0001213900-23-086754 | 10-Q | XBRL Viewer

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Loss Per Share (Details)	12 Months Ended
Loss Per Share (Details)	Dec. 31, 2021 shares
Loss Per Share [Abstract]
Vested warrants	1,680,774

Property, Equipment and Leasehold Improvements (Tables)

9 Months Ended

Sep. 30, 2023

Property, Equipment and Leasehold Improvements [Abstract]

Schedule of Property, Equipment and Leasehold Improvements

Property, equipment and leasehold improvements as of September 30, 2023 and December 31, 2022 consisted of the following:

	(In thousands)
	September			December 31,
	2023			2022
Furniture / Fixtures	$	897		$	897
Computer equipment		3,683			3,640
Vehicles		106			106
Leasehold improvements		874			801
Subtotal		5,560			5,444
Less: Accumulated depreciation		(3,010	)		(1,623	)
Property, equipment and leasehold improvements, net	$	2,550		$	3,821

Commitments and Contingencies (Details) - Schedule of Lease Terms and Discount Rate	Sep. 30, 2023
Schedule of lease terms and discount rate [Abstract]
Weighted average remaining lease term (in years) – operating leases	1 year
Weighted average discount rate – operating leases	4.00%

Subsequent Events (Details) - Subsequent Event [Member]	Oct. 19, 2023 USD ($) $ / shares
Subsequent Events (Details) [Line Items]
Common stock, par value (in Dollars per share) \| $ / shares	$ 0.0001
Convertible ratio	0.13091
Sale of common stock	$ 10,000,000
Borrowing term	3 years
Maximum borrowing amount	$ 10,000,000
Gross sales price	$ 4,000,000

Equity

9 Months Ended

Sep. 30, 2023

Equity [Abstract]

EQUITY

7.	EQUITY

Prior to the Business Combination, Legacy FaZe had two classes of capital stock outstanding: common stock and preferred stock. Following the Business Combination, the Company has one class of capital stock outstanding: common stock. The following summarizes the terms of the Company’s capital stock.

Preferred Stock

The Company had 3,545,529 shares of Legacy FaZe preferred stock authorized for issuance with a par value of $0.00001 per share as of December 31, 2021 and prior to the Closing of the Business Combination.

The Company had 3,237,800 shares of Legacy FaZe’s preferred stock issued and outstanding as of December 31, 2021. As a result of the Business Combination, 3,237,800 shares of Legacy FaZe’s preferred stock outstanding as of the Closing Date were converted into shares of Legacy FaZe’s common stock on a one-to-one basis. Pursuant to the Company’s second amended and restated certificate of incorporation, the Company is authorized to issue up to 1,000,000 shares of preferred stock with a par value of $0.0001. As of September 30, 2023, the Company had no shares of preferred stock issued and outstanding.

Common Stock

The Company had 31,900,878 shares of Legacy FaZe common stock authorized for issuance with a par value of $0.00001 per share as of December 31, 2021 and prior to the Closing of the Business Combination.

Pursuant to the Company’s second amended and restated certificate of incorporation, the Company is authorized to issue up to 500,000,000 shares of common stock with a par value of $0.0001 per share.

The Company had 76,988,356 and 71,511,887 shares of common stock issued and outstanding as of September 30, 2023 and December 31, 2022 respectively.

Earn-out Shares

As a result of the Business Combination, a number of shares of the Company’s common stock (the “Seller Earn Out”) equal to 6% of the sum of i) the total number of shares of the Company’s common stock issued and outstanding as of immediately after the Closing and ii) the total number of shares of the Company’s common stock equal to the product of (A) the total number of net vested company option shares calculated as of immediately prior to the Closing and (B) the Equity Value Exchange Ratio were issued and are subject to vesting and forfeiture conditions upon reaching certain volume-weighted average price (“VWAP”) per share during the period commencing 90 days after the Closing Date and ending five years after the Closing Date (“Earn-out Period”). Among other things further disclosed in the Merger Agreement, if the following events (“Trigger Events”) occur on or before the five-year anniversary of the Business Combination, then the following vesting events will occur:

●

the VWAP per share of the Company’s common stock at any point during the trading hours of a trading day is equal to or greater than $12.00 for any 20 trading days within any period of 30 consecutive trading days, one-third (“First Target Earn-Out Shares”) shall immediately vest and no longer be subject to the forfeiture conditions;

●

the VWAP per share of the Company’s common stock at any point during the trading hours of a trading day is equal to or greater than $14.00 for any 20 trading days within any period of 30 consecutive trading days, one-third (“Second Target Earn-Out Shares” and, together with the First Target Earn-Out Shares and the Second Target Earn-Out Shares, the “Earn-Out Shares”) shall immediately vest and no longer be subject to the forfeiture conditions;

●

the VWAP per share of the Company’s common stock at any point during the trading hours of a trading day is equal to or greater than $16.00 for any 20 trading days within any period of 30 consecutive trading days, one-third (“Third Target Earn-Out Shares”) shall immediately vest and no longer be subject to the forfeiture conditions;

●

in the event of a sale during the Earn-out Period, to the extent that the holders of the Company’s common stock receive sale price that is greater than or equal to the applicable closing price, any Earn-Out Shares that have not previously vested shall be deemed to have vested immediately prior to the closing of such sale, and the holders of any Earn-Out Shares deemed vested shall be eligible to participate in such sale with respect to the Sponsor Earn-Out Shares (as defined below) on the same terms, and subject to the same conditions, as apply to the holders of the Company’s common stock. Upon the consummation of the sale, the Earn-out Period shall terminate.

As a result of the Business Combination, among other things further disclosed in the Sponsor Support Agreement, dated as of October 24, 2021, by and among B. Riley Principal 150 Merger Corp., B. Riley Principal 150 Sponsor Co. LLC, and FaZe Clan Inc., the sponsors agreed that (x) an aggregate of 2,156,250 sponsor shares shall be fully vested and (y) an aggregate of 2,156,250 sponsor shares (the “Sponsor Earn-Out Shares”) shall be subject to the same vesting or forfeiture provisions during the Earn-out Period, and subject to the same Trigger Events mentioned above.

The Earn-out Shares meet the accounting definition of a derivative financial instrument, are considered to be indexed to the Company’s common stock and meet other the conditions in ASC 815-40, Derivatives and Hedging: Contracts in Entity’s Own Equity, to be classified as equity.

As of September 30, 2023, the Earn-Out Period had begun but vesting conditions had not yet been met.

Public Warrants to Acquire Common Stock

Prior to the Business Combination, there were 5,750,000 Public Warrants issued and outstanding in connection with the initial public offering of B. Riley 150 with an exercise price of $11.50 per share. The Public Warrants became exercisable 30 days after the Business Combination. Each whole share of the warrant is exercisable for one share of the Company’s common stock.

The Company may redeem the outstanding Public Warrants for $0.01 per warrant upon at least 30 days’ prior written notice of redemption given after the warrants become exercisable, if the reported last sale price of the common stock equals or exceeds $18.00 per share (as adjusted for stock dividends, sub-divisions, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period commencing after the warrants become exercisable and ending on the third trading day before the Company sends the notice of redemption to the warrant holders. Upon issuance of a redemption notice by the Company, the warrant holders may, at any time after the redemption notice, exercise the Public Warrants on a cashless basis.

The Public Warrants meet the definition of a derivative financial instrument and the equity scope exception in ASC 815-10-15-74(a) to be classified as equity, and are not subject to remeasurement provided that the Company continues to meet the criteria for equity classification.

As of September 30, 2023, all 5,750,000 Public Warrants remain outstanding.

- Definition

The entire disclosure for equity.

+ References

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+ Details

Private Placement Warrants and Recurring Fair Value Measurements (Details)	9 Months Ended
	Sep. 30, 2023 $ / shares shares
Private Placement Warrants and Recurring Fair Value Measurements [Abstract]
Private placement warrants \| shares	173,333
Exercise price \| $ / shares	$ 11.5

Loss Per Share (Details) - Schedule of Basic and Diluted Earnings Per Share (Parentheticals) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Schedule of Basic and Diluted Earnings Per Share [Abstract]
Net loss attributable to FaZe Holdings Inc.,diluted	$ (7,201)	$ (130,598)	$ (35,597)	$ (149,462)
Weighted-average common shares outstanding, diluted	68,234,009	54,590,538	66,315,727	32,144,653
Net loss per share, diluted	$ (0.10)	$ (2.39)	$ (0.54)	$ (4.65)

- Definition

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

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+ Details

- Definition

Amount, after deduction of tax, noncontrolling interests, dividends on preferred stock and participating securities, and addition from assumption of issuance of common shares for dilutive potential common shares; of income (loss) available to common shareholders.

+ References + Details

Private Placement Warrants and Recurring Fair Value Measurements

9 Months Ended

Sep. 30, 2023

Private Placement Warrants and Recurring Fair Value Measurements [Abstract]

PRIVATE PLACEMENT WARRANTS AND RECURRING FAIR VALUE MEASUREMENTS

6.	PRIVATE PLACEMENT WARRANTS AND RECURRING FAIR VALUE MEASUREMENTS

Warrant Liability

Prior to the Business Combination, B. Riley 150 issued 173,333 Private Placement Warrants with an exercise price of $11.50 per share. The Private Placement Warrants are identical to the Public Warrants, as described in Note 7, Equity, except that the Private Placement Warrants (including the common stock underlying the Private Placement Warrants) were not transferable, assignable or salable until August 18, 2022, and they are not redeemable by the Company for cash so long as they are held by the sponsor or its permitted transferees. The sponsor, or its permitted transferees, has the option to exercise the Private Placement Warrants on a cashless basis. If the Private Placement Warrants are held by holders other than the sponsor or its permitted transferees, the Private Placement Warrants can be redeemable by the Company in all redemption scenarios and exercisable by the holders on the same basis as the Public Warrants. Upon the Closing of the Business Combination, the Company has determined that the Private Placement Warrants are classified as liabilities and marked to market at each reporting period.

A Black-Scholes model is used to value the Private Placement Warrants at each reporting period. The change in fair value of warrants is recognized as part of change in fair value of warrant liabilities in the Consolidated Statements of Operations. Inherent in a binomial options pricing model are assumptions related to expected share-price volatility, expected life, risk-free interest rate, discount rate and dividend yield. The Company estimates the volatility of its common stock based on a binomial lattice model using the stock price and the price of the Public Warrants as of the valuation date, risk-free interest rate, and the expected life of the warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the Private Placement Warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates to remain at zero.

The value of the warrant is de minimis and as such the company did not revalue the warrants as of September 30, 2023.

The key inputs into the Black-Scholes model in determining the fair value of the Private Placement Warrants were as follows at September 30, 2023 and December 31, 2022:

	September			December 31,
	2023			2022
Risk-free interest rate		4.1	%		4.0	%
Expected term (years)		3.8			4.5
Expected volatility		98.2	%		53.3	%
Exercise price	$	11.50		$	11.50
Dividend yield		0			0

The following table presents a summary of the changes in the fair value of the Private Placement Warrants liability since the Closing Date:

	(In thousands)
Warrant liabilities at July 19, 2022	$	114
Change in fair value of warrant liabilities		(90	)
Warrant liabilities at December 31, 2022		24
Change in fair value of warrant liabilities		(13	)
Warrant liabilities at March 31, 2023		11
Change in fair value of warrant liabilities		—
Warrant liabilities at June 30, 2023	$	11
Change in fair value of warrant liabilities		(9	)
Warrant liabilities at September 30, 2023	$	2

The following table presents information about the Company’s assets and liabilities that were measured at fair value on a recurring basis as of September 30, 2023 and December 31, 2022, and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.

