Mobile Esports (MGAM) - 2024 Q1 - Quarterly Report

Financial Performance - The company reported a net loss of $618,627 for the three months ended March 31, 2024, compared to a net loss of $812,084 for the same period in 2023, indicating an improvement of about 23.9%[16] - The company had no revenue reported for the three months ended March 31, 2024, consistent with the same period in 2023[16] - The accumulated deficit increased from $(8,322,769) as of December 31, 2023, to $(8,940,015) as of March 31, 2024, indicating a rise of approximately 7.4%[19] - The total stockholders' equity decreased from $3,097,206 as of December 31, 2023, to $2,524,759 as of March 31, 2024, a decline of about 18.5%[19] - The company incurred interest income of $129 for the three months ended March 31, 2024, compared to $3,647 in the same period of 2023, a decrease of approximately 96.5%[16] - The company’s cash flows from operating activities showed a net cash used of $360,632 for the three months ended March 31, 2024, compared to $687,767 for the same period in 2023, indicating a reduction in cash outflow of about 47.5%[20] Assets and Liabilities - Total assets decreased from $3,421,344 as of December 31, 2023, to $3,035,562 as of March 31, 2024, representing a decline of approximately 11.3%[14] - Cash and restricted cash decreased from $3,174,703 at the beginning of the period to $2,769,620 at the end of the period, a reduction of approximately 12.8%[20] - The total accounts payable and accrued expenses increased to $329,635 as of March 31, 2024, from $152,423 as of December 31, 2023[52] - The company has operating lease liabilities totaling $100,640, with a present value of $92,473 as of March 31, 2024[50] Expenses - General and administrative expenses were $617,374 for the three months ended March 31, 2024, down from $815,731 in the same period of 2023, reflecting a decrease of about 24.2%[16] - For the three months ended March 31, 2024, the company reported depreciation expense of approximately $2,800, compared to $1,000 for the same period in 2023[48] - Cash paid for operating leases was approximately $15,400 for the three months ended March 31, 2024, compared to $12,300 for the same period in 2023[49] Shareholder Information - The weighted average common shares outstanding remained unchanged at 20,421,593 for both periods[16] - As of March 31, 2024, the company had 21,191,593 shares issued and outstanding from an authorized 100,000,000 shares of common stock[57] - At March 31, 2024, there were 3,568,916 warrants outstanding, with diluted net loss per share being the same as basic net loss per share due to anti-dilutive instruments[69] Corporate Developments - The company has a new Chief Executive Officer and is working with consultants to achieve its strategic goals[29] - The company has a reportable segment focused on the development of esports, with 95.3% of total assets located in the United States as of March 31, 2024[46] - The company has incurred related party transactions totaling $30,000 for board stipends during the three months ended March 31, 2024[53] Compliance and Trading Status - The company was notified on April 11, 2023, of non-compliance with Nasdaq's minimum bid price requirement of $1.00 per share, with an initial compliance period until October 9, 2023[70] - On April 18, 2024, the company's common stock was suspended from trading on the Nasdaq Capital Market and currently trades on the OTC Pink Sheets[71] Warrant Information - The estimated fair value of the 2023 Consultant Warrants was $91,000, with $26,000 recognized as expense for the three months ended March 31, 2023[59] - The company recorded total expense of approximately $46,000 and $72,000 during the three months ended March 31, 2024 and 2023, respectively, for warrant amortization[64] - The unamortized warrant expense at March 31, 2024, was approximately $139,000, to be amortized over a weighted-average period of 0.5 years[64] - The company issued 1,886,793 PIPE Warrants with an exercise price of $2.90 per share, which expire 5 years from issuance, with an estimated fair value of $2,093,000[62] - The company issued 172,500 IPO Warrants with an exercise price of $6.60 per share, with an estimated fair value of $474,000[61]