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Investment In Unconsolidated Affiliate
9 Months Ended
Sep. 30, 2025
Investment In Unconsolidated Affiliate [Abstract]  
Investment In Unconsolidated Affiliate

Note 9 – Investment In Unconsolidated Affiliate

 

On January 27, 2025, the Company made a $2.4 million capital contribution to Flywheel AB3 Investor LLC (“Flywheel AB3”), which in turn is a member of a limited liability company engaged in the production and distribution of an animated film, The Angry Birds Movie 3 (the “Film”). Under the terms of the LLC agreement of Flywheel AB3, the Company made an additional capital contribution of $600,000 on August 25, 2025 upon notification by the Board of Managers of Flywheel AB3. In addition, $51,300 in direct legal fees associated with the investment in Flywheel were also capitalized as part of the investment.

 

When the Film is released, the Company will be entitled to its proportionate share of the net profits generated from the movie, including ticket, television, streaming, merchandising, licensing, and ancillary film sales. In connection with this investment, the Company was granted a right of first negotiation with respect to arrangements to host any promotional events, distribute any advertising and marketing materials and conduct promotional activities for the film involving live video gaming in one or more esports facilities owned and operated by the Company, including but not limited to, its HyperX Esports Arena in Las Vegas, Nevada.

 

The Company’s investment in Flywheel AB3 represents a 33% ownership interest which is accounted for under the equity method of accounting because the Company has the ability to exercise significant influence over Flywheel AB3 but does not control it. The investment in Flywheel AB3 is initially recorded at cost and will be adjusted each period for the Company’s proportionate share of Flywheel AB3’s net income or loss, as well as any distributions or impairment, as required. The Company evaluates its equity method investment for impairment whenever events or changes in circumstances indicate that the carrying amount of the investment might not be recoverable. As of September 30, 2025, the carrying amount of the Company’s investment in Flywheel AB3 was $3,051,300. The Company’s share of net income from Flywheel AB3 during the nine months ended September 30, 2025 was $0. No impairment was recorded during the nine months ended September 30, 2025.