	(In thousands)
			Quoted Prices in		Significant Other		Significant Other
	September 30,		Active Markets		Observable Inputs		Observable Inputs
	2023		(Level 1)		(Level 2)		(Level 3)
Liabilities:
Private Placement Warrants	$	2	$	—	$	—	$	2
Total	$	2	$	—	$	—	$	2

	(In thousands)
			Quoted Prices in		Significant Other		Significant Other
	December 31,		Active Markets		Observable Inputs		Observable Inputs
	2022		(Level 1)		(Level 2)		(Level 3)
Liabilities:
Private Placement Warrants	$	24	$	—	$	—	$	24
Total	$	24	$	—	$	—	$	24

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (35,597)	$ (149,462)
Adjustments to reconcile net loss to net cash used in operating activities:
Provision for doubtful accounts	1,444	378
Additions to content asset		(599)
Depreciation & amortization expense	1,805	1,230
Amortization of operating lease right of use assets	1,132
Content asset impairments		1,073
Stock-based compensation expense	9,996	4,996
Change in fair value of warrant liabilities	(23)	(19)
Non-cash interest expense		4,491
Loss on debt extinguishment		115,292
Other		(37)
Change in operating assets and liabilities:
Accounts receivable	3,986	(9,642)
Inventory		6
Prepaid expenses and other assets	1,919	(6,127)
Employee retention tax credit	1,695
Other long-term assets	200
Contract assets	(5,386)	(2,100)
Accounts payable and accrued expenses	(88)	(9,728)
Contract liabilities	(1,311)	2,197
Other current liabilities		(7)
Operating lease liabilities	(991)
Short-term debt		(420)
Other long-term liabilities		36
NET CASH USED IN OPERATING ACTIVITIES	(21,219)	(48,442)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment	(116)	(3,804)
Purchase of intangible assets	(32)	(607)
Issuance of note receivable
NET CASH USED IN INVESTING ACTIVITIES	(148)	(4,411)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of loans principal		(21,123)
Proceeds from issuance of term loan		20,000
Issuance of common stock in connection with exercise of stock options	783	220
Payments of transaction fees by Legacy FaZe		(25,146)
Proceeds from recapitalization of B. Riley 150 redemptions and transaction costs		5,655
Proceeds from PIPE offering		100,000
Proceeds from conversion of preferred and common warrants		101
NET CASH PROVIDED BY FINANCING ACTIVITIES	783	79,707
NET CHANGE IN CASH AND RESTRICTED CASH	(20,584)	26,854
Cash and restricted cash at beginning of period	37,807	17,618
CASH AND RESTRICTED CASH AT END OF PERIOD	17,223	44,472
RECONCILIATION TO CONSOLIDATED BALANCE SHEETS
Cash	16,623	43,872
Restricted cash	600	600
Cash and restricted cash	17,223	44,472
SUPPLEMENTAL DISCLOSURE FOR OPERATING ACTIVITIES:
Cash paid for interest		3,027
SUPPLEMENTAL DISCLOSURE FOR NON-CASH INVESTING AND FINANCING ACTIVITIES:
Issuance of common stock in connection with litigation settlement		294
Purchase of property, plant and equipment in accrued expenses		28
Conversion of convertible notes and accrued interest into common stock under original contractual terms		17,551
Conversion of redeemable convertible preferred stock to common stock pursuant to Business Combination		33,705
Issuance of common stock in connection with SEPA agreement	$ 253

Litigation

9 Months Ended

Sep. 30, 2023

Litigation [Abstract]

LITIGATION

10.

LITIGATION

From time to time, in the normal course of operations, the Company is subject to litigation matters and claims, including claims relating to employee relations and business practices. The Company expenses legal fees as incurred. The Company records a provision for contingent losses when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. An unfavorable outcome to any legal matter, if material, could have an adverse effect on the Company’s operations or its financial position, liquidity, or results of operations.

On November 30, 2020, Adult Use Holdings, Inc. (“Adult Use”) and Zola Ventures Ltd. (“Zola”) initiated arbitration claiming that the Company owed CA$ 3 million to Adult Use and Zola in connection with alleged funding to the Company of CA$ 30.0 million by Bridging Finance Group. On December 21, 2020, the Company brought counterclaims against Adult Use, Zola, and their principals Adam Salman and Igor Gimelshtein. On May 14, 2021, the Company applied for summary disposition of the claim for CA$ 3 million brought by Adult Use and Zola. On August 4, 2021, the arbitrator granted the Company’s application and issued a Partial Final Award dismissing Adult Use’s and Zola’s claim. The United States District Court for the Southern District of New York subsequently affirmed the Partial Final Award and its dismissal of Adult Use’s and Zola’s claims against the Company in a decision issued September 28, 2022. On November 8 and November 11, 2022, the arbitrator held hearings in connection with the Company’s counterclaims. On December 23, 2022, the Company filed an application for costs and attorneys’ fees. On June 3, 2023, the Company was awarded $399 thousand of costs and attorneys’ fees for prevailing against the CA$ 3 million claim brought against the Company and for the Counterclaim Respondents’ conduct that unnecessarily increased the costs of the arbitration. As result, the Company has not recorded a reserve with respect to this litigation.

Property, Equipment and Leasehold Improvements (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Property, Equipment and Leasehold Improvements [Abstract]
Depreciation expense	$ 0.3	$ 0.3	$ 1.4	$ 0.8

Property, Equipment and Leasehold Improvements

9 Months Ended

Sep. 30, 2023

Property, Equipment and Leasehold Improvements [Abstract]

PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS

4.	PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS

Property, equipment and leasehold improvements as of September 30, 2023 and December 31, 2022 consisted of the following:

	(In thousands)
	September			December 31,
	2023			2022
Furniture / Fixtures	$	897		$	897
Computer equipment		3,683			3,640
Vehicles		106			106
Leasehold improvements		874			801
Subtotal		5,560			5,444
Less: Accumulated depreciation		(3,010	)		(1,623	)
Property, equipment and leasehold improvements, net	$	2,550		$	3,821

Depreciation expense totaled $0.3 million and $0.3 million for the three months ended September 30, 2023 and 2022, respectively.

Depreciation expense totaled $1.4 million and $0.8 million for the nine months ended September 30, 2023 and 2022, respectively.

Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) - USD ($) $ in Thousands	Common Stock	Additional Paid-In Capital	Accumulated Deficit	Total
Balance at Dec. 31, 2021	$ 2	$ 5,477	$ (112,408)	$ (106,929)
Balance (in Shares) at Dec. 31, 2021	18,841,538
Stock based compensation expense		1,150		1,150
Issuance of common stock upon vesting of restricted stock awards
Issuance of common stock upon vesting of restricted stock awards (in Shares)	4,084
Exercise of stock option		64		64
Exercise of stock option (in Shares)	74,768
Net loss			(9,542)	(9,542)
Balance at Mar. 31, 2022	$ 2	6,691	(121,950)	(115,257)
Balance (in Shares) at Mar. 31, 2022	18,920,390
Balance at Dec. 31, 2021	$ 2	5,477	(112,408)	(106,929)
Balance (in Shares) at Dec. 31, 2021	18,841,538
Net loss				(149,462)
Balance at Sep. 30, 2022	$ 7	322,724	(261,870)	60,861
Balance (in Shares) at Sep. 30, 2022	70,258,004
Balance at Mar. 31, 2022	$ 2	6,691	(121,950)	(115,257)
Balance (in Shares) at Mar. 31, 2022	18,920,390
Stock based compensation expense		1,509		1,509
Issuance of common stock in connection with litigation settlement		294		294
Issuance of common stock in connection with litigation settlement (in Shares)	13,021
Issuance of common stock upon vesting of restricted stock awards
Issuance of common stock upon vesting of restricted stock awards (in Shares)	16,108
Exercise of stock option		36		36
Exercise of stock option (in Shares)	43,104
Net loss			(9,322)	(9,322)
Balance at Jun. 30, 2022	$ 2	8,530	(131,272)	(122,740)
Balance (in Shares) at Jun. 30, 2022	18,992,623
Stock based compensation expense		2,546		2,546
Exercise of common and preferred warrants		101		101
Exercise of common and preferred warrants (in Shares)	2,332,117
Recapitalization transaction		311,427		311,432
Recapitalization transaction (in Shares)	48,266,163
Issuance of common stock upon vesting of restricted stock awards
Issuance of common stock upon vesting of restricted stock awards (in Shares)	167,806
Exercise of stock option		120		120
Exercise of stock option (in Shares)	313,962
Net loss			(130,598)	(130,598)
Balance at Sep. 30, 2022	$ 7	322,724	(261,870)	60,861
Balance (in Shares) at Sep. 30, 2022	70,258,004
Balance at Dec. 31, 2022	$ 7	327,686	(280,942)	$ 46,751
Balance (in Shares) at Dec. 31, 2022	71,511,887			71,511,887
Stock based compensation expense		2,673		$ 2,673
Issuance of common stock upon vesting of restricted stock awards
Issuance of common stock upon vesting of restricted stock awards (in Shares)	483,251
Exercise of stock option		783		783
Exercise of stock option (in Shares)	2,050,920
Net loss			(14,040)	(14,040)
Balance at Mar. 31, 2023	$ 7	331,142	(294,982)	36,167
Balance (in Shares) at Mar. 31, 2023	74,046,058
Balance at Dec. 31, 2022	$ 7	327,686	(280,942)	$ 46,751
Balance (in Shares) at Dec. 31, 2022	71,511,887			71,511,887
Net loss				$ (35,597)
Balance at Sep. 30, 2023	$ 8	338,718	(316,539)	$ 22,187
Balance (in Shares) at Sep. 30, 2023	76,988,356			75,688,236
Balance at Mar. 31, 2023	$ 7	331,142	(294,982)	$ 36,167
Balance (in Shares) at Mar. 31, 2023	74,046,058
Stock based compensation expense	$ 1	5,964		5,964
Issuance of common stock in connection with SEPA agreement		253		253
Issuance of common stock in connection with SEPA agreement (in Shares)	487,995
Issuance of common stock upon vesting of restricted stock units
Issuance of common stock upon vesting of restricted stock units (in Shares)	479,755
Issuance of common stock upon vesting of restricted stock awards
Issuance of common stock upon vesting of restricted stock awards (in Shares)	574,501
Exercise of stock option
Exercise of stock option (in Shares)	99,927
Net loss			(14,356)	(14,356)
Balance at Jun. 30, 2023	$ 8	337,359	(309,338)	28,029
Balance (in Shares) at Jun. 30, 2023	75,688,236
Stock based compensation expense		1,359		1,359
Issuance of common stock upon vesting of restricted stock units
Issuance of common stock upon vesting of restricted stock units (in Shares)	1,300,120
Net loss			(7,201)	(7,201)
Balance at Sep. 30, 2023	$ 8	$ 338,718	$ (316,539)	$ 22,187
Balance (in Shares) at Sep. 30, 2023	76,988,356			75,688,236

Private Placement Warrants and Recurring Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2023

Private Placement Warrants and Recurring Fair Value Measurements [Abstract]

Schedule of Fair Value of the Private Placement Warrants

The key inputs into the Black-Scholes model in determining the fair value of the Private Placement Warrants were as follows at September 30, 2023 and December 31, 2022:

	September			December 31,
	2023			2022
Risk-free interest rate		4.1	%		4.0	%
Expected term (years)		3.8			4.5
Expected volatility		98.2	%		53.3	%
Exercise price	$	11.50		$	11.50
Dividend yield		0			0

Schedule of Changes in the Fair Value of the Private Placement Warrants Liability

The following table presents a summary of the changes in the fair value of the Private Placement Warrants liability since the Closing Date:

	(In thousands)
Warrant liabilities at July 19, 2022	$	114
Change in fair value of warrant liabilities		(90	)
Warrant liabilities at December 31, 2022		24
Change in fair value of warrant liabilities		(13	)
Warrant liabilities at March 31, 2023		11
Change in fair value of warrant liabilities		—
Warrant liabilities at June 30, 2023	$	11
Change in fair value of warrant liabilities		(9	)
Warrant liabilities at September 30, 2023	$	2

Schedule of Assets and Liabilities that Were Measured at Fair Value on A Recurring Basis

	(In thousands)
			Quoted Prices in		Significant Other		Significant Other
	September 30,		Active Markets		Observable Inputs		Observable Inputs
	2023		(Level 1)		(Level 2)		(Level 3)
Liabilities:
Private Placement Warrants	$	2	$	—	$	—	$	2
Total	$	2	$	—	$	—	$	2

	(In thousands)
			Quoted Prices in		Significant Other		Significant Other
	December 31,		Active Markets		Observable Inputs		Observable Inputs
	2022		(Level 1)		(Level 2)		(Level 3)
Liabilities:
Private Placement Warrants	$	24	$	—	$	—	$	24
Total	$	24	$	—	$	—	$	24

Stock Compensation Expense (Details) - Schedule of Nonvested Stock Options - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Schedule of nonvested stock options [Abstract]
Number, Granted	0	0	0	0
Nonvested Stock Options [Member]
Schedule of nonvested stock options [Abstract]
Number, Outstanding Begining balance			670,008
Weighted Average Exercise Price, Outstanding Begining balance			$ 0.38
Number, Granted
Weighted- Average Exercise Price, Granted
Number, Vested			(262,944)
Weighted- Average Exercise Price, Vested			$ 0.38
Number, Forfeited
Weighted- Average Exercise Price, Forfeited
Number, Outstanding Ending balance	407,064		407,064
Weighted Average Exercise Price, Outstanding Ending balance	$ 0.38		$ 0.38
Nonvested RSAs [Member]
Schedule of nonvested stock options [Abstract]
Number, Outstanding Begining balance			1,649,962
Weighted Average Exercise Price, Outstanding Begining balance			$ 6.27
Number, Granted			1,925,856
Weighted- Average Exercise Price, Granted			$ 0.42
Number, Vested			(1,083,291)
Weighted- Average Exercise Price, Vested			$ 6.49
Number, Forfeited
Weighted- Average Exercise Price, Forfeited
Number, Outstanding Ending balance	2,492,527		2,492,527
Weighted Average Exercise Price, Outstanding Ending balance	$ 1.35		$ 1.35

Description of the Business

9 Months Ended

Sep. 30, 2023

Description of the Business [Abstract]

DESCRIPTION OF THE BUSINESS

1.	DESCRIPTION OF THE BUSINESS

FaZe Holdings Inc. (“FaZe” or the “Company”), is a lifestyle and media platform rooted in gaming and youth culture. The Company’s premium brand, talent network, and large audience can be monetized across a variety of products and services.

