolidated Financial Statements |
Cost of Revenues | Cost of Revenues Cost of revenues include software license royalty fees, merchant fees, server and database center costs, game localization costs, game licenses, engine fees and amortization costs. Cost of revenues for the years ended December 31, 2023 and 2022 were comprised of the following: SCHEDULE OF COST OF REVENUES 2023 2022 Software license royalties – related parties $ 14,398,482 $ 16,963,388 Software license royalties 1,128,517 145,055 License and amortization – related parties 20,496,961 25,407,002 License and amortization 804 250,876 Game localization - 840 Merchant fees 1,369,595 2,424,832 Engine fees 4,301,104 1,972,126 Internet, server and data center 6,487,340 5,792,967 Costs related to advertising revenue 123,600 164,590 Total: $ 48,306,403 $ 53,121,676 |
General and Administrative Costs | General and Administrative Costs General and administrative costs include rent, salaries, stock-based compensation, legal and professional expenses, administrative internet and server, contractor costs, insurance expense, licenses and permits, other taxes and travel expenses. These costs are expensed as they are incurred. For the years ended December 31, 2023 and 2022, general and administrative expenses totaled $ 15,816,088 18,713,958 799,955 223,250 |
Advertising and Marketing Costs | Advertising and Marketing Costs The Company expenses advertising and marketing costs as incurred. For the years ended December 31, 2023 and 2022, advertising and marketing expenses totaled $ 1,582,464 714,492 |
Research and Development | Research and Development Research and development costs are expensed as incurred. Research and development costs include travel, payroll, and other general expenses specific to research and development activities. Research and development costs for the years ended December 31, 2023 and 2022 were $ 5,057,421 2,955,592 48,080 no |
Non-controlling Interests | Non-controlling Interests Non-controlling interests on the consolidated balance sheets and consolidated statements of operations and comprehensive income (loss) include the equity allocated to non-controlling interest holders. As of December 31, 2023 and 2022, there were non-controlling interests with the following subsidiaries: SCHEDULE OF EQUITY INTEREST AND NON CONTROLLING INTEREST IN SUBSIDIARIES Subsidiary Name Equity % Owned Non-Controlling % Snail Innovative Institute 70 % 30 % BTBX.IO, LLC 70 % 30 % Donkey Crew, LLC 99 % 1 % Snail Inc. and Subsidiaries Notes to Consolidated Financial Statements |
Cash and Cash Equivalents and Restricted Cash and Cash Equivalents | Cash and Cash Equivalents and Restricted Cash and Cash Equivalents Cash is available for use in current operations or other activities such as capital expenditures and business combinations. Restricted cash and cash equivalents are time deposits, that are currently provided as a standby letter of credit to landlords. The Company’s policy for determining whether an item is treated as cash, or a cash equivalent, is based on its original maturity, liquidity, and risk profile. Investments with maturities of three months or less, are highly liquid and have insignificant risk are considered to be cash equivalents. |
Restricted Escrow Deposits | Restricted Escrow Deposits Our restricted deposits held in escrow are to provide a source of funding for certain indemnification obligations of Snail, Inc. to our underwriters in connection with our IPO. The deposit and related interest earnings were restricted for one year from the IPO date and were released from restrictions in November 2023. |
Accounts Receivable | Accounts Receivable The Company generally records a receivable related to revenue when it has an unconditional right to invoice and receive payment. Accounts receivable are carried at original invoice amount less an allowance made for credit losses. The Company uses a combination of quantitative and qualitative factors to estimate the allowance, including an analysis of the customers’ creditworthiness, historical experience, age of current accounts receivable balances, changes in financial condition or payment terms of our customers, and reasonable forecasts of the collectability of the accounts receivable. The Company evaluates the allowance for credit losses on a periodic basis and adjusts it as necessary based on the risk factors mentioned above. Any increase in the provision for credit losses is recorded as a charge to general and administrative expense in the current period. Any amounts deemed uncollectible are written off against the allowance for credit losses. Management judgment is required to estimate our allowance for credit losses in any accounting period. The amount and timing of our credit losses and cash collection could change significantly because of a change in any of the risk factors mentioned above. During the year ended December 31, 2023, the Company’s allowance for credit losses increased from $ 19,929 523,500 77,928 |
Property, Plant and Equipment, Net | Property, Plant and Equipment, Net Property, plant and equipment, net, are stated at cost. Depreciation is calculated using the straight-line method over the following useful lives: SCHEDULE OF USEFUL LIVES OF PROPERTY, PLANT AND EQUIPMENT Buildings 39 years Building improvements 7 years Leasehold improvements Lesser of the lease term or the estimated useful lives of the improvements, generally 5 15 years Computer equipment and software 3 5 years Furniture and fixtures 3 years Auto and trucks 5 years When assets are retired or disposed of, the cost and accumulated depreciation thereon are removed, and any resulting gains or losses are included in the consolidated statements of operations and comprehensive income (loss). Leasehold improvements are amortized using the straight-line method over the estimated life of the asset, not to exceed the length of the lease. Repairs and maintenance costs are expensed as incurred. |
Foreign Currency | Foreign Currency The functional currency for our foreign operations is primarily the applicable local currency. Accounts of foreign operations are translated into U.S. dollars using exchange rates for assets and liabilities at the balance sheet date and average prevailing exchange rates for the period for revenue and expense accounts. Adjustments resulting from the translation are included in accumulated other comprehensive loss. Realized and unrealized transaction gains and losses arising from transactions denominated in foreign currencies different than the relevant functional currency are included in our consolidated statements of operations and comprehensive income (loss) in the period in which they occur. |
Intangible Assets – License Usage Rights | Intangible Assets – License Usage Rights The Company enters into license agreements with third-party developers and related party developers that require the Company to make payments for license usage rights and game development and production services. These license agreements grant the Company the exclusive publishing and distribution rights to game titles as well as, in some cases, the underlying intellectual property rights. These license agreements also specify the payment schedules, royalty rates and the relevant licensing period. The Company capitalizes the cost of license usage rights as intangible assets and amortizes them over the terms of the respective licensing rights. |
Fair Value Measurements | Fair Value Measurements The Company follows Financial Accounting Standards Board (“FASB”) ASC Topic 820, Fair Value Measurements. ASC 820 defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles and enhances disclosures about fair value measurements. Fair value is defined under ASC 820 as the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. ASC 820 establishes a hierarchy of valuation inputs based on the extent to which the inputs are observable in the marketplace. Observable inputs reflect market data obtained from sources independent of the reporting entity and unobservable inputs reflect the entity’s own assumptions about how market participants would value an asset or liability based on the best information available. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value. The following describes the hierarchy of inputs used to measure fair value and the primary valuation methodologies used by the Company for financial instruments measured at fair value. The three levels of inputs are as follows: ● Level 1 ● Level 2 ● Level 3 Snail Inc. and Subsidiaries Notes to Consolidated Financial Statements A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Our financial instruments include cash and cash equivalents, restricted cash and cash equivalents, short-term financial instruments, derivative instruments, short-term loans, accounts receivable and accounts payable. The carrying values of these financial instruments approximate their fair value due to their short maturities. The carrying amount of our debt approximates fair value because the interest rates on these instruments approximate the interest rate on debt with similar terms available to us for a similar duration except for the Company’s promissory note which has a fixed rate for 5 years 0.50 |
Amortizable Intangibles and Other Long-lived Assets | Amortizable Intangibles and Other Long-lived Assets The Company’s long-lived assets and other assets consisting of property, plant and equipment and purchased intangible assets, are reviewed for impairment in accordance with the guidance of FASB Topic ASC 360, Property, Plant, and Equipment. Intangible assets subject to amortization are carried at cost less accumulated amortization and amortized over the estimated useful life in proportion to the economic benefits received. The Company evaluates the recoverability of definite-lived intangible assets and other long-lived assets in accordance with ASC Subtopic 360-10, which generally requires the assessment of these assets for recoverability when events or circumstances indicate a potential impairment exists. The Company considers certain events and circumstances in determining whether the carrying value of identifiable intangible assets and other long-lived assets, other than indefinite lived intangible assets, may not be recoverable including, but not limited to: significant changes in performance relative to expected operating results; significant changes in the use of the assets; significant negative industry or economic trends; and changes in the Company’s business strategy. If the Company determines that the carrying value may not be recoverable, the Company estimates the undiscounted cash flows to be generated from the use and ultimate disposition of the asset group to determine whether an impairment exists. If an impairment is indicated based on a comparison of the asset groups’ carrying values and the undiscounted cash flows, the impairment loss is measured as the amount by which the carrying amount of the asset group exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. There can be no assurance, however, that market conditions will not change or demand for the Company’s products under development will continue. Either of these could result in future impairment of long-lived assets. Actual useful lives and cash flows could be different from those estimated by management which could have a material effect on our consolidated reporting results and financial positions. |
Income Taxes | Income Taxes Income taxes are provided for the tax effects of transactions reported in the consolidated financial statements and consisted of taxes currently due and deferred taxes. Deferred taxes are recognized for the differences between the basis of assets and liabilities for financial statement and income tax purposes. The Company follows FASB Topic ASC 740, Income Taxes, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates, applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. FASB ASC 740-10-25 provides criteria for the recognition, measurement, presentation, and disclosure of uncertain tax positions. The Company must recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. The Company recognizes liabilities for uncertain tax positions pursuant to FASB ASC 740-10-25. Such amounts are included in the long-term accrued expenses on the accompanying consolidated balance sheets in the amount of $ 254,731 457,024 Snail Inc. and Subsidiaries Notes to Consolidated Financial Statements |
