Super League Enterprise, Inc. 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA   The consolidated financial statements and related financial information required to be filed hereunder are indexed under Item 15 of this report and are incorporated herein by reference.   ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE   None.   ITEM 9A. CONTROLS AND   PROCEDURES   Evaluation of Disclosure Controls and Procedures   Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2021. Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are designed to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to the company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Based on the evaluation of our disclosure controls and procedures, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of December 31, 2021.    Limitations on Effectiveness of Controls and Procedures   Our disclosure controls and procedures are designed to provide reasonable assurance of achieving the desired control objectives. Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls or our internal control over financial reporting will prevent or detect all errors and all fraud. Our management recognizes that any control system, no matter how well designed and operated, is based upon certain judgments and assumptions and cannot provide absolute assurance that its objectives will be met. The design of a control system must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.   Management ’ s Report on Internal Control over Financial Reporting   Internal Control Over Financial Reporting   Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act.  Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles.  This process includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our consolidated financial statements.   Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Also, projections of any evaluation of the internal control over financial reporting to future periods are subject to risk that the internal control may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate.   Management ’ s Assessment of the Effectiveness of our Internal Control Over Financial Reporting   Management has evaluated the effectiveness of our internal control over financial reporting as of December 31, 2021. In conducting its evaluation, management used the framework set forth in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on our evaluation under such framework, our management has concluded that our internal control over financial reporting was effective as of December 31, 2021.   Report of Independent Registered Public Accounting Firm   We are an “emerging growth company,” as defined in Rule 405 of the Securities Act and, accordingly, we are not required to provide the attestation report of our independent registered public accounting firm on our internal control over financial reporting required by Item 308(b) of Regulation S-K.   -50- Table of Contents   Changes in Internal Control over Financial Reporting   There were no changes in our internal control over financial reporting that occurred during the fiscal quarter ended December 31, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.   On June 1, 2021, the Company completed the acquisition of Mobcrush pursuant to which the Company acquired all of the issued and outstanding shares of Mobcrush. Upon completion of the merger, Mobcrush became a wholly-owned subsidiary of the Company. The Company is in the process of evaluating internal control over financial reporting in connection with the acquisition of Mobcrush, and expects to complete our evaluation no later than one year from the acquisition date.   On August 24, 2021, the Company completed the acquisition of Bannerfy pursuant to which the Company acquired all of the issued and outstanding shares of Bannerfy. Upon completion of the acquisition, Bannerfy became a wholly-owned subsidiary of the Company. The Company is in the process of evaluating internal control over financial reporting in connection with the acquisition of Bannerfy, and expects to complete our evaluation no later than one year from the acquisition date.   On October 4, 2021, the Company completed the acquisition of Bloxbiz pursuant to which the Company acquired all of the issued and outstanding shares of Bloxbiz. Upon completion of the acquisition, Bloxbiz became a wholly-owned subsidiary of the Company. The Company is in the process of evaluating internal control over financial reporting in connection with the acquisition of Bloxbiz, and expects to complete our evaluation no later than one year from the acquisition date.   ITEM 9B. OTHER INFORMATION   Tumim Offering   On March 25, 2022, we entered into the Purchase Agreement with Tumim, pursuant to which we have the right, but not the obligation, to sell to Tumim, and Tumim is obligated to purchase up to the Total Commitment from time to time during the term of the Purchase Agreement, subject to certain limitations and conditions. As consideration for Tumim’s commitment to purchase shares of common stock under the Purchase Agreement, we issued to Tumim 50,000 Commitment Shares following the execution of the Purchase Agreement.   The Purchase Agreement initially precludes us from issuing and selling more than 7,361,833 shares of our common stock, including the Commitment Shares, which number equals 19.99% of our common stock issued and outstanding as of March 25, 2022, unless we obtain stockholder approval to issue additional shares, or unless certain exceptions apply. In addition, a beneficial ownership limitation in the agreement initially limits us from directing Tumim to purchase shares of common stock if such purchases would result in Tumim beneficially owning more than 4.99% of the then-outstanding shares of our common stock (subject to an increase to 9.99% at Tumim’s option upon at least 61 calendar days’ notice).   From and after the initial satisfaction of the conditions to our right to commence sales to Tumim under the Purchase Agreement (such event, the “Commencement,” and the date of initial satisfaction of all such conditions, the “Commencement Date”), we may direct Tumim to purchase shares of common stock at a purchase price per share equal to 95% of the average daily dollar volume-weighted average price for our common stock during the three consecutive trading day period immediately following the date on which we deliver to Tumim a notice for such purchase. We will control the timing and amount of any such sales of common stock to Tumim. Actual sales of shares of common stock to Tumim will depend on a variety of factors to be determined by us from time to time, including, among other things, market conditions, the trading price of our common stock, and determinations by us as to the appropriate sources of funding for the Company and our operations.   The Commencement Date of the Tumim Offering was March 25, 2022. Unless earlier terminated, the Purchase Agreement will automatically terminate upon the earliest of (i) the expiration of the 18-month period following the Commencement Date, (ii) Tumim’s purchase or receipt of the Total Commitment worth of common stock, or (iii) the occurrence of certain other events set forth in the Purchase Agreement. We have the right to terminate the Purchase Agreement at any time after Commencement, at no cost or penalty, upon five trading days’ prior written notice to Tumim. Tumim has the right to terminate the Purchase Agreement upon five trading days’ prior written notice to us, but only upon the occurrence of certain events set forth in the Purchase Agreement.   We intend to use the net proceeds, if any, from the Tumim Offering for working capital and general corporate purposes, including sales and marketing activities, product development and capital expenditures. We may also use a portion of the net proceeds to acquire or invest in complementary businesses, products and technologies. The Purchase Agreement contains customary representations, warranties and agreements by us, as well as customary indemnification obligations of the Company.   The securities in the Tumim Offering are being offered pursuant to our effective S-3 shelf registration statement (File No. 333-259347), which was filed with the SEC on September 7, 2021 and declared effective on November 16, 2021. The Tumim Offering will be made only by means of a prospectus supplement and the accompanying base prospectus that form part of the S-3. A prospectus supplement relating to the Tumim Offering was filed with the SEC pursuant to Rule 424(b) under the Securities Act on March 29, 2022.   The Purchase Agreement is filed as Exhibit 10.31 to this Report and is incorporated herein by reference. The description of the terms of the Purchase Agreement set forth above is qualified in its entirety by reference to such exhibit. In addition, the legal opinion letter of Disclosure Law Group, a Professional Corporation, counsel to the Company, regarding the validity of the shares of common stock to be issued from time to time in connection with the Tumim Offering is filed as Exhibit 5.1 to this Report. The legal opinion letter is also filed with reference to, and is hereby incorporated by reference into, the S-3 shelf registration statement.   -51- Table of Contents   PART III   ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE   Except as provided below, in accordance with General Instruction G(3) to Form 10-K, certain information required by this Item is incorporated herein by reference to our definitive proxy statement for our 2022 annual meeting of stockholders to be filed with the SEC no later than April 30, 2022.   ITEM 11. EXECUTIVE COMPENSATION.   Except as provided below, in accordance with General Instruction G(3) to Form 10-K, certain information required by this Item is incorporated herein by reference to our definitive proxy statement for our 2022 annual meeting of stockholders to be filed with the SEC no later than April 30, 2022.   ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS   Except as provided below, in accordance with General Instruction G(3) to Form 10-K, certain information required by this Item is incorporated herein by reference to our definitive proxy statement for our 2022 annual meeting of stockholders to be filed with the SEC no later than April 30, 2022.   ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE   Except as provided below, in accordance with General Instruction G(3) to Form 10-K, certain information required by this Item is incorporated herein by reference to our definitive proxy statement for our 2022 annual meeting of stockholders to be filed with the SEC no later than April 30, 2022.   ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES   Except as provided below, in accordance with General Instruction G(3) to Form 10-K, certain information required by this Item is incorporated herein by reference to our definitive proxy statement for our 2022 annual meeting of stockholders to be filed with the SEC no later than April 30, 2022.   -52- Table of Contents   PART IV   ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES   Exhibit No. Name   Incorporation by Reference 2.1 Agreement and Plan of Merger Agreement and Plan of Merger by and among Super League Gaming, Inc., SLG Merger Sub, Inc. and Framerate, Inc.   Exhibit 2.1 to the Current Report on Form 8-K, filed on June 7, 2019. 2.2 Agreement and Plan of Merger, dated March 9, 2021, by and among Super League Gaming, Inc., SLG Merger Sub II, Inc., and Mobcrush, Inc.   Exhibit 2.1 to the Current Report on Form 8-K, filed on March 11, 2021. 2.3 Amendment No. 1 to Agreement and Plan of Merger by and between Super League Gaming, Inc., and Mobcrush Streaming, Inc., dated April 20, 2021.   Exhibit 10.1 to the Current Report on Form 8-K, filed on April 21, 2021. 2.4 Asset Purchase Agreement, dated October 4, 2021, among Super League Gaming, Inc., Bloxbiz Co., Samuel Drozdov, and Benjamin Khakshoor.   Exhibit 2.1 to the Current Report on Form 8-K, filed on October 7, 2021. 3.1 Second Amended and Restated Certificate of Incorporation of Super League Gaming, Inc., dated November 19, 2018.   Exhibit 3.1 to the Registration Statement, filed on January 4, 2019 3.2 Second Amended and Restated Bylaws of Super League Gaming, Inc.   Exhibit 3.2 to the Registration Statement, filed on January 4, 2019 3.3 Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation of Super League Gaming, Inc., dated February 8, 2019.   Exhibit 3.3 to the Amendment No. 2 to the Registration Statement , filed on February 12, 2019 4.1 Form of Common Stock Certificate.   Exhibit 4.1 to the Amendment No. 2 to the Registration Statement , filed on February 12, 2019 4.2 Form of Registration Rights Agreement, among Super League Gaming, Inc. and certain accredited investors.   Exhibit 4.2 to the Registration Statement on Form S-1 , filed on January 4, 2019 4.3 Common Stock Purchase Warrant dated June 16, 2017 issued to Ann Hand.   Exhibit 4.3 to the Registration Statement on Form S-1, filed on January 4, 2019 4.4 Form of 9.00% Secured Convertible Promissory Note.   Exhibit 4.4 to the Registration Statement on Form S-1, filed on January 4, 2019 4.5 Form of Callable Common Stock Purchase Warrant, issued to certain accredited investors.   Exhibit 4.5 to the Registration Statement on Form S-1, filed on January 4, 2019 4.6 Form of Representative’s Warrant.   Exhibit 4.6 to the Amendment No. 2 to the Registration Statement on Form S-1, filed on February 12, 2019 5.1 Opinion of Disclosure Law Group, a Professional Corporation.   Filed herewith. 10.1 † Super League Gaming, Inc. Amended and Restated 2014 Stock Option and Incentive Plan.   Exhibit 10.1 to the Registration Statement , filed on January 4, 2019 10.2 † Form of Stock Option Agreement under 2014 Stock Option and Incentive Plan.   Exhibit 10.2 to the Registration Statement , filed on January 4, 2019 10.3 Subscription Agreement, among Nth Games, Inc. and certain accredited investors.   Exhibit 10.3 to the Registration Statement , filed on January 4, 2019 10.4 Subscription Agreement, among Super League Gaming, Inc. and certain accredited investors.   Exhibit 10.4 to the Registration Statement, filed on January 4, 2019 10.5 Form of Theater Agreement, filed herewith.   Exhibit 10.5 to the Registration Statement , filed on January 4, 2019 10.6 Lease between Super League Gaming, Inc. and Roberts Business Park Santa Monica LLC, dated June 1, 2016.   Exhibit 10.6 to the Registration Statement, filed on January 4, 2019 10.7+ License Agreement between Super League Gaming, Inc. and Riot Games, Inc., dated June 22, 2016.   Exhibit 10.7 to the Registration Statement , filed on January 4, 2019 10.8+ Amended and Restated License Agreement between Super League Gaming, Inc. and Mojang AB, dated August 1, 2016.   Exhibit 10.8 to the Registration Statement , filed on January 4, 2019 10.9+ Master Agreement between Super League Gaming, Inc. and Viacom Media Networks, dated June 9, 2017.   Exhibit 10.9 to the Registration Statement, filed on January 4, 2019 10.10 Form of Common Stock Purchase Agreement, among Super League Gaming, Inc. and certain accredited investors.   Exhibit 10.10 to the Registration Statement , filed on January 4, 2019 10.11 Form of Investors’ Rights Agreement, among Super League Gaming, Inc. and certain accredited investors.   Exhibit 10.11 to the Registration Statement, filed on January 4, 2019 10.12 † Employment Agreement, between Super League Gaming, Inc. and Ann Hand, dated June 16, 2017.   Exhibit 10.12 to the Registration Statement , filed on January 4, 2019 10.13 † Employment Agreement, between Super League Gaming, Inc. and David Steigelfest, dated October 31, 2017.   Exhibit 10.13 to the Registration Statement, filed on January 4, 2019   -53- Table of Contents   10.14 Riot Games, Inc. Extension Letter, dated November 21, 2017.   Exhibit 10.14 to the Registration Statement, filed on January 4, 2019 10.15 Form of Note Purchase Agreement, among Super League Gaming, Inc. and certain accredited investors.   Exhibit 10.15 to the Registration Statement , filed on January 4, 2019 10.16 Form of Security Agreement, between Super League Gaming, Inc. and certain accredited investors.   Exhibit 10.16 to the Registration Statement, filed on January 4, 2019 10.17 Form of Intercreditor and Collateral Agent Agreement, among Super League Gaming, Inc. and certain accredited investors.   Exhibit 10.17 to the Registration Statement , filed on January 4, 2019 10.18 Form of Investors’ Rights Agreement (9% Secured Convertible Promissory Notes), among Super League Gaming, Inc. and certain accredited investors.   Exhibit 10.18 to the Registration Statement , filed on January 4, 2019 10.19 Master Service Agreement and Initial Statement of Work between Super League Gaming, Inc. and Logitech Inc., dated March 1, 2018.    Exhibit 10.19 to the Registration Statement , filed on January 4, 2019 10.20 Asset Purchase Agreement, between Super League Gaming, Inc. and Minehut, dated June 22, 2018.   Exhibit 10.20 to the Registration Statement, filed on January 4, 2019 10.21 † Amended and Restated Employment Agreement, between Super League Gaming, Inc. and Ann Hand, dated November 15, 2018.   Exhibit 10.21 to the Registration Statement , filed on January 4, 2019 10.22 † Amended and Restated Employment Agreement, between Super League Gaming, Inc. and David Steigelfest, dated November 1, 2018.   Exhibit 10.22 to the Registration Statement, filed on January 4, 2019 10.23 † Employment Agreement, between Super League Gaming, Inc. and Matt Edelman, dated November 1, 2018.   Exhibit 10.23 to the Registration Statement, filed on January 4, 2019 10.24 † Employment Agreement, between Super League Gaming, Inc. and Clayton Haynes, dated November 1, 2018.   