On July 19, 2022 (the “Closing Date”), pursuant to an Agreement and Plan of Merger (the “Merger Agreement”) dated as of October 24, 2021 (as amended in December 2021 and March 2022), by and among B. Riley 150 Merger Corp. (“B. Riley 150”), a special purpose acquisition company, and BRPM Merger Sub, Inc., a directly wholly owned subsidiary of B. Riley 150 (“Merger Sub”) and FaZe Clan, Inc. (“Legacy FaZe”), the parties consummated the merger of Merger Sub with and into Legacy FaZe, with Legacy FaZe continuing as the surviving corporation (the “Merger”), as well as the other transactions contemplated by the Merger Agreement (the Merger and such other transactions, the “Business Combination”). In connection with the closing of the Business Combination (the “Closing”), Legacy FaZe became a wholly owned subsidiary of B. Riley 150, which changed its name to “FaZe Holdings Inc.”

Legacy FaZe determined that it was the accounting acquirer in the Business Combination based on an analysis of the criteria outlined in Accounting Standards Codification (“ASC”) 805, Business Combinations. The Merger was accounted for as a reverse recapitalization, in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). Under this method of accounting, B. Riley 150 was treated as the acquired company for financial reporting purposes. Accordingly, the Business Combination was treated as the equivalent of Legacy FaZe issuing stock for the net assets of B. Riley 150, accompanied by a recapitalization. The net assets of B. Riley 150 were stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination are those of Legacy FaZe.

In accordance with guidance applicable to these circumstances, the equity structure has been retroactively restated in all comparative periods up to the Closing Date, to reflect the number of shares of the Company’s common stock issued to Legacy FaZe’s common stockholders in connection with the Business Combination. As a result, these financial statements represent the continuation of Legacy FaZe and the historical shareholders’ deficit. Common stock, preferred stock and loss per share of Legacy FaZe prior to the Business Combination have been retrospectively adjusted for the Business Combination using an exchange ratio of 2.2267 (“Equity Value Exchange Ratio”). The accumulated deficit of Legacy FaZe has been carried forward after the Business Combination.

Notice of Delisting

On March 23, 2023, the Company received a letter (the “Letter”) from the Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market (“Nasdaq”) informing the Company that its common stock, par value $0.0001 per share (the “Common Stock”), failed to comply with the $1 minimum bid price required for continued listing on The Nasdaq Capital Market under Nasdaq Listing Rule 5550(a)(2) based upon the closing bid price of the Common Stock for the 30 consecutive business days prior to the date of the Letter. The notice has no immediate effect on the listing of the Common Stock or warrants, and the Common Stock and warrants will continue to trade on The Nasdaq Capital Market under the symbols “FAZE” and “FAZEW,” respectively.

In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has been provided an initial period of 180 calendar days, or until September 19, 2023 (the “Compliance Date”), by which the Company must regain compliance with the minimum bid price requirement. To regain compliance, the closing bid price of the Common Stock must meet or exceed $1.00 per share for a minimum of ten consecutive business days at any time prior to the Compliance Date, unless the Staff exercises its discretion to extend this ten-day period pursuant to Nasdaq Listing Rule 5810(c)(3)(H).

On September 20, 2023, the Company received a letter from Nasdaq granting the Company an additional compliance period of 180 calendar days, or until March 18, 2024, in which to regain compliance. Nasdaq granted the additional compliance period based on the Company’s continuing to meet the continued listing requirement for market value of publicly held shares and all other initial listing requirements of the Nasdaq Capital Market, with the exception of the Bid Price Requirement, and the Company’s furnishing of written notice to Nasdaq of its intent to cure this deficiency during the additional compliance period by effecting a reverse stock split, if necessary.

If the Company does not qualify for, or fails to regain compliance during, the second compliance period, then the Staff will provide written notification to the Company that the Common Stock will be subject to delisting. At that time, the Company may appeal the Staff’s delisting determination to the Nasdaq Hearings Panel.

Intangible Assets (Details) - Schedule of Estimated Future Amortization of Intangible Assets $ in Thousands	Sep. 30, 2023 USD ($)
Schedule of Estimated Future Amortization of Intangible Assets [Abstract]
2023 (remainder)	$ 85
2024	310
2025	60
2026	7
Total future amortization of amortizable intangible assets	$ 462

Private Placement Warrants and Recurring Fair Value Measurements (Details) - Schedule of Assets and Liabilities that Were Measured at Fair Value on A Recurring Basis - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Liabilities:
Total	$ 2	$ 24
Private Placement Warrants [Member]
Liabilities:
Private Placement Warrants	2	24
Quoted Prices In Active Markets (Level 1) [Member]
Liabilities:
Total
Quoted Prices In Active Markets (Level 1) [Member] \| Private Placement Warrants [Member]
Liabilities:
Private Placement Warrants
Significant Other Observable Inputs (Level 2) [Member]
Liabilities:
Total
Significant Other Observable Inputs (Level 2) [Member] \| Private Placement Warrants [Member]
Liabilities:
Private Placement Warrants
Significant Other Observable Inputs (Level 3) [Member]
Liabilities:
Total	2	24
Significant Other Observable Inputs (Level 3) [Member] \| Private Placement Warrants [Member]
Liabilities:
Private Placement Warrants	$ 2	$ 24

Commitments and Contingencies

9 Months Ended

Sep. 30, 2023

Commitments and Contingencies [Abstract]

COMMITMENTS AND CONTINGENCIES

9.	COMMITMENTS AND CONTINGENCIES

Operating Leases

The Company leases certain business and residential facilities under operating lease agreements that specify minimum rentals with lease terms ranging from two to two and a half years. The Company’s rent expense for the three months ended September 30, 2023 and 2022 was $0.8 million and $0.6 million, respectively. The Company’s rent expense for the nine months ended September 30, 2023 and 2022 was $1.2 million and $1.7 million, respectively. Rent expense is included in general and administrative expense in the Consolidated Statements of Operations. Scheduled rent increases, if any, are amortized on a straight-line basis over the lease term.

Our lease agreements generally do not provide an implicit borrowing rate; therefore, an internal incremental borrowing rate is determined based on information available at lease commencement date for purposes of determining the present value of lease payments. We used the incremental borrowing rate on September 30, 2023 and December 31, 2022 for all leases that commenced prior to that date. In determining this rate, which is used to determine the present value of future lease payments, we estimate the rate of interest we would pay on a collateralized basis, with similar payment terms as the lease and in a similar economic environment.

Lease Costs

(In thousands)	Three months Ended September 30, 2023		Three months Ended September 30, 2022
Components of total lease costs:
Operating lease expense	$	791	$	826
Total lease costs	$	791	$	826

(In thousands)	Nine months Ended September 30, 2023		Nine months Ended September 30, 2022
Components of total lease costs:
Operating lease expense	$	1,188	$	1,192
Total lease costs	$	1,188	$	1,192

Lease Positions as of September 30, 2023 and December 31, 2022

Right of use, or ROU, lease assets and lease liabilities for our operating leases are recorded on the balance sheet as follows:

	September		December 31,
(In thousands)	2023		2022
Assets
Right of use asset – long term	$	1,560	$	2,693
Total right of use asset	$	1,560	$	2,693
Liabilities
Operating lease liabilities – short term	$	1,488	$	1,488
Operating lease liabilities – long term		93		1,084
Total lease liability	$	1,581	$	2,572

Lease Terms and Discount Rate

Weighted average remaining lease term (in years) – operating leases			1.0
Weighted average discount rate – operating leases			4	%

Future minimum lease payments, which include non-cancelable operating leases at September 30, 2023, are as follows:

Year ending December 31,	(In thousands)
2023 (remainder)	$	502
2024		1,071
2025		5
2026		3
Thereafter		-
Total minimum lease payment	$	1,581

Commitments and Contingencies (Details) - Schedule of Future Minimum Lease Payment $ in Thousands	Sep. 30, 2023 USD ($)
Schedule of future minimum lease payment [Abstract]
2023 (remainder)	$ 502
2024	1,071
2025	5
2026	3
Thereafter
Total minimum lease payment	$ 1,581

Stock Compensation Expense (Details) - Schedule of Stock Option Grant Activity - $ / shares		9 Months Ended
	Dec. 31, 2022	Sep. 30, 2023
Vested and Nonvested Stock Options [Member]
Schedule of stock option grant activity [Abstract]
Number, Outstanding Ending balance	18,863,654	16,712,807
Weighted Average Exercise Price, Outstanding Ending balance	$ 0.38	$ 0.38
Weighted Average Remaining Life, Ending balance	4 years 1 month 17 days	3 years 4 months 17 days
Number, Granted
Weighted Average Exercise Price, Granted
Number, Exercised		(2,150,847)
Weighted Average Exercise Price, Exercised		$ 0.38
Number, Expired or forfeited
Weighted Average Exercise Price, Expired or forfeited
Vested and Nonvested Stock Warrants [Member]
Schedule of stock option grant activity [Abstract]
Number, Outstanding Ending balance	5,923,333	5,923,333
Weighted Average Exercise Price, Outstanding Ending balance	$ 11.5	$ 11.5
Weighted Average Remaining Life, Ending balance	4 years 6 months 18 days	3 years 9 months 18 days
Number, Granted
Weighted Average Exercise Price, Granted
Number, Exercised
Weighted Average Exercise Price, Exercised
Number, Expired or forfeited
Weighted Average Exercise Price, Expired or forfeited

Description of the Business (Details)	Sep. 30, 2023 $ / shares	Mar. 23, 2023 $ / shares	Dec. 31, 2022 $ / shares	Dec. 31, 2021 $ / shares
Description of the Business [Line Items]
Equity value exchange ratio	2.2267
Common stock, par value	$ 0.0001		$ 0.0001
Minimum bid price		$ 1
Common Stock [Member]
Description of the Business [Line Items]
Common stock, par value	0.0001	$ 0.0001		$ 0.00001
Exceed per share	$ 1

Condensed Consolidated Statements of Operations (Unaudited) (Parentheticals) - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Income Statement [Abstract]
Net loss per common share diluted	$ (0.10)	$ (2.39)	$ (0.54)	$ (4.65)
Weighted-average number of common shares outstanding diluted	68,234,009	54,590,538	66,315,727	32,144,653

- Definition

+ References

+ Details

Commitments and Contingencies (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Commitments and Contingencies [Abstract]
Rent expense	$ 0.8	$ 0.6	$ 1.2	$ 1.7