Concentration of Credit Risk and Significant Customers | Concentration of Credit Risk and Significant Customers The Company maintains cash balances at several major financial institutions. While the Company attempts to limit credit exposure with any single institution, balances often exceed insurable amounts. As of December 31, 2023 and 2022, the Company had deposits of $ 14,716,652 17,929,308 The Company extends credit to various digital resellers and partners. Collection of trade receivables may be affected by changes in economic or other industry conditions and may, accordingly, impact our overall credit risk. The Company does not require collateral or other security to support financial instruments subject to credit risk. The Company performs ongoing credit evaluations of customers and maintains reserves for potentially uncollectible accounts. The Company had four customers as of December 31, 2023, and two customers as of December 31, 2022, who accounted for approximately 95 57 43 20 16 16 29 28 80 54 42 18 11 30 23 12 As of December 31, 2023 and 2022, the Company had one vendor who accounted for approximately 69 % and two vendors who accounted for approximately 43 % and 12 The Company had one vendor, SDE, a related party, that accounted for 51 47 |
Leases | Leases The Company has a lease relating primarily to office facilities. The Company determines if an arrangement is or contains a lease at contract inception. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. The lease liability is measured as the present value of the unpaid lease payments, and the right-of-use asset value is derived from the calculation of the lease liability. Lease payments include fixed and in-substance fixed payments, variable payments based on an index or rate, variable payments based on the level of services provided by the landlords of our leases, reasonably certain purchase options, and termination penalties. Variable lease payments related to the services provided by the landlords are non-lease components that are recognized as rent expenses as incurred. For leased assets with similar lease terms and asset types, the Company applied a portfolio approach in determining a single incremental borrowing rate for the leased assets. The Company uses its estimated incremental borrowing rate, which is derived from information available at the lease commencement date, in determining the present value of lease payments because the Company does not have the information necessary to determine the rate implicit in the lease. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. The Company’s lease term includes any option to extend the lease when it is reasonably certain to be exercised based on considering all relevant factors. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheets and the Company recognizes lease expense for these leases on a straight-line basis over the lease term. Operating leases are included in operating lease right-of-use assets, net, current portion of operating lease liabilities, and operating lease liabilities, net of current portion on the consolidated balance sheets. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses In August 2020, the FASB issued ASU 2020-06, Contracts in Entity’s Own Equity (Subtopic 815-40) – Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity In October 2023, the FASB issued ASU 2023-06, Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative, In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosure (Topic 280), In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, Snail Inc. and Subsidiaries Notes to Consolidated Financial Statements |
Employee Savings Plans | Employee Savings Plans The Company maintains a 401(k) for its United States based employees. The plan is offered to all eligible employees to make voluntary contributions. Employer contributions to the plan are reported under general and administrative costs in the amounts of $ 88,756 65,908 |
Stock-Based Compensation | Stock-Based Compensation The Company recognizes compensation cost for stock-based awards to employees based on the awards’ estimated grant-date fair value using a straight-line approach over the service period for which such awards are expected to vest. The Company accounts for forfeitures as they occur. The Company issued restricted stock units (“Restricted Stock Units” or “restricted stock units”) during the years ended December 31, 2023, and 2022. The fair value of Restricted Stock Units is determined based on the quoted market price of our common stock on the date of grant. The Company’s 2022 Omnibus Incentive Plan (the “2022 Plan”) became effective upon the consummation of the IPO. The 2022 Omnibus Incentive allows us to grant options to purchase our common stock and to grant stock options, stock appreciation rights, restricted stock, restricted stock units and performance awards and other cash-based awards and other stock-based awards to our employees, officers, and directors, up to a maximum of 5,718,000 5,718,000 1 4,485,275 |
Restricted Stock Units | Restricted Stock Units The Company granted restricted stock units under our 2022 Omnibus Incentive Plan to employees and directors. Restricted stock units are unfunded, unsecured rights to receive common stock upon the satisfaction of certain vesting criteria. Upon vesting, a number of shares of common stock equivalent to the number of restricted stock units is typically issued net of required tax withholding requirements, if any. Restricted stock units are subject to forfeiture and transfer restrictions. For the years ended December 31, 2023 and 2022, stock-based compensations expenses amounted to $ 848,035 223,250 |
Warrants | Warrants In connection with the IPO, offering costs related to legal, accounting, and underwriting costs were net with the proceeds and recorded as a reduction in additional paid in capital, in the stockholders’ equity section of the consolidated balance sheets. The Company also issued Underwriters Warrants (as defined below) for services provided during the IPO to purchase 120,000 On August 24, 2023, the Company issued warrants in connection with its convertible debt for the purchase of 714,285 Equity On August 24, 2023, the Company issued a warrant to an investor (the “Equity Line Warrant”) for the purchase of 367,647 Equity. |
Share Repurchase Program | Share Repurchase Program On November 10, 2022, the Company’s board of directors authorized a share repurchase program under which the Company may repurchase up to $ 5 No 1,350,275 3.7 2.72 1.3 Snail Inc. and Subsidiaries Notes to Consolidated Financial Statements |
Earnings (Loss) Per Share | Earnings (Loss) Per Share Earnings (loss) per share (“EPS”) is calculated by dividing the net income (loss) that is applicable to the common stockholders for the period by the weighted average number of shares of common stock during that period. The diluted EPS for the period is calculated by dividing the net income (loss) applicable to common stockholders for the period by the weighted average number of shares of common stock and common stock equivalents outstanding during the period. The Company’s common stock equivalents are measured using the treasury stock method and represent unvested restricted stock units and warrants. The Company issues two classes of common stock with differing voting rights, and as such, reports EPS using the dual class method. For comparative purposes, the Company has presented EPS for the year ended December 31, 2022 assuming the number of shares exchanged in the reorganization and issued in the IPO of the Company were outstanding at the start of the year. For more information see Note 19 – Earnings (Loss) Per Share. |
Dividend Restrictions | Dividend Restrictions Our ability to pay cash dividends is currently restricted by the terms of our credit facilities. |
PRESENTATION AND NATURE OF OP_2
PRESENTATION AND NATURE OF OPERATIONS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
SCHEDULE OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) | SCHEDULE OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) For the twelve months ended As reported Adjustment As adjusted Cost of revenues $ 49,507,888 $ 3,613,788 $ 53,121,676 Gross profit 24,936,253 (3,613,788 ) 21,322,465 General and administrative 22,327,746 (3,613,788 ) 18,713,958 For the three months ended As reported Adjustment As adjusted Cost of revenues $ 9,816,397 $ 1,044,540 $ 10,860,937 Gross profit 3,642,091 (1,044,540 ) 2,597,551 General and administrative 5,570,291 (1,044,540 ) 4,525,751 |
SCHEDULE OF SUBSIDIARIES INCLUDED IN THE CONSOLIDATED FINANCIAL STATEMENTS | The consolidated financial statements include the accounts of Snail, Inc. and the following subsidiaries: SCHEDULE OF SUBSIDIARIES INCLUDED IN THE CONSOLIDATED FINANCIAL STATEMENTS Equity % Subsidiary Name Owned Snail Games USA Inc. 100 % Snail Innovation Institute 70 % Frostkeep Studios, Inc. 100 % Eminence Corp 100 % Wandering Wizard, LLC 100 % Donkey Crew, LLC 99 % Interactive Films, LLC 100 % Project AWK Productions, LLC 100 % BTBX.IO, LLC 70 % |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
SCHEDULE OF COST OF REVENUES | SCHEDULE OF COST OF REVENUES 2023 2022 Software license royalties – related parties $ 14,398,482 $ 16,963,388 Software license royalties 1,128,517 145,055 License and amortization – related parties 20,496,961 25,407,002 License and amortization 804 250,876 Game localization - 840 Merchant fees 1,369,595 2,424,832 Engine fees 4,301,104 1,972,126 Internet, server and data center 6,487,340 5,792,967 Costs related to advertising revenue 123,600 164,590 Total: $ 48,306,403 $ 53,121,676 |
SCHEDULE OF EQUITY INTEREST AND NON CONTROLLING INTEREST IN SUBSIDIARIES | SCHEDULE OF EQUITY INTEREST AND NON CONTROLLING INTEREST IN SUBSIDIARIES Subsidiary Name Equity % Owned Non-Controlling % Snail Innovative Institute 70 % 30 % BTBX.IO, LLC 70 % 30 % Donkey Crew, LLC 99 % 1 % |
SCHEDULE OF USEFUL LIVES OF PROPERTY, PLANT AND EQUIPMENT | Property, plant and equipment, net, are stated at cost. Depreciation is calculated using the straight-line method over the following useful lives: SCHEDULE OF USEFUL LIVES OF PROPERTY, PLANT AND EQUIPMENT Buildings 39 years Building improvements 7 years Leasehold improvements Lesser of the lease term or the estimated useful lives of the improvements, generally 5 15 years Computer equipment and software 3 5 years Furniture and fixtures 3 years Auto and trucks 5 years |
REVENUE FROM CONTRACTS WITH C_2
REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
SCHEDULE OF DISAGGREGATION OF REVENUE | SCHEDULE OF DISAGGREGATION OF REVENUE 2023 2022 Over time $ 6,437,618 $ 18,832,396 Point in time 54,464,480 55,611,745 Total revenue from contracts with customers: $ 60,902,098 $ 74,444,141 Geography The Company attributes net revenue to geographic regions based on customer location. Net revenue by geographic region for the years ended December 31, 2023 and 2022 were as follows: 2023 2022 United States $ 53,577,666 $ 69,977,621 International 7,324,432 4,466,520 Total revenue from contracts with customers: $ 60,902,098 $ 74,444,141 Platform Net revenue by platform for the years ended December 31, 2023 and 2022 were as follows: 2023 2022 Console $ 26,628,037 $ 32,382,088 PC 26,402,330 31,592,858 Mobile 5,830,671 9,506,777 Other 2,041,060 962,418 Total revenue from contracts with customers: $ 60,902,098 $ 74,444,141 Distribution channel Our products are delivered through digital online services (digital download, online platforms, and cloud streaming), mobile, and retail distribution and other. Net revenue by distribution channel for the years ended December 31, 2023 and 2022 was as follows: 2023 2022 Digital $ 53,030,367 $ 63,974,946 Mobile 5,830,671 9,506,777 Physical retail and other 2,041,060 962,418 Total revenue from contracts with customers: $ 60,902,098 $ 74,444,141 |