Exhibit 10.24 to the Registration Statement , filed on January 4, 2019 10.25++ Commercial Partnership Agreement between Super League Gaming, Inc., and ggCircuit, LLC, dated September 23, 2019.   Exhibit 10.1 to the Quarterly Report on Form 10-Q for the period ended September 30, 2019, filed November 14, 2019. 10.26 Form of Registration Rights Agreement, dated March 2021.   Exhibit 10.1 to the Current Report on Form 8-K, filed on March 11, 2021. 10.27 Form of Voting Agreement, dated March 2021.   Exhibit 10.2 to the Current Report on Form 8-K, filed on March 11, 2021. 10.28 Form of Securities Purchase Agreement, dated March 19, 2021.   Exhibit 10.1 to the Current Report on Form 8-K, filed on March 23, 2021. 10.29 Equity Distribution Agreement, dated as of September 3, 2021, by and between Super League Gaming, Inc. and Maxim Group LLC.   Exhibit 1.3 to the Company’s Registration Statement on Form S-3 (File No. 333-259347, filed September 7, 2021. 10.30 Share Purchase Agreement, by and between Super League Gaming, Inc. and Bannerfy Ltd., dated August 11, 2021.   Exhibit 10.4 to the Quarterly Report on Form 10-Q for the period ended June 30, 2021, filed August 16, 2021. 10.31 Common Stock Purchase Agreement, dated March 25, 2022, by and between Super League Gaming, Inc. and Tumim Stone Capital LLC   Filed herewith. 14.1 Super League Gaming, Inc. Code of Business Conduct and Ethics.   Exhibit 14.1 to the Registration Statement , filed on January 4, 2019 23.1 Consent of Disclosure Law Group, a Professional Corporation (included in Exhibit 5.1)   Filed herewith. 23.2 Consent of Independent Registered Public Accounting Firm – Baker Tilly US, LLP   Filed herewith. 31.1 *  Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act.     31.2 *  Certification of Principal Financial and Accounting Officer Pursuant to Section 302 of the Sarbanes-Oxley Act.     32 * Certification Pursuant to Section 906 of the Sarbanes-Oxley Act.         101.INS Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document 101.SCH Inline XBRL Taxonomy Extension Schema Document 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document 104 Cover Page Interactive Data File (embedded within the Inline XBRL Document and included in Exhibit 101)   *  Filed herewith.  † Identifies exhibits that consist of a management contract or compensatory plan or arrangement. + Confidential treatment has been requested for certain confidential portions of this exhibit pursuant to Rule 406 under the Securities Act of 1933, as amended, and Rule 24b-2 under the Securities Exchange Act of 1934, as amended (together, the “Rules”). In accordance with the Rules, these confidential portions have been omitted from this exhibit and filed separately with the Securities and Exchange Commission. ++ Certain portions of this exhibit (indicated by “[*****]”) have been omitted as the Company has determined (i) the omitted information is not material and (ii) the omitted information would likely cause harm to the Company if publicly disclosed.     -54- Table of Contents     INDEX TO CONSOLIDATED FINANCIAL STATEMENTS SUPER LEAGUE GAMING, INC.             Page       Report of Independent Registered Public Accounting Firm (PCAOB ID: 23 )   F-2       Consolidated   Financial Statements for the Years Ended December 31, 2021 and 2020           Consolidated Balance Sheets as of December 31, 2021 and 2020   F-3 Consolidated Statements of Operations for the years ended December 31, 2021 and 2020   F-4 Consolidated Statements of Stockholders’ Equity (Deficit) for the years ended December 31, 2021 and 2020   F-5 Consolidated Statements of Cash Flows for the years ended December 31, 2021 and 2020   F-6 Notes to Consolidated Financial Statements   F-7             F-1 Table of Contents   REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM   To the Stockholders and Board of Directors Super League Gaming, Inc.   Opinion on the Financial Statements   We have audited the accompanying consolidated balance sheets of Super League Gaming, Inc. (the “Company”) as of December 31, 2021 and 2020, the related consolidated statements of operations, stockholders’ equity and cash flows for the years then ended, and the related notes to the consolidated financial statements (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.   Basis for Opinion   These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.   We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.   Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.     /s/ Baker Tilly US, LLP   We have served as the Company’s auditor since 2016.   Irvine, California March 31, 2022     F-2 Table of Contents     SUPER LEAGUE GAMING, INC. CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2021 and 2020       2021     2020   ASSETS                 Current Assets                 Cash and cash equivalents   $ 14,533,000     $ 7,942,000   Accounts receivable     6,328,000       588,000   Prepaid expenses and other current assets     1,334,000       837,000   Total current assets     22,195,000       9,367,000   Property and Equipment, net     104,000       138,000   Intangible and Other Assets, net     24,243,000       1,907,000   Goodwill     50,263,000       2,565,000   Total assets   $ 96,805,000     $ 13,977,000                     LIABILITIES AND STOCKHOLDERS ’ EQUITY                 Current Liabilities                 Accounts payable and accrued expenses   $ 5,514,000     $ 1,829,000   Deferred revenue     76,000       -   Total current liabilities     5,590,000       1,829,000   Deferred taxes     518,000       1,208,000   Long-term note payable     -       -   Total liabilities     6,108,000       3,037,000                     Commitments and Contingencies (Note 10)                                       Stockholders ’ Equity                 Preferred stock, par value $ 0.001 per share; 10,000,000 shares authorized; no shares issued or outstanding     -       -   Common stock, par value $ 0.001 per share; 100,000,000 shares authorized; 36,809,187 and 15,483,010 shares issued and outstanding as of December 31, 2021 and 2020, respectively.     46,000       25,000   Additional paid-in capital     215,943,000       115,459,000   Accumulated deficit     ( 125,292,000 )     ( 104,544,000 ) Total stockholders’ equity     90,697,000       10,940,000                     Total liabilities and stockholders’ equity   $ 96,805,000     $ 13,977,000     The accompanying notes are an integral part of these consolidated financial statements.   F-3 Table of Contents     SUPER LEAGUE GAMING, INC. CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2021 and 2020       2021     2020                     REVENUES   $ 11,672,000     $ 2,064,000                     COST OF REVENUES     6,547,000       856,000                     GROSS PROFIT     5,125,000       1,208,000                     OPERATING EXPENSES                 Selling, marketing and advertising     9,670,000       5,490,000   Engineering, technology and development     11,100,000       6,821,000   General and administrative     9,435,000       7,640,000   Total operating expenses     30,205,000       19,951,000                     NET OPERATING LOSS     ( 25,080,000 )     ( 18,743,000 )                   OTHER INCOME (EXPENSE)                 Accrued interest expense     ( 5,000 )     ( 8,000 ) Gain on loan forgiveness     1,213,000           Other     13,000       19,000   Total other income     1,221,000       11,000                     LOSS BEFORE BENEFIT FROM INCOME TAXES     ( 23,859,000 )     ( 18,732,000 )                   Benefit from income taxes     3,111,000       -                     NET LOSS   $ ( 20,748,000 )   $ ( 18,732,000 )                   Net loss attributable to common stockholders - basic and diluted                 Basic and diluted loss per common share   $ ( 0.69 )   $ ( 1.64 ) Weighted-average number of shares outstanding, basic and diluted     29,882,828       11,430,057     The accompanying notes are an integral part of these consolidated financial statements.   F-4 Table of Contents     SUPER LEAGUE GAMING, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS ’ EQUITY FOR THE YEARS ENDED DECEMBER 31, 2021 and 2020       2021     2020   Common stock (Shares):                 Balance, beginning of period     15,483,010       8,573,922   Issuance of common stock at $ 9.00 per share, net of issuance costs (Note 7)     1,512,499       -   Issuance of common stock at $ 4.10 per share, net of issuance costs (Note 7)     2,926,830       -   Issuance of common stock at $ 2.60 per share, net of issuance costs (Note 7)     3,076,924       -   Issuance of common stock at $ 3.50 per share, net of issuance costs (Note 7)     -       1,825,000   Issuance of common stock at $ 1.85 per share, net of issuance costs (Note 7)     -       4,988,981   Common stock issued for Mobcrush acquisition (Note 5)     12,067,571       -   Common stock issued for Bannerfy acquisition (Note 5)     415,855       -   Common stock issued for Bloxbiz acquisition (Note 5)     1,030,928       -   Common stock issued for Framerate Acquisition (Note 5)           32,936   Stock-based compensation     295,570       62,171   Balance, end of period     36,809,187       15,483,010                     Common stock (Amount):                 Balance, beginning of period   $ 25,000     $ 18,000   Issuance of common stock at $ 9.00 per share, net of issuance costs (Note 7)     2,000       -   Issuance of common stock at $ 4.10 per share, net of issuance costs (Note 7)     3,000       -   Issuance of common stock at $ 2.60 per share, net of issuance costs (Note 7)     3,000       -   Issuance of common stock at $ 3.50 per share, net of issuance costs (Note 7)     -       2,000   Issuance of common stock at $ 1.85 per share, net of issuance costs (Note 7)     -       5,000   Common stock issued for Mobcrush Acquisition (Note 5)     12,000       -   Common stock issued for Bloxbiz Acquisition (Note 5)     1,000       -   Balance, end of period   $ 46,000     $ 25,000                     Additional paid-in-capital:                 Balance, beginning of period   $ 115,459,000     $ 99,237,000   Issuance of common stock at $ 9.00 per share, net of issuance costs (Note 7)     13,540,000       -   Issuance of common stock at $ 4.10 per share, net of issuance costs (Note 7)     11,927,000       -   Issuance of common stock at $ 2.60 per share, net of issuance costs (Note 7)     7,924,000       -   Issuance of common stock at $ 3.50 per share, net of issuance costs (Note 7)     -       5,951,000   Issuance of common stock at $ 1.85 per share, net of issuance costs (Note 7)     -       8,398,000   Common stock issued for Mobcrush Acquisition (Note 5)     59,843,000       -   Common stock issued for Bannerfy Acquisition (Note 5)     1,768,000       -   Common stock issued for Bloxbiz Acquisition (Note 5)     2,999,000       -   Stock-based compensation     2,381,000       1,863,000   Stock option exercises     111,000       10,000   Other     ( 9,000 )     -   Balance, end of period   $ 215,943,000     $ 115,459,000                     Accumulated Deficit:                 Balance, beginning of period   $ ( 104,544,000 )   $ ( 85,812,000 ) Net Loss     ( 20,748,000 )     ( 18,732,000 ) Balance, end of period   $ ( 125,292,000 )   $ ( 104,544,000 ) Total stockholders ’ equity   $ 90,697,000     $ 10,940,000     The accompanying notes are an integral part of these consolidated financial statements.   F-5 Table of Contents     SUPER LEAGUE GAMING, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2021 and 2020       2021     2020                     CASH FLOWS FROM OPERATING ACTIVITIES                 Net loss   $ ( 20,748,000 )   $ ( 18,732,000 ) Adjustments to reconcile net loss to net cash used in operating activities:                 Depreciation and amortization     3,323,000       1,368,000   Stock-based compensation     2,381,000       2,004,000   Gain on loan forgiveness (Note 6)     ( 1,213,000 )     -   Change in valuation allowance (Note 5)     ( 3,073,000 )     -   Changes in assets and liabilities:                 Accounts receivable     ( 4,270,000 )     ( 295,000 ) Prepaid expenses and other current assets     ( 348,000 )     ( 55,000 ) Accounts payable and accrued expenses     1,328,000       977,000   Deferred revenue     ( 54,000 )     ( 151,000 ) Deferred taxes     ( 38,000 )     -   Accrued interest on notes payable     5,000       8,000   Net cash used in operating activities     ( 22,707,000 )     ( 14,876,000 )                   CASH FLOWS FROM INVESTING ACTIVITIES                 Cash acquired in connection with Mobcrush Acquisition (Note 5)     586,000       -   Cash paid in connection with Bannerfy Acquisition, net (Note 5)     ( 497,000 )     -   Cash paid in connection with Bloxbiz Acquisition, net (Note 5)     ( 3,000,000 )     -   Purchase of property and equipment     ( 22,000 )     ( 9,000 ) Capitalization of software development costs     ( 1,065,000 )     ( 1,035,000 ) Acquisition of other intangible and other assets     ( 205,000 )     ( 146,000 ) Net cash used in investing activities     ( 4,203,000 )     ( 1,190,000 )                   CASH FLOWS FROM FINANCING ACTIVITIES                 Proceeds from issuance of common stock, net of issuance costs     33,390,000       14,356,000   Proceeds from note payable (Note 6)     -       1,200,000   Proceeds from stock option exercises     111,000       10,000   Net cash provided by financing activities     33,501,000       15,566,000                     (DECREASE)INCREASE IN CASH AND CASH EQUIVALENTS     6,591,000       ( 500,000 )                   CASH AND CASH EQUIVALENTS – beginning of year     7,942,000       8,442,000                     CASH AND CASH EQUIVALENTS – end of year   $ 14,533,000     $ 7,942,000                     SUPPLEMENTAL NONCASH FINANCING ACTIVITIES                 Issuance of common stock in connection with Mobcrush Acquisition   $ 59,855,000     $ -   Issuance of common stock in connection with Bannerfy Acquisition     1,705,000       -   Issuance of common stock in connection with Bloxbiz Acquisition     3,000,000       -   Issuance of common stock for Framerate Acquisition (Note 5)     -       245,000     The accompanying notes are an integral part of these consolidated financial statements.   F-6 Table of Contents   SUPER LEAGUE GAMING, INC.   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS     1. DESCRIPTION OF BUSINESS   Super League Gaming, Inc. (Nasdaq: SLGG), (“Super League,” the “Company,” “we,” “us” or “our”) builds and operates networks of games, monetization tools and content channels across open-world gaming platforms that empower developers, energize players, and entertain fans. Our solutions provide incomparable access to an audience consisting of players in the largest global metaverse environments, fans of hundreds of thousands of gaming influencers, and viewers of gameplay content across major social media and digital video platforms. Fueled by proprietary and patented technology systems, the company’s platform includes access to vibrant in-game communities, a leading metaverse advertising platform, a network of highly viewed channels and original shows on Instagram, TikTok, Snap, YouTube, and Twitch, cloud-based livestream production tools, and an award-winning esports invitational tournament series. Super League’s properties deliver powerful opportunities for brands and advertisers to achieve impactful insights and marketing outcomes with gamers of all ages.   Super League was incorporated on October 1, 2014 as Nth Games, Inc. under the laws of the State of Delaware and changed its name to Super League Gaming, Inc. on June 15, 2015. We are an “emerging growth company” as defined by the Jumpstart Our Business Startups Act of 2012, as amended.   Acquisition of Mobcrush Streaming, Inc. On June 1, 2021, the Company completed the acquisition of Mobcrush Streaming, Inc. (“Mobcrush”), a live streaming technology platform used by gaming influencers who generate and distribute original content to fans and subscribers across the most popular live streaming and social media platforms, including Twitch, YouTube, Facebook, Instagram, Twitter, and more. Mobcrush also operates Mineville and Pixel Paradise, two of only seven official Minecraft servers in partnership with Microsoft Corporation (“Microsoft”).   Acquisition of Bannerfy, LTD. On August 24, 2021, the Company completed the acquisition of Bannerfy, Ltd., (“Bannerfy”) pursuant to which the Company acquired all of the issued and outstanding common shares of Bannerfy, as described at Note 5. Bannerfy is an intelligent technology platform that enables digital video and live streaming creators to collaborate with tier one sponsors on their social media channels including YouTube through scalable and custom premium placements.   Acquisition of Bloxbiz Co. On October 4, 2021, the Company acquired (i) substantially all of the assets of Bloxbiz Co. (“Bloxbiz”) and (ii) the personal goodwill of the Founders regarding Bloxbiz's business, as described at Note 5. Bloxbiz is a dynamic ad platform designed specifically for metaverse environments. Bloxbiz’s initial deployment enables brands to advertise across popular Roblox game titles and helps Roblox creators with monetization and game analytics.   In accordance with the acquisition method of accounting, the financial results of Super League presented herein include the financial results of the fiscal year 2021 acquisitions described above for the period from the respective transaction closing dates to the end of the current period presented herein. Refer to Note 5 for additional information.     2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES   Basis of Presentation   The consolidated financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).   Principles of Consolidation   The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries.   