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
ASSETS
Cash	$ 16,623	$ 37,207
Accounts receivable, net	3,095	8,525
Employee retention tax credit	1,695
Contract assets	8,220	6,223
Prepaid expenses and other assets	4,850	6,768
Total Current Assets	34,483	58,723
Restricted cash	600	600
Property, equipment and leasehold improvements, net	2,550	3,821
Operating lease right-of-use assets	1,560	2,693
Intangible assets, net	462	848
Other long-term assets	606	553
TOTAL ASSETS	40,261	67,238
LIABILITIES:
Accounts payable and accrued expenses	14,308	14,397
Contract liabilities	2,183	3,494
Operating lease liabilities, current	1,488	1,488
Total Current Liabilities	17,979	19,379
Warrant liabilities	2	24
Operating lease liabilities, non-current	93	1,084
Total Liabilities	18,074	20,487
COMMITMENTS AND CONTINGENCIES (Note 9)
MEZZANINE EQUITY:
Series A preferred stock, $0.00001 par value, 3,545,529 shares authorized at September 30, 2023 and 2022, respectively, zero share shares issued and outstanding at September 30, 2023 and 2022.
STOCKHOLDERS’ EQUITY:
Preferred stock, $0.0001 par value; 1,000,000 shares of the Company’s preferred stock authorized at September 30, 2023; zero share of the Company’s preferred stock issued and outstanding at September 30, 2023 and December 31, 2022
Common stock, $0.0001 par value at September 30, 2023 and December 31, 2022, respectively; 500,000,000 and 500,000,000 shares of common stock authorized at September 30, 2023 and December 31, 2022, respectively; 75,688,236 and 71,511,887 shares of common stock issued and outstanding at September 30, 2023 and December 31, 2022 respectively	8	7
Additional paid-in capital	338,718	327,686
Accumulated deficit	(316,539)	(280,942)
Total Stockholders’ Equity	22,187	46,751
TOTAL LIABILITIES, MEZZANINE EQUITY, AND STOCKHOLDERS’ EQUITY	$ 40,261	$ 67,238

Intangible Assets (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
Intangible Assets (Details) - USD ($) $ in Millions	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Intangible Assets [Abstract]
Amortization expense	$ 0.1	$ 0.2	$ 0.3	$ 0.4

Litigation (Details) - USD ($) $ in Thousands	Jun. 03, 2023	May 14, 2021	Nov. 30, 2020
Litigation [Line Items
Alleged funding amount			$ 3,000
Disposition of the claim		$ 3,000
Awarded cost	$ 399
Amount claim	$ 3,000
Bridging Finance Group [Member]
Litigation [Line Items
Alleged funding amount			$ 30,000

Loss Per Share (Details) - Schedule of Antidilutive Shares - shares	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive common stock equivalents	37,429,497	33,695,674
Public Warrants [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive common stock equivalents	5,750,000	5,750,000
Private Placement Warrants [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive common stock equivalents	173,333	173,333
Seller Earn-out [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive common stock equivalents	5,312,098	5,312,098
Sponsor Earn-out Shares [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive common stock equivalents	2,156,250	2,156,250
Legacy FaZe preferred warrant [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive common stock equivalents
Unvested restricted stock award [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive common stock equivalents	2,492,527	2,248,834
Unvested restricted stock units [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive common stock equivalents	2,685,616
Convertible preferred stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive common stock equivalents
Stock options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive common stock equivalents	18,859,673	18,055,159

Stock Compensation Expense (Details) - Schedule of Restricted Stock Units - Nonvested RSUs [Member]	9 Months Ended
	Sep. 30, 2023 $ / shares shares
Schedule of restricted stock units [Abstract]
Number, Nonvested, Beginning balance \| shares	702,417
Weighted Average Price, Nonvested, Beginning balance \| $ / shares	$ 2.79
Number, Granted \| shares	2,885,984
Weighted Average Price, Granted \| $ / shares	$ 1.82
Number, Vested \| shares	(578,535)
Weighted Average Price, Vested \| $ / shares	$ 1.59
Number,Forfeited \| shares	(324,250)
Weighted Average Price,Forfeited \| $ / shares	$ 2.75
Number, Nonvested, Ending balance \| shares	2,685,616
Weighted Average Price, Nonvested, Ending balance \| $ / shares	$ 1.31

Liquidity

9 Months Ended

Sep. 30, 2023

Liquidity [Abstract]

LIQUIDITY

2.	LIQUIDITY

As shown in the accompanying consolidated financial statements, the Company has incurred significant recurring losses resulting in an accumulated deficit. The Company anticipates further losses in the development of its business. The Company also had negative cash flows used in operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

Based on its cash resources and positive cash reserve as of September 30, 2023, together with the SEPA described below, the Company does not believe it has sufficient resources to fund its operations at least until twelve months from the date of issuance of these financial statements. The positive working capital as of September 30, 2023 was mainly due to funds from the PIPE offering and from the Business Combination.

On May 10, 2023, the Company and YA II PN, Ltd., a Cayman Islands exempt limited partnership managed by Yorkville Advisors Global, LP (the “Investor”), entered into a Standby Equity Purchase Agreement (the “SEPA”).

The Company will have the right to issue and sell to the Investor, from time to time, as provided in the SEPA, and the Investor shall purchase from the Company, up to $25 million in aggregate gross purchase price (the “Commitment Amount”) of the newly issued shares of the Company’s common stock, par value $0.0001 (the “Common Stock”) (each such sale, an “Advance”) by delivering written notice to the Investor (each, an “Advance Notice” and the date on which the Company is deemed to have delivered an Advance Notice, the “Advance Notice Date”). The Common Stock purchased pursuant to an Advance will be purchased at a price equal to 97% of the lowest daily VWAP of the Common Stock during the three consecutive trading days commencing on the Advance Notice Date. “VWAP” means, for any trading day, the daily volume weighted average price of the Common Stock for such trading day on the Nasdaq Stock Market during regular trading hours as reported by Bloomberg L.P.

The issuance of the Common Stock under the SEPA will be subject to certain limitations, including that (i) the Investor may not purchase any Common Stock that would result in it owning more than 4.99% of the Company’s Common Stock or (ii) the aggregate number of Common Stock issued pursuant to the SEPA cannot exceed 19.9% of the Company’s Common Stock as of as of the date of the SEPA (referred to as the “Exchange Cap”). The Exchange Cap shall not be applicable if: (i) the Company’s stockholders have approved the issuance of Common Stock in excess of the Exchange Cap in accordance with the applicable rules of the Principal Market or (ii) to the extent that (and only for so long as) the average price for the issuance of Common Stock equals or exceed the lower of (i) the Nasdaq Official Closing Price (as reflected on Nasdaq.com) immediately preceding the date of the SEPA; or (ii) the average Nasdaq Official Closing Price for the five Trading Days immediately preceding the date of the SEPA.

Pursuant to the terms of the SEPA, the Company shall prepare and file with the SEC a registration statement (the “Registration Statement”) or multiple Registration Statements registering for resale of the Common Stock issuable to the Investor under the SEPA. The Company in its sole discretion may choose when to file such Registration Statements; provided, however, that the Company shall not have the ability to request any Advances until the effectiveness of a Registration Statement.

As consideration for the Investor’s commitment to purchase Common Stock at the Company’s direction upon the terms and subject to the conditions set forth in the SEPA, the Company issued 487,995 shares of Common Stock to the Investor.

The SEPA shall terminate automatically on the earliest of (i) the first day of the month next following the 36-month anniversary of the date of the SEPA and (ii) the date on which the Investor shall have made payment of Common Stock pursuant to the SEPA for Common Stock equal to the Commitment Amount. The SEPA may be terminated at any time by the mutual written consent of the parties to the SEPA, effective as of the date of such mutual written consent unless otherwise provided in such written consent, or by the Company upon five trading days’ prior written notice to the Investor subject to the terms of the SEPA. Despite these mitigating factors, the Company believes that there is still substantial doubt in connection with the Company’s ability to continue as a going concern.

Commitments and Contingencies (Details) - Schedule of Lease Costs - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Components of total lease costs:
Operating lease expense	$ 791	$ 826	$ 1,188	$ 1,192
Total lease costs	$ 791	$ 826	$ 1,188	$ 1,192

Intangible Assets

9 Months Ended

Sep. 30, 2023

Intangible Assets [Abstract]

INTANGIBLE ASSETS

5.	INTANGIBLE ASSETS

Intangible assets as of September 30, 2023 and December 31, 2022 consisted of the following:

		(In thousands)
		Gross				Net
		Carrying		Accumulated		Carrying
As of September 30, 2023	Useful Life	Value		Amortization		Value

Website development	3 years	$	450	$	276	$	174
Talent acquisition	2 – 3 years		1,054		766		288
Intangible assets, net		$	1,504	$	1,042	$	462

		(In thousands)
		Gross				Net
		Carrying		Accumulated		Carrying
As of December 31, 2022	Useful Life	Value		Amortization		Value

Website development	3 years	$	377	$	175	$	202
Talent acquisition	2 – 3 years		1,201		555		646
Intangible assets, net		$	1,578	$	730	$	848

Amortization expense totaled $0.1 million and $0.2 million for the three months ended September 30, 2023 and 2022, respectively. Amortization expense totaled $0.3 million and $0.4 million for the nine months ended September 30, 2023 and 2022 respectively.

The following table presents the estimated future amortization of intangible assets:

Years ending December 31,	(In thousands)
2023 (remainder)	$	85
2024		310
2025		60
2026		7
Total future amortization of amortizable intangible assets	$	462

The Company did not have any fully amortized intangible assets as of September 30, 2023 and as of September 30, 2022.

Summary of Significant Accounting Policies (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2021
Summary of Significant Accounting Policies [Line Items]
Amortization expense
Employee retention credit					70.00%
Tax credit receivable	1.7		1.7
Impairment contract assets
Revenue contract liability balance	3.5	6.1	10.6
Revenue earned outside of the united states	$ 0.9	$ 1.2	4.4	$ 4.7
Revenue Recognition [Member]
Summary of Significant Accounting Policies [Line Items]
Revenue contract liability balance			$ 26.5

Stock Compensation Expense (Details) - USD ($) $ in Thousands	1 Months Ended		3 Months Ended		9 Months Ended
	Oct. 24, 2021	Jul. 31, 2021	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Stock Compensation Expense [Line Items]
Common stock, reserved for issuance			1,791,416		1,791,416
Granted shares					27,711
Options issued and vesting (in Dollars)			$ 7	$ 336	$ 19	$ 454
Total granted			0	0	0	0
2022 Omnibus Incentive Plan [Member]
Stock Compensation Expense [Line Items]
Common stock, reserved for issuance			12,358,689		12,358,689
Shares of common stock are subject to restricted stock award					2,570,125
Shares of restricted stock awards			8,482,031		8,482,031
2022 Employee Stock Purchase Plan [Member]
Stock Compensation Expense [Line Items]
Common stock, reserved for issuance	75,000,000		75,000,000		75,000,000
Percentage of diluted shares outstanding	2.00%
Percentage of fair market value	85.00%
Shares of restricted stock awards			75,000,000		75,000,000
Amended and Restated 2019 Equity Incentive Plan [Member]
Stock Compensation Expense [Line Items]
Common stock, reserved for issuance			23,380,173		23,380,173
Aggregate number of shares authorized		10,500,000
Number of share equity value exchange ratio		21,371
Vesting and exercise of stock options			16,712,807		16,712,807
Shares of restricted stock awards			2,008,872		2,008,872
Minimum [Member] \| 2022 Employee Stock Purchase Plan [Member]
Stock Compensation Expense [Line Items]
Percentage of employee authorize payroll deduction	1.00%
Maximum [Member] \| 2022 Employee Stock Purchase Plan [Member]
Stock Compensation Expense [Line Items]
Percentage of employee authorize payroll deduction	15.00%
Common Stock [Member] \| Amended and Restated 2019 Equity Incentive Plan [Member]
Stock Compensation Expense [Line Items]
Shares of restricted stock awards			149,171		149,171
Warrant [Member]
Stock Compensation Expense [Line Items]
Total granted			0	0	0	0
RSAs [Member]
Stock Compensation Expense [Line Items]
Total granted			1,925,856	0	1,925,856	1,119,698
Recognized stock-based compensation expense (in Dollars)			$ 300	$ 2,500	$ 10,000	$ 3,700
RSUs [Member]
Stock Compensation Expense [Line Items]
Total granted			750,000	0	2,885,984	0
Recognized stock-based compensation expense (in Dollars)			$ 1,100	$ 200	$ 2,500	$ 500

Loss Per Share

9 Months Ended

Sep. 30, 2023

Loss Per Share [Abstract]

LOSS PER SHARE

11.