SCHEDULE OF DEFERRED REVENUE | SCHEDULE OF DEFERRED REVENUE 2023 2022 Deferred revenue, beginning balance in advance of revenue recognition billing $ 9,551,446 $ 20,280,934 Revenue recognized (6,437,618 ) (18,832,396 ) Revenue deferred 31,202,878 8,102,908 Deferred revenue, ending balance 34,316,706 9,551,446 Less: current portion (19,252,628 ) (4,335,404 ) Deferred revenue, long term $ 15,064,078 $ 5,216,042 |
CASH AND CASH EQUIVALENTS, AN_2
CASH AND CASH EQUIVALENTS, AND RESTRICTED CASH AND CASH EQUIVALENTS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Cash And Cash Equivalents And Restricted Cash And Cash Equivalents | |
SUMMARY OF COMPONENTS OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AND CASH EQUIVALENTS | SUMMARY OF COMPONENTS OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AND CASH EQUIVALENTS 2023 2022 Cash and cash equivalents $ 15,198,123 $ 12,863,817 Restricted cash and cash equivalents 1,116,196 6,374,368 Cash and cash equivalents, and restricted cash and cash equivalents $ 16,314,319 $ 19,238,185 |
ACCOUNTS RECEIVABLE (PAYABLE)_2
ACCOUNTS RECEIVABLE (PAYABLE) – RELATED PARTY (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accounts Receivable Payable Related Party | |
SCHEDULE OF ACCOUNTS RECEIVABLE RELATED PARTY | SCHEDULE OF ACCOUNTS RECEIVABLE RELATED PARTY 2023 2022 Accounts receivable – related party $ 13,500,592 $ 13,519,409 Less: accounts payable – related party – SDE (10,946,478 ) (2,175,225 ) Net accounts receivable, related party - SDE 2,554,114 11,344,184 Less: accounts receivable – related party, net of current portion 7,500,592 - Net accounts receivable (payable), related party, current - SDE $ (4,946,478 ) $ 11,344,184 |
PREPAID EXPENSES - RELATED PA_2
PREPAID EXPENSES - RELATED PARTY (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Prepaid Expenses - Related Party | |
SCHEDULE OF PREPAID EXPENSES - RELATED PARTY | SCHEDULE OF PREPAID EXPENSES - RELATED PARTY 2023 2022 Prepaid royalties $ 6,086,406 $ 582,500 Prepaid licenses 7,500,000 5,000,000 Other prepaids 242,060 - Prepaid expenses - related party, ending balance 13,828,466 5,582,500 Less: short-term portion (6,044,404 ) — Total prepaid expenses - related party, long-term $ 7,784,062 $ 5,582,500 |
PREPAID EXPENSES AND OTHER CU_2
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Prepaid Expenses And Other Current Assets | |
SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS | Prepaid expenses and other current assets consisted of the following as of December 31, 2023, and 2022: SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS 2023 2022 Prepaid income taxes $ 9,529,755 $ 9,822,603 Deferred offering costs 105,411 — Other prepaids 70,967 80,271 Other current assets 463,315 662,267 Total prepaid expenses and other current assets $ 10,169,448 $ 10,565,141 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT, NET | Property, plant and equipment, net consisted of the following as of December 31, 2023 and 2022: SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT, NET 2023 2022 Building $ 1,874,049 $ 1,874,049 Land 2,700,000 2,700,000 Building improvements 1,010,218 1,010,218 Leasehold improvements 1,537,775 1,537,775 Autos and trucks 178,695 178,695 Computer and equipment 1,809,214 1,821,819 Furniture and fixtures 411,801 411,801 Property, plant and equipment, gross 9,521,752 9,534,357 Accumulated depreciation (4,839,686 ) (4,419,558 ) Property, plant and equipment, net $ 4,682,066 $ 5,114,799 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
SCHEDULE OF INTANGIBLE ASSETS | The following tables reflect all the intangible assets presented on the consolidated balance sheets as of December 31, 2023 and 2022: SCHEDULE OF INTANGIBLE ASSETS December 31, 2023 Gross Weighted Carrying Accumulated Impairment Net Book Average Amount Amortization Loss Value Useful Life License rights from related parties $ 136,665,000 $ (136,665,000 ) $ — $ — 3 5 License rights $ 3,000,000 $ (3,000,000 ) $ — $ — 5 Intangible assets - other: Software $ 51,784 $ (51,784 ) $ — $ — 3 Trademark 10,745 (9,914 ) — 831 12 In-progress patent 270,886 — — 270,886 Total: $ 333,415 $ (61,698 ) $ — $ 271,717 Snail Inc. and Subsidiaries Notes to Consolidated Financial Statements December 31, 2022 Gross Weighted Carrying Accumulated Impairment Net Book Average Amount Amortization Loss Value Useful Life License rights from related parties $ 136,665,000 $ (135,280,942 ) $ — $ 1,384,058 3 5 License rights $ 3,000,000 $ (3,000,000 ) $ — $ — 5 Intangible assets - other: Software $ 51,784 $ (51,784 ) $ — $ — 3 Trademark 10,745 (9,110 ) — 1,635 12 In-progress patent 270,886 — — 270,886 Total: $ 333,415 $ (60,894 ) $ — $ 272,521 |
SCHEDULE OF FUTURE AMORTIZATION EXPENSE OF INTANGIBLE ASSETS | SCHEDULE OF FUTURE AMORTIZATION EXPENSE OF INTANGIBLE ASSETS Years ending December 31, Amount 2024 $ 804 2025 27 2026 — 2027 — 2028 — Thereafter 270,886 Total $ 271,717 |
ACCOUNTS PAYABLE _ RELATED PA_2
ACCOUNTS PAYABLE — RELATED PARTIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accounts Payable Related Parties | |
SCHEDULE OF ACCOUNTS PAYABLE- RELATED PARTIES | SCHEDULE OF ACCOUNTS PAYABLE- RELATED PARTIES 2023 2022 Accounts payable - Suzhou $ 55,762,870 $ 57,533,171 Less: accounts receivable - Suzhou (37,614,912 ) (37,614,912 ) Accounts payable - SDE 4,946,478 - Total accounts payable – related parties $ 23,094,436 $ 19,918,259 |
REVOLVING LOAN, SHORT TERM NO_2
REVOLVING LOAN, SHORT TERM NOTES AND LONG - TERM DEBT (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
SCHEDULE OF LONG TERM DEBT | SCHEDULE OF LONG TERM DEBT December 31, 2023 December 31, 2022 2021 Revolving Loan 9,000,000 6,000,000 December 31, 2024 0.25 8.25 5,262,627 1.5 to 1 $ 6,000,000 $ 9,000,000 2021 Promissory Note 10 3.5 5 6 to 10 4.2 5.3 June 30, 2031 1.5 to 1 2,811,923 2,891,820 2022 Short Term Note 10,000,000 January 26, 2023 3.75 0.50 5 1.5 to 1 0.25 5.75 8.25 833,333 5,833,333 2023 Convertible Notes 7.4 1,080,000 7.5 February 24, 2024 May 24, 2024 16 678,254 109.7 797,361 - 2023 Note Payable – Ark: Survival Evolved 7 years . In return the vendor has agreed to provide the Company with funds in cash of up to $ 3.0 million without discount and free of charges and costs to the Company. The Company drew on the full $ 3.0 The funds are repaid in monthly installments starting in November 2023 and are to be based on 20% of the gross monthly ARK: Survival Ascended The Company has imputed interest at 8.0 % on draws made. If in default, the interest rate is levied on the outstanding balances at a rate of 12.0 % per annum. 1,500,000 - Total debt of $ 12,225,256 282,639 11,942,617 17,725,153 Total debt 11,942,617 17,725,153 Less: current portion of promissory note 2,811,923 86,524 Less: revolving loan 6,000,000 9,000,000 Less: notes payable 2,333,333 5,416,666 Less: convertible notes, net of discount 797,361 - Total long-term debt $ - $ 3,221,963 |
SCHEDULE OF FUTURE MINIMUM PAYMENTS OF LONG TERM DEBT | The following table provides future minimum payments of its long-term debt as of December 31: SCHEDULE OF FUTURE MINIMUM PAYMENTS OF LONG TERM DEBT Years ending December 31, Amount 2024 $ 9,502,708 2025 86,013 2026 89,115 2027 92,329 2028 95,414 Thereafter 2,359,677 Long term debt $ 12,225,256 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
SCHEDULE OF INCOME (LOSS) BEFORE INCOME TAXES | The components of income (loss) before income taxes for the years ended December 31, 2023 and 2022 are as follows: SCHEDULE OF INCOME (LOSS) BEFORE INCOME TAXES 2023 2022 United States $ (11,666,676 ) $ (1,587,477 ) Foreign 171,600 135,232 Total $ (11,495,076 ) $ (1,452,245 ) |
SCHEDULE OF INCOME TAX (BENEFIT) PROVISION | The income tax benefit for the years ended December 31, 2023 and 2022 are as follows: SCHEDULE OF INCOME TAX (BENEFIT) PROVISION 2023 2022 Current: U.S. federal $ 112,344 $ (499,784 ) U.S. State 82,595 (2,535,117 ) Foreign 49,373 — Total current income taxes 244,312 (3,034,901 ) Deferred: U.S. federal (2,577,737 ) 602,102 U.S. State (67,227 ) (11,686 ) Foreign — (1,938 ) Total deferred income taxes (2,644,964 ) 588,478 Income tax benefit $ (2,400,652 ) $ (2,446,423 ) |
SCHEDULE OF PROVISION (BENEFITS) FOR INCOME TAXES RATE RECONCILIATION | SCHEDULE OF PROVISION (BENEFITS) FOR INCOME TAXES RATE RECONCILIATION 2023 2022 Federal statutory income tax rate 21.00 % 21.00 % Valuation allowance (1.21 )% 58.33 % FIN 48 1.13 % 5.21 % Return to provision (0.78 )% 17.27 % State refund benefit — 130.84 % Change in subsidiary tax status — (73.52 )% PPP loan — 2.45 % GILTI (0.43 )% (1.80 )% State taxes (0.10 )% 2.94 % Foreign withholding tax (0.43 )% — R&D credit true-up 1.76 % 2.84 % Rate change (0.02 )% 1.82 % Other (0.04 )% 1.10 % Effective tax rate 20.88 % 168.48 % |
SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES | The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities consisted of the following as of December 31, 2023 and 2022: SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES 2023 2022 Deferred tax assets (noncurrent): Net operating losses $ 9,941,478 $ 6,884,595 Deferred revenue 1,564,708 2,003,812 Research and development credit 664,877 494,777 Book lease liability (ASC 842) 640,414 937,968 Fixed assets and intangibles 286,902 1,959,679 Section 174 capitalized research and experimental expenditures 2,101,923 825,394 Interest limitation carryforward 329,383 30,944 Stock based compensation 234,110 48,678 Other 960,471 1,006,040 Total deferred tax assets 16,724,266 14,191,887 Deferred tax liabilities (noncurrent): Book ROU assets (ASC 842) (533,369 ) (786,350 ) Basis difference in subsidiary (799,595 ) (797,806 ) Total deferred tax liabilities: (1,332,964 ) (1,584,156 ) Long-term deferred tax asset 15,391,302 12,607,731 Valuation allowance (5,143,802 ) (5,005,195 ) Net deferred tax asset $ 10,247,500 $ 7,602,536 |
SCHEDULE OF UNRECOGNIZED TAX BENEFITS | The following table reflects changes in gross unrecognized tax benefits for the years ended December 31, 2023 and 2022: SCHEDULE OF UNRECOGNIZED TAX BENEFITS 2023 2022 Unrecognized tax benefits at beginning of year $ 696,895 $ 693,913 Gross Increases – current year positions — — Gross Increases – prior year positions — 72,177 Gross Decreases – expiration of statute of limitation (37,550 ) — Gross Decreases – settlements (171,737 ) (69,195 ) Unrecognized tax benefits at end of year $ 487,608 $ 696,895 |
OPERATING LEASE RIGHT-OF-USE _2
OPERATING LEASE RIGHT-OF-USE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Operating Lease Right-of-use Assets | |
SCHEDULE OF TERMINATIONS OPERATING LEASE | SCHEDULE OF TERMINATIONS OPERATING LEASE Right of Accumulated Lease Liability Gain on Use Asset Amortization Current Long Term Termination Lease Terminations $ (1,301,571 ) $ 907,370 $ 442,704 $ 74,030 $ 122,533 |
SCHEDULE OF OPERATING LEASE COSTS | Operating lease costs included in the general and administrative expenses in our consolidated statements of operations and comprehensive income (loss) for the years ended December 31, 2023 and 2022, are as follows: SCHEDULE OF OPERATING LEASE COSTS 2023 2022 Operating lease costs $ 1,578,751 $ 1,590,872 |
SCHEDULE OF SUPPLEMENTAL INFORMATION RELATED TO OPERATING LEASES | Supplemental information related to operating leases for lease liabilities as of December 31, 2023 and 2022, is as follows: SCHEDULE OF SUPPLEMENTAL INFORMATION RELATED TO OPERATING LEASES 2023 2022 Cash paid for amounts included in the measurement of lease liabilities $ 1,548,889 $ 1,489,396 Weighted average remaining lease term 1.9 2.9 Weighted average discount rate 5.00 % 5.00 % |
SCHEDULE OF FUTURE UNDISCOUNTED LEASE PAYMENTS FOR OPERATING LEASES AND RECONCILIATION OF THESE PAYMENTS TO OUR OPERATING LEASE LIABILITIES | Future undiscounted lease payments for operating leases and a reconciliation of these payments to our operating lease liabilities as of December 31, 2023 are as follows: SCHEDULE OF FUTURE UNDISCOUNTED LEASE PAYMENTS FOR OPERATING LEASES AND RECONCILIATION OF THESE PAYMENTS TO OUR OPERATING LEASE LIABILITIES Years ending December 31, Future lease payments Imputed Interest Amount Lease Liabilities 2024 $ 1,610,844 $ 105,810 $ 1,505,034 2025 1,453,784 28,290 1,425,494 2026 — — — Thereafter — — — Total future lease payments $ 3,064,628 $ 134,100 $ 2,930,528 |
EARNINGS (LOSS) PER SHARE (Tabl
EARNINGS (LOSS) PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