Use of Estimates   The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. The Company believes that, of the significant accounting policies described herein, the accounting policies associated with revenue recognition, impairment of goodwill and intangibles, stock-based compensation expense, capitalized internal-use-software costs, accounting for business combinations, and accounting for income taxes and valuation allowances against net deferred tax assets, require its most difficult, subjective or complex judgments.   F- 7 Table of Contents   Going Concern   The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company incurred net losses of $ 20.7 million and $ 18.7 million during the years ended December 31, 2021 and 2020, respectively, and had an accumulated deficit of $ 125.3 million as of December 31, 2021. For the years ended December 31, 2021 and 2020, net cash used in operating activities totaled $ 22.7 million and $14.9 million, respectively.   As of December 31, 2021, the Company had cash and cash equivalents of approximately $ 14.5 million. The Company has used and will continue to use significant capital for the growth and development of its business. The Company has grown significantly in fiscal year 2021 through organic and inorganic growth activities, including the expansion of our premium advertising inventory and year over year increases in recognized revenues across our three primary revenue streams, as reflected elsewhere herein.   In 2022, we are focused on the continued expansion of our service offerings and revenue growth opportunities through internal development, collaborations, and through opportunistic strategic acquisitions. In addition, as further described at Note 11, on March 25, 2022, we entered into a common stock purchase agreement (the “ Purchase Agreement ”) with Tumim Stone Capital, LLC (“ Tumim ”). Pursuant to the Purchase Agreement, the Company has the right, but not the obligation, to sell to Tumim, and Tumim is obligated to purchase, up to $ 10,000,000 of newly issued shares of the Company’s common stock, from time to time during the term of the Purchase Agreement, subject to certain limitations and conditions. Our management believes that our cash balances and capital raising facilities in place will be sufficient to meet our cash requirements through at least March 2023.   The Company considers historical operating results, capital resources and financial position, in combination with current projections and estimates, as part of its plan to fund operations over a reasonable period. Management's considerations assume, among other things, that the Company will continue to be successful implementing its business strategy, that there will be no material adverse developments in the business, liquidity or capital requirements and, if necessary, the Company will be able to raise additional equity or debt financing on acceptable terms. If one or more of these factors do not occur as expected, it could cause a reduction or delay of its business activities, sales of material assets, default on its obligations, or forced insolvency. The accompanying financial statements do not contain any adjustments which might be necessary if the Company were unable to continue as a going concern. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company.   F- 8 Table of Contents   Reclassifications   Certain reclassifications to operating expense line items have been made to prior year amounts for consistency and comparability with the current year’s consolidated financial statement presentation. These reclassifications had no effect on the reported total operating expenses for the periods presented.   Revenue Recognition   Revenue is recognized when the Company transfers promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods and services. In this regard, revenue is recognized when: (i) the parties to the contract have approved the contract (in writing, orally, or in accordance with other customary business practices) and are committed to perform their respective obligations; (ii) the entity can identify each party’s rights regarding the goods or services to be transferred; (iii) the entity can identify the payment terms for the goods or services to be transferred; (iv) the contract has commercial substance (that is, the risk, timing, or amount of the entity’s future cash flows is expected to change as a result of the contract); and (v) it is probable that the entity will collect substantially all of the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer.   Transaction prices are based on the amount of consideration to which we expect to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties, if any. We consider the explicit terms of the revenue contract, which are typically written and executed by the parties, our customary business practices, the nature, timing, and the amount of consideration promised by a customer in connection with determining the transaction price for our revenue arrangements. Refunds and sales returns historically have not been material.   Super League generates revenues from (i) advertising, serving as a marketing channel for brands and advertisers to reach their target audiences of gamers across our network, (ii) content, curating and distributing esports and gaming-centric entertainment content for our own network of digital channels and media and entertainment partner channels and (iii) direct to consumer offers including digital subscriptions, in-game digital goods, and gameplay access fees.   The Company reports revenue on a gross or net basis based on management’s assessment of whether the Company acts as a principal or agent in the transaction and is evaluated on a transaction by transaction basis. To the extent the Company acts as the principal, revenue is reported on a gross basis net of any sales tax from customers, when applicable. The determination of whether the Company acts as a principal or an agent in a transaction is based on an evaluation of whether the Company controls the good or service prior to transfer to the customer. Where applicable, the Company has determined that it acts as the principal in all of its advertising and sponsorships, content and direct to consumer revenue streams, except in situations where we utilize a reseller partner with respect to direct advertising sales arrangements.   Revenue billed or collected in advance is recorded as deferred revenue until the event occurs or until applicable performance obligations are satisfied.   Advertising and Sponsorships   Advertising revenue primarily consists of direct sales activity along with sales of programmatic display and video advertising units to third -party advertisers and exchanges. Advertising arrangements typically include contract terms for time periods ranging from several days to several weeks in length.   For advertising arrangements that include performance obligations satisfied over time, customers typically simultaneously receive and consume the benefits under the arrangement as we satisfy our performance obligations, over the applicable contract term. As such, revenue is recognized over the contract term based upon estimates of progress toward complete satisfaction of the contract performance obligations (typically utilizing a time, effort or delivery-based method of estimation). Revenue from shorter-term advertising arrangements that provide for a contractual delivery or performance date is recognized when performance is substantially complete and or delivery occurs. Payments are typically due from customers during the term of the arrangement for longer-term campaigns, and once delivery is complete for shorter-term campaigns.   Sponsorship revenue arrangements may include: exclusive or non-exclusive title sponsorships, marketing benefits, official product status exclusivity, product visibly and additional infrastructure placement, social media rights, rights to on-screen activations and promotions, display material rights, media rights, hospitality and tickets and merchandising rights. Sponsorship revenues also include revenues pursuant to arrangements with brand and media partners, retail venues, game publishers and broadcasters that allow our partners to run amateur esports experiences, and or capture specifically curated gameplay content that is customized for our partners’ distribution channels. Sponsorship arrangements typically include contract terms for time periods ranging from several weeks or months to terms of twelve months in length.   For sponsorship arrangements that include performance obligations satisfied over time, customers typically simultaneously receive and consume the benefits under the agreement as we satisfy our performance obligations, over the applicable contract term. As such, revenue is recognized over the contract term based upon estimates of progress toward complete satisfaction of the contract performance obligations (typically utilizing a time, effort or delivery-based method of estimation). Payments are typically due from customers during the term of the arrangement.   Revenue from sponsorship arrangements for one -off branded experiences and/or the development of content tailored specifically for our partners’ distribution channels that provide for a contractual delivery or performance date, is recognized at a point in time, when performance is substantially complete and or delivery occurs.   F- 9 Table of Contents   Content   Content sales revenue is generated in connection with our curation and distribution of esports and entertainment content for our own network of digital channels and media and entertainment partner channels. We distribute three primary types of content for syndication and licensing, including: ( 1 ) our own original programming content, ( 2 ) user generated content (“UGC”), including online gameplay and gameplay highlights, and ( 3 ) the creation of content for third parties utilizing our remote production and broadcast technology.   For content arrangements that include performance obligations satisfied over time, customers typically simultaneously receive and consume the benefits under the arrangement as we satisfy our performance obligations, over the applicable contract term. As such, revenue is recognized over the contract term based upon estimates of progress toward complete satisfaction of the contract performance obligations (typically utilizing a time, effort or delivery-based method of estimation). Revenue from shorter-term content sales arrangements that provide for a contractual delivery or performance date is recognized when performance is substantially complete and/or delivery occurs. Payments are typically due from customers during the term of the arrangement for longer-term campaigns, and once delivery is complete for shorter-term campaigns.   Payments are typically due from customers during the term of the arrangement for longer-term campaigns, and once delivery is complete for shorter-term campaigns.    Direct to Consumer   Direct to consumer revenues primarily consist of primarily monthly digital subscription fees, and sales of in-game digital goods. Subscription revenue is recognized in the period the services are rendered. Payments are typically due from customers at the point of sale.   InPvP Platform Generated Sales Transactions . Our Mobcrush subsidiary generates in-game Platform sales revenues via digital goods sold within the platform, including cosmetic items, durable goods, player ranks and game modes, leveraging the flexibility of the Microsoft Minecraft Bedrock platform, and powered by the InPvP cloud architecture technology platform. Revenue is generated when transactions are facilitated between Microsoft and the end user, either via in-game currency or cash.   Revenue for digital goods sold on the platform is recognized when Microsoft (our partner) collects the revenue and facilitates the transaction on the platform. Revenue for such arrangements includes all revenue generated, bad debt, make goods, and refunds of all transactions managed via the platform by Microsoft. The revenue is recognized on a monthly basis. Payments are made to the Company monthly based on the reconciled sales revenue generated.   Revenue was comprised of the following for the years ended December 31, 2021 and 2020:       2021     2020   Advertising and sponsorships   $ 8,005,000     $ 1,170,000   Content sales     2,264,000       735,000   Direct to consumer     1,403,000       159,000       $ 11,672,000     $ 2,064,000     For the fiscal years ended December 31, 2021 and 2020, 19 % and 55 % of revenues were recognized at a single point in time, and 81 % and 45 % of revenues were recognized over time, respectively.   Cost of Revenues   Cost of revenues includes direct costs incurred in connection with the satisfaction of performance obligations under our revenue arrangements including internal and third -party engineering, creative, content, broadcast and other personnel, talent and influencers, developers, content capture and production services, direct marketing, cloud services, software, prizing, and revenue sharing fees.   Advertising   Gaming experience and Super League brand related advertising costs include the cost of ad production, social media, print media, digital marketing, promotions, and merchandising. The Company expenses advertising costs as incurred. Advertising costs are included in selling, marketing and advertising expenses in the accompanying statements of operations. Advertising expenses for the fiscal years ended December 31, 2021 and 2020 were $ 568,000 and $ 187,000 , respectively, and are included in selling, marketing and advertising expenses in the accompanying statements of operations.   F- 10 Table of Contents   Engineering, Technology and Development Costs   Components of our platform are available on a “free to use,” “always on basis,” and are utilized and offered as an audience acquisition tool, as a means of growing our audience, engagement, viewership, players and community. Engineering, technology and development related operating expenses includes the costs described below, incurred in connection with our audience acquisition and viewership expansion activities. Engineering, technology and development related operating expenses include (i) allocated internal engineering personnel expenses, including salaries, noncash stock compensation, taxes and benefits, (ii) third -party contract software development and engineering expenses, (iii) internal use software cost amortization expense, and (iv) technology platform related cloud services, broadband and other platform expenses, incurred in connection with our audience acquisition and viewership expansion activities, including tools and product offering development, testing, minor upgrades and features, free to use services, corporate information technology and general platform maintenance and support.     Cash and Cash Equivalents   The Company considers all highly-liquid, short-term investments with original maturities of three months or less when purchased to be cash equivalents. The Company’s cash equivalents consisted of investments in AAA-rated money market funds for the periods presented.   Accounts Receivable   Accounts receivable are recorded at the original invoice amount, less an estimate made for doubtful accounts, if any. The Company provides an allowance for doubtful accounts for potential credit losses based on its evaluation of the collectability and the customers’ creditworthiness. Accounts receivable are written off when they are determined to be uncollectible. As of December 31, 2021 and 2020, no allowance for doubtful accounts was deemed necessary.   Fair Value Measurements   Fair value is defined as the exchange price that would be received from selling 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 on the measurement date. The Company measures financial assets and liabilities at fair value at each reporting period using a fair value hierarchy which requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value:   Level 1. Quoted prices in active markets for identical assets or liabilities.     Level   2 . Quoted prices for similar assets and liabilities in active markets or inputs other than quoted prices which are observable for the assets or liabilities, either directly or indirectly through market corroboration, for substantially the full term of the financial instruments.   Level   3. Unobservable inputs which are supported by little or no market activity and which are significant to the fair value of the assets or liabilities.   The Company does not have any instruments that are measured at fair value on a recurring basis. However, the Company measured certain acquired intangible assets and the Earn-Out using Level 3 inputs on a nonrecurring basis.   Property and Equipment   Property and equipment are recorded at cost. Major additions and improvements that materially extend useful lives of property and equipment are capitalized. Maintenance and repairs are charged against the results of operations as incurred. When these assets are sold or otherwise disposed of, the asset and related depreciation are relieved, and any gain or loss is included in the statements of operations for the period of sale or disposal. Depreciation and amortization are computed on a straight-line basis over the estimated useful lives of the assets, typically over a three to five -year period.   F- 11 Table of Contents   Acquisitions   Acquisition Method.  