LOSS PER SHARE

In accordance with the provisions of ASC 260, Earnings Per Share, net loss per share is computed by dividing net loss by the weighted-average shares of common stock outstanding during the period. The results of operations were net losses for the three and nine months ended September 30, 2023 and 2022. The following table sets forth the computation of basic and diluted earnings per share attributable to common stockholders for the three and nine months ended September 30, 2023 and 2022:

	(In thousands, except shares and per-share information)
	Three months ended						Nine months ended
	September 30,						September
	2023			2022			2023			2022
Basic and diluted loss per share:
Net loss attributable to FaZe Holdings Inc., basic and diluted	$	(7,201	)	$	(130,598	)	$	(35,597	)	$	(149,462	)
Weighted-average common shares outstanding, basic and diluted		68,234,009			54,590,538			66,315,727			32,144,653
Net loss per share, basic and diluted	$	(0.10	)	$	(2.39	)	$	(0.54	)	$	(4.65	)

During a loss period, the effect of the potential exercise of stock options, warrants, convertible preferred stock, and convertible debt are not considered in the diluted loss per share calculation since the effect would be antidilutive. The Company did not have any participating securities in the periods presented. The Company had 1,680,774 fully vested warrants pursuant to which common shares were issuable for little to no consideration outstanding as of the Closing Date and for the year ended December 31, 2021. These warrants were exercised during the Business Combination. The Company considered these warrants outstanding in the context of basic loss per share and included these warrants in the weighted-average shares of common stock outstanding for the period until converted.

The Company had antidilutive shares for the three and nine months ended September 30, 2023 and 2022. The following securities were not included in the computation of diluted shares outstanding for the three and nine months ended September 30, 2023 and 2022 because the effect would be antidilutive:

	As of September 30, 2023		As of September 30, 2022
Convertible preferred stock		—		—
Public Warrants		5,750,000		5,750,000
Private Placement Warrants		173,333		173,333
Seller Earn-out		5,312,098		5,312,098
Sponsor Earn-out Shares		2,156,250		2,156,250
Legacy FaZe preferred warrant		—		—
Unvested restricted stock award		2,492,527		2,248,834
Unvested restricted stock units		2,685,616		—
Stock options		18,859,673		18,055,159
Total potentially dilutive common stock equivalents		37,429,497		33,695,674

Summary of Significant Accounting Policies (Details) - Disaggregates the Company’s Revenue by Major Type - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Disaggregation of Revenue [Line Items]
Total revenue	$ 12,510	$ 14,012	$ 36,749	$ 48,621
Brand Sponsorships [Member]
Disaggregation of Revenue [Line Items]
Total revenue	4,225	7,072	14,616	28,054
Content [Member]
Disaggregation of Revenue [Line Items]
Total revenue	3,316	4,098	9,658	10,641
Consumer Products [Member]
Disaggregation of Revenue [Line Items]
Total revenue	439	471	852	2,328
Esports [Member]
Disaggregation of Revenue [Line Items]
Total revenue	4,482	2,322	11,537	7,285
Other Revenue [Member]
Disaggregation of Revenue [Line Items]
Total revenue	$ 48	$ 49	$ 86	$ 313

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

- Definition

Amount of revenue recognized from goods sold, services rendered, insurance premiums, or other activities that constitute an earning process. Includes, but is not limited to, investment and interest income before deduction of interest expense when recognized as a component of revenue, and sales and trading gain (loss).

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
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-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(g)(1)(ii))
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2009/role/commonPracticeRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
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Reference 14: http://www.xbrl.org/2003/role/disclosureRef
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Reference 15: http://www.xbrl.org/2003/role/disclosureRef
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Reference 16: http://www.xbrl.org/2003/role/disclosureRef
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Reference 17: http://www.xbrl.org/2003/role/disclosureRef
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Reference 18: http://www.xbrl.org/2003/role/disclosureRef
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Reference 22: http://www.xbrl.org/2003/role/disclosureRef
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Reference 23: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Loss Per Share (Tables)

9 Months Ended

Sep. 30, 2023

Loss Per Share [Abstract]

Schedule of Basic and Diluted Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share attributable to common stockholders for the three and nine months ended September 30, 2023 and 2022:

	(In thousands, except shares and per-share information)
	Three months ended						Nine months ended
	September 30,						September
	2023			2022			2023			2022
Basic and diluted loss per share:
Net loss attributable to FaZe Holdings Inc., basic and diluted	$	(7,201	)	$	(130,598	)	$	(35,597	)	$	(149,462	)
Weighted-average common shares outstanding, basic and diluted		68,234,009			54,590,538			66,315,727			32,144,653
Net loss per share, basic and diluted	$	(0.10	)	$	(2.39	)	$	(0.54	)	$	(4.65	)

Schedule of Antidilutive Shares

The following securities were not included in the computation of diluted shares outstanding for the three and nine months ended September 30, 2023 and 2022 because the effect would be antidilutive:

	As of September 30, 2023		As of September 30, 2022
Convertible preferred stock		—		—
Public Warrants		5,750,000		5,750,000
Private Placement Warrants		173,333		173,333
Seller Earn-out		5,312,098		5,312,098
Sponsor Earn-out Shares		2,156,250		2,156,250
Legacy FaZe preferred warrant		—		—
Unvested restricted stock award		2,492,527		2,248,834
Unvested restricted stock units		2,685,616		—
Stock options		18,859,673		18,055,159
Total potentially dilutive common stock equivalents		37,429,497		33,695,674

Property, Equipment and Leasehold Improvements (Details) - Schedule of Property, Equipment and Leasehold Improvements - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Subtotal	$ 5,560	$ 5,444
Less: Accumulated depreciation	(3,010)	(1,623)
Property, equipment and leasehold improvements, net	2,550	3,821
Furniture / Fixtures [Member]
Property, Plant and Equipment [Line Items]
Subtotal	897	897
Computer equipment [Member]
Property, Plant and Equipment [Line Items]
Subtotal	3,683	3,640
Vehicles [Member]
Property, Plant and Equipment [Line Items]
Subtotal	106	106
Leasehold improvements [Member]
Property, Plant and Equipment [Line Items]
Subtotal	$ 874	$ 801

Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) - $ / shares	Sep. 30, 2023	Dec. 31, 2022
Preferred Stock, par value (in Dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, par value (in Dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	500,000,000	500,000,000
Common stock, shares issued	75,688,236	71,511,887
Common stock, shares outstanding	75,688,236	71,511,887
Series A Preferred Stock
Preferred Stock, par value (in Dollars per share)	$ 0.00001	$ 0.00001
Preferred stock, shares authorized	3,545,529	3,545,529
Preferred stock, shares issued
Preferred stock, shares outstanding

Stock Compensation Expense (Tables)

9 Months Ended

Sep. 30, 2023

Stock Compensation Expense [Abstract]

Schedule of Equity Compensation Plans

The following table contains information about the Company’s equity compensation plans as of September 30, 2023:

	Shares				Shares
	Reserved for		Awards		Available for
	Issuance		Outstanding		Grant

2022 Omnibus Incentive Plan		12,358,689		3,876,658		8,482,031
2022 Employee Stock Purchase Plan		75,000,000		—		75,000,000
Amended 2019 Equity Incentive Plan		23,380,173		21,371,301		2,008,872

Schedule of Stock-Based Compensation Expense

Stock-based compensation expense for the periods presented was comprised of the following, which were included in general and administrative expenses within the Consolidated Statements of Operations:

	(In thousands)				(In thousands)
	For the three months ended September 30,				For the nine months ended September 30,
	2023		2022		2023		2022
Stock options	$	7	$	336	$	19	$	454
Restricted stock awards		1,341		2,001		9,966		4,542
Total stock-based compensation expense	$	1,348	$	2,337	$	9,985	$	4,996

Schedule of Stock Option Grant Activity

The following is an analysis of the stock option grant activity during the nine months ended September 30, 2023:

Vested and Nonvested Stock Options	Number			Weighted Average Exercise Price		Weighted Average Remaining Life
Outstanding December 31, 2022		18,863,654		$	0.38		4.13
Granted		-			-		-
Exercised		(2,150,847	)		0.38		-
Expired or forfeited		-			-		-
Outstanding September 30, 2023		16,712,807		$	0.38		3.38

Vested and Nonvested Stock Warrants	Number		Weighted Average Exercise Price		Weighted Average Remaining Life
Outstanding December 31, 2022		5,923,333	$	11.50		4.55
Granted		-		-		-
Exercised		-		-		-
Expired or forfeited		-		-		-
Outstanding September 30, 2023		5,923,333	$	11.50		3.80

Schedule of Nonvested Stock Options

Nonvested Stock Options	Number			Weighted- Average Exercise Price
Nonvested on December 31, 2022		670,008		$	0.38
Granted		-			-
Vested		(262,944	)		0.38
Forfeited		-			-
Nonvested on September 30, 2023		407,064		$	0.38

Nonvested RSAs	Number			Weighted Average Price
Nonvested December 31, 2022		1,649,962		$	6.27
Granted		1,925,856			0.42
Vested		(1,083,291	)		6.49
Forfeited		-
Nonvested September 30, 2023		2,492,527		$	1.35

Schedule of Restricted Stock Units

A summary of Restricted Stock Units (“RSUs”) issuances during the nine months ended September 30, 2023 is as follows:

Nonvested RSUs	Number			Weighted Average Price
Nonvested December 31, 2022		702,417		$	2.79
Granted		2,885,984			1.82
Vested		(578,535	)		1.59
Forfeited		(324,250	)		2.75
Nonvested September 30, 2023		2,685,616		$	1.31

Intangible Assets (Details) - Schedule of Intangible Assets - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Website development [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets, Useful Life	3 years	3 years
Intangible assets, Gross Carrying Value	$ 450	$ 377
Intangible assets, Accumulated Amortization	276	175
Intangible assets, Net Carrying Value	174	202
Talent acquisition [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets, Gross Carrying Value	1,054	1,201
Intangible assets, Accumulated Amortization	766	555
Intangible assets, Net Carrying Value	$ 288	$ 646
Talent acquisition [Member] \| Minimum [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets, Useful Life	2 years	2 years
Talent acquisition [Member] \| Maximum [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets, Useful Life	3 years	3 years
Intangible assets, net [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets, Gross Carrying Value	$ 1,504	$ 1,578
Intangible assets, Accumulated Amortization	1,042	730
Intangible assets, Net Carrying Value	$ 462	$ 848

Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2023

Summary of Significant Accounting Policies [Abstract]

Disaggregates the Company’s Revenue by Major Type

The following table disaggregates the Company’s revenue by major type for the three and nine months ended September 30, 2023, and 2022:

	(In thousands)				(In thousands)
	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
Brand sponsorships	$	4,225	$	7,072	$	14,616	$	28,054
Content		3,316		4,098		9,658		10,641
Consumer products		439		471		852		2,328
Esports		4,482		2,322		11,537		7,285
Other		48		49		86		313
Total revenue	$	12,510	$	14,012	$	36,749	$	48,621

Stock Compensation Expense (Details) - Schedule of Equity Compensation Plans - shares	Sep. 30, 2023	Oct. 24, 2021
2022 Omnibus Incentive Plan [Member]
Class of Stock [Line Items]
Shares Reserved for Issuance	12,358,689
Awards Outstanding	3,876,658
Shares Available for Grant	8,482,031
2022 Employee Stock Purchase Plan [Member]
Class of Stock [Line Items]
Shares Reserved for Issuance	75,000,000	75,000,000
Awards Outstanding
Shares Available for Grant	75,000,000
Amended 2019 Equity Incentive Plan [Member]
Class of Stock [Line Items]
Shares Reserved for Issuance	23,380,173
Awards Outstanding	21,371,301
Shares Available for Grant	2,008,872

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
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Reference 14: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2023

Commitments and Contingencies [Abstract]

Schedule of Lease Costs

(In thousands)	Three months Ended September 30, 2023		Three months Ended September 30, 2022
Components of total lease costs:
Operating lease expense	$	791	$	826
Total lease costs	$	791	$	826