SCHEDULE OF EARNINGS PER SHARE | SCHEDULE OF EARNINGS PER SHARE 2023 2022 For the year ended 2023 2022 Basic Earnings (Loss) Per Share: Net (loss) income attributable to Class A common stockholders $ (1,960,813 ) $ 228,482 Net (loss) income attributable to Class B common stockholders (7,125,262 ) 719,325 Net (loss) income attributable to common stockholders (7,125,262 ) 719,325 Total net (loss) income attributable to Snail Inc and Snail Games USA Inc. $ (9,086,075 ) $ 947,807 Class A weighted average shares outstanding – basic 7,911,369 9,131,512 Class B weighted average shares outstanding – basic 28,748,580 28,748,580 weighted average shares outstanding - basic 28,748,580 28,748,580 Class A and B basic (loss) earnings per share $ (0.25 ) $ 0.03 Diluted Earnings (Loss) Per Share: Net (loss) income attributable to Class A common stockholders $ (1,960,813 ) $ 228,482 Net (loss) income attributable to Class B common stockholders $ (7,125,262 ) $ 719,325 Net (loss) attributable to common stockholders $ (7,125,262 ) $ 719,325 Class A weighted average shares outstanding - basic 7,911,369 9,131,512 Dilutive effects of common stock equivalents - - Class A weighted average shares outstanding - diluted 7,911,369 9,131,512 Class B weighted average shares outstanding - basic 28,748,580 28,748,580 weighted average shares outstanding - basic 28,748,580 28,748,580 Dilutive effects of common stock equivalents - - Class B weighted average shares outstanding - diluted 28,748,580 28,748,580 weighted average shares outstanding - diluted 28,748,580 28,748,580 Diluted (loss) earnings per Class A and B share $ (0.25 ) $ 0.03 |
EQUITY (Tables)
EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
SCHEDULE OF PROCEEDS BETWEEN THE INSTRUMENTS | SCHEDULE OF PROCEEDS BETWEEN THE INSTRUMENTS Convertible notes $ 554,246 Derivative liability - Warrants 445,754 Total proceeds $ 1,000,000 |
SCHEDULE OF CONVERTIBLE NOTES | SCHEDULE OF CONVERTIBLE NOTES Fair value Principal Amount Unamortized debt discount and issuance costs Net carrying amount Amount Levelling Convertible Notes $ 860,910 $ (63,549 ) $ 797,361 $ 536,170 Level 3 |
SCHEDULE OF STOCK BASED WARRANTS | SCHEDULE OF STOCK BASED WARRANTS Issuance December 31, Stock price $ 1.35 $ 1.21 Exercise price $ 1.89 $ 1.89 Contractual term (years) 5.0 4.65 Volatility 60.0 % 50.0 % Risk-free rate 4.39 % 3.87 % |
Director [Member] | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
SCHEDULE OF RESTRICTED STOCK UNITS ACTIVITY | SCHEDULE OF RESTRICTED STOCK UNITS ACTIVITY Restricted Stock Units Weighted-Average Grant-Date Fair Values Outstanding as of January 1, 2023 24,000 $ 5.00 Granted 43,478 1.38 Vested (24,000 ) (5.00 ) Forfeited or cancelled — — Outstanding as of December 31, 2023 43,478 $ 1.38 |
Employee Stock [Member] | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
SCHEDULE OF RESTRICTED STOCK UNITS ACTIVITY | SCHEDULE OF RESTRICTED STOCK UNITS ACTIVITY Restricted Stock Units Weighted-Average Grant-Date Fair Values Outstanding as of January 1, 2023 1,197,552 $ 5.00 Granted — — Vested — — Forfeited or cancelled (32,305 ) 5.00 Outstanding as of December 31, 2023 1,165,247 $ 5.00 |
Warrant One [Member] | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
SCHEDULE OF STOCK BASED WARRANTS | SCHEDULE OF STOCK BASED WARRANTS Issuance December 31, Stock price $ 1.35 $ 1.21 Exercise price $ 1.50 $ 1.50 Contractual term (years) 5.0 4.65 Volatility 40.0 % 50.0 % Risk-free rate 5.49 % 3.87 % |
SCHEDULE OF OPERATIONS AND COMP
SCHEDULE OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Cost of revenues | $ 10,860,937 | $ 53,121,676 | |
Gross profit | 2,597,551 | $ 12,595,695 | 21,322,465 |
General and administrative | 4,525,751 | 15,816,088 | 18,713,958 |
General and administrative | (4,525,751) | $ (15,816,088) | (18,713,958) |
Previously Reported [Member] | |||
Cost of revenues | 9,816,397 | 49,507,888 | |
Gross profit | 3,642,091 | 24,936,253 | |
General and administrative | 5,570,291 | 22,327,746 | |
General and administrative | (5,570,291) | (22,327,746) | |
Revision of Prior Period, Adjustment [Member] | |||
Cost of revenues | 1,044,540 | 3,613,788 | |
Gross profit | (1,044,540) | (3,613,788) | |
General and administrative | 1,044,540 | 3,613,788 | |
General and administrative | $ (1,044,540) | $ (3,613,788) |
SCHEDULE OF SUBSIDIARIES INCLUD
SCHEDULE OF SUBSIDIARIES INCLUDED IN THE CONSOLIDATED FINANCIAL STATEMENTS (Details) | Dec. 31, 2023 | Dec. 31, 2022 |
Snail Innovation Institute [Member] | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Equity interest owned by the company | 70% | 70% |
Donkey Crew, LLC [Member] | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Equity interest owned by the company | 99% | 99% |
BTBX.IO, LLC [Member] | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Equity interest owned by the company | 70% | 70% |
Subsidiaries [Member] | Snail Games Usa Inc [Member] | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Equity interest owned by the company | 100% | |
Subsidiaries [Member] | Snail Innovation Institute [Member] | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Equity interest owned by the company | 70% | |
Subsidiaries [Member] | Frostkeep Studios Inc [Member] | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Equity interest owned by the company | 100% | |
Subsidiaries [Member] | Eminence Corp [Member] | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Equity interest owned by the company | 100% | |
Subsidiaries [Member] | Wandering Wizard Llc [Member] | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Equity interest owned by the company | 100% | |
Subsidiaries [Member] | Donkey Crew, LLC [Member] | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Equity interest owned by the company | 99% | |
Subsidiaries [Member] | Interactive Films Llc [Member] | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Equity interest owned by the company | 100% | |
Subsidiaries [Member] | Project AWK Productions Llc [Member] | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Equity interest owned by the company | 100% | |
Subsidiaries [Member] | BTBX.IO, LLC [Member] | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Equity interest owned by the company | 70% |
PRESENTATION AND NATURE OF OP_3
PRESENTATION AND NATURE OF OPERATIONS (Details Narrative) | 1 Months Ended | 12 Months Ended | |||||
Nov. 09, 2022 $ / shares shares | Jul. 13, 2022 shares | Apr. 30, 2024 USD ($) | Nov. 30, 2022 USD ($) | Dec. 31, 2023 USD ($) Integer | Dec. 31, 2022 USD ($) | Jan. 31, 2024 USD ($) | |
Net proceeds from shares issued in IPO | $ 11,791,705 | ||||||
Number of operating segments | Integer | 1 | ||||||
Revolving loan | $ 3,000,000 | ||||||
Short term debt | 2,333,333 | 5,416,666 | |||||
Accrued interest and principal | 300,000 | ||||||
Interest Expense | 1,500,000 | ||||||
Accrued interest and principal | 0 | 580,878 | |||||
Revolving loan payable current | 6,000,000 | $ 9,000,000 | |||||
Prromissory note | 2,800,000 | ||||||
Unrestricted cash | 15,200,000 | ||||||
Subsequent Event [Member] | |||||||
Accrued interest and principal | $ 300,000 | ||||||
Short-Term Debt [Member] | |||||||
Short term debt | $ 800,000 | ||||||
Short-Term Debt [Member] | Subsequent Event [Member] | |||||||
Short term debt | $ 800,000 | ||||||
IPO [Member] | |||||||
Net proceeds from shares issued in IPO | $ 12,000,000 | ||||||
Offering costs | $ 3,000,000 | ||||||
Period amount in escrow is restricted | 12 months | ||||||
Common Class A [Member] | |||||||
Number of shares of common stock issued as per agreement | shares | 6,251,420 | ||||||
Common Class A [Member] | IPO [Member] | |||||||
Number of shares of common stock issued as per agreement | shares | 3,000,000 | ||||||
Share issued price per share | $ / shares | $ 5 | ||||||
Common Class B [Member] | |||||||
Number of shares of common stock issued as per agreement | shares | 28,748,580 | ||||||
Snail Games USA Stock holders [Member] | |||||||
Number of shares transferred | shares | 500,000 | ||||||
Snail Technology Hk Limited [Member] | |||||||
Number of shares transferred | shares | 500,000 |
SCHEDULE OF COST OF REVENUES (D
SCHEDULE OF COST OF REVENUES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Accounting Policies [Abstract] | ||
Software license royalties – related parties | $ 14,398,482 | $ 16,963,388 |
Software license royalties | 1,128,517 | 145,055 |
License and amortization – related parties | 20,496,961 | 25,407,002 |
License and amortization | 804 | 250,876 |
Game localization | 840 | |
Merchant fees | 1,369,595 | 2,424,832 |
Engine fees | 4,301,104 | 1,972,126 |
Internet, server and data center | 6,487,340 | 5,792,967 |
Costs related to advertising revenue | 123,600 | 164,590 |
Total: | $ 48,306,403 | $ 53,121,676 |
SCHEDULE OF EQUITY INTEREST AND
SCHEDULE OF EQUITY INTEREST AND NON CONTROLLING INTEREST IN SUBSIDIARIES (Details) | Dec. 31, 2023 | Dec. 31, 2022 |
Snail Innovation Institute [Member] | ||
Equity interest owned by the company | 70% | 70% |
Non controlling interest held in a subsidiary | 30% | 30% |
BTBX.IO, LLC [Member] | ||
Equity interest owned by the company | 70% | 70% |
Non controlling interest held in a subsidiary | 30% | 30% |
Donkey Crew, LLC [Member] | ||
Equity interest owned by the company | 99% | 99% |
Non controlling interest held in a subsidiary | 1% | 1% |
SCHEDULE OF USEFUL LIVES OF PRO
SCHEDULE OF USEFUL LIVES OF PROPERTY, PLANT AND EQUIPMENT (Details) | Dec. 31, 2023 |
Building [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 39 years |
Building Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 7 years |
Leasehold Improvements [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 5 years |
Leasehold Improvements [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 15 years |
Computer Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 3 years |
Computer Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 5 years |
Furniture and Fixtures [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 3 years |
Vehicles [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 5 years |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||
Aug. 24, 2023 | Nov. 09, 2022 | Nov. 30, 2021 | Mar. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2020 | Jul. 31, 2023 | Nov. 10, 2022 | |
Product Information [Line Items] | |||||||||
Contract with customer, liability, revenue recognized | $ 500,000 | ||||||||
Deferred revenue - long term | 15,064,078 | $ 5,216,042 | |||||||
Deferred revenue | 19,252,628 | 4,335,404 | |||||||
General and administrative expense | $ 4,525,751 | 15,816,088 | 18,713,958 | ||||||
Advertising expense | 1,582,464 | 714,492 | |||||||
Research and development expense | 5,057,421 | 2,955,592 | |||||||
Stock based compensation | 48,080 | 0 | |||||||
Liabilities for uncertain tax positions | 254,731 | 457,024 | |||||||
Deposits not insured by FDIC | 14,716,652 | 17,929,308 | |||||||
Employer contributions to the plan | 88,756 | 65,908 | |||||||
Stock based compensation | $ 848,035 | $ 223,250 | |||||||
Convertible debt shares | 714,285 | ||||||||
Warrant [Member] | |||||||||
Product Information [Line Items] | |||||||||
Number of shares issued | 367,647 | ||||||||
Common Class B [Member] | |||||||||
Product Information [Line Items] | |||||||||
Number of shares issued | 28,748,580 | ||||||||
Common Class A [Member] | |||||||||
Product Information [Line Items] | |||||||||
Number of warrants issued to purchase common stock | 120,000 | ||||||||
Number of shares issued | 6,251,420 | ||||||||
Shares remain available for repurchase | $ 1,300,000 | ||||||||
Omnibus Incentive Plan (2022 Plan) [Member] | |||||||||
Product Information [Line Items] | |||||||||
Number of shares available for issuance | 5,718,000 | ||||||||
Omnibus Incentive Plan (2022 Plan) [Member] | Common Class B [Member] | |||||||||
Product Information [Line Items] | |||||||||
Annual increase in shares reserve for issuance (as a percent) | 1% | ||||||||
Share Repurchase Program [Member] | |||||||||
Product Information [Line Items] | |||||||||
Number of treasury stock sold | 0 | 0 | |||||||
Share Repurchase Program [Member] | Common Class A [Member] | |||||||||
Product Information [Line Items] | |||||||||
Shares authorized to repurchase | $ 5,000,000 | ||||||||
Number of shares repurchased | 1,350,275 | ||||||||