Acquisitions that meet the definition of a business under ASC 805, “Business Combinations,” (“ASC 805” ) are accounted for using the acquisition method of accounting. Under the acquisition method of accounting, assets acquired, liabilities assumed, contractual contingencies, and contingent consideration, when applicable, are recorded at fair value at the acquisition date. Any excess of the purchase price over the fair value of the net assets acquired is recorded as goodwill. The application of the acquisition method of accounting requires management to make significant estimates and assumptions in the determination of the fair value of assets acquired and liabilities assumed in connection with the allocation of the purchase price consideration to the assets acquired and liabilities assumed. Transaction costs associated with business combinations are expensed as incurred and are included in general and administrative expenses in the consolidated statements of operations. Contingent consideration, if any, is recognized and measured at fair value as of the acquisition date.   Cost Accumulation Model.  Acquisitions that do not meet the definition of a business under ASC 805 are accounted for as an asset acquisition, utilizing a cost accumulation model. Assets acquired and liabilities assumed are recognized at cost, which is the consideration the acquirer transfers to the seller, including direct transaction costs, on the acquisition date. The cost of the acquisition is then allocated to the assets acquired based on their relative fair values. Goodwill is not recognized in an asset acquisition. Direct transaction costs include those third -party costs that can be directly attributable to the asset acquisition and would not have been incurred absent the acquisition transaction.   Contingent consideration, representing an obligation of the acquirer to transfer additional assets or equity interests to the seller if future events occur or conditions are met, is recognized when probable and reasonably estimable. Contingent consideration recognized is included in the initial cost of the assets acquired, with subsequent changes in the recorded amount of contingent consideration recognized as an adjustment to the cost basis of the acquired assets. Subsequent changes are allocated to the acquired assets based on their relative fair value. Depreciation and/or amortization of adjusted assets are recognized as a cumulative catch-up adjustment, as if the additional amount of consideration that is no longer contingent had been accrued from the outset of the arrangement.   Contingent consideration that is paid to sellers that remain employed by the acquirer and linked to future services is generally considered compensation cost and recorded in the statement of operations in the post-combination period.    Intangible Assets   Intangible assets primarily consist of (i) internal-use software development costs, (ii) domain name, copyright and patent registration costs, (iii) commercial licenses and branding rights, (iv) developed technology acquired, (v) partner, customer, creator and influencer related intangible assets acquired and (vi) other intangible assets, which are recorded at cost (or in accordance with the acquisition method or cost accumulation methods described above) and amortized using the straight-line method over the estimated useful lives of the assets, ranging from three to 10 years.   Software development costs incurred to develop internal-use software during the application development stage are capitalized and amortized on a straight-line basis over the software’s estimated useful life, which is generally three years. Software development costs incurred during the preliminary stages of development are charged to expense as incurred. Maintenance and training costs are charged to expense as incurred. Upgrades or enhancements to existing internal-use software that result in additional functionality are capitalized and amortized on a straight-line basis over the applicable estimated useful life.   Goodwill   The Company currently has one  reporting unit. The following table presents the changes in the carrying amount of goodwill for the year ended December 31, 2021:       2021             Balance as of December 31, 2020   $ 2,565,000   Acquisitions (See Note 5)     47,698,000   Balance as of December 31, 2021   $ 50,263,000     F- 12 Table of Contents   Goodwill represents the excess of the purchase price of the acquired business over the acquisition date fair value of the net assets acquired. Goodwill is tested for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis ( December 31) and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. We consider our market capitalization and the carrying value of our assets and liabilities, including goodwill, when performing our goodwill impairment tests. We operate in one reporting segment.   If a potential impairment exists, a calculation is performed to determine the fair value of existing goodwill. This calculation can be based on quoted market prices and / or valuation models, which consider the estimated future undiscounted cash flows resulting from the reporting unit, and a discount rate commensurate with the risks involved. Third party appraised values may also be used in determining whether impairment potentially exists. In assessing goodwill impairment, significant judgment is required in connection with estimates of market values, estimates of the amount and timing of future cash flows, and estimates of other factors that are used to determine the fair value of our reporting unit. If these estimates or related projections change in future periods, future goodwill impairment tests may result in charges to earnings.   When conducting the Company’s annual or interim goodwill impairment assessment, we initially perform a qualitative evaluation of whether it is more likely than not that goodwill is impaired. In evaluating whether it is more likely than not that the fair value of our reporting unit is less than its carrying amount, we consider the guidance set forth in ASC- 350 “Intangibles Goodwill and Other,” (“ASC 350” ) which requires an entity to assess relevant events and circumstances, including macroeconomic conditions, industry and market considerations, cost factors, financial performance and other relevant events or circumstances. From a qualitative standpoint, we considered the Company’s history of reported losses and negative cash flows from operating activities, along with the downturn in macroeconomic conditions and the broader mid-cap and micro-cap equity markets in late 2021. We also considered that the Company experienced significant inorganic and organic growth in fiscal 2021, including the impact of the acquisitions of Mobcrush, Bannerfy and Bloxbiz on our premium advertising inventory, product offerings to advertisers, current period revenues recognized and future revenue generating opportunities. Given that the Company’s significant growth occurred recently, and the relatively short period of time between the commencement of the downturn in macroeconomic and general equity market conditions as of December 31, 2021, management believes that the recent reduction in prices of our common stock, consistent with the broader market, is not other-than-temporary and not indicative of any fundamental change in the value or prospects of the underlying business as of the measurement date.   As another data point, the Company also performed a quantitative goodwill impairment analysis comparing the estimated fair value of the Company’s reporting unit to its carrying or book value as of the current period presented herein. In performing the quantitative analysis, the Company compared the fair value of the reporting unit to its carrying or book value to determine if the fair value of the reporting unit exceeded its carrying value as of the testing date, in which case the standard indicates that goodwill would not be impaired, and no further testing is required. The fair value of a reporting unit refers to the price that would be received to sell the reporting unit as a whole in an orderly transaction between market participants at the measurement date. Quoted market prices in active markets are considered to be the best evidence of fair value and should be used as the basis for fair value measurement, if available. When using quoted market prices to estimate the fair value of a reporting unit, we consider all available evidence. In certain circumstances, such as a distressed market, it may be appropriate to consider recent trends in the Company’s stock price, instead of a single day’s stock price in evaluating fair value. In these circumstances, averages over relatively short periods of time are used to determine representative market values.   At December 31, 2021, we reported goodwill of $ 50.3 million. We utilized the Company’s market capitalization, based on the 30 -day volume weighted average ( “30 -day VWAP”) closing price of the Company’s common stock as of December 31, 2021, multiplied by the number of shares of the Company’s common stock outstanding as of the measurement date, for purposes of estimating the fair value of the Company at December 31, 2021. In management’s estimate, the 30 -day VWAP of closing stock prices for our common stock was the best estimate of fair value of the company’s single reporting unit available at the date of testing. Based on the results of the quantitative impairment analysis, the fair value of the Company’s single reporting unit exceeded its carrying value at December 31, 2021 by approximately $ 11.3 million.   Based on the qualitative analysis and other data points described above,  the Company concluded that goodwill was not “more likely than not” impaired as of December 31, 2021.   As described above, we have significant intangible assets recorded on our consolidated balance sheets. We will continue to evaluate the recoverability of the carrying amount of our intangible assets on an ongoing basis. There can be no assurance that the outcome of such reviews in the future will not result in substantial impairment charges. Impairment assessment inherently involves judgment as to assumptions about expected future cash flows and the impact of market conditions on those assumptions. Future events and changing market conditions may impact our assumptions as to prices, costs, holding periods or other factors that may result in changes in our estimates of future cash flows. Although we believe the assumptions we used in testing for impairment are reasonable, significant changes in any one of our assumptions could produce a significantly different result. The 30 -day VWAP of closing stock prices for our common stock subsequent to December 31, 2021, consistent with the broader market, have continued to trend downward. If the decline in our stock price persists throughout the three month period ending March 31, 2022, we will perform an interim goodwill impairment assessment as of March 31, 2022, consistent with the methodology and approach described above.   Impairment of Long-Lived Assets   The Company assesses the recoverability of long-lived assets whenever events or changes in circumstances indicate that their carrying value may not be recoverable. Factors we consider important, which could trigger an impairment review, include the following: significant underperformance relative to expected historical or projected future operating results; significant changes in the manner of our use of the acquired assets or the strategy for our overall business; significant negative industry or economic trends; significant adverse changes in legal factors or in the business climate, including adverse regulatory actions or assessments; and significant decline in our stock price for a sustained period. In the event the sum of the expected undiscounted future cash flows resulting from the use of the asset is less than the carrying amount of the asset, an impairment loss equal to the excess of the asset’s carrying value over its fair value is recorded. For the periods presented herein, management believes that there was no impairment of long-lived assets. There can be no assurance, however, that market conditions or demand for the Company’s products or services will not change, which could result in long-lived asset impairment charges in the future.   Stock-Based Compensation   Compensation expense for stock-based awards is measured at the grant date, based on the estimated fair value of the award, and is recognized as an expense, typically on a straight-line basis over the employee’s requisite service period (generally the vesting period of the equity award) which is generally two to four years. Compensation expense for awards with performance conditions that affect vesting is recorded only for those awards expected to vest or when the performance criteria are met. The fair value of restricted stock and restricted stock unit awards is determined by the product of the number of shares or units granted and the grant date market price of the underlying common stock. The fair value of stock option and common stock purchase warrant awards is estimated on the date of grant utilizing the Black-Scholes-Merton option pricing model. The Company utilizes the simplified method for estimating the expected term for options granted to employees due to the lack of available or sufficient historical exercise data for the Company for the applicable options terms. The Company accounts for forfeitures of awards as they occur. Estimates of expected volatility of the underlying common stock for the expected term of the stock option used in the Black-Scholes-Merton option pricing model are determined by reference to historical volatilities of the Company’s common stock and historical volatilities of similar companies.   Grants of equity-based awards (including warrants) to non-employees in exchange for consulting or other services are accounted for using the grant date fair value of the equity instruments issued.   F- 13 Table of Contents   Equity Financing Costs   Specific incremental costs directly attributable to a proposed or actual offering of securities or debt are deferred and charged against the gross proceeds of the financing. In the event that the proposed or actual financing is not completed, or is deemed not likely to be completed, such costs are expensed in the period that such determination is made. Deferred financing costs, if any, are included in other current assets in the accompanying balance sheet. For the years ended December 31, 2021 and 2020, financing costs charged against gross proceeds in connection with equity financings totaled $ 434,000 and $ 176,000 , respectively.   Reportable Segments   The Company utilizes the management approach to identify the Company’s operating segments and measure the financial information disclosed, based on information reported internally to the Chief Operating Decision Maker (“CODM”) to make resource allocation and performance assessment decisions. An operating segment of a public entity has all the following characteristics: ( 1 ) it engages in business activities from which it may earn revenues and incur expenses; ( 2 ) its operating results are regularly reviewed by the public entity's CODM to make decisions about resources to be allocated to the segment and assess its performance: and ( 3 ) its discrete financial information is available. Based on the applicable criteria under the standard, the components of the Company’s operations are its: ( 1 ) advertising and sponsorship component, including content sales component; and ( 2 ) the Company’s direct-to-consumer component.   A reportable segment is an identified operating segment that also exceeds the quantitative thresholds described in the applicable standard. Based on the applicable criteria under the standard, including quantitative thresholds, management has determined that the Company has one reportable segment that operated primarily in domestic markets during the periods presented herein.   Concentration of Credit Risks   Financial instruments that potentially subject the Company to concentrations of credit risk are cash equivalents, investments and accounts receivable. The Company places its cash equivalents and investments primarily in highly rated money market funds. Cash equivalents are also invested in deposits with certain financial institutions and may, at times, exceed federally insured limits. The Company has not experienced any significant losses on its deposits of cash and cash equivalents.    Risks and Uncertainties   Concentrations . The Company had certain customers whose revenue individually represented 10% or more of the Company’s total revenue, or whose accounts receivable balances individually represented 10% or more of the Company’s total accounts receivable, and vendors whose accounts payable balances individually represented 10% or more of the Company’s total accounts payable, as follows:       Years Ended December 31,       2021     2020   Number of customers > 10% of revenues / percent of revenues     One  / 12 %     Four  / 49 %   Revenue concentrations were comprised of the following revenue categories:       Years Ended December 31,       2021     2020   Advertising and sponsorships     12 %     28 % Content     -       21         12 %     49 %       December 31, 2021     December 31, 2020   Number of customers > 10% of accounts receivable / percent of accounts receivable     Three / 35 %     Two / 39 % Number of vendors > 10% of accounts payable / percent of accounts payable     One / 21 %     Three / 52 %   F- 14 Table of Contents   Earnings (Loss) Per Share   Basic earnings (loss) per share is computed by dividing the income or loss by the weighted-average number of outstanding shares of common stock for the applicable period. Diluted earnings per share is computed by dividing the income or loss by the weighted-average number of outstanding shares of common stock for the applicable period, including the dilutive effect of common stock equivalents. Potentially dilutive common stock equivalents primarily consist of employee stock options, warrants issued to employees and non-employees in exchange for services and warrants issued in connection with financings. All outstanding stock options, restricted stock units and warrants, totaling 5,060,000 and 4,470,000 at December 31, 2021 and December 31, 2020, respectively, have been excluded from the computation of diluted loss per share because the effect of inclusion would have been anti-dilutive.    