(In thousands)	Nine months Ended September 30, 2023		Nine months Ended September 30, 2022
Components of total lease costs:
Operating lease expense	$	1,188	$	1,192
Total lease costs	$	1,188	$	1,192

Schedule of Lease Assets and Lease Liabilities

Right of use, or ROU, lease assets and lease liabilities for our operating leases are recorded on the balance sheet as follows:

	September		December 31,
(In thousands)	2023		2022
Assets
Right of use asset – long term	$	1,560	$	2,693
Total right of use asset	$	1,560	$	2,693
Liabilities
Operating lease liabilities – short term	$	1,488	$	1,488
Operating lease liabilities – long term		93		1,084
Total lease liability	$	1,581	$	2,572

Schedule of Lease Terms and Discount Rate

Weighted average remaining lease term (in years) – operating leases			1.0
Weighted average discount rate – operating leases			4	%

Schedule of Future Minimum Lease Payment

Future minimum lease payments, which include non-cancelable operating leases at September 30, 2023, are as follows:

Year ending December 31,	(In thousands)
2023 (remainder)	$	502
2024		1,071
2025		5
2026		3
Thereafter		-
Total minimum lease payment	$	1,581

Stock Compensation Expense

9 Months Ended

Sep. 30, 2023

Stock Compensation Expense [Abstract]

STOCK COMPENSATION EXPENSE

8.	STOCK COMPENSATION EXPENSE

2022 Omnibus Incentive Plan

On October 24, 2021, the stockholders of the Company approved the 2022 Omnibus Incentive Plan (the “OIP”), which became effective as of the Closing Date of the Business Combination. The OIP allows grants of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock, restricted stock units, stock bonuses, other stock-based awards, cash awards, and substitute awards (the “OIP Awards”) to selected officers, employees, partners, non-employee directors, independent contractors, and consultants. The Company has 12,358,689 shares of the Company’s common stock reserved for issuance pursuant to awards that may be granted under the OIP. As of September 30, 2023, 2,570,125 shares of the Company’s common stock are subject to restricted stock awards.

2022 Employee Stock Purchase Plan

On October 24, 2021, the stockholders of the Company approved the 2022 Employee Stock Purchase Plan (the “ESPP”), which became effective as of the Closing Date of the Business Combination. An aggregate of 1,791,416 shares of the Company’s common stock has been reserved for issuance or transfer pursuant to rights granted under the ESPP (“Aggregate Number”). The Aggregate Number represents 2% of the aggregate number of shares of the Company’s fully diluted shares outstanding immediately after the Closing and is subject to increase each year over a ten-year period. The maximum aggregate number of shares of common stock available for issuance under ESPP shall not exceed 75,000,000 shares. The ESPP will be implemented through a series of offerings of purchase rights to eligible employees. Each eligible employee may authorize payroll deductions at a minimum of 1% up to a maximum of 15% on a pro rata basis for each pay period during an offering. Under the ESPP, the Company’s Board may designate the period of each offering, but no offering shall exceed 27 months in duration. Unless otherwise determined, the offering shall be for a purchase period of 6 months, beginning on the offering date and ending on the exercise date. The purchase price for each share shall be 85% of the fair market value of the Company’s common stock on the offering date or the exercise date, whichever is less. As of September 30, 2023, 27,711 shares have been granted under this plan.

Amended and Restated 2019 Equity Incentive Plan

The Company maintained an equity incentive plan established in October 2019, the Amended 2019 Equity Incentive Plan (the “Legacy FaZe Plan”). The Legacy FaZe Plan allowed grants of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock and restricted stock units, generally to directors, employees, consultants and service providers. In July 2021, the Company’s Board amended the Legacy FaZe Plan and increased the maximum aggregate number of shares authorized to be issued to 10,500,000 shares of Legacy FaZe common stock, which is equivalent to 21,371,301 shares of the Company’s common stock calculated using the Equity Value Exchange Ratio. As of September 30, 2023, 16,712,807 shares of the Company’s common stock are issuable upon the vesting and exercise of stock options originally granted under the Legacy FaZe Plan, and 149,171 shares of the Company’s common stock are subject to restricted stock awards originally granted under the Legacy FaZe Plan. Following the Closing of the Business Combination, no further awards may be awarded under the Legacy FaZe Plan, and any outstanding awards granted under the plan will remain subject to the terms of the Legacy FaZe Plan and the applicable award agreement.

The following table contains information about the Company’s equity compensation plans as of September 30, 2023:

	Shares				Shares
	Reserved for		Awards		Available for
	Issuance		Outstanding		Grant

2022 Omnibus Incentive Plan		12,358,689		3,876,658		8,482,031
2022 Employee Stock Purchase Plan		75,000,000		—		75,000,000
Amended 2019 Equity Incentive Plan		23,380,173		21,371,301		2,008,872

Stock Compensation Expense

Stock-based compensation expense for the periods presented was comprised of the following, which were included in general and administrative expenses within the Consolidated Statements of Operations:

	(In thousands)				(In thousands)
	For the three months ended September 30,				For the nine months ended September 30,
	2023		2022		2023		2022
Stock options	$	7	$	336	$	19	$	454
Restricted stock awards		1,341		2,001		9,966		4,542
Total stock-based compensation expense	$	1,348	$	2,337	$	9,985	$	4,996

Options

The following is an analysis of the stock option grant activity during the nine months ended September 30, 2023:

Vested and Nonvested Stock Options	Number			Weighted Average Exercise Price		Weighted Average Remaining Life
Outstanding December 31, 2022		18,863,654		$	0.38		4.13
Granted		-			-		-
Exercised		(2,150,847	)		0.38		-
Expired or forfeited		-			-		-
Outstanding September 30, 2023		16,712,807		$	0.38		3.38

Nonvested Stock Options	Number			Weighted- Average Exercise Price
Nonvested on December 31, 2022		670,008		$	0.38
Granted		-			-
Vested		(262,944	)		0.38
Forfeited		-			-
Nonvested on September 30, 2023		407,064		$	0.38

The Company recognized stock-based compensation expense related to options granted and vesting expense of $7 thousand during the three months ended September 30, 2023, which is included in general and administrative expenses. The Company recognized stock-based compensation expense related to options issued and vesting of $336 thousand during the three months ended September 30, 2022, which is included in general and administrative expenses.

The Company recognized stock-based compensation expense related to options granted and vesting expense of $19 thousand during the nine months ended September 30, 2023, which is included in general and administrative expenses. The Company recognized stock-based compensation expense related to options issued and vesting of $454 thousand during the nine months ended September 30, 2022, which is included in general and administrative expenses.

During the three months ended September 30, 2023 and 2022, the Company granted a total of 0 and 0 options, respectively. During the nine months ended September 30, 2023 and 2022, the Company granted a total of 0 and 0 options, respectively.

Warrants

The following is an analysis of the warrant grant activity during the nine months ended September 30, 2023:

Vested and Nonvested Stock Warrants	Number		Weighted Average Exercise Price		Weighted Average Remaining Life
Outstanding December 31, 2022		5,923,333	$	11.50		4.55
Granted		-		-		-
Exercised		-		-		-
Expired or forfeited		-		-		-
Outstanding September 30, 2023		5,923,333	$	11.50		3.80

During the three months ended September 30, 2023 and 2022, the Company granted a total of 0 and 0 warrants, respectively. During the nine months ended September 30, 2023 and 2022, the Company granted a total of 0 and 0 warrants, respectively. As of September 30, 2023 there are no Nonvested stock Warrants outstanding.

Restricted Stock Awards

A summary of Restricted Stock Awards (“RSAs”) issuances during the nine months ended September 30, 2023 is as follows:

Nonvested RSAs	Number			Weighted Average Price
Nonvested December 31, 2022		1,649,962		$	6.27
Granted		1,925,856			0.42
Vested		(1,083,291	)		6.49
Forfeited		-
Nonvested September 30, 2023		2,492,527		$	1.35

The Company recognized stock-based compensation expense related to RSAs granted and vesting expense of $0.3 million and $2.5 million during the three months ended September 30, 2023 and 2022, respectively, which is included in general and administrative expenses. The Company recognized stock-based compensation expense related to RSAs granted and vesting expense of $10.0 million and $3.7 million during the nine months ended September 30, 2023 and 2022, respectively, which is included in general and administrative expenses.

During the three months ended September 30, 2023 and 2022, the Company granted a total of 1,925,856 and 0 RSAs, respectively. During the nine months ended September 30, 2023 and 2022, the Company granted a total of 1,925,856 and 1,119,698 RSAs, respectively.

Restricted Stock Units

A summary of Restricted Stock Units (“RSUs”) issuances during the nine months ended September 30, 2023 is as follows:

Nonvested RSUs	Number			Weighted Average Price
Nonvested December 31, 2022		702,417		$	2.79
Granted		2,885,984			1.82
Vested		(578,535	)		1.59
Forfeited		(324,250	)		2.75
Nonvested September 30, 2023		2,685,616		$	1.31

The Company recognized stock-based compensation expense related to RSUs granted and vesting expense of $1.1 million and $0.2 million during the three months ended September 30, 2023 and 2022, respectively, which is included in general and administrative expenses. The Company recognized stock-based compensation expense related to RSUs granted and vesting expense of $2.5 million and $0.5 million during the nine months ended September 30, 2023 and 2022, respectively, which is included in general and administrative expenses.

During the three months ended September 30, 2023 and 2022, the Company granted a total of 750,000 and 0 RSUs, respectively. During the nine months ended September 30, 2023 and 2022, the Company granted a total of 2,885,984 and 0 RSUs, respectively.

Accounting Policies, by Policy (Policies)

9 Months Ended

Sep. 30, 2023

Summary of Significant Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying interim Condensed Consolidated Financial Statements of the Company have been prepared in conformity with U.S. GAAP and are consistent in all material respects with those applied in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 filed with the Securities and Exchange Commission (the “SEC”) on April 4, 2023. These Condensed Consolidated Financial Statements are unaudited and have been prepared by the Company following the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted as permitted by such rules and regulations; however, the Company believes the disclosures are adequate to make the information presented not misleading.

The interim financial information is unaudited, but reflects all normal recurring adjustments that are, in the opinion of management, necessary to fairly present the information set forth herein. The interim Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Interim results are not necessarily indicative of the results for a full year. The preparation of the Condensed Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and judgements that affect the amounts reported in the Consolidated Financial Statements and accompanying notes. Significant items subject to such estimates and assumptions include revenue recognition, allowance for doubtful accounts, and intangible asset impairments, share-based compensation expense, valuation allowance for deferred income taxes and amortization of intangible assets. The Company bases its estimates on historical experience and on various other assumptions that the Company believes to be reasonable under the circumstances. On a regular basis, the Company evaluates the assumptions, judgements and estimates. Actual results may differ from these estimates.

There have been no material changes in the Company’s significant accounting policies as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

Principles of consolidation

Principles of Consolidation

The Condensed Consolidated Financial Statements include the accounts of FaZe Holdings Inc. and its wholly owned subsidiary. All significant intercompany balances and transactions have been eliminated.

Use of Estimates

Use of Estimates

The preparation of the Company’s Condensed Consolidated Financial Statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of income and expenses during the reporting period. These estimates are based on information available as of the date of the consolidated financial statements. The inputs into certain of these estimates and assumptions include the consideration of the economic impact of the COVID-19 pandemic. Significant estimates include revenue recognition, allowance for doubtful accounts, warrant liabilities, valuation of the Company’s common stock before the Business Combination, stock-based compensation expense, and income taxes. These estimates generally involve complex issues and require management to make judgments, involve analysis of historical and future trends, can require extended periods of time to resolve, and are subject to change from period to period. In all cases, actual results could differ materially from management’s estimates.

Content Asset, net

Content Asset, net

The Company produces programming content which it plans to broadcast on online video and streaming platforms. Costs of produced content consist of development and production costs. These costs are capitalized as “Content Asset, net” on the Consolidated Balance Sheets.

Each title is predominantly monetized on its own. At the specific title level, the Company tests the content asset for impairment when events and circumstances indicate that its fair value may be less than its unamortized cost. If the carrying value of a content asset exceeds its estimated fair value, an impairment charge will be recorded in the amount of the difference.