Aggregate purchase price of shares repurchased | $ 3,700,000 | ||||||||
Average price paid per share for repurchase of shares | $ 2.72 | ||||||||
Shares remain available for repurchase | $ 1,300,000 | ||||||||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customers [Member] | |||||||||
Product Information [Line Items] | |||||||||
Concentration percentage | 95% | 57% | |||||||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | One Customer [Member] | |||||||||
Product Information [Line Items] | |||||||||
Concentration percentage | 43% | 29% | |||||||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Two Customers [Member] | |||||||||
Product Information [Line Items] | |||||||||
Concentration percentage | 20% | 28% | |||||||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Three Customers [Member] | |||||||||
Product Information [Line Items] | |||||||||
Concentration percentage | 16% | ||||||||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Four Customers [Member] | |||||||||
Product Information [Line Items] | |||||||||
Concentration percentage | 16% | ||||||||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customers [Member] | |||||||||
Product Information [Line Items] | |||||||||
Concentration percentage | 80% | 54% | |||||||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | One Customer [Member] | |||||||||
Product Information [Line Items] | |||||||||
Concentration percentage | 42% | 30% | |||||||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Two Customer [Member] | |||||||||
Product Information [Line Items] | |||||||||
Concentration percentage | 18% | 23% | |||||||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Three Customer [Member] | |||||||||
Product Information [Line Items] | |||||||||
Concentration percentage | 11% | 12% | |||||||
Accounts Payable [Member] | Supplier Concentration Risk [Member] | Vendors [Member] | |||||||||
Product Information [Line Items] | |||||||||
Concentration percentage | 69% | ||||||||
Accounts Payable [Member] | Supplier Concentration Risk [Member] | One Vendor [Member] | |||||||||
Product Information [Line Items] | |||||||||
Concentration percentage | 43% | ||||||||
Accounts Payable [Member] | Supplier Concentration Risk [Member] | Two Vendors [Member] | |||||||||
Product Information [Line Items] | |||||||||
Concentration percentage | 12% | ||||||||
Combined Gross Cost Of Revenues And Operating Expenses [Member] | Supplier Concentration Risk [Member] | Major Vendors [Member] | |||||||||
Product Information [Line Items] | |||||||||
Concentration percentage | 51% | 47% | |||||||
Promissory Note [Member] | Wall Street Journal Prime Rate [Member] | |||||||||
Product Information [Line Items] | |||||||||
Debt instrument interest rate stated percentage period | 5 years | ||||||||
Floating prime rate | 0.50% | ||||||||
General and Administrative Expense [Member] | |||||||||
Product Information [Line Items] | |||||||||
Allocated share based compensation expense | $ 799,955 | $ 223,250 | |||||||
Survival Ascended [Member] | |||||||||
Product Information [Line Items] | |||||||||
Deferred revenue | $ 500,000 | ||||||||
ARK II [Member] | |||||||||
Product Information [Line Items] | |||||||||
Deferred revenue - long term | $ 1,300,000 | ||||||||
Related Party [Member] | |||||||||
Product Information [Line Items] | |||||||||
Allowance for credit losses | 11,344,184 | ||||||||
INDIEV Inc [Member] | |||||||||
Product Information [Line Items] | |||||||||
Allowance for credit losses | $ 77,928 | ||||||||
ARK Survival Evolved [Member] | Long Term Title License Agreement With Platform [Member] | |||||||||
Product Information [Line Items] | |||||||||
Contract with customer, liability, revenue recognized | 2,500,000 | ||||||||
ARK Survival Evolved [Member] | Agreement With Platform [Member] | |||||||||
Product Information [Line Items] | |||||||||
Proceeds from agreement with customers | $ 3,500,000 | ||||||||
ARK Survival Evolved [Member] | Non Exclusive License Agreement With Platform [Member] | |||||||||
Product Information [Line Items] | |||||||||
Contract with customer, liability, revenue recognized | 4,000,000 | $ 4,000,000 | |||||||
Proceeds from agreement with customers | $ 8,000,000 | ||||||||
ARK II [Member] | Long Term Title License Agreement With Platform [Member] | |||||||||
Product Information [Line Items] | |||||||||
Deferred revenue - long term | $ 2,300,000 | ||||||||
Minimum [Member] | |||||||||
Product Information [Line Items] | |||||||||
Typical customer terms | 30 days | ||||||||
Minimum [Member] | Omnibus Incentive Plan (2022 Plan) [Member] | |||||||||
Product Information [Line Items] | |||||||||
Number of shares available for issuance | 4,485,275 | ||||||||
Minimum [Member] | Related Party [Member] | |||||||||
Product Information [Line Items] | |||||||||
Allowance for credit losses | $ 19,929 | ||||||||
Maximum [Member] | |||||||||
Product Information [Line Items] | |||||||||
Typical customer terms | 75 days | ||||||||
Maximum [Member] | Related Party [Member] | |||||||||
Product Information [Line Items] | |||||||||
Allowance for credit losses | $ 523,500 |
SCHEDULE OF DISAGGREGATION OF R
SCHEDULE OF DISAGGREGATION OF REVENUE (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Total revenue from contracts with customers: | $ 60,902,098 | $ 74,444,141 |
Sales Channel Directly To Consumer Digital Online Service [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue from contracts with customers: | 53,030,367 | 63,974,946 |
Sales Channel Directly To Consumer Mobile Sale [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue from contracts with customers: | 5,830,671 | 9,506,777 |
Sales Channel, Through Intermediary [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue from contracts with customers: | 2,041,060 | 962,418 |
Console [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue from contracts with customers: | 26,628,037 | 32,382,088 |
Pc [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue from contracts with customers: | 26,402,330 | 31,592,858 |
Mobile [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue from contracts with customers: | 5,830,671 | 9,506,777 |
Manufactured Product, Other [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue from contracts with customers: | 2,041,060 | 962,418 |
UNITED STATES | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue from contracts with customers: | 53,577,666 | 69,977,621 |
Non-US [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue from contracts with customers: | 7,324,432 | 4,466,520 |
Transferred over Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue from contracts with customers: | 6,437,618 | 18,832,396 |
Transferred at Point in Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue from contracts with customers: | $ 54,464,480 | $ 55,611,745 |
SCHEDULE OF DEFERRED REVENUE (D
SCHEDULE OF DEFERRED REVENUE (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | ||
Deferred revenue, beginning balance in advance of revenue recognition billing | $ 9,551,446 | $ 20,280,934 |
Revenue recognized | (6,437,618) | (18,832,396) |
Revenue deferred | 31,202,878 | 8,102,908 |
Deferred revenue, ending balance | 34,316,706 | 9,551,446 |
Less short term portion | (19,252,628) | (4,335,404) |
Deferred revenue, long term | $ 15,064,078 | $ 5,216,042 |
REVENUE FROM CONTRACTS WITH C_3
REVENUE FROM CONTRACTS WITH CUSTOMERS (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation of Revenue [Line Items] | |||
Contract with Customer, Liability | $ 34,316,706 | $ 9,551,446 | $ 20,280,934 |
Non-refundable payments | 32,500,000 | ||
Contract with customer liability | 19,252,628 | 4,335,404 | |
Deferred Income, Current | 3,800,000 | ||
Contract with customer, liability, revenue recognized | 500,000 | ||
Deferred revenue, current | $ 1,300,000 | $ 1,300,000 | |
Maximum [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Expected timing of satisfaction period | 60 months | ||
Next 12 To 60 Months [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Deferred income non current | $ 2,700,000 | ||
DLC [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Contract with Customer, Liability | $ 13,700,000 | ||
Expected timing of satisfaction period | 12 months | ||
Contract with customer liability | $ 1,200,000 | ||
ARK II [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Contract with Customer, Liability | $ 11,100,000 | ||
Expected timing of satisfaction period | 24 months |
SUMMARY OF COMPONENTS OF CASH A
SUMMARY OF COMPONENTS OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AND CASH EQUIVALENTS (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Cash And Cash Equivalents And Restricted Cash And Cash Equivalents | |||
Cash and cash equivalents | $ 15,198,123 | $ 12,863,817 | |
Restricted cash and cash equivalents | 1,116,196 | 6,374,368 | |
Cash and cash equivalents, and restricted cash and cash equivalents | $ 16,314,319 | $ 19,238,185 | $ 16,554,115 |
CASH AND CASH EQUIVALENTS, AN_3
CASH AND CASH EQUIVALENTS, AND RESTRICTED CASH AND CASH EQUIVALENTS (Details Narrative) - USD ($) | Dec. 31, 2023 | Jun. 21, 2023 | Dec. 31, 2022 |
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |||
Restricted cash and cash equivalents, noncurrent | $ 1,116,196 | $ 6,374,368 | |
Restricted cash and cash equivalents | $ 5,273,391 | ||
Debt [Member] | |||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |||
Restricted cash and cash equivalents, noncurrent | $ 1,116,196 | $ 6,374,368 |
SCHEDULE OF ACCOUNTS RECEIVABLE
SCHEDULE OF ACCOUNTS RECEIVABLE RELATED PARTY (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Related Party [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Accounts receivable – related party | $ 13,500,592 | $ 13,519,409 |
Less: accounts payable – related party – SDE | (23,094,436) | (19,918,259) |
Less: accounts receivable – related party, net of current portion | 7,500,592 | |
SDE [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Less: accounts payable – related party – SDE | (10,946,478) | (2,175,225) |
Net accounts receivable, related party - SDE | 2,554,114 | 11,344,184 |
Net accounts receivable (payable), related party, current - SDE | $ (4,946,478) | $ 11,344,184 |
ACCOUNTS RECEIVABLE (PAYABLE)_3
ACCOUNTS RECEIVABLE (PAYABLE) – RELATED PARTY (Details Narrative) $ in Millions | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Immediate Family Member of Management or Principal Owner [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Related party transaction ownership percentage | 100% |
Related Party Transaction, Amounts of Transaction | $ 0.5 |
Related Party [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Accounts Receivable, Held-for-Sale | 6 |
SDE [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Payments for cash | $ 33.1 |
DUE FROM SHAREHOLDER (Details N
DUE FROM SHAREHOLDER (Details Narrative) - USD ($) | 12 Months Ended | ||
Apr. 26, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Dividend paid | $ 94,934,400 | $ 94,934,400 | |
Accrued interest | $ 0 | 580,878 | |
Snail Digital Technology Co [Member] | |||
Due from shareholder assigned to related party | 94,934,400 | ||
Dividend paid | $ 94,934,400 | ||
Related Party [Member] | |||
Due from other related parties | $ 0 | ||
Receivables from Stockholder [Member] | |||
Related party transaction, rate | 2% |
DIVIDEND DISTRIBUTION (Details
DIVIDEND DISTRIBUTION (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Apr. 26, 2022 | Apr. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Dividend Distribution | ||||
Paid in-kind dividend | $ 94,934,400 | $ 94,934,400 | ||
Cash dividend | $ 8,200,000 | |||
Dividends | 0 | |||
Refund receivable related to withholding taxes | $ 1,886,600 | $ 1,886,600 |
SCHEDULE OF PREPAID EXPENSES -
SCHEDULE OF PREPAID EXPENSES - RELATED PARTY (Details) - USD ($) | Dec. 31, 2023 | Sep. 30, 2023 | Dec. 31, 2022 |
Defined Benefit Plan Disclosure [Line Items] | |||
Other prepaids | $ 70,967 | $ 80,271 | |
Related Party [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Prepaid royalties | $ 6,086,406 | 582,500 | |
Prepaid licenses | 7,500,000 | 5,000,000 | |
Other prepaids | 242,060 | ||
Prepaid expenses - related party, ending balance | 13,828,466 | 5,582,500 | |