Income Taxes   Income taxes are accounted for using an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company’s consolidated financial statements or income tax returns. A valuation allowance is established to reduce deferred tax assets if all, or some portion, of such assets will more than likely not be realized, or if it is determined that there is uncertainty regarding future realization of such assets.   Under U.S. GAAP, a tax position is a position in a previously filed tax return, or a position expected to be taken in a future tax filing that is reflected in measuring current or deferred income tax assets and liabilities. Tax positions are recognized only when it is more likely than not, based on technical merits, that the position will be sustained upon examination. Tax positions that meet the more likely than not thresholds are measured using a probability weighted approach as the largest amount of tax benefit being realized upon settlement. The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may require periodic adjustments, and which may not accurately forecast actual outcomes. Management believes the Company has no uncertain tax positions for the years ended December 31, 2021 and 2020.   The Company has elected to include interest and penalties related to its tax contingences as a component of income tax expense. There were no accruals for interest and penalties related to uncertain tax positions for the periods presented. Income tax returns remain open for examination by applicable authorities, generally three years from filing for federal and four years for state. The Company is not currently under examination by any taxing authority nor has it been notified of an impending examination.   Recent Accounting Guidance   Recent Accounting Pronouncements - Not Yet Adopted. In February 2016, the FASB issued an ASU that requires lessees to present right-of-use assets and lease liabilities on the balance sheet. The new guidance is to be applied using a modified retrospective approach at the beginning of the earliest comparative periods in the financial statements and is effective for fiscal years beginning after December 15, 2021 and early adoption is permitted. The Company is evaluating the impact that this guidance will have on its financial position, results of operations and financial statement disclosures.   Recent Accounting Pronouncements - Adopted.  In June 2016, the FASB issued guidance on the measurement and recognition of credit losses on most financial assets. For trade receivables, loans, and held-to-maturity debt securities, the current probable loss recognition methodology is being replaced by an expected credit loss model. For available-for-sale debt securities, the recognition model on credit losses is generally unchanged, except the losses will be presented as an adjustable allowance. The guidance will be applied retrospectively with the cumulative effect recognized as of the date of adoption. The guidance became effective at the beginning of the Company’s first quarter of the fiscal year ending December 31, 2021. The adoption of this standard did not have a material impact on the Company's consolidated financial statements and related disclosures.   F- 15 Table of Contents     3. PROPERTY AND EQUIPMENT   Property and equipment consisted of the following at December 31, 2021 and 2020:       2021     2020                     Computer hardware   $ 3,165,000     $ 3,143,000   Furniture and fixtures     356,000       342,000         3,521,000       3,485,000   Less: accumulated depreciation and amortization     ( 3,417,000 )     ( 3,347,000 )     $ 104,000     $ 138,000     Depreciation and amortization expense for property and equipment was $ 73,000 and $ 110,000 for the years ended December 31, 2021 and 2020, respectively.     4. INTANGIBLE AND OTHER ASSETS   Intangible and other assets consisted of the following at December 31, 2021 and 2020:       2021     2020                     Capitalized software development costs   $ 4,339,000     $ 3,275,000   Trade name     189,000       189,000   Domain     68,000       68,000   Copyrights and other     641,000       435,000   Intangible assets acquired in connection with Mobcrush Acquisition (Note 5)     19,500,000       -   Intangible assets acquired in connection with Bannerfy Acquisition (Note 5)     3,068,000       -   Intangible assets acquired in connection with Bloxbiz acquisition (Note 5)     1,747,000       -         29,552,000       3,967,000   Less: accumulated amortization     ( 5,309,000 )     ( 2,060,000 ) Intangible and other assets, net   $ 24,243,000     $ 1,907,000     Amortization expense for the fiscal year ended December 31, 2021 totaled $ 3,187,000 . Amortization expense included in cost of revenues for the fiscal year ended December 31, 2021 totaled $ 63,000 . Amortization expense for the fiscal year ended December 31, 2020 totaled $ 1,258,000 .   The Company expects to record amortization of intangible assets for fiscal years ending December31, 2022 and future fiscal years as follows:   For the years ending December 31,         2022   $ 5,086,000   2023     4,749,000   2024     4,347,000   2025     3,909,000   2026     2,899,000   Thereafter     3,253,000       $ 24,243,000       5. ACQUISITIONS   Acquisition of Mobcrush   On March 9, 2021, we entered into an Agreement and Plan of Merger, as amended on April 20, 2021, ( the “Mobcrush Merger Agreement”) by and among Mobcrush, the Company, and SLG Merger Sub II, Inc., a wholly-owned subsidiary of the Company (“Merger Co”), which provided for the acquisition of Mobcrush by Super League pursuant to the merger of Merger Co with and into Mobcrush, with Mobcrush as the surviving corporation (the “Mobcrush Acquisition”).   On June 1, 2021 ( “Mobcrush Closing Date”), the Company completed the Mobcrush Acquisition pursuant to which the Company acquired all of the issued and outstanding shares of Mobcrush. In accordance with the terms and subject to the conditions of the Mobcrush Merger Agreement: (A) each outstanding share of Mobcrush common stock, par value $ 0.001 per share (“Mobcrush Common Stock”), and Mobcrush preferred stock, par value $ 0.001 , was canceled and converted into the right to receive (i) 0.528 shares of the Company’s common stock, as determined in the Mobcrush Merger Agreement, and (ii) any cash in lieu of fractional shares of common stock otherwise issuable under the Mobcrush Merger Agreement (the “Mobcrush Merger Consideration”). At closing, the Company issued to the former stockholders of Mobcrush an aggregate total of  12,067,571  shares of the Company’s common stock and reserved an aggregate total of  514,633  shares of common stock for future stock option grants, under the Super League 2014 Stock Option and Incentive Plan, to the former Mobcrush employees retained by the Company in connection with the Mobcrush Acquisition, resulting in a total of 12,582,204 shares of  common stock issued and reserved as consideration for the Mobcrush Acquisition. Upon completion of the Mobcrush Acquisition, Mobcrush became a wholly-owned subsidiary of the Company.   F- 16 Table of Contents   The Mobcrush Acquisition was approved by the board of directors of each of the Company and Mobcrush, and was approved by the stockholders of Mobcrush. For purposes of complying with Nasdaq Listing Rule 5635, Super League’s stockholders approved the issuance of an aggregate of 12,582,204 shares of Common Stock to be issued in connection with the Mobcrush Acquisition.   Transaction costs incurred by the Company relating to the Mobcrush Acquisition totaled $ 636,000 and were expensed as incurred in accordance with the acquisition method of accounting.   In accordance with the acquisition method of accounting, the financial results of Super League presented herein include the financial results of Mobcrush from the Mobcrush Closing Date to the end of the current period presented. Total revenues for Mobcrush from the Mobcrush Closing Date to December 31, 2021 ( “Mobcrush Stub Period”), included in the consolidated statements of operations for the fiscal year ended December 31, 2021, were approximately $ 5.2 million. Disclosure of net loss for Mobcrush on a stand-alone basis for the Mobcrush Stub Period is not practical due to the integration of Mobcrush operations, including resource allocation and related operating expenses, with those of the consolidated Company upon acquisition, consistent with Super League operating in one reporting segment.   The Company determined that the Mobcrush Acquisition constitutes a business acquisition as defined by Accounting Standards Codification (“ASC”) 805,   Business Combinations . Accordingly, the assets acquired and liabilities assumed in the transaction were recorded at their estimated acquisition date fair values, while transaction costs associated with the acquisition were expensed as incurred pursuant to the acquisition method of accounting in accordance with ASC 805.  Super League’s preliminary purchase price allocation was based on an evaluation of the appropriate fair values of the assets acquired and liabilities assumed and represents management’s best estimate based on available data. Fair values are determined based on the requirements of ASC 820,   Fair Value Measurements and Disclosures  (“ASC 820” ).   The following table summarizes the determination of the fair value of the purchase price consideration paid in connection with the Mobcrush Acquisition:   Equity Consideration at closing – shares of common stock   $ 12,067,571   Super League closing stock price per share on the Mobcrush Closing Date   $ 4.96   Fair value of common stock issued   $ 59,855,000     The fair value of the Company Common Stock used in determining the estimated fair value of the Mobcrush Merger Consideration was $ 4.96 per share based on the closing price of Company Common Stock on June 1, 2021, as quoted on the Nasdaq Capital Market.   The purchase price allocation was based upon a preliminary estimate of the fair value of the assets acquired and the liabilities assumed by the Company in connection with the Mobcrush Acquisition, as follows:       Amount   Assets Acquired and Liabilities Assumed:         Cash   $ 586,000   Accounts receivable     1,266,000   Prepaids     141,000   Property and equipment     13,000   Identifiable intangible assets     19,500,000   Accounts payable and accrued expenses     ( 2,017,000 ) Deferred revenue     ( 130,000 ) Net deferred income tax liability     ( 3,073,000 ) Identifiable net assets acquired     16,286,000   Goodwill     43,569,000   Total purchase price   $ 59,855,000     The following table presents details of the fair values of the acquired intangible assets of Mobcrush:       Estimated Useful Life (in years)     Amount   Preferred partner relationship     7       10,700,000   Developed technology     5       3,900,000   Influencers/content creators     5       2,000,000   Advertiser and agency relationships     5       1,900,000   Trademarks     7       500,000   Customer relationships     5       500,000   Total intangible assets acquired           $ 19,500,000     F- 17 Table of Contents   Aggregated amortization expense for the fiscal year ended December 31, 2021 related to intangible assets acquired in connection with the Mobcrush Acquisition, totaled $ 1,883,000 . Goodwill represents the excess of the purchase price of the acquired business over the acquisition date fair value of the net assets acquired. Goodwill recorded in connection with the Mobcrush Acquisition is primarily attributable to expected synergies from combining the operations of Super League and Mobcrush, and also includes residual value attributable to the assembled and trained workforce acquired in the Mobcrush Acquisition.   Pursuant to the terms of the Mobcrush Merger Agreement, immediately prior to the effective time of the Mobcrush Acquisition, each vested option to acquire shares of Mobcrush common stock held by former Mobcrush employees was exercised so that, at the effective time of the Mobcrush Acquisition, shares of Mobcrush Common Stock issued upon exercise of these vested options received shares of Company Common Stock issuable as Mobcrush Merger Consideration. Unvested options to acquire shares of Mobcrush common stock that were outstanding immediately prior to the Mobcrush Closing Date were canceled, and a number of options to purchase shares of Company Common Stock were issued to replace the cancelled unvested Mobcrush options in a manner consistent with options historically granted by Super League under the Super League 2014 Stock Option and Incentive Plan (the “Replacement Options”).   Pursuant to the terms of the Mobcrush Merger Agreement, 514,633  shares of the Company’s common stock were reserved for Replacement Option grants to the former Mobcrush employees retained by the Company in connection with the Mobcrush Acquisition. As of December 31, 2021, 415,000 Replacement Options have been granted to former Mobcrush employees retained by the Company, with continued employment required to vest and retain the Replacement Options granted.  Under ASC 805, consideration arrangements in which the payments are automatically forfeited if employment terminates is considered to be compensation for post-combination services, and not acquisition consideration. As such, the 514,633 shares of the Company’s common stock reserved at closing for future stock option grants to former Mobcrush employees retained by the Company are not included as a component of the consideration paid in connection with the Mobcrush Acquisition, and will be accounted for pursuant to ASC 718, “ Stock based Compensation, ” upon grant. For the fiscal year ended December 31, 2021, noncash stock compensation expense related to stock options granted pursuant to the terms of the Mobcrush Merger Agreement totaled $ 252,000 .   Management is primarily responsible for determining the fair value of the tangible and identifiable intangible assets acquired and liabilities assumed as of the Mobcrush Closing Date. Management considered a number of factors, including reference to a preliminary independent analysis of estimated fair values solely for the purpose of allocating the purchase price to the assets acquired and liabilities assumed. The analysis included a preliminary discounted cash flow analysis which estimated the future net cash flows expected to result from the respective assets acquired as of the Mobcrush Closing Date. A discount rate consistent with the risks associated with achieving the estimated net cash flows was used to estimate the present value of future estimated net cash flows. The Company is in the process of finalizing the estimates and assumptions developed in connection with the independent analysis of estimated fair values of intangible assets acquired solely for the purpose of allocating the purchase price to the assets acquired and liabilities assumed. Any adjustments to the fair values of intangibles assets acquired, or estimates of economic useful lives of the intangible assets acquired, could impact the carrying value of those assets and related goodwill, as well as the estimates of periodic amortization of intangible assets acquired to be reflected in the statement of operations. In addition, the Company is in the process of finalizing its estimate and analysis of the fair values of certain tax attributes acquired. Any adjustments to the preliminary estimates of tax attributes acquired will increase or decrease the estimated net deferred tax liability recorded in connection with the acquisition method of accounting, with an offsetting adjustment to goodwill.   F- 18 Table of Contents   The fair values of the acquired intangible assets, as described above, was determined using the following methods:   Description   Valuation Method Applied Valuation Method Description   Assumptions Preferred partner relationship / Advertiser and agency relationships   Multi-Period Excess Earnings Method ("MPEEM") under the Income Approach   MPEEM is an application of the DCF Method, whereby revenue derived from the intangible asset is estimated using the overall business revenue, adjusted for attrition, obsolescence, cost of goods sold, operating expenses, and taxes. Required returns attributable to other assets employed in the business are subtracted. The  “excess” earnings are attributable to the intangible asset, and are discounted to present value at a rate of return to estimate the fair value of the intangible asset.     Discount rate 13 % - 14%; Forecast period 6 - 10yrs.;   Developed technology and Trademarks   Relief-from-Royalty Method under the Income Approach   Under the Relief-from-Royalty method, the royalty savings is calculated by estimating a reasonable royalty rate that a third party would negotiate in a licensing agreement. Such royalties are most commonly expressed as a percentage of total revenue involving the technology.     Forecast period: 4 - 5 yrs.; Royalty Rate: Developed Technology 5 % - 3%; Discount Rate: 14%;   Influencers/content creators   With-and-Without Method under the Income Approach   The With-and-Without Method compares the present value of the after-tax cash flows of the business assuming that the subject intangible asset is in place with the present value of the after-tax cash flows of the business assuming the subject asset is not in place. The difference between the present value of the two scenarios isolates the impact of the subject intangible asset and provides an estimation of fair value.     