The Company’s policy is to amortize the content asset once the content airs. Given that the content was fully written off prior to airing, no amortization expense was recorded for the three and nine months ended September 30, 2023 and 2022. The Company does not own any purchased or licensed programming content.

Exploitation costs such as marketing, advertising, publicity, promotion, and other distribution expenses directly connected with the distribution of the content asset are expensed as incurred.

Fixed Assets

Fixed Assets

Fixed assets are stated at cost less accumulated depreciation. Cost includes expenditures for furniture, computer equipment, vehicles, leasehold improvements, and other assets. Maintenance and repairs are charged to expense as incurred. When assets are sold, retired, or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in operations. The costs of fixed assets are depreciated using the straight-line method over the estimated useful lives or lease life of the related assets.

Employee Retention Tax Credit

Employee Retention Tax Credit

The Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") provided an employee retention credit which was a refundable tax credit against certain employment taxes. The Consolidated Appropriations Act (the "Appropriations Act") extended and expanded the availability of the employee retention credit through December 31, 2021. The Appropriations Act amended the employee retention credit to be equal to 70% of qualified wages paid to employees during the 2021 fiscal year.

The Company qualified for the employee retention credit beginning in June 2020 for qualified wages through September 2021 and filed a cash refund claim during the fiscal year ended December 31, 2023. As of September 30, 2023, the tax credit receivable of $1.7 million has been included in the Employee retention tax credit line on the Company's Condensed Consolidated Balance Sheet.

Employee Retention Tax Credit

Revenue Recognition and Contract Balances

Revenues are recognized when control of the promised goods or services is transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The Company’s payment terms and conditions vary by customer and contract type. In instances where the timing of revenue recognition differs from the timing of invoicing, the Company does not adjust the promised amount of consideration for the effects of a significant financing component when the Company expects, at contract inception, that the period between the Company’s transfer of a promised product or service to the Company’s customer and payment for that product or service will be one year or less.

The Company generally records a receivable related to revenue when the Company has an unconditional right to invoice and receive payment. Contract assets arise from contracts when revenue is recognized over time and the amount of revenue recognized, including management’s estimate of variable consideration that has been included in the transaction price exceeds the amount billed to the customer. These amounts are included in contract assets until the right to payment is no longer conditional on events other than the passage of time. These contract assets are reclassified to receivables when the right to consideration becomes unconditional. For the three and nine months ending September 30, 2023, and 2022, no impairment was recorded from contract assets.

The Company’s allowances for doubtful accounts are typically immaterial and, if required, are based on management’s best estimate of expected credit losses inherent in the Company’s accounts receivable balance.

Contract liabilities are recorded in the event that the Company bills for services in advance of the time the services are performed, or when cash payments are received or due in advance of satisfying the Company’s performance obligations, even if amounts are refundable. Contract liabilities recorded at September 30, 2023, and December 31, 2022, represent the Company’s accounting for the timing difference between when the customer is billed or funds are received and when the performance obligation is satisfied. During the three months ended September 30, 2023 and 2022, the Company recognized $3.5 million and $6.1 million as revenue that was relating to contract liability, respectively. During the nine months ended September 30, 2023 recognized $10.6 million and $26.5 million as revenue that was relating to the contract liability, respectively.

The following table disaggregates the Company’s revenue by major type for the three and nine months ended September 30, 2023, and 2022:

	(In thousands)				(In thousands)
	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
Brand sponsorships	$	4,225	$	7,072	$	14,616	$	28,054
Content		3,316		4,098		9,658		10,641
Consumer products		439		471		852		2,328
Esports		4,482		2,322		11,537		7,285
Other		48		49		86		313
Total revenue	$	12,510	$	14,012	$	36,749	$	48,621

The section below describes the Company’s revenue recognition policies and significant judgments in further detail for each major revenue source of the Company.

Brand Sponsorships

The Company offers advertisers a full range of promotional vehicles, including but not limited to online advertising, livestream announcements, event content generation, social media posts, logo placement on the Company’s official merchandise, and special appearances of members of the Company’s talent roster. The Company’s brand sponsorship agreements may include multiple services that are capable of being individually distinct; however the intended benefit is an association with the Company’s brand, and the services are not distinct within the context of the contracts. Revenues from brand sponsorship agreements are recognized ratably over the contract term. Payment terms and conditions vary, but payments are generally due periodically throughout the term of the contract. In instances where the timing of revenue recognition differs from the timing of billing, management has determined the brand sponsorship agreements generally do not include a significant financing component.

Content

The Company and its talent roster generate and produce original content which the Company monetizes through Google’s AdSense service. Revenue is variable and is earned when the visitor views or “clicks through” on the advertisement. The amount of revenue earned is reported to the Company monthly and is recognized upon receipt of the report of viewership activity. Payment terms and conditions vary, but payments are generally due within 30 to 45 days after the end of each month.

The Company grants exclusive licenses to customers for certain content produced by the Company’s talent. The Company grants the customer a license to the intellectual property, which is the content and its use in generating advertising revenues, for a pre-determined period, for an amount paid by the customer, in most instances, upon execution of the contract. The Company’s only performance obligation is to license the content for use in generating advertising revenues, and the Company recognizes the full contract amount at the point at which the Company provides the customer access to the content, which is at the execution of the contract. The Company has no further performance obligations under these types of contracts and does not anticipate generating any additional revenue from these arrangements apart from the contract amount.

Principal Versus Agent Considerations

A significant amount of the Company’s brand sponsorship and content revenues are generated from the Company’s talent, who are under exclusive, multi-year contracts. The Company’s talent consists of independent contractors, whose compensation is tied to the revenue that they generate. Management has evaluated the terms of the Company’s brand sponsorship and content agreements and has concluded the Company is the principal. Brand sponsorship and content revenues are reported on a gross basis, while revenue-sharing and other fees paid to the Company’s talent are recorded as cost of revenues. The Company owns the brand and intellectual property, takes primary responsibility for delivery of services, and exercises control over content generation and monetization. The Company contracts directly with Google on its Company operated channels, and the talent contracts directly with Google on their own channels. As part of the Company’s contracts with its talent, the Company agrees to serve as the talent’s exclusive management company as it relates to any and all type of work the talent may perform, including content creation and advertising revenue generated from the content. While the talent owns the content they create while they are under contract with the Company, the talent grants the Company an exclusive perpetual license to the content, and the Company grants limited usage rights of that content back to the talent, conditional upon them complying with their contract. Furthermore, all income earned from services provided by the talent related to gaming, Esports, content creation, or the business of the Company, which includes revenue from advertising via talent content, is subject to the talent agreement and is payable to the Company. In addition, the Company’s contracts with its talent specify rules and restrictions on the content the talent can create and post. As such, through its contracts with talent, the Company is the principal because the Company is the entity exercising primary control over the content generated in the YouTube channels being monetized.

Consumer Products

The Company earns consumer products revenue from sales of the Company’s consumer products on the Company’s website or at live or virtual events. Revenues are recognized at a point in time, as control is transferred to the customer upon shipment. The Company offers customer returns and discounts through a third-party distributor and accounts for this as a reduction to revenue. The Company does not offer loyalty programs or other sales incentive programs that are material to revenue recognition. Payment is due at the time of sale. The Company has outsourced the design, manufacturing, fulfillment, distribution, and sale of the Company’s consumer products to a third party in exchange for royalties based on the amount of revenue generated. Management evaluated the terms of the agreement to determine whether the Company’s consumer products revenues should be reported gross or net of royalties paid. Key indicators that management evaluated in determining whether the Company is the principal in the sale (gross reporting) or an agent (net reporting) include, but are not limited to:

●

the Company is the party that is primarily responsible for fulfilling the promise to provide the specified good or service,

●

the Company has inventory risk before the good is transferred to the customer, and

●

the Company is the party that has discretion in establishing pricing for the specified good or service.

Based on management’s evaluation of the above indicators, the Company reports consumer products revenues on a gross basis.

Esports

League Participation: Generally, the Company has one performance obligation – to participate in the overall Esport event – because the underlying activities do not have standalone value absent the Company’s participation in the tournament or event. Revenue from prize winnings and profit-share agreements is variable and is highly uncertain. The Company recognizes revenue at the point in time when the uncertainty is resolved.

Player Transfer Fees: Player transfer agreements include a fixed fee and may include a variable fee component. The Company recognizes the fixed portion of revenue from transfer fees upon satisfaction of the Company’s performance obligation, which coincides with the execution of the related agreement. The variable portion of revenue is considered highly uncertain and is recognized at the point in time when the uncertainty is resolved.

Licensing of Intellectual Property: The Company’s licenses of intellectual property generate royalties that are recognized in accordance with the royalty recognition constraint. That is, royalty revenue is recognized at the time when the sale occurs.

Transaction Price Allocated to the Remaining Performance Obligations

For the estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of September 30, 2023, the Company applies the allowable practical expedient and does not disclose information about remaining performance obligations that have original expected durations of one year or less. Revenue expected to be recognized in the future related to performance obligations that have original expected durations greater than one year that are unsatisfied (or partially unsatisfied) as of September 30, 2023 were not material.

Warrants

Warrants

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480, Distinguishing Liabilities from Equity, and ASC 815, Derivatives and Hedging. Warrants that meet the definition of a derivative financial instrument and the equity scope exception in ASC 815-10-15-74(a) are classified as equity, and are not subject to remeasurement provided that the Company continues to meet the criteria for equity classification. Warrants that are accounted for as equity-classified are further discussed in Note 7, Equity. Warrants that are classified as liabilities are accounted for at fair value and remeasured at each reporting date until exercise, expiration, or modification that results in equity classification. Any change in the fair value of the warrants is recognized as change in fair value of warrant liabilities in the Consolidated Statements of Operations. The classification of warrants, including whether warrants should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. The fair value of liability-classified warrants is determined using the Black-Scholes options pricing model (“Black-Scholes model”) which includes Level 3 inputs as further discussed in Note 6, Private Placement Warrants and Recurring Fair Value Measurements.

The value of the warrant is de minimis and as such the company did not revalue the warrants as of September 30, 2023.

Stock-Based Compensation

Stock-Based Compensation

The Company accounts for its stock-based awards in accordance with ASC 718, Compensation – Stock Compensation, which requires fair value measurement on the grant date and recognition of compensation expense for all stock-based payment awards.

Legacy FaZe issued stock options before there was an active market for the Company’s common stock. The Board of Directors (the “Board”) was required to estimate the fair value of the Company’s common stock at the time of each award. The Board considered numerous objective and subjective factors in determining the value of the Company’s common stock at each grant date, including the following: (1) the per-share price of issuances of the Company’s preferred stock, which the Company sold to outside investors in arm’s-length transactions, and the rights, preferences, and privileges of the Company’s preferred stock and common stock; (2) valuations performed by an independent valuation specialist; (3) the Company’s stage of development and revenue growth; (4) the fact that the awards involved illiquid securities in a private company; and (5) the likelihood of achieving a liquidity event for the shares of common stock underlying the awards, such as an initial public offering or sale of the Company, given prevailing market conditions. The Company believed this to have been a reasonable methodology based on certain arm’s-length transactions involving the Company’s preferred stock, supported by the results produced by this valuation methodology. Since the Business Combination, the Company’s common stock is now actively traded, so the fair value of the common stock is readily available.

For stock options, the Company estimates the fair value using the Black-Scholes model. The fair value is expensed over the requisite service periods of the awards (usually one to four years), in the period of grant for awards that vest immediately and have no future service condition, or in the period the awards vest immediately after meeting a performance condition becomes probable (i.e., the occurrence of a change in control event). As there was no public market for its common stock at the time of the stock option grant, the Company determined the volatility for options granted based on an analysis of reported data for a peer group of companies. The expected volatility of options granted has been estimated based on an average of the historical volatility measures of this peer group of companies. The expected life of options has been estimated utilizing the “simplified method” due to the lack of available or sufficient historical exercise data for the Company for the applicable options terms. The simplified method is based on the average of the vesting tranches and the contractual life of each grant. The risk-free interest rate is based on a treasury instrument whose term is consistent with the expected life of the stock options. The Company has not paid, and does not anticipate paying, cash dividends on its common stock; therefore, the expected dividend yield is assumed to be zero. As the Company’s stock is now publicly traded after the Business Combination, the fair value of the Company’s stock and the volatility is readily available.