Less: short-term portion | (6,044,404) | ||
Total prepaid expenses - related party, long-term | $ 7,784,062 | $ 5,582,500 |
PREPAID EXPENSES - RELATED PA_3
PREPAID EXPENSES - RELATED PARTY (Details Narrative) - USD ($) $ in Millions | Mar. 10, 2023 | Dec. 31, 2023 | Dec. 31, 2022 |
Amount prepaid in advance | $ 5 | ||
Maximum amount payable | $ 5 | ||
ARK I [Member] | |||
Prepaid expenses license rights | $ 2.5 | ||
Prepaid royalties | $ 5.5 | ||
ARK II [Member] | |||
Prepaid expenses license rights | $ 5 |
SCHEDULE OF PREPAID EXPENSES AN
SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($) | Dec. 31, 2023 | Sep. 30, 2023 | Dec. 31, 2022 |
Prepaid Expenses And Other Current Assets | |||
Prepaid income taxes | $ 9,529,755 | $ 9,822,603 | |
Deferred offering costs | 105,411 | ||
Other prepaids | 70,967 | 80,271 | |
Other current assets | 463,315 | 662,267 | |
Total prepaid expenses and other current assets | $ 10,169,448 | $ 10,169,448 | $ 10,565,141 |
SCHEDULE OF PROPERTY, PLANT AND
SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT, NET (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 9,521,752 | $ 9,534,357 |
Accumulated depreciation | (4,839,686) | (4,419,558) |
Property, plant and equipment, net | 4,682,066 | 5,114,799 |
Building [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 1,874,049 | 1,874,049 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 2,700,000 | 2,700,000 |
Building Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 1,010,218 | 1,010,218 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 1,537,775 | 1,537,775 |
Trucks [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 178,695 | 178,695 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 1,809,214 | 1,821,819 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 411,801 | $ 411,801 |
PROPERTY, PLANT AND EQUIPMENT_3
PROPERTY, PLANT AND EQUIPMENT, NET (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Property, Plant and Equipment [Line Items] | ||
Depreciation and amortization expense | $ 432,306 | $ 565,906 |
Property plant and equipment, disposals | 12,605 | 99,811 |
Accumulated depreciation | 12,178 | 97,421 |
Disposal of assets | 427 | 17,067 |
Sale of fixed assets | 19,500 | |
Purchase of fixed assets | 9,521,752 | 9,534,357 |
Property plant and equipment net | 4,682,066 | 5,114,799 |
Donkey Crew, LLC [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment net | $ 3,045 | 13,569 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Sale of fixed assets | 19,500 | |
Purchase of fixed assets | $ 88,398 |
SCHEDULE OF INTANGIBLE ASSETS (
SCHEDULE OF INTANGIBLE ASSETS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Net | $ 271,717 | |
License Rights, Related Parties [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 136,665,000 | $ 136,665,000 |
Finite-Lived Intangible Assets, Accumulated Amortization | (136,665,000) | (135,280,942) |
Finite-Lived Intangible Assets, Impairment Loss | ||
Finite-Lived Intangible Assets, Net | $ 1,384,058 | |
License Rights, Related Parties [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Acquired Finite-Lived Intangible Assets, Weighted Average Useful Life | 3 years | 3 years |
License Rights, Related Parties [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Acquired Finite-Lived Intangible Assets, Weighted Average Useful Life | 5 years | 5 years |
License [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | $ 3,000,000 | $ 3,000,000 |
Finite-Lived Intangible Assets, Accumulated Amortization | (3,000,000) | (3,000,000) |
Finite-Lived Intangible Assets, Impairment Loss | ||
Acquired Finite-Lived Intangible Assets, Weighted Average Useful Life | 5 years | 5 years |
Computer Software, Intangible Asset [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | $ 51,784 | $ 51,784 |
Finite-Lived Intangible Assets, Accumulated Amortization | $ (51,784) | $ (51,784) |
Acquired Finite-Lived Intangible Assets, Weighted Average Useful Life | 3 years | 3 years |
Trademarks [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | $ 10,745 | $ 10,745 |
Finite-Lived Intangible Assets, Accumulated Amortization | (9,914) | (9,110) |
Finite-Lived Intangible Assets, Net | $ 831 | $ 1,635 |
Acquired Finite-Lived Intangible Assets, Weighted Average Useful Life | 12 years | 12 years |
Patents [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | $ 270,886 | $ 270,886 |
Finite-Lived Intangible Assets, Net | 270,886 | 270,886 |
Other Intangible Assets [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 333,415 | 333,415 |
Finite-Lived Intangible Assets, Accumulated Amortization | (61,698) | (60,894) |
Finite-Lived Intangible Assets, Impairment Loss | ||
Finite-Lived Intangible Assets, Net | $ 271,717 | $ 272,521 |
SCHEDULE OF FUTURE AMORTIZATION
SCHEDULE OF FUTURE AMORTIZATION EXPENSE OF INTANGIBLE ASSETS (Details) | Dec. 31, 2023 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2024 | $ 804 |
2025 | 27 |
2026 | |
2027 | |
2028 | |
Thereafter | 270,886 |
Total | $ 271,717 |
INTANGIBLE ASSETS (Details Narr
INTANGIBLE ASSETS (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 1,384,862 | $ 7,657,669 |
Finite-lived intangible assets, remaining amortization period | 1 year |
SCHEDULE OF ACCOUNTS PAYABLE- R
SCHEDULE OF ACCOUNTS PAYABLE- RELATED PARTIES (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Suzhou [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Accounts payable - SDE | $ 55,762,870 | $ 57,533,171 |
Less: accounts receivable - Suzhou | (37,614,912) | (37,614,912) |
SDE [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Accounts payable - SDE | 4,946,478 | |
Total accounts payable – related parties | 10,946,478 | 2,175,225 |
Related Party [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Accounts payable - SDE | 23,094,436 | 19,918,259 |
Less: accounts receivable - Suzhou | (13,500,592) | (13,519,409) |
Total accounts payable – related parties | $ 23,094,436 | $ 19,918,259 |
ACCOUNTS PAYABLE _ RELATED PA_3
ACCOUNTS PAYABLE — RELATED PARTIES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Suzhou Snail [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Accounts Payable, Current | $ 18,147,958 | $ 19,918,259 |
SDE [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Accounts Payable, Current | 4,946,478 | |
Snail Digital Technology Co. Ltd. [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Costs and Expenses, Related Party | 279,699 | 404,347 |
Related Party Transaction, Amounts of Transaction | $ 2,050,000 | $ 4,219,660 |
LOAN AND INTEREST RECEIVABLE _2
LOAN AND INTEREST RECEIVABLE — RELATED PARTY (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Feb. 28, 2022 | Feb. 28, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | |
Subsidiary of Suzhou Snail [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Loan to related party | $ 200,000 | |||
Loan to related party | 2% | |||
Suzhou Snail [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Amount of loan and interest receivable offset | $ 103,890 | |||
Suzhou Snail [Member] | Snail Digital Technology Co. Ltd. [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Loan amount and interest assumed | $ 203,890 | |||
Related Party [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Loan and interest receivable - related party | $ 103,753 | $ 101,753 | ||
Interest income earned | $ 2,000 | $ 1,753 |
LOAN PAYABLE AND INTEREST PAY_2
LOAN PAYABLE AND INTEREST PAYABLE — RELATED PARTIES (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Jul. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Feb. 28, 2022 | |
Related Party Transaction [Line Items] | ||||
Interest Expense | $ 1,500,000 | |||
Related Party [Member] | ||||
Related Party Transaction [Line Items] | ||||
Loan payable - related parties | $ 527,770 | |||
Interest Expense | 3,222 | |||
Loan From Related Party [Member] | ||||
Related Party Transaction [Line Items] | ||||
Interest rate per annum | 2% | |||
Loan From Related Party [Member] | Related Party [Member] | ||||
Related Party Transaction [Line Items] | ||||
Loan payable - related parties | $ 400,000 | |||
Loan From Related Party Due In June 2022 [Member] | Wholly Owned Subsidiary of Snail Digital Technology Co. Ltd. [Member] | ||||
Related Party Transaction [Line Items] | ||||
Loan payable - related parties | $ 300,000 | |||
Payment of related party debt | $ 300,000 | |||
Loan From Related Party Due In December 2023 [Member] | Snail Digital Technology Co. Ltd. [Member] | ||||
Related Party Transaction [Line Items] | ||||
Loan payable - related parties | $ 100,000 | |||
Loans payable offset against receivable, related party | $ 100,000 | |||
Loans payable offset against receivable | $ 3,890 |
SCHEDULE OF LONG TERM DEBT (Det
SCHEDULE OF LONG TERM DEBT (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Short-Term Debt [Line Items] | ||
Total debt | $ 11,942,617 | $ 17,725,153 |
Less: current portion of promissory note | 2,811,923 | 86,524 |
Less: revolving loan | 6,000,000 | 9,000,000 |
Less: notes payable | 2,333,333 | 5,416,666 |
Less: convertible notes, net of discount | 797,361 | |
Total long-term debt | 3,221,963 | |
Revolving Credit Facility [Member] | ||
Short-Term Debt [Line Items] | ||
Total debt | 6,000,000 | 9,000,000 |
Promissory Note Two Thousand Twenty One [Member] | ||
Short-Term Debt [Line Items] | ||
Total debt | 2,811,923 | 2,891,820 |
Short-Term Debt [Member] | ||
Short-Term Debt [Line Items] | ||
Total debt | 833,333 | 5,833,333 |
Less: notes payable | 800,000 | |
Convertible Notes Payable [Member] | ||
Short-Term Debt [Line Items] | ||
Total debt | 797,361 | |
Notes Payable, Other Payables [Member] | ||
Short-Term Debt [Line Items] | ||
Total debt | $ 1,500,000 |
SCHEDULE OF LONG TERM DEBT (D_2
SCHEDULE OF LONG TERM DEBT (Details) (Parenthetical) - USD ($) | 1 Months Ended | 12 Months Ended | |||||
Aug. 24, 2023 | Jun. 21, 2023 | Jan. 26, 2022 | Jun. 17, 2021 | Jul. 31, 2023 | Nov. 30, 2022 | Dec. 31, 2023 | |
Debt Instrument [Line Items] | |||||||
Interest rate | 8.25% | ||||||
Long term debt | $ 12,225,256 | ||||||
Long term debt discount | $ 282,639 | ||||||
Revolving Credit Facility [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Line of Credit Facility, Expiration Date | Dec. 31, 2024 | ||||||
Interest rate | 8.25% | ||||||
Minimum Requirement of Debt Service Coverage Ratio as Covenant | 1.5 to 1 | ||||||
Revolving Credit Facility [Member] | Prime Rate [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Annual interest rate | 0.25% | ||||||
Revolving Credit Facility [Member] | Minimum [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 9,000,000 | ||||||
Revolving Credit Facility [Member] | Maximum [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 6,000,000 | ||||||
Proceeds from time deposits accepted | $ 5,262,627 | ||||||
Promissory Note Two Thousand Twenty One [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Minimum Requirement of Debt Service Coverage Ratio as Covenant | 1.5 to 1 | ||||||
Debt Instrument, Interest Rate, Stated Percentage, Period | 10 years | ||||||
Carrying value | $ 4,200,000 | ||||||
Market value | $ 5,300,000 | ||||||
Debt Instrument, Maturity Date | Jun. 30, 2031 | ||||||
Promissory Note Two Thousand Twenty One [Member] | For the First Five Years [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate | 3.50% | ||||||
Debt Instrument, Interest Rate, Stated Percentage, Period | 5 years | ||||||
Debt Instrument, Description of Variable Rate Basis | 6 to 10 | ||||||
Short-Term Debt [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate | 5.75% | ||||||
Minimum Requirement of Debt Service Coverage Ratio as Covenant | 1.5 to 1 | ||||||
Debt Instrument, Maturity Date | Jan. 26, 2023 | ||||||
Payments for Loans | $ 10,000,000 | ||||||
Debt Instrument, Basis Spread on Variable Rate | 3.75% | ||||||
Debt Instrument, Default Interest Rate | 5% | ||||||
Short-Term Debt [Member] | Wall Street Journal Prime Rate [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Debt Instrument, Basis Spread on Variable Rate | 0.50% | 0.25% | |||||
Convertible Notes Payable [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate | 7.50% | ||||||
Convertible note discount rate | 7.40% | ||||||
Convertible Notes Payable | $ 1,080,000 | ||||||
Debt Instrument, Maturity Date Range, Start | Feb. 24, 2024 | ||||||