Forecast period: 4 years; Recreate Period 20 months; Discount Rate: 13%;   Customer relationships   Cost Approach   In the Replacement Cost Method, value is estimated by determining the current cost of replacing an asset with one of equivalent economic utility. The premise of the approach is that a prudent investor would pay no more for an asset than the amount for which the utility of the asset could be replaced.   Rate of Return 14%; Discount rate 13%; Discount period .5; Risk Adjusted Return Factor 1.1   The Mobcrush Acquisition was treated for tax purposes as a nontaxable transaction and, as such, the historical tax bases of the acquired assets and assumed liabilities, net operating losses, and other tax attributes of Mobcrush will carryover. As a result, no new tax goodwill was created in connection with the Mobcrush Acquisition as there is no step-up to fair value of the underlying tax bases of the acquired net assets. The acquisition method of accounting includes the establishment of a net deferred tax asset or liability resulting from book tax basis differences related to assets acquired and liabilities assumed on the date of acquisition. Acquisition date deferred tax assets primarily relate to certain net operating loss carryforwards of Mobcrush. Acquisition date deferred tax liabilities relate to specifically identified non-goodwill intangibles acquired. The estimated net deferred tax liability was determined as follows:       Book Basis     Tax Basis     Difference   Intangible assets acquired   $ 19,500,000     $ 2,635,000     $ ( 16,865,000 ) Tangible assets acquired     13,000               ( 13,000 ) Estimated net operating loss carryforwards – Mobcrush     -       5,895,000       5,895,000   Net deferred tax liability – pretax                     ( 10,983,000 ) Estimated tax rate                     27.98 % Estimated net deferred tax liability                   $ ( 3,073,000 )   Release of Valuation Allowance . Since inception, the Company has maintained a full valuation allowance against its net deferred tax assets. The net deferred tax liability resulting from the Mobcrush Acquisition created a source of income to utilize against the Company’s existing net deferred tax assets. Under the acquisition method of accounting, the impact on the acquiring company’s deferred tax assets is recorded outside of acquisition accounting. Accordingly, the valuation allowance on a portion of the Company’s net deferred tax assets was released, resulting in an income tax benefit of approximately $ 3,073,000 , recorded as a credit to income tax expense for fiscal year ended December 31, 2021. The offsetting amounts reduced net deferred tax liabilities,  $3,073,000, of which reduced the net deferred tax liability established in connection with the application of the acquisition method of accounting for the Mobcrush Acquisition.   F- 19 Table of Contents   The following unaudited pro forma combined results of operations for the periods presented are provided for illustrative purposes only. The unaudited pro forma combined statements of operations for the fiscal year ended December 31, 2021 and 2020, assume the acquisition occurred as of January 1, 2020. The unaudited pro forma combined financial results do not purport to be indicative of the results of operations for future periods or the results that actually would have been realized had the entities been a single entity during these periods.       2021     2020                     Revenue   $ 14,976 ,000     $ 8,591,000   Net Loss     (26,363,000 )     (29,077,000 )   Pro forma adjustments primarily relate to the amortization of identifiable intangible assets acquired over the estimated economic useful life as described above, the expensing of stock options issued to former Mobcrush employees acquired in connection with the Mobcrush Acquisition, the exclusion of interest expense related to convertible debt of Mobcrush not assumed by Super League in connection with the Mobcrush Acquisition, the exclusion of nonrecurring transaction costs,  and the exclusion of amortization and depreciation related to tangible and intangible assets of Mobcrush existing immediately prior to the Mobcrush Acquisition.   The unaudited pro forma combined statements of operations for the periods presented herein have been adjusted to give effect to pro forma events that are expected to have a continuing impact on the combined results. As such, the income tax benefit related to the release of valuation allowance reflected in the statement of income for the fiscal year ended December 31, 2021, as described above, totaling $3,073,000, is not reflected in the accompanying unaudited pro forma combined statements of income for the periods presented.   Acquisition of Bannerfy, LTD   On August 11, 2021, the Company entered into a Share Purchase Agreement (the “Bannerfy Purchase Agreement”) with William Roberts, Colin Gillespie, and Robert Pierre (collectively, “Sellers”), pursuant to which the Company agreed to purchase, and Sellers agreed to sell, all of the issued and outstanding common shares of Bannerfy, a company organized under the laws of England and Wales for a total purchase price of $ 7.0 million (the “Bannerfy Purchase Price”) (the “Bannerfy Acquisition”). On August 24, 2021 ( the “Bannerfy Closing Date”), the Company completed the acquisition of Bannerfy.   Pursuant to the Bannerfy Purchase Agreement, upon the consummation of the Bannerfy Acquisition (the “Bannerfy Closing”), the Company paid an initial payment (subject to a holdback as described below) of $ 2.45 million (the “Bannerfy Closing Consideration”), paid or to be paid as follows (i) $ 525,000 in the form of a cash payment, and (ii) $ 1.92 million in the form of shares of the Company’s common stock, at a price per share of $ 4.10 , the closing price of the Company’s common stock on the effective date of the Bannerfy Purchase Agreement, as reported on the Nasdaq Capital Market. Pursuant to the terms of the Bannerfy Purchase Agreement, $ 275,000 of the Bannerfy Closing Consideration (“Holdback Amount”), was withheld from the Bannerfy Closing Consideration to satisfy any indemnifiable losses incurred by the Company (as defined in the Bannerfy Purchase Agreement) prior to the first anniversary of the Bannerfy Closing Date. In the event the Company incurs no indemnifiable losses prior to the first anniversary of the Bannerfy Closing Date, the Company will release to the Sellers the Holdback Amount as follows: (i) $ 55,000 payable in the form of cash, and (ii) approximately $ 220,000 in the form of shares of the Company’s common stock at $4.10.   In accordance with the Bannerfy Purchase Agreement, all remaining portions of the Bannerfy Purchase Price subsequent to the payment of the Bannerfy Closing Consideration, up to approximately $ 4.55 million (the “Contingent Consideration”), is payable upon the achievement of certain revenue and gross profit thresholds for the remainder of the 2021 fiscal year, and each of the fiscal years ending December 31, 2022, and December 31, 2023 ( “Earnout Periods”).  For the 2021, 2022 and 2023 Earnout Periods, 8 %, 38 % and 54 %, respectively of the Contingent Consideration is potentially payable. The Contingent Consideration is payable in the form of both cash and shares of the Company’s common stock, 21 % in cash and 79 % in Company common stock, based on a conversion price of $4.10 per share.   F- 20 Table of Contents   The Bannerfy Acquisition was accounted for in accordance with ASC 805. In accordance with ASC 805, if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, the set is not considered a business. Gross assets acquired excludes cash and cash equivalents, deferred tax assets, and goodwill resulting from the effects of deferred tax liabilities. A single identifiable asset includes any individual asset or group of assets that could be recognized and measured as a single identifiable asset in a business combination. When evaluating whether assets are similar, we considered the nature of each single identifiable asset and the risks associated with managing and creating outputs from the assets. Management determined that the Bannerfy Acquisition involved the acquisition of developed technology, which accounted for substantially all of the fair value of the gross assets acquired, and therefore, the Bannerfy Acquisition was determined not to be the acquisition of a business under ASC 805, and is therefore accounted for as an asset acquisition utilizing a cost accumulation model in accordance with the applicable guidance.   Transaction costs incurred in connection with the Bannerfy Acquisition totaled $ 62,000 , which are included as a component of the purchase price paid in connection with the Bannerfy Acquisition.   The Bannerfy Purchase Price paid as of December 31, 2021, comprised of the Bannerfy Closing Consideration of $2.45 million and $62,000 of related transaction costs, was allocated to the developed technology acquired, with an estimated useful life of seven years. In addition, the carrying value of the developed technology acquired in connection with the Bannerfy Acquisition includes an adjustment related to deferred taxes, totaling $ 556,000 , as described below. Net working capital assets acquired were not material.   Aggregated amortization expense for the fiscal year ended December 31, 2021, related to the developed technology acquired in connection with the Bannerfy Acquisition, totaled $ 146,000 .   The Company hired the former director of Bannerfy (“Bannerfy Executive”), who was also a selling shareholder of Bannerfy. Pursuant to the provisions of the Bannerfy Purchase Agreement, in the event that the Bannerfy Executive ceases to be an employee, during any of the Earnout Periods, as a consequence of his resignation or termination for cause, as defined in the Bannerfy Purchase Agreement, the Bannerfy Executive shall only be entitled to such percentage of any Contingent Consideration payment which would otherwise be payable to him on a prorated basis based on the number of months employed during the applicable Earnout Period. Under ASC 805, a contingent consideration arrangement in which the payments are automatically forfeited if employment terminates is considered to be compensation for post-combination services, and not acquisition consideration. As such, the Contingent Consideration, if any, will be accounted for as post-combination services and expensed in the period that payment of any amounts of Contingent Consideration becomes probable and reasonably estimable.    The Bannerfy Acquisition was treated for tax purposes as a nontaxable transaction and, as such, the historical tax bases of the acquired assets and assumed liabilities, net operating losses, and other tax attributes of Bannerfy will carryover. As a result, there is no step-up to fair value of the underlying tax bases of the acquired net assets in connection with the Bannerfy Acquisition. The acquisition method of accounting includes the establishment of a net deferred tax asset or liability resulting from book tax basis differences related to assets acquired and liabilities assumed on the date of acquisition. When an acquisition of a group of assets is purchased in a transaction that is not accounted for as a business combination under ASC 805, a difference between the book and tax bases of the assets arises. ASC 740, “Income Taxes,” (“ASC 740” ) requires the use of simultaneous equations to determine the assigned value of the asset and the related deferred tax asset or liability. As neither goodwill nor a bargain purchase gain is recognized in an asset acquisition, recognizing deferred tax assets or liabilities for temporary differences in an asset acquisition results in adjusting the carrying amount of the related assets and liabilities. The deferred tax liability and resulting adjustment to the carrying amount of the assets acquired in connection with the Bannerfy Acquisition was determined as follows:       Book Basis     Tax Basis     Difference   Intangible assets acquired   $ 2,512,000     $ -     $ ( 2,512,000 ) Estimated net operating loss carryforwards – Bannerfy             144,000       144,000   Net deferred tax liability – pretax                     ( 2,368,000 ) Estimated tax rate                     19 % Estimated net deferred tax liability – Pursuant to ASC 740(1)                   $ ( 556,000 )     ( 1 ) Pursuant to ASC 740, the deferred tax liability is estimated using the following formula: (a) Applicable tax rate divided by (b) one minus the applicable tax rate, multiplied by (c) the tax basis of the net assets acquired less the initial book basis of the net assets acquired.   Bannerfy commenced operations in September 2020. As such, the historical balance sheets and statements of operations of Bannerfy were not material, and therefore unaudited pro forma combined results of operations for the periods presented are not provided for illustrative purposes. Revenues and net loss related to Bannerfy for the period from the closing date to December 31, 2021 were not material.   F- 21 Table of Contents   Bloxbiz Co. Acquisition   On October 4, 2021 ( “Bloxbiz Closing Date”), the Company entered into an Asset Purchase Agreement (the “Bloxbiz Purchase Agreement”) with Bloxbiz Co. and the founders of Bloxbiz (the “Founders”), pursuant to which the Company acquired (i) substantially all of the assets of Bloxbiz (the “Bloxbiz Assets”), and (ii) the personal goodwill of the Founders regarding Bloxbiz's business, (the "Bloxbiz Acquisition”). The consummation of the Bloxbiz Acquisition (the “Bloxbiz Closing”) occurred simultaneously with the execution of the Bloxbiz Purchase Agreement on the Bloxbiz Closing Date.   At closing, the Company paid an aggregate total of $ 6.0 million to Bloxbiz and the Founders (the “Bloxbiz Closing Consideration”), of which $ 3.0 million was paid in the form of cash (the “Bloxbiz Closing Cash Consideration”) and $ 3.0 million was paid in the form of shares of the Company's common stock, at a per share price of $ 2.91 , the closing price of the Company's common stock on the Bloxbiz Closing Date, as reported on the Nasdaq Capital Market (the “Bloxbiz Stock Consideration”).   Pursuant to the terms and subject to the conditions of the Bloxbiz Purchase Agreement, up to an aggregate amount $ 11.5 million will be payable to Bloxbiz and the Founders in connection with the achievement of certain revenue milestones for the period from the Bloxbiz Closing Date until December 31, 2022 and for the fiscal year ending December 31, 2023 ( the “Bloxbiz Contingent Consideration”)(“Bloxbiz Earn Out Periods”). The Bloxbiz Contingent Consideration is payable in the form of both cash and shares of the Company’s common stock, in equal amounts, as more specifically set forth in the Bloxbiz Purchase Agreement.   The Bloxbiz Acquisition was approved by the board of directors of each of the Company and Bloxbiz, and was approved by the stockholders of Bloxbiz.   In accordance with the acquisition method of accounting, the financial results of Super League presented herein include the financial results of Bloxbiz from the Bloxbiz Closing Date to the end of the current period presented herein. Total revenues for Bloxbiz from the Bloxbiz Closing Date to December 31, 2021 ( “Bloxbiz Stub Period”), included in the consolidated statements of operations for the fiscal year ended on December 31, 2021 was $ 486,000 . Disclosure of net loss for Bloxbiz on a stand-alone basis for the Bloxbiz Stub Period is not practical due to the integration of Bloxbiz activities, including resource allocation and related operating expenses, with those of the consolidated Company upon acquisition, consistent with Super League operating in one reporting segment.   The Company determined that the Bloxbiz Acquisition constitutes a business acquisition as defined by Accounting Standards Codification (“ASC”) 805,   Business Combinations . Accordingly, the assets acquired and liabilities assumed in the transaction were recorded at their estimated acquisition date fair values, while transaction costs associated with the acquisition were expensed as incurred pursuant to the acquisition method of accounting in accordance with ASC 805.  Super League’s preliminary purchase price allocation was based on an evaluation of the appropriate fair values of the assets acquired and liabilities assumed and represents management’s best estimate based on available data. Fair values are determined based on the requirements of ASC 820,   Fair Value Measurements and Disclosures  (“ASC 820” ).   Transaction costs incurred by the Company relating to the Bloxbiz Acquisition totaled $ 47,000 and were expensed as incurred in accordance with the acquisition method of accounting.   The following table summarizes the determination of the fair value of the purchase price consideration paid in connection with the Bloxbiz Acquisition:   Cash consideration at closing           $ 3,000,000   Equity consideration at closing – shares of common stock     1,031,928           Super League closing stock price per share on the Bloxbiz Closing Date   $ 2.91           Fair value of equity consideration issued at closing   $ 3,000,000       3,000,000   Fair value of total consideration issued at closing           $ 6,000,000     The fair value of the Company Common Stock used in determining the estimated fair value of the Bloxbiz Closing Consideration was $ 2.91 per share based on the closing price of Company Common Stock on October 4, 2021, as quoted on the Nasdaq Capital Market.   