The Black-Scholes model requires the input of certain assumptions that require the Company’s judgment, including the fair value of common shares before the Business Combination, expected term, and the expected price volatility of the underlying stock. The assumptions used in calculating the fair value of stock-based compensation represent the Company’s best estimates, but these estimates involve inherent uncertainties and the application of judgment. As a result, if factors change resulting in the use of different assumptions, stock-based compensation expense could be materially different in the future. The Company accounts for forfeitures of stock-based awards as they occur.

Fair Value Measurement

Fair Value Measurement

The fair value hierarchy 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. The fair value hierarchy consists of the following three levels:

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

Level 3: Unobservable inputs which are supported by little or no market activity

The carrying amount of the Company’s financial instruments, including cash, accounts receivable, notes receivable, and accounts payable, approximate fair value due to their short-term nature.

The Company’s private placement warrants (the “Private Placement Warrants”) are accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liabilities on the Consolidated Balance Sheets. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of warrant liabilities in the Consolidated Statements of Operations.

See Note 6, Private Placement Warrants and Recurring Fair Value Measurements, for additional information on the Company’s liabilities measured at fair value.

Earnings (Loss) Per Share

Earnings (Loss) Per Share

Basic earnings (loss) per share is computed by dividing net earnings (loss) attributable to the Company by the number of weighted average shares of the Company’s common stock outstanding during the period. Diluted earnings (loss) per share is computed by dividing net earnings (loss) attributable to the Company by the number of weighted-average shares of the Company’s common stock outstanding during the period after adjusting for the impact of securities that would have a dilutive effect on earnings (loss) per share. As the Company has incurred losses in all periods presented, all potentially dilutive securities are antidilutive. See Note 11, Loss Per Share, for additional information on dilutive securities.

Segment Reporting

Segment Reporting

Operating segments are defined as components of an entity for which separate financial information is available and is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company has determined that its Chief Executive Officer is the CODM. The Company operates and reports financial information in one segment, as the CODM reviews financial information presented on a consolidated basis, at the Company level, for the purposes of making operating decisions, allocation of resources, and evaluating financial performance.

As of September 30, 2023 and December 31, 2022, the Company did not have material assets located outside of the United States. For the three months ended September 30, 2023 and 2022, the Company had international Esports revenue of $0.9 million and $1.2 million, respectively, earned outside of the United States. For the nine months ended September 30, 2023 and 2022, the Company had international Esports revenue of $4.4 million and $4.7 million, respectively, earned outside of the United States.

Recently Adopted Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In September 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This guidance requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This guidance also requires enhanced disclosures regarding significant estimates and judgements used in estimating credit losses. The new guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The adoption of this standard did not have a material impact on the Company’s financial statements and related disclosures.

Stock Compensation Expense (Details) - Schedule of Stock-Based Compensation Expense - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Class of Stock [Line Items]
Total stock-based compensation expense	$ 1,348	$ 2,337	$ 9,985	$ 4,996
Stock options [Member]
Class of Stock [Line Items]
Total stock-based compensation expense	7	336	19	454
Restricted stock awards [Member]
Class of Stock [Line Items]
Total stock-based compensation expense	$ 1,341	$ 2,001	$ 9,966	$ 4,542

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

+ Details

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2023

Summary of Significant Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

Principles of Consolidation

Use of Estimates

Content Asset, net

Exploitation costs such as marketing, advertising, publicity, promotion, and other distribution expenses directly connected with the distribution of the content asset are expensed as incurred.

Fixed Assets

Employee Retention Tax Credit

Revenue Recognition and Contract Balances

The following table disaggregates the Company’s revenue by major type for the three and nine months ended September 30, 2023, and 2022:

	(In thousands)				(In thousands)
	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
Brand sponsorships	$	4,225	$	7,072	$	14,616	$	28,054
Content		3,316		4,098		9,658		10,641
Consumer products		439		471		852		2,328
Esports		4,482		2,322		11,537		7,285
Other		48		49		86		313
Total revenue	$	12,510	$	14,012	$	36,749	$	48,621

The section below describes the Company’s revenue recognition policies and significant judgments in further detail for each major revenue source of the Company.

Brand Sponsorships

Content

Principal Versus Agent Considerations

Consumer Products

●

the Company is the party that is primarily responsible for fulfilling the promise to provide the specified good or service,

●

the Company has inventory risk before the good is transferred to the customer, and

●

the Company is the party that has discretion in establishing pricing for the specified good or service.

Based on management’s evaluation of the above indicators, the Company reports consumer products revenues on a gross basis.

Esports

Transaction Price Allocated to the Remaining Performance Obligations

Warrants

The value of the warrant is de minimis and as such the company did not revalue the warrants as of September 30, 2023.

Stock-Based Compensation

Fair Value Measurement

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

Level 3: Unobservable inputs which are supported by little or no market activity

The carrying amount of the Company’s financial instruments, including cash, accounts receivable, notes receivable, and accounts payable, approximate fair value due to their short-term nature.

See Note 6, Private Placement Warrants and Recurring Fair Value Measurements, for additional information on the Company’s liabilities measured at fair value.

Earnings (Loss) Per Share

Segment Reporting

Recently Adopted Accounting Pronouncements

Private Placement Warrants and Recurring Fair Value Measurements (Details) - Schedule of Fair Value of the Private Placement Warrants - $ / shares	9 Months Ended	12 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Schedule of Fair Value of the Private Placement Warrants [Abstract]
Risk-free interest rate	4.10%	4.00%
Expected term (years)	3 years 9 months 18 days	4 years 6 months
Expected volatility	98.20%	53.30%
Exercise price (in Dollars per share)	$ 11.5	$ 11.5
Dividend yield	0.00%	0.00%

Loss Per Share (Details) - Schedule of Basic and Diluted Earnings Per Share - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Schedule of Basic and Diluted Earnings Per Share [Abstract]
Net loss attributable to FaZe Holdings Inc., basic	$ (7,201)	$ (130,598)	$ (35,597)	$ (149,462)
Weighted-average common shares outstanding, basic	68,234,009	54,590,538	66,315,727	32,144,653
Net loss per share, basic	$ (0.1)	$ (2.39)	$ (0.54)	$ (4.65)

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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- Definition

Amount, after deduction of tax, noncontrolling interests, dividends on preferred stock and participating securities; of income (loss) available to common shareholders.

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+ Details

Document And Entity Information - shares	9 Months Ended
Document And Entity Information - shares	Sep. 30, 2023	Nov. 03, 2023
Document Information Line Items
Entity Registrant Name	FAZE HOLDINGS INC.
Document Type	10-Q
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		77,501,183
Amendment Flag	false
Entity Central Index Key	0001839360
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Document Period End Date	Sep. 30, 2023
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Shell Company	false
Entity Ex Transition Period	false
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	001-40083
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	85-2081659
Entity Address, Address Line One	720 N. Cahuenga Blvd.
Entity Address, City or Town	Los Angeles
Entity Address, Country	CA
Entity Address, Postal Zip Code	90038
City Area Code	(818)
Local Phone Number	688-6373
Entity Interactive Data Current	Yes
Common stock, par value $0.0001 per share
Document Information Line Items
Trading Symbol	FAZE
Title of 12(b) Security	Common stock, par value $0.0001 per share
Security Exchange Name	NASDAQ
Warrants, each whole warrant exercisable for one share of common stock
Document Information Line Items
Trading Symbol	FAZEW
Title of 12(b) Security	Warrants, each whole warrant exercisable for one share of common stock
Security Exchange Name	NASDAQ

Liquidity (Details) $ / shares in Units, $ in Millions	9 Months Ended
Liquidity (Details) $ / shares in Units, $ in Millions	Sep. 30, 2023 USD ($) $ / shares shares
Liquidity [Line Items]
Aggregate gross purchase price \| $	$ 25
Purchase percentage	97.00%
Common stock,description	(i) the Investor may not purchase any Common Stock that would result in it owning more than 4.99% of the Company’s Common Stock or (ii) the aggregate number of Common Stock issued pursuant to the SEPA cannot exceed 19.9% of the Company’s Common Stock as of as of the date of the SEPA (referred to as the “Exchange Cap”).
Common Stock [Member]
Liquidity [Line Items]
Common stock, par value \| $ / shares	$ 0.0001
Investor [Member]
Liquidity [Line Items]
Common stock issued \| shares	487,995

Private Placement Warrants and Recurring Fair Value Measurements (Details) - Schedule of Changes in the Fair Value of the Private Placement Warrants Liability - Private Placement Warrants [Member] - USD ($) $ in Thousands	3 Months Ended			5 Months Ended	9 Months Ended
	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Dec. 31, 2022	Sep. 30, 2023
Warrant liabilities	$ 11	$ 11	$ 24	$ 114	$ 24
Change in fair value of warrant liabilities	(9)		(13)	(90)
Warrant liabilities	$ 2	$ 11	$ 11	$ 24	$ 2

Subsequent Events

9 Months Ended

Sep. 30, 2023

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

12.

SUBSEQUENT EVENTS

In preparing the consolidated financial statements, the Company has evaluated subsequent events through November 13, 2023, which is the date the Condensed Consolidated Financial Statements were available for issuance.

GameSquare Merger Agreement

On October 19, 2023, the Company, entered into an Agreement and Plan of Merger (the “Merger Agreement”), with GameSquare Holdings, Inc., a British Columbia corporation (“GameSquare”), and GameSquare Merger Sub I, Inc., a Delaware corporation and wholly owned subsidiary of GameSquare ( “Merger Sub”), pursuant to which, subject to the terms and conditions set forth in the Merger Agreement, Merger Sub will merge with and into the Company (the “Merger”), with the Company surviving such Merger as a wholly-owned subsidiary of GameSquare.

On the terms and subject to the conditions of the Merger Agreement, each share of common stock, par value $0.0001 per share, of the Company (the “FaZe Common Stock”) issued and outstanding immediately prior to the effective time of the Merger (the “Effective Time”) (other than shares held in treasury by FaZe or held directly by GameSquare or Merger Sub) will be converted into the right to receive 0.13091 (the “Exchange Ratio”) of a fully paid and non-assessable share of common stock, no par value, of GameSquare (the “GameSquare Common Stock”) and, if applicable, cash in lieu of fractional shares of FaZe Common Stock, subject to any applicable withholding.

At the Effective Time, (i) all of the Company’s equity awards outstanding immediately prior to the Effective Time, including options to purchase shares of FaZe Common Stock and each share of FaZe Common Stock subject to vesting, repurchase, or other lapse of restrictions will be assumed by GameSquare and converted into GameSquare equity awards on substantially the same terms, except that the assumed equity awards will cover a number of shares of GameSquare Common Stock, and, if applicable, have an exercise price, determined using the Exchange Ratio and (ii) all outstanding FaZe warrants exercisable for shares of FaZe Common Stock will be assumed by GameSquare and converted into GameSquare warrants on substantially the same terms, except that the assumed warrants will cover a number of shares of GameSquare Common Stock, and, if applicable, have an exercise price, determined using the Exchange Ratio.

Under the Merger Agreement, GameSquare has agreed to appoint to its board of directors two persons determined by the Company, and a third member to be mutually agreed upon by the Company and GameSquare prior to the Effective Time, as of the Effective Time, with such directors to hold office until the earliest to occur of the appointment or election and qualification of his or her respective successor or his or her death, resignation, disqualification or proper removal.

In addition, in connection with the Merger, GameSquare is to complete a financing involving the raising of additional capital or commitments to be made available to it following the Merger consisting of (i) a private placement in public equity to raise $10,000,000 through the sale of GameSquare Common Stock (the “Pipe Financing”), subject to reduction to the minimum extent necessary based on applicable restrictions pertaining to GameSquare’s issuance of shares of GameSquare Common Stock under NASDAQ Listing Rule 5635, or any other applicable rule imposed by applicable stock exchanges, which financing is supported by the backstop obligation by Goff & Jones Lending Co, LLC (the “Backstop Investor”) under the Backstop Agreement; (ii) GameSquare shall have entered into an asset-based loan facility agreement (the “Financing and Security Agreement”) with SLR Digital Finance LLC, as lender (the “Lender”), having a three (3) year term and providing for maximum aggregate borrowings thereunder