Debt Instrument, Maturity Date Range, End | May 24, 2024 | ||||||
Debt Instrument, Interest Rate, Increase (Decrease) | 16% | ||||||
Debt Instrument, Unamortized Discount, Current | $ 678,254 | ||||||
Debt Instrument, Interest Rate, Effective Percentage | 109.70% | ||||||
Notes Payable, Other Payables [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate | 8% | ||||||
Debt Instrument, Term | 7 years | ||||||
Cash | $ 3,000,000 | ||||||
Short-term debt, refinanced, amount | $ 3,000,000 | ||||||
Debt Instrument, Frequency of Fee | The funds are repaid in monthly installments starting in November 2023 and are to be based on 20% of the gross monthly ARK: Survival Ascended revenues. | ||||||
Short-Term Debt, Interest Rate Increase | 12% |
SCHEDULE OF FUTURE MINIMUM PAYM
SCHEDULE OF FUTURE MINIMUM PAYMENTS OF LONG TERM DEBT (Details) | Dec. 31, 2023 USD ($) |
Debt Disclosure [Abstract] | |
2024 | $ 9,502,708 |
2025 | 86,013 |
2026 | 89,115 |
2027 | 92,329 |
2028 | 95,414 |
Thereafter | 2,359,677 |
Long term debt | $ 12,225,256 |
REVOLVING LOAN, SHORT TERM NO_3
REVOLVING LOAN, SHORT TERM NOTES AND LONG - TERM DEBT (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Short-Term Debt [Line Items] | ||
Interest expense | $ 462,284 | $ 26,514 |
Short term obligations | 12,002,949 | 11,898,434 |
Amortization of debt discount | 959,359 | 244,399 |
Revolver Loan [Member] | ||
Short-Term Debt [Line Items] | ||
Interest expense | 1,485,241 | $ 895,761 |
Interest expense | $ 2,903 | |
weighted average interest rate | 8.10% | 6.90% |
SCHEDULE OF INCOME (LOSS) BEFOR
SCHEDULE OF INCOME (LOSS) BEFORE INCOME TAXES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
United States | $ (11,666,676) | $ (1,587,477) |
Foreign | 171,600 | 135,232 |
Total | $ (11,495,076) | $ (1,452,245) |
SCHEDULE OF INCOME TAX (BENEFIT
SCHEDULE OF INCOME TAX (BENEFIT) PROVISION (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
U.S. federal | $ 112,344 | $ (499,784) |
U.S. State | 82,595 | (2,535,117) |
Foreign | 49,373 | |
Total current income taxes | 244,312 | (3,034,901) |
U.S. federal | (2,577,737) | 602,102 |
U.S. State | (67,227) | (11,686) |
Foreign | (1,938) | |
Total deferred income taxes | (2,644,964) | 588,478 |
Income tax benefit | $ (2,400,652) | $ (2,446,423) |
SCHEDULE OF PROVISION (BENEFITS
SCHEDULE OF PROVISION (BENEFITS) FOR INCOME TAXES RATE RECONCILIATION (Details) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Federal statutory income tax rate | 21% | 21% |
Valuation allowance | (1.21%) | 58.33% |
FIN 48 | 1.13% | 5.21% |
Return to provision | (0.78%) | 17.27% |
State refund benefit | 130.84% | |
Change in subsidiary tax status | (73.52%) | |
PPP loan | 2.45% | |
GILTI | (0.43%) | (1.80%) |
State taxes | (0.10%) | 2.94% |
Foreign withholding tax | (0.43%) | |
R&D credit true-up | 1.76% | 2.84% |
Rate change | (0.02%) | 1.82% |
Other | (0.04%) | 1.10% |
Effective tax rate | 20.88% | 168.48% |
SCHEDULE OF DEFERRED TAX ASSETS
SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Income Tax Disclosure [Abstract] | ||
Net operating losses | $ 9,941,478 | $ 6,884,595 |
Deferred revenue | 1,564,708 | 2,003,812 |
Research and development credit | 664,877 | 494,777 |
Book lease liability (ASC 842) | 640,414 | 937,968 |
Fixed assets and intangibles | 286,902 | 1,959,679 |
Section 174 capitalized research and experimental expenditures | 2,101,923 | 825,394 |
Interest limitation carryforward | 329,383 | 30,944 |
Stock based compensation | 234,110 | 48,678 |
Other | 960,471 | 1,006,040 |
Total deferred tax assets | 16,724,266 | 14,191,887 |
Book ROU assets (ASC 842) | (533,369) | (786,350) |
Basis difference in subsidiary | (799,595) | (797,806) |
Total deferred tax liabilities: | (1,332,964) | (1,584,156) |
Long-term deferred tax asset | 15,391,302 | 12,607,731 |
Valuation allowance | (5,143,802) | (5,005,195) |
Net deferred tax asset | $ 10,247,500 | $ 7,602,536 |
SCHEDULE OF UNRECOGNIZED TAX BE
SCHEDULE OF UNRECOGNIZED TAX BENEFITS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Unrecognized tax benefits at beginning of year | $ 696,895 | $ 693,913 |
Gross Increases – current year positions | ||
Gross Increases – prior year positions | 72,177 | |
Gross Decreases – expiration of statute of limitation | (37,550) | |
Gross Decreases – settlements | (171,737) | (69,195) |
Unrecognized tax benefits at end of year | $ 487,608 | $ 696,895 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) | 12 Months Ended | |
Dec. 31, 2023 USD ($) entity | Dec. 31, 2022 USD ($) | |
Operating Loss Carryforwards [Line Items] | ||
Federal statutory income tax rate | 21% | 21% |
Income tax expense (benefit) | $ 2,400,652 | $ 2,446,423 |
Effective tax rate | 20.90% | 168.50% |
Number of unconsolidated entities | entity | 2 | |
Operating loss carryforwards of non-includable entities, which begin to expire in 2037 | $ 2,884,392 | |
Operating loss carryforwards of unconsolidated entities with indefinite carryforward period | 11,498,479 | |
Interest carryforward | 1,539,810 | |
Deferred tax assets valuation allowance non includable entities | 5,143,802 | $ 5,005,195 |
Non includable entities valuation allowance | 4,022,729 | 4,057,479 |
Deferred Tax Assets, Valuation Allowance | 5,143,802 | 5,005,195 |
Federal deferred tax liability on the unremitted earnings of the foreign subsidiary | 0 | 0 |
Reinvested related subsidiaries | 977,166 | |
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | 295,428 | 497,720 |
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued | 0 | |
Domestic Tax Authority [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Deferred Tax Assets, Valuation Allowance | 686,808 | 683,552 |
Foreign Tax Authority [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Deferred Tax Assets, Valuation Allowance | 434,265 | 264,165 |
Tax credit carryforward amount | 192,180 | |
Foreign Tax Authority [Member] | Research Tax Credit Carryforward [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Tax credit carryforward amount | 343,428 | |
Research Tax Credit Carryforward [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Tax credit carryforward amount | $ 434,265 | |
California Franchise Tax Board [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards of non-includable entities, which begin to expire in 2037 | 14,345,028 | |
Domestic Tax Authority [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
NOL carryforwards | 26,508,814 | |
State and Local Jurisdiction [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
NOL carryforwards | $ 5,453,676 |
SCHEDULE OF TERMINATIONS OPERAT
SCHEDULE OF TERMINATIONS OPERATING LEASE (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Lessee, Lease, Description [Line Items] | ||
Right of Use Asset | $ (2,440,690) | $ (3,606,398) |
Lease Liability Current | 1,505,034 | 1,371,227 |
Lease Liability Long Term | 1,425,494 | 2,930,529 |
Gain on Termination | 122,533 | |
Lease Terminated And Expired [Member] | ||
Lessee, Lease, Description [Line Items] | ||
Right of Use Asset | (1,301,571) | |
Accumulated Amortization | 907,370 | |
Lease Liability Current | 442,704 | |
Lease Liability Long Term | 74,030 | |
Gain on Termination | $ 122,533 | $ 122,533 |
SCHEDULE OF OPERATING LEASE COS
SCHEDULE OF OPERATING LEASE COSTS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Operating Lease Right-of-use Assets | ||
Operating lease costs | $ 1,578,751 | $ 1,590,872 |
SCHEDULE OF SUPPLEMENTAL INFORM
SCHEDULE OF SUPPLEMENTAL INFORMATION RELATED TO OPERATING LEASES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Operating Lease Right-of-use Assets | ||
Cash paid for amounts included in the measurement of lease liabilities | $ 1,548,889 | $ 1,489,396 |
Weighted average remaining lease term | 1 year 10 months 24 days | 2 years 10 months 24 days |
Weighted average discount rate | 5% | 5% |
SCHEDULE OF FUTURE UNDISCOUNTED
SCHEDULE OF FUTURE UNDISCOUNTED LEASE PAYMENTS FOR OPERATING LEASES AND RECONCILIATION OF THESE PAYMENTS TO OUR OPERATING LEASE LIABILITIES (Details) | Dec. 31, 2023 USD ($) |
Operating Lease Right-of-use Assets | |
2024, Future lease payments. | $ 1,610,844 |
2024, Imputed Interest | 105,810 |
2024, Lease Liabilities | 1,505,034 |
2025, Future lease payments | 1,453,784 |
2025, Imputed Interest | 28,290 |
2025, Lease Liabilities | 1,425,494 |
2026, Future lease payments | |
2026, Imputed Interest | |
2026, Lease Liabilities | |
Thereafter, Future lease payments | |
Thereafter, Imputed Interest | |
Thereafter, Lease Liabilities | |
Total future lease payments | 3,064,628 |
Total Imputed Interest | 134,100 |
Total Lease Liabilities | $ 2,930,528 |
OPERATING LEASE RIGHT-OF-USE _3
OPERATING LEASE RIGHT-OF-USE ASSETS (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Apr. 30, 2018 | |
Short-Term Debt [Line Items] | |||
Operating lease right-of-use assets | $ 2,440,690 | $ 3,606,398 | |
Lease termination | 122,533 | ||
Lease Terminated And Expired [Member] | |||
Short-Term Debt [Line Items] | |||
Operating lease right-of-use assets | 1,301,571 | ||
Variable lease payments | 125,207 | 77,385 | |
Lease termination | 122,533 | 122,533 | |
Standby Letters of Credit [Member] | |||
Short-Term Debt [Line Items] | |||
Maximum borrowing capacity | $ 1,075,000 | ||
Operating lease right-of-use assets | $ 2,440,690 | $ 3,606,398 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | Sep. 08, 2023 | Mar. 14, 2023 |
Commitments and Contingencies Disclosure [Abstract] | ||
Deferred revenue | $ 1,500,000 | |
Other Income | $ 300,000 | |
Damages value | $ 3,000,000 | |
Security deposit | $ 130,000 |
SCHEDULE OF EARNINGS PER SHARE
SCHEDULE OF EARNINGS PER SHARE (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||
Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |||
Basic Earnings (Loss) Per Share: | ||||||
Total net (loss) income attributable to Snail Inc and Snail Games USA Inc. | $ (9,086,075) | $ 947,807 | $ (9,086,075) | $ 947,807 | ||
Class A and B basic (loss) earnings per share | $ (0.25) | $ 0.03 | ||||
Diluted Earnings (Loss) Per Share: | ||||||
Diluted (loss) earnings per Class A and B share | $ (0.25) | $ 0.03 | ||||
Common Class A [Member] | ||||||
Basic Earnings (Loss) Per Share: | ||||||
Net (loss) income attributable to common stockholders | $ (1,960,813) | $ 228,482 | $ (1,960,813) | $ 228,482 | ||
weighted average shares outstanding - basic | 7,911,369 | 9,131,512 | 7,911,369 | [1] | 9,131,512 | [1] |
Class A and B basic (loss) earnings per share | $ (0.25) | $ 0.03 | ||||
Diluted Earnings (Loss) Per Share: | ||||||
Net (loss) attributable to common stockholders | $ (1,960,813) | $ 228,482 | $ (1,960,813) | $ 228,482 | ||
Dilutive effects of common stock equivalents | ||||||
weighted average shares outstanding - diluted | 7,911,369 | 9,131,512 | 7,911,369 | [1] | 9,131,512 | [1] |
Diluted (loss) earnings per Class A and B share | $ (0.25) | $ 0.03 | ||||
Common Class B [Member] | ||||||
Basic Earnings (Loss) Per Share: | ||||||
Net (loss) income attributable to common stockholders | $ (7,125,262) | $ 719,325 | $ (7,125,262) | $ 719,325 | ||
weighted average shares outstanding - basic | 28,748,580 | 28,748,580 | 28,748,580 | [1] | 28,748,580 | [1] |
Class A and B basic (loss) earnings per share | $ (0.25) | $ 0.03 | ||||
Diluted Earnings (Loss) Per Share: | ||||||
Net (loss) attributable to common stockholders | $ (7,125,262) | $ 719,325 | $ (7,125,262) | $ 719,325 | ||
Dilutive effects of common stock equivalents | ||||||
weighted average shares outstanding - diluted | 28,748,580 | 28,748,580 | 28,748,580 | [1] | 28,748,580 | [1] |
Diluted (loss) earnings per Class A and B share | $ (0.25) | $ 0.03 | ||||
[1]The shares used for the denominator in the calculation of EPS are presented as if the IPO occurred on January 1, 2022 for comparative purposes. |
SCHEDULE OF PROCEEDS BETWEEN TH
SCHEDULE OF PROCEEDS BETWEEN THE INSTRUMENTS (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |
Aug. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Equity [Abstract] | |||
Convertible notes | $ 554,246 | ||
Derivative liability | |||
Warrants | 445,754 | $ 193,927 | |
Total proceeds | $ 1,000,000 |
SCHEDULE OF CONVERTIBLE NOTES (
SCHEDULE OF CONVERTIBLE NOTES (Details) - Convertible Debt [Member] - USD ($) | Dec. 31, 2023 | Aug. 31, 2023 |