F- 22 Table of Contents   The purchase price allocation was based upon a preliminary estimate of the fair value of the assets acquired and the liabilities assumed by the Company in connection with the Bloxbiz Acquisition, as follows:       Amount   Assets Acquired and Liabilities Assumed:         Accounts receivable   $ 124,000   Identifiable intangible assets     1,747,000   Identifiable net assets acquired     1,871,000   Goodwill     4,129,000   Total purchase price   $ 6,000,000     The following table presents details of the fair values of the acquired intangible assets of Bloxbiz:       Estimated Useful Life (in years)     Amount   Developed technology     7     $ 912,000   Developer relationships     3       559,000   Customer relationships     3       276,000   Total intangible assets acquired           $ 1,747,000     Aggregated amortization expense for the fiscal year ended December 31, 2021 related to intangible assets acquired in connection with the Bloxbiz Acquisition, totaled $ 99,000 . Goodwill represents the excess of the purchase price of the acquired business over the acquisition date fair value of the net assets acquired. Goodwill recorded in connection with the Bloxbiz Acquisition is primarily attributable to expected synergies from combining the operations and assets of Super League and Bloxbiz, and also includes residual value attributable to the assembled and trained workforce acquired in the acquisition.   Management is primarily responsible for determining the fair value of the tangible and identifiable intangible assets acquired and liabilities assumed as of the Bloxbiz Closing Date. Management considered a number of factors, including reference to a preliminary independent analysis of estimated fair values solely for the purpose of allocating the purchase price to the assets acquired and liabilities assumed. The analysis included a preliminary discounted cash flow analysis which estimated the future net cash flows expected to result from the respective assets acquired as of the Bloxbiz Closing Date. A discount rate consistent with the risks associated with achieving the estimated net cash flows was used to estimate the present value of future estimated net cash flows. The Company is in the process of finalizing the estimates and assumptions developed in connection with the independent analysis of estimated fair values of intangible assets acquired solely for the purpose of allocating the purchase price to the assets acquired and liabilities assumed. Any adjustments to the fair values of intangibles assets acquired, or estimates of economic useful lives of the intangible assets acquired, could impact the carrying value of those assets and related goodwill, as well as the estimates of periodic amortization of intangible assets acquired to be reflected in the statement of operations. In addition, the Company is in the process of finalizing its estimate and analysis of the fair values of certain tax attributes acquired. Any adjustments to the preliminary estimates of tax attributes acquired will increase or decrease the estimated net deferred tax liability recorded in connection with the acquisition method of accounting, with an offsetting adjustment to goodwill. The fair values of the intangible assets acquired in connection with the Bloxbiz acquisition were determined using the cost method. Under the cost method, value is estimated by determining the current cost of replacing an asset with one of equivalent economic utility. The premise of the approach is that a prudent investor would pay no more for an asset than the amount for which the utility of the asset could be replaced. Valuation assumptions utilized included rates of return of 30 %, discount periods of 0.5 to one, risk adjusted return factors of 1.1 to 1.3 and weighted average costs of capital of 30 %.   The Company hired the Founders of Bloxbiz in connection with the Bloxbiz Acquisition. Pursuant to the provisions of the Bloxbiz Purchase Agreement, in the event that a Founder ceases to be an employee during any of the Bloxbiz Earn Out Periods, as a consequence of his resignation without good cause, or termination for cause, the Bloxbiz Contingent Consideration will be reduced by one -half ( 50% ) for the respective Bloxbiz Earn Out Periods, if and when earned. Under ASC 805, a contingent consideration arrangement in which the payments are automatically forfeited if employment terminates is considered to be compensation for post-combination services, and not acquisition consideration. As such, the Contingent Consideration, if any, will be accounted for as post-combination services and expensed in the period that payment of any amounts of Contingent Consideration becomes probable and reasonably estimable.    For tax purposes, consistent with the accounting for book purposes, the Bloxbiz Closing Consideration was allocated to the assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date, with the excess purchase price allocated to goodwill.  As a result, no deferred tax assets or liabilities were recorded with the acquisition and all of the goodwill is expected to be deductible for tax purposes.   Bloxbiz operations commenced in December 2020. As such, the historical balance sheets and statements of operations of Bloxbiz were not material, and therefore unaudited pro forma combined results of operations for the periods presented are not provided for illustrative purposes.    Other   On June 6, 2019, we acquired Framerate, Inc., (“Framerate”). The underlying agreement provided for the issuance of up to an additional $ 980,000 worth of shares of the Company’s common stock, at a price of $ 7.44 per share (the “Earn-Out Shares”), in the event Framerate achieved certain performance-based milestones during the two -year period following the closing of the acquisition (the “Earn-Out”). One-half of the Earn-Out Shares are issuable on the one -year anniversary of the Effective Date, and the remaining one -half are issuable on the second anniversary of the Effective Date. In June 2020, we issued an additional 32,936 shares of our common stock to the former shareholders of Framerate in connection with the achievement of certain components of the year- one earn-out related performance milestones.   F- 23 Table of Contents     6. NOTE PAYABLE   Long-Term Note Payable   On May 4, 2020, the Company entered into a forgivable loan from the U.S. Small Business Administration (“SBA”) resulting in net proceeds of $ 1,200,047 pursuant to the Paycheck Protection Program (“PPP”) enacted by Congress under the CARES Act administered by the SBA (the “PPP Loan”). To facilitate the PPP Loan, the Company entered into a Note Payable Agreement with a bank (the “Lender”) (the “PPP Loan Agreement”). The PPP Loan had an original maturity date of May 4, 2022, and accrued interest at a rate of 1.00 % per annum, with interest accruing throughout the period the PPP Loan was outstanding, or until forgiven.   The PPP Loan was accounted for as a financial liability in accordance with FASB ASC 470, “ Debt. ” Accordingly, the proceeds from the PPP Loan were recorded as a long-term liability on the balance sheet until either ( 1 ) the loan is, in part or wholly, forgiven and the company had been “legally released” or ( 2 ) the Company paid off the loan to the Lender. Interest was accrued in accordance with the interest method.   In May 2021, the PPP loan was forgiven pursuant to the terms and conditions of the PPP Loan Agreement and the provision of the Cares Act. Upon forgiveness, and legal release, the Company reduced the liability by the amount forgiven, totaling $ 1,213,000 and recorded a gain on extinguishment in the accompanying statement of operations.     7. STOCKHOLDERS ’  EQUITY   Preferred Stock   The Company’s initial certificate of incorporation authorized 5,000,000 shares of preferred stock, par value $ 0.001 per share. No preferred stock had been issued and outstanding since inception of the Company. In October 2016, the Company’s Board of Directors (the “Board of Directors”) and a majority of the holders of the Company’s common stock approved an amendment and restatement of the certificate of incorporation which, in part, eliminated the authorized preferred stock. In August 2018, the Board of Directors approved a second amendment and restatement of the Company’s amended and restated certificate of incorporation (the “Amended and Restated Charter”) to, in part, increase the Company’s authorized capital to a total of 110.0 million shares, including 10.0 million shares of newly created preferred stock, par value $ 0.001 per share (“Preferred Stock”), authorize the Board of Directors to fix the designation and number of each series of Preferred Stock, and to determine or change the designation, relative rights, preferences, and limitations of any series of Preferred Stock. The Amended and Restated Charter was approved by a majority of the Company’s stockholders in September 2018,  and was filed with the State of Delaware in November 2018. All references in the accompanying consolidated financial statements to Preferred Stock have been restated to reflect the Amended and Restated Charter.   Common Stock   The Amended and Restated Charter also increased the Company’s authorized capital to include 100.0 million shares of common stock, par value $ 0.001 , and removed the deemed liquidation provision, as such term is defined in the Amended and Restated Charter. Each holder of common stock is entitled to one vote for each share of common stock held at all meetings of stockholders.   F- 24 Table of Contents   Financing Activities   Fiscal year ended December 31, 2021:   In January 2021, the Company issued 3,076,924 shares of common stock at a price of $ 2.60 per share, raising aggregate net proceeds of approximately $ 8.0 million, after deducting offering expenses totaling $ 73,000 .   In February 2021, the Company issued 2,926,830 shares of common stock at a price of $ 4.10 per share, raising aggregate net proceeds of approximately $ 12.0 million, after deducting offering expenses totaling $ 70,000 .   In March 2021, the Company issued 1,512,499 shares of common stock at a price of $ 9.00 per share, raising aggregate net proceeds of approximately $ 13.6 million, after deducting offering expenses totaling $ 72,000 .   The offerings described above were made pursuant to an effective shelf registration statement on Form S- 3, which was originally filed with the Securities and Exchange Commission on April 10, 2020 ( File No. 333 - 237626 ). The net proceeds from these offerings were intended to be used for working capital and other general corporate purposes, including sales and marketing activities, product development and capital expenditures. The Company also reserved the right to use a portion of the net proceeds for the acquisition of, or investment in, technologies, solutions or businesses.   Equity Distribution Agreement   On September 3, 2021, the Company entered into an Equity Distribution Agreement (the “Sales Agreement”) with two investment banks (the “Agents”), pursuant to which the Company may offer and sell, from time to time, through the Agents (the “Offering”), up to $ 75 million of its shares of common stock, par value $ 0.001 per share (the “Shares”). Any Shares offered and sold in the Offering will be issued pursuant to the Company’s Registration Statement on Form S- 3 filed with the Securities and Exchange Commission (the “SEC”) on September 3, 2021 ( the “Form S- 3” ) and the prospectus relating to the Offering that forms a part of the Form S- 3, following such time as the Form S- 3 is declared effective by the SEC.   Subject to the terms and conditions of the Sales Agreement, the Agents will use their commercially reasonable efforts to sell the Shares from time to time, based upon the Company’s instructions. Under the Sales Agreement, the Agents may sell the Shares by any method permitted by law deemed to be an “at-the-market” offering as defined in Rule 415 promulgated under the Securities Act of 1933, as amended (the “Securities Act”), including, without limitation, sales made directly on the Nasdaq Capital Market, on any other existing trading market for the Company’s common stock or to or through a market maker. The Agents may also sell Shares in privately negotiated transactions, provided that the Agents receive the Company’s prior written approval.   The Company has no obligation to sell any of the Shares, and may at any time suspend offers under the Sales Agreement. The Offering will terminate upon the earlier of (a) the sale of all of the Shares, (b) the termination by the mutual written agreement of the managing agent and the Company, or (c) one year from the date that the Form S- 3 is declared effective by the SEC.   Under the terms of the Sales Agreement, the Agents will be entitled to an aggregate commission at a fixed rate of 3.0 % of the gross sales price of Shares sold under the Sales Agreement.   The Company intends to use the net proceeds from any “at-the-market” offering primarily for working capital and general corporate purposes, including sales and marketing activities, product development and capital and acquisition related expenditures. The Company may also use a portion of the net proceeds for the acquisition of, or investment in, technologies, solutions or businesses.   F- 25 Table of Contents   Fiscal year ended December 31, 2020:   In May 2020, the Company issued 1,825,000 shares of common stock at a price of $ 3.50 per share, raising aggregate net proceeds of approximately $ 6.0 million, after deducting placement agent fees of $ 319,000 and other offering expenses totaling $ 116,000 . The offering was made pursuant to an effective shelf registration statement on Form S- 3 previously filed with the U.S. Securities and Exchange Commission.   In August 2020, the Company issued 4,540,541 shares of common stock at a price of $ 1.85 per share, raising aggregate net proceeds of approximately $ 7.6 million, after deducting placement agent fees of $ 588,000 and other offering expenses totaling $ 180,000 . The offering was conducted pursuant to the Company’s effective Registration Statements on Form S- 1  (File No. 333 - 248248 ), and a related registration statement filed pursuant to Rule 462 (b) under the Securities Act. In addition, pursuant to the terms of the related underwriting agreement, the Company granted to the underwriter a 30 -day over-allotment option to purchase up to an additional 681,081 Shares at the same public offering price per share, less discounts and commissions, which was partially exercised in September 2020, resulting in the issuance of 448,440 shares of common stock and net proceeds of $ 771,000 , after deducting placement agent fees of $ 58,000 . The net proceeds from this offering were utilized for working capital and other general corporate purposes, including sales and marketing activities, product development and capital expenditures.     8.         STOCK-BASED INCENTIVE PLANS   The Super League 2014 Stock Option and Incentive Plan (the “Plan”) was approved by the Board of Directors and the stockholders of Super League in October 2014. The Plan was subsequently amended in May 2015, May 2016, July 2017 and October 2018. The Plan allows grants of stock options, stock awards and performance shares with respect to common stock of the Company to eligible individuals, which generally includes directors, officers, employees, advisors and consultants. The Plan provides for both the direct award and sale of shares of common stock and for the grant of options to purchase shares of common stock. Options granted under the Plan include non-statutory options as well as incentive options intended to qualify under Section 422 of the Internal Revenue Code of 1986, as amended.   The Board of Directors administers the Plan and determines which eligible individuals are to receive option grants or stock issuances under the Plan, the times when the grants or issuances are to be made, the number of shares of common stock subject to each grant or issuance, the status of any granted option as either an incentive stock option or a non-statutory stock option under the federal tax laws, the vesting schedule to be in effect for the option grant or stock issuance and the maximum term for which any granted option is to remain outstanding. The exercise price of options is generally equal to the fair market value of common stock of the Company on the date of grant. Options generally begin to be exercisable six months to one year after grant and typically expire 10 years after grant. Stock options and restricted shares generally vest over two to four years (generally representing the requisite service period). The Plan terminates automatically on July 1, 2027. The Plan provides for the following programs:   Option Grants   Under the discretionary option grant program, the Company’s compensation committee of the Board of Directors may grant ( 1 ) non-statutory options to purchase shares of common stock to eligible individuals in the employ or service of Super League or its affiliates (including employees, non-employee members of the Board of Directors and consultants) at an exercise price not less than 85 % of the fair market value of such shares on the grant date, and ( 2 ) incentive stock options to purchase shares of common stock to eligible employees at an exercise price not less than 100 % of the fair market value of such shares on the grant date ( not less than 110 % of fair market value if such employee actually or constructively owns more than 10% of Super League’s voting stock or the voting stock of any of its subsidiaries).   Stock Awards or Sales   Under the stock award or sales program, eligible individuals may be issued shares of common stock of the Company directly, upon the attainment of performance milestones or the completion of a specified period of service or as a bonus for past services. Under this program, the purchase price for the shares will not be less than 100 % of the fair market value of the shares on the date of issuance, and payment may be in the form of cash or past services rendered. Eligible individuals will have no stockholder rights with respect to any unvested restricted shares or restricted stock units issued to them under the stock award or sales program; however, eligible individuals will have the right to receive any regular cash dividends paid on such shares.   