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REVOLVING LOAN, SHORT TERM NOTES AND LONG - TERM DEBT (Tables)
 9 Months Ended
Sep. 30, 2023
Debt Disclosure [Abstract]  
SCHEDULE OF LONG TERM DEBT

 

   September 30, 2023   December 31, 2022 
2021 Revolving Loan - On June 21, 2023, the Company amended its revolving loan agreement (“amended revolver”) and decreased the maximum balance to $6,000,000. The amended revolver matures on December 31, 2023 and has an annual interest rate equal to the prime rate less 0.25%. At September 30, 2023, the interest rate on this loan was 8.25%. The revolver was secured by certificate of deposit accounts held with the financial institution and that were released in accordance with the 2023 amendment. Debt covenants of this loan require the Company to maintain a minimum debt service coverage ratio of at least 1.5 to 1. The Company was not in compliance with the debt service coverage ratio for the twelve month period ended September 30, 2023 and received a waiver from the lender.  $6,000,000   $9,000,000 
2021 Promissory Note - On June 17, 2021, the Company amended its loan agreement to reduce the principal amount with financial institution for 10 years, annual interest rate of 3.5% for the first 5 years, and then floating at Wall Street Journal rate from years 6 to 10, the loan is secured by the Company’s building and matures on June 30, 2031. The note is subject to a prepayment penalty. Debt covenants of this loan require the Company to maintain a minimum debt service coverage ratio of at least 1.5 to 1. The Company was not in compliance with the debt service coverage ratio for the twelve month period ended September 30, 2023 and received a waiver from the lender.   2,832,231    2,891,820 
2022 Short Term Note - On January 26, 2022, the Company amended its revolving loan and long-term debt agreements to obtain an additional note with a principal balance of $10,000,000 which was originally set to mature on January 26, 2023. Interest shall be equal to the higher of 3.75% or the Wall Street Journal Prime Rate plus 0.50%. The loan is secured by the Company’s assets. In the event of a default, all outstanding amounts under the note will bear interest at a default rate equal to 5% over the note rate. Debt covenants of this loan require the Company to maintain a minimum debt service coverage ratio of at least 1.5 to 1 and will be measured quarterly. The Company was not in compliance with the debt service coverage ratio for the twelve month period ended September 30, 2023 and received a waiver from the lender. In November 2022, the maturity was extended to January 26, 2024 and the interest rate amended to the higher of the Wall Street Journal Prime Rate less 0.25%, or 5.75%. At September 30, 2023, the interest rate on this loan was 8.25%.   2,083,333    5,833,333 
2023 Convertible Notes – On August 24, 2023, the Company issued convertible notes at a 7.4% discount and a principal balance of $1,080,000. The notes have an interest rate of 7.5%, will be paid in consecutive monthly installments beginning February 24, 2024 and will mature on May 24, 2024. In the event of a default the interest rate will be increased to the lower of 16% per annum or the highest amount permitted by applicable law. The Company has the option to prepay the notes at any time and the note holders have the option to convert the notes, in whole or in part, any time after November 24, 2023. The Company recognized a discount of $678,254 on the notes to account for the stated discount, the fair value of the warrants issued in connection with the notes and the costs of issuance. The discount is amortized using the effective interest rate of 109.7%.   515,217    - 
2023 Note Payable – In July 2023, the Company entered into a cooperation agreement with its internet, server and datacenter vendor. The Company agreed to make the vendor the official server host of Ark: Survival Evolved and future iterations and sequels of the game for a period of 7 years. In return the vendor has agreed to provide the Company with funds in cash of up to $3.0 million without discount and free of charges and costs to the Company. The funds are to be repaid in monthly installments starting in November 2023 and are to be based on 20% of the gross monthly Ark Survival revenues. The Company has imputed interest at 8.0% on draws made. If in default, the interest rate levied on outstanding balances at a rate of 12.0% per annum.   2,275,000    - 
Total debt of $14,270,565, net of discount of $564,784   13,705,781    17,725,153 
Less: current portion of promissory note   2,832,231    86,524 
Less: revolving loan   6,000,000    9,000,000 
Less: notes payable   4,358,333    5,416,666 
Less: convertible notes, net of discount   515,217    - 
Total long-term debt  $-   $3,221,963 
SCHEDULE OF FUTURE MINIMUM PAYMENTS OF LONG TERM DEBT

The following table provides future minimum payments of its long-term debt as of December 31:

 

Years ending December 31,  Amount 
Remainder of 2023  $9,968,601 
2024   1,579,415 
2025   86,013 
2026   89,115 
2027   92,329 
Thereafter   2,455,092 
Long term debt  $14,270,565