Debt Instrument [Line Items] | ||
Principal Amount | $ 860,910 | $ 1,080,000 |
Unamortized debt discount and issuance costs | (63,549) | |
Net carrying amount | 797,361 | |
Fair value amount | $ 536,170 |
SCHEDULE OF STOCK BASED WARRANT
SCHEDULE OF STOCK BASED WARRANTS (Details) - $ / shares | 1 Months Ended | |
Dec. 31, 2023 | Aug. 31, 2023 | |
Warrant [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Stock price | $ 1.21 | $ 1.35 |
Exercise price | $ 1.89 | $ 1.89 |
Contractual term (years) | 4 years 7 months 24 days | 5 years |
Volatility | 50% | 60% |
Risk-free rate | 3.87% | 4.39% |
Warrant One [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Stock price | $ 1.21 | $ 1.35 |
Exercise price | $ 1.50 | $ 1.50 |
Contractual term (years) | 4 years 7 months 24 days | 5 years |
Volatility | 50% | 40% |
Risk-free rate | 3.87% | 5.49% |
SCHEDULE OF RESTRICTED STOCK UN
SCHEDULE OF RESTRICTED STOCK UNITS ACTIVITY (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Director [Member] | Restricted Stock Units (RSUs) [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||
Outstanding, beginning balance | 24,000 | |
Outstanding, beginning balance per share | $ 5 | |
Outstanding, granted | 43,478 | 24,000 |
Outstanding, granted per share | $ 1.38 | $ 5 |
Outstanding vested | (24,000) | |
Outstanding vested per share | $ (5) | |
Outstanding, forfeited or cancelled | ||
Outstanding, forfeited or cancelled per share | ||
Outstanding, ending balance | 43,478 | 24,000 |
Outstanding, ending balance per share | $ 1.38 | $ 5 |
Outstanding, vested | 24,000 | |
Outstanding, vested per share | $ 5 | |
Employees [Member] | Performance Shares [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||
Outstanding, beginning balance | 1,197,552 | |
Outstanding, beginning balance per share | $ 5 | |
Outstanding, granted | 1,200,960 | |
Outstanding, granted per share | $ 5 | |
Outstanding vested | ||
Outstanding vested per share | ||
Outstanding, forfeited or cancelled | (32,305) | (3,408) |
Outstanding, forfeited or cancelled per share | $ 5 | |
Outstanding, ending balance | 1,165,247 | 1,197,552 |
Outstanding, ending balance per share | $ 5 | $ 5 |
Outstanding, vested | ||
Outstanding, vested per share |
EQUITY (Details Narrative)
EQUITY (Details Narrative) | 1 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Oct. 10, 2023 shares | Sep. 08, 2023 USD ($) | Aug. 24, 2023 USD ($) $ / shares shares | Nov. 09, 2022 $ / shares shares | Aug. 31, 2023 USD ($) $ / shares shares | Sep. 30, 2023 $ / shares shares | Dec. 31, 2023 USD ($) Integer $ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | |
Class of Stock [Line Items] | ||||||||
Number of classes of common stock | Integer | 2 | |||||||
Proceeds from issuance of common stock3 | $ | $ 1,000,000 | |||||||
Proceeds from convertible debt | $ | 554,246 | |||||||
Proceeds from debt | $ | $ 847,500 | |||||||
Amortization of debt discount | $ | $ 959,359 | 244,399 | ||||||
Other income | $ | $ 300,000 | |||||||
Common stock issued | $ | $ 10,137,510 | |||||||
Number of share repurchased | 1,350,275 | 1,197,649 | ||||||
Payments for repurchase of equity | $ | $ 257,093 | $ 3,414,713 | ||||||
Deferred income tax benefit related to our stock-based compensation expense | $ | 185,432 | 48,678 | ||||||
Research And Development [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Stock based compensation | $ | 48,080 | 0 | ||||||
Restricted Stock Units (RSUs) [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Stock based compensation | $ | 799,955 | $ 223,250 | ||||||
Total unrecognized compensation cost | $ | $ 1,100,000 | |||||||
Total unrecognized compensation cost expected to be recognized over a weighted-average service period | 2 years 7 months 6 days | |||||||
Restricted Stock Units (RSUs) [Member] | Director [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Vesting period | 1 year | |||||||
Outstanding, beginning balance | 24,000 | 24,000 | ||||||
Outstanding, beginning balance per share | $ / shares | $ 5 | $ 5 | ||||||
Outstanding, granted | 43,478 | 24,000 | ||||||
Outstanding, granted per share | $ / shares | $ 1.38 | $ 5 | ||||||
Outstanding vested | (24,000) | |||||||
Outstanding vested per share | $ / shares | $ (5) | |||||||
Outstanding, forfeited or cancelled | ||||||||
Outstanding, forfeited or cancelled per share | $ / shares | ||||||||
Outstanding, ending balance | 43,478 | 24,000 | ||||||
Outstanding, ending balance per share | $ / shares | $ 1.38 | $ 5 | ||||||
Outstanding, vested | 24,000 | |||||||
Outstanding, vested per share | $ / shares | $ 5 | |||||||
Performance Shares [Member] | Employees [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Vesting period | 5 years | |||||||
Outstanding, beginning balance | 1,197,552 | 1,197,552 | ||||||
Outstanding, beginning balance per share | $ / shares | $ 5 | $ 5 | ||||||
Outstanding, granted | 1,200,960 | |||||||
Outstanding, granted per share | $ / shares | $ 5 | |||||||
Outstanding vested | ||||||||
Outstanding vested per share | $ / shares | ||||||||
Outstanding, forfeited or cancelled | (32,305) | (3,408) | ||||||
Outstanding, forfeited or cancelled per share | $ / shares | $ 5 | |||||||
Outstanding, ending balance | 1,165,247 | 1,197,552 | ||||||
Outstanding, ending balance per share | $ / shares | $ 5 | $ 5 | ||||||
Outstanding, vested | ||||||||
Outstanding, vested per share | $ / shares | ||||||||
Convertible Debt [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Convertible debt principal amount | $ | $ 1,080,000 | $ 860,910 | ||||||
Convertible shares | 714,285 | |||||||
Contractual interest expense | 7.40% | 109.70% | ||||||
Convertible debt discount | 7.50% | |||||||
Convertible debt discount | 16% | |||||||
Convertible debt maturity date | May 24, 2024 | |||||||
Debt instrument, description | The Convertible Notes may be prepaid by the Company upon giving the Investors a fifteen-trading day notice by paying an amount equal to the then outstanding balance. If the Company enters into a qualifying financing it may be required by the Investors to repay part or all of the Convertible Notes at a 112.5% premium (limited to 10% of the proceeds of the qualified financing, if such financing results in gross proceeds to the Company at least $5,000,000). In event of default or change of control, the Investors may require the Company to prepay the Convertible Notes at a 120% premium | |||||||
Proceeds from convertible debt | $ | $ 5,000,000 | |||||||
Proceeds from debt | $ | 525,754 | |||||||
Debt discount | $ | $ 152,500 | |||||||
Interest Expense, Debt | $ | $ 424,460 | |||||||
Contractual interest expense | $ | 29,025 | |||||||
Accretion expense | $ | 306,664 | |||||||
Amortization of debt discount | $ | 88,951 | |||||||
Warrant [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Number of shares issued | 367,647 | |||||||
Common stock, shares authorized | 714,285 | |||||||
Common stock, par value | $ / shares | $ 1.89 | |||||||
Fair value of warrant liability | $ | 480,281 | |||||||
Other income | $ | 34,527 | |||||||
Common Stock [Member] | Equity Line Purchase Agreement [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Beneficial ownership | 9.99% | |||||||
Warrant One [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Number of shares issued | 367,647 | |||||||
Common stock, par value | $ / shares | $ 1.50 | |||||||
Fair value of warrant liability | $ | 103,767 | |||||||
Other income | $ | $ 1,644 | |||||||
Equity Line Purchase Agreement [Member] | Common Stock [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock issued | $ | $ 5,000,000 | |||||||
Sale of Stock, Number of Shares Issued in Transaction | 15,093,768 | |||||||
Warrant to purchase | 367,647 | |||||||
Warrant to purchase deferred offering costs | $ | $ 105,411 | |||||||
Common Class A [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Number of votes per share | Integer | 1 | |||||||
Number of Class A share issuable upon conversion | Integer | 1 | |||||||
Number of warrants issued to purchase common stock | 9,275,420 | 9,251,420 | ||||||
Number of shares issued | 6,251,420 | |||||||
Convertible shares | 120,000 | |||||||
Common stock, shares authorized | 500,000,000 | 500,000,000 | ||||||
Common stock, par value | $ / shares | $ 0.0001 | $ 0.0001 | ||||||
Number of share repurchased | 1,350,275 | 1,197,649 | ||||||
Aggregate purchase price | $ | $ 3,700,000 | $ 3,400,000 | ||||||
Average price paid per share | $ / shares | $ 2.72 | |||||||
Aggregate purchase price | $ | $ 1,300,000 | |||||||
Payments for repurchase of equity | $ | $ 2,850,000 | |||||||
Common Class A [Member] | Convertible Debt [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Proceeds from issuance of common stock3 | $ | $ 1,000,000 | |||||||
Common Class A [Member] | Common Stock [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Number of shares issued | 3,000,000 | |||||||
Common stock issued | $ | $ 300 | |||||||
Common Class A [Member] | Underwriting Agreement [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Number of warrants issued to purchase common stock | 120,000 | |||||||
Percentage of warrants issued | 400% | |||||||
Weighted average expected volatility (in percent) | 53% | |||||||
Discount rate (in percent) | 4.49% | |||||||
Remaining term (in years) | 3 years | |||||||
Common Class A [Member] | IPO [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Number of warrants issued to purchase common stock | 3,000,000 | |||||||
Price per share | $ / shares | $ 4.675 | |||||||
Number of shares issued | 3,000,000 | |||||||
Common Class A [Member] | IPO [Member] | Warrant [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Percent of issue price at IPO price | 125% | |||||||
Issue price per share | $ / shares | $ 6.25 | |||||||
Warrants term | 3 years | |||||||
Common Class A [Member] | Over-Allotment Option [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Price per share | $ / shares | $ 4.675 | |||||||
Number of shares issued | 450,000 | |||||||
Common Class B [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Number of votes per share | Integer | 10 | |||||||
Number of warrants issued to purchase common stock | 28,748,580 | 28,748,580 | ||||||
Number of shares issued | 28,748,580 | |||||||
Common stock, shares authorized | 100,000,000 | 100,000,000 | ||||||
Common stock, par value | $ / shares | $ 0.0001 | $ 0.0001 | ||||||
Common Class B [Member] | Common Stock [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock issued | $ |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||
Feb. 29, 2024 | Jan. 31, 2024 | Apr. 30, 2024 | Mar. 31, 2024 | Jan. 31, 2024 | Aug. 31, 2023 | Mar. 31, 2024 | Dec. 31, 2023 | Dec. 31, 2022 | Jan. 01, 2024 | |
Subsequent Event [Line Items] | ||||||||||
Short term debt | $ 2,333,333 | $ 5,416,666 | ||||||||
Accrued interest and principal | 0 | 580,878 | ||||||||
Proceeds from Convertible Debt | $ 554,246 | |||||||||
Notes payable | 6,500,000 | 4,166,667 | ||||||||
Short-Term Debt [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Short term debt | 800,000 | |||||||||
SDE [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Accounts payable | $ 4,946,478 | |||||||||
Offset Agreement [Member] | SDE [Member] | Forecast [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Notes payable | $ 1,500,000 | |||||||||
Subsequent Event [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Accrued interest and principal | $ 300,000 | |||||||||
Subsequent Event [Member] | Short-Term Debt [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Short term debt | $ 800,000 | $ 800,000 | ||||||||
Subsequent Event [Member] | Offset Agreement [Member] | SDE [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Accounts payable | 500,000 | 500,000 | ||||||||
Accounts receivable net current | 6,000,000 | 6,000,000 | ||||||||
Revolving loan balance | $ 3,000,000 | |||||||||
Accrued interest and principal | $ 312,075 | |||||||||
Conversion of Stock, Shares Converted | 71,460 | |||||||||
Proceeds from Convertible Debt | $ 60,000 | |||||||||
Deferred income, revenue recognized | $ 1,200,000 | |||||||||
Subsequent Event [Member] | Development Agreement [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Royalty expense | $ 3,000,000 | |||||||||
Installments | $ 253,000 |