F- 26 Table of Contents   The initial reserve under the Plan was 583,334 shares of common stock, which reserve was subsequently increased to 1,000,000 shares upon stockholders’ approval in May 2016. In July 2017, the Company amended and restated the Plan to increase the number of shares of common stock reserved thereunder from 1,000,000 shares to 1,500,000 shares. In October 2018, the Company amended and restated the Plan to increase the number of shares of common stock reserved thereunder from 1,500,000 shares to 1,833,334 shares. In July 2020, the Company’s shareholders approved an amendment to the Plan to increase the number of shares authorized for issuance from 1,833,334 to 2,583,334 . In May 2021, the Company’s shareholders approved an amendment to the Plan to increase the number of shares authorized for issuance from 2,583,334 to 5,000,000 . As of December 31, 2021, 1,840,995 shares remained available for issuance under the Plan.   Super League issues new shares of common stock upon the exercise of stock options, the grant of restricted stock, or the delivery of shares pursuant to vested restricted stock units. The compensation committee of the Board of Directors may amend or modify the Plan at any time, subject to any required approval by the stockholders of the Company, pursuant to the terms therein.    Stock Options   The fair value of stock options granted was estimated on their respective grant dates using the Black-Scholes-Merton option pricing model and the following weighted-average assumptions for the years ended December 31, 2021 and 2020:       2021     2020   Volatility     95 %     95 % Risk–free interest rate     .99 %     . 47 % Dividend yield     - %     - % Expected life of options (in years)     5.86       6.02     A summary of stock option activity for the year ended December 31, 2021 is as follows:               Weighted-Average               Options (#)     Exercise Price Per Share ($)     Remaining Contractual Term (Years)     Aggregate Intrinsic Value ($)                                     Outstanding at December 31, 2020     1,638,000     $ 5.59             $ 308,000   Granted     998,000     $ 4.50                   Exercised     ( 35,000 )   $ 3.17                   Canceled / forfeited     ( 168,000 )   $ 5.63                   Outstanding at December 31, 2021     2,433,000     $ 5.18       7.73     $ 246,000   Vested and exercisable at December 31, 2021     1,004,000     $ 6.66       5.82     $ 242,000     The weighted-average grant date fair value of stock options granted during the years ended December 31, 2021 and 2020 was $ 3.40 and $ 2.23 , respectively. The total intrinsic value of stock options exercised during the years ended December 31, 2021 and 2020 was $ 121,000 and $ 0 , respectively. The aggregate fair value of stock options that vested during the years ended December 31, 2021 and 2020 was $ 720,000 and $ 620,000 , respectively. As of December 31, 2021, the total unrecognized compensation expense related to non-vested stock option awards was $ 3,749,000 , which is expected to be recognized over a weighted-average term of approximately three years.   In February 2020, the Board of Directors approved the cancellation of 540,000 stock options in exchange for 243,000 RSUs (the “Stock Swap”) for seven employees. The stock options canceled had a weighted average exercise price of $ 10.16 and a weighted average grant date fair value of $ 8.33 . The RSUs issued had weighted average grant date fair value of $ 2.60 and vest over two years. Cancellation of an existing equity-classified award along with a concurrent grant of a replacement award is accounted for as a modification under ASC 718, “Stock-based Compensation.” Total compensation cost to be recognized is equal to the original grant date fair value plus any incremental fair value calculated as the excess of the fair value of the replacement RSUs over the fair value of the original stock option awards on the cancellation date. Any incremental compensation cost is recognized prospectively over the remaining service period, in addition to the remaining unrecognized grant date fair value. There was no incremental compensation cost in connection with the Stock Swap. The net impact of the Stock Swap was to return 297,000 shares to the share reserve under the Plan for the Company’s future employee related incentive and retention activities.   F- 27 Table of Contents   Restricted Stock Units   The following table summarizes non-vested restricted stock unit activity for the year ended December 31, 2021:       Restricted Stock Units (#)     Weighted Average Grant Date Fair Value ($)   Non-vested restricted stock units at December 31, 2020     382,000     $ 4.68   Granted     250,000     $ 4.81   Vested     ( 260,000 )   $ 4.07   Canceled     ( 11,000 )   $ 9.91   Non-vested restricted stock units at December 31, 2021     361,000     $ 5.05     As of December 31, 2021, the total unrecognized compensation expenses related to non-vested restricted stock units was $ 864,000 , which will be recognized over a weighted-average term of approximately 1.8 years.   Warrants Issued to Employees and Nonemployees for Services   A summary of employee and nonemployee warrant activity for the year ended December 31, 2021 is as follows:               Weighted-Average               Warrants (#)     Exercise Price Per Share ($)     Remaining Contractual Term (Years)     Aggregate Intrinsic Value ($)                                     Outstanding at December 31, 2020     964,000     $ 10.02                   Expired     ( 183,000 )   $ 9.00             $ -   Outstanding at December 31, 2021     781,000     $ 10.26       4.56     $ -   Vested and exercisable as of December 31, 2021     781,000     $ 10.26       4.56     $ -     Compensation expense related to common stock purchase warrants was $ 0 and $ 282,000 for the years ended December 31, 2021 and 2020, respectively. No warrants were granted to employees or non-employees in exchange for services performed during the periods presented herein. The aggregate fair value of warrants that vested during the years ended December 31, 2021 and 2020 was $ 0 and $ 206,000 , respectively. As of December 31, 2021, the total unrecognized compensation expense related to warrants was $ 0 .   Noncash Stock Compensation Expense   Noncash stock-based compensation expense for the periods presented was comprised of the following:       2021     2020   Stock options   $ 1,148,000     $ 745,000   Warrants     -       282,000   Restricted stock units     1,233,000       836,000   Other     -       141,000   Total noncash stock compensation expense   $ 2,381,000     $ 2,004,000     Noncash stock-based compensation expense for the periods presented was included in the following financial statement line items:        2021     2020   Sales, marketing and advertising   $ 934,000     $ 849,000   Engineering, technology and development     288,000       254,000   General and administrative     1,159,000       901,000   Total noncash stock compensation expense   $ 2,381,000     $ 2,004,000     F- 28 Table of Contents     9.         INCOME TAXES   Super League’s provision for income taxes consisted of the following for the years ended December 31, 2021 and 2020:       2021     2020   Current:                 Federal taxes   $ -     $ -   State taxes     -       -   Total current   $ -     $ -         2021     2020   Deferred:                 Federal taxes   $ ( 4,654,000 )   $ 2,919,000   State taxes     ( 969,000 )     886,000   Foreign     ( 38,000 )     -   Subtotal     ( 5,661,000 )     3,805,000   Change in valuation allowance     2,550,000       ( 3,805,000 ) Total deferred     ( 3,111,000 )     -   Provision for income taxes   $ ( 3,111,000 )   $ -     The tax effects of temporary differences and carryforwards that give rise to significant portions of deferred tax assets and liabilities consist of the following as of December 31, 2021 and 2020.       2021     2020   Deferred tax assets (liabilities):                 Net operating loss and credits   $ 27,963,000     $ 20,799,000   Stock compensation     2,837,000       3,155,000   Accrued liabilities     11,000       65,000   Fixed assets and intangibles     ( 4,812,000 )     ( 106,000 ) State taxes     1,000       -   Total deferred tax assets     26,000,000       23,913,000   Valuation allowance     ( 26,518,000 )     ( 23,913,000 ) Total deferred tax assets, net of valuation allowance   $ ( 518,000 )   $ -     A reconciliation of the federal statutory income tax rate and the effective income tax rate is as follows:       2021     2020                     Statutory federal tax rate - (benefit) expense     21 %     21 % State tax, net     -       -   Non-deductible permanent items     ( 2 )     ( 1 ) Valuation allowance     ( 6 )     ( 20 )       13 %     - %   For the years ended December 31, 2021 and 2020, the Company recorded full valuation allowances against its domestic net deferred tax assets due to uncertainty regarding future realizability pursuant to guidance set forth in the FASB’s Accounting Standards Codification Topic No. 740,  Income Taxes. In future periods, if the Company determines it will more likely than not be able to realize these amounts, the applicable portion of the benefit from the release of the valuation allowance will generally be recognized in the statements of operations in the period the determination is made. The Company does not maintain a valuation allowance on the activity in the UK from its recent acquisition of Bannerfy Ltd due to the deferred tax liability position.   F- 29 Table of Contents   At December  31, 2021, the Company had U.S. federal, state income tax, and foreign net operating loss carryforwards of approximating $ 102,096,000 , $ 92,469,000 and $ 343,000 , respectively, expiring through 2041. Utilization of the net operating loss carryforwards may be subject to a substantial annual limitation due to ownership change limitations that may have occurred or that could occur in the future, as required by Section  382 of the Internal Revenue Code of 1986, as amended, as well as similar state provisions. The Company has not completed a study to assess whether an ownership change has occurred or whether there have been multiple ownership changes since the Company’s formation due to the complexity and cost associated with such a study, and the fact that there may be additional such ownership changes in the future.       10. COMMITMENTS AND CONTINGENCIES   Operating Leases   The Company leased office space under an operating lease agreement which expired on May 31, 2017, and was amended to a month-to-month basis lease. In June 2020, we terminated the lease for the majority of our corporate headquarters (approximately 4,965 square feet). As of December 31, 2021 we maintain approximately 3,200 square feet of office space, 1,650 square feet of which is on a month-to-month basis, and 1,550 square feet of which is subject to a two -year lease, commencing on August 1, 2021, at a combined rate of approximately $ 11,800 per month.   Rent expense for the years ended December 31, 2021 and 2020 was approximately $ 111,000 and $ 200,000 , respectively, and is included in general and administrative expenses in the accompanying statements of operations. Rental payments are expensed in the statements of operations in the period to which they relate. Scheduled rent increases, if any, are amortized on a straight-line basis over the lease term.   Related Party Transactions   In May 2018, the Company entered into a consulting agreement with a member of the Board of Directors, pursuant to which the board member provides the Company with strategic advice and planning services for which he receives a cash payment of $ 7,500 per month from the Company. The consulting agreement had an initial term ending December 31, 2019, and could be extended upon mutual agreement of the board member and the Company. The consulting agreement was extended throughout fiscal year 2020 and fiscal year 2021.     11. SUBSEQUENT EVENTS   The Company evaluated subsequent events for their potential impact on the consolidated financial statements and disclosures through the date the consolidated financial statements were available to be issued and determined that, except as set forth below, no subsequent events occurred that were reasonably expected to impact the consolidated financial statements presented herein.   Common Stock Purchase Agreement   On March 25, 2022, we entered into a common stock purchase agreement (the “Purchase Agreement”) with Tumim Stone Capital, LLC (“Tumim”). Pursuant to the Purchase Agreement, the Company has the right, but not the obligation, to sell to Tumim, and Tumim is obligated to purchase, up to $ 10,000,000 of newly issued shares (the “Total Commitment”) of the Company’s common stock, par value $ 0.001 per share from time to time during the term of the Purchase Agreement (the “Tumim Offering”), subject to certain limitations and conditions. As consideration for Tumim’s commitment to purchase shares of common stock under the Purchase Agreement, the Company issued to Tumim 50,000 shares of common stock, valued at $ 100,000 , following the execution of the Purchase Agreement (the “Commitment Shares”).   The Purchase Agreement initially precludes the Company from issuing and selling more than 7,361,833 shares of its common stock, including the Commitment Shares, which number equals 19.99 % of the common stock issued and outstanding as of March 25, 2022, unless the Company obtains stockholder approval to issue additional shares, or unless certain exceptions apply. In addition, a beneficial ownership limitation in the agreement initially limits the Company from directing Tumim to purchase shares of common stock if such purchases would result in Tumim beneficially owning more than 4.99 % of the then-outstanding shares of common stock (subject to an increase to 9.99 % at Tumim’s option upon at least 61 calendar days’ notice).   From and after the initial satisfaction of the conditions to the Company’s right to commence sales of common stock to Tumim (such event, the “Commencement,” and the date of initial satisfaction of all such conditions, the “Commencement Date”), the Company may direct Tumim to purchase shares of common stock at a purchase price per share equal to 95 % of the average daily dollar volume-weighted average price for the common stock during the three consecutive trading day period immediately following the date on which the Company delivers to Tumim a notice for such purchase. The Company will control the timing and amount of any such sales of common stock to Tumim. Actual sales of shares of common stock to Tumim will depend on a variety of factors to be determined by the Company from time to time, including, among other things, market conditions, the trading price of the common stock, and determinations by the Company as to the appropriate sources of funding for the Company and its operations.   The Commencement Date of the Tumim Offering was March 25, 2022. Unless earlier terminated, the Purchase Agreement will automatically terminate upon the earliest of (i) the expiration of the 18 -month period following the Commencement Date, (ii) Tumim’s purchase or receipt of the Total Commitment worth of common stock, or (iii) the occurrence of certain other events set forth in the Purchase Agreement. The Company has the right to terminate the Purchase Agreement at any time after Commencement, at no cost or penalty, upon five trading days’ prior written notice to Tumim. Tumim has the right to terminate the Purchase Agreement upon five trading days’ prior written notice to the Company, but only upon the occurrence of certain events set forth in the Purchase Agreement.   The Company intends to use the net proceeds, if any, from the Tumim Offering for working capital and general corporate purposes, including sales and marketing activities, product development and capital expenditures. The Company may also use a portion of the net proceeds to acquire or invest in complementary businesses, products and technologies. The Purchase Agreement contains customary representations, warranties and agreements by the Company, as well as customary indemnification obligations of the Company.   F- 30 Table of Contents       SIGNATURES   Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.     SUPER LEAGUE GAMING, INC.           Date: March 31, 2022 By:   /s/ Ann Hand       Ann Hand       President and Chief Executive Officer (Principal Executive Officer)       SUPER LEAGUE GAMING, INC.           Date: March 31, 2022 By:   /s/ Clayton Haynes       Clayton Haynes       Chief Financial Officer (Principal Financial and Accounting Officer)     Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.   Signature Title Date       /s/ Ann Hand Chief Executive Officer, March 31, 2022 Ann Hand President, Chair of the Board     (Principal Executive Officer)         /s/ Clayton Haynes Chief Financial Officer March 31, 2022 Clayton Haynes (Principal Financial and Accounting Officer)         /s/ David Steigelfest Director March 31, 2022 David Steigelfest           /s/ Jeff Gehl Director March 31, 2022 Jeff Gehl           /s/ Kristin Patrick Director March 31, 2022 Kristin Patrick           /s/ Mark Jung Director March 31, 2022 Mark Jung           /s/ Michael Keller Director March 31, 2022 Michael Keller           /s/ Michael Wann Director March 31, 2022 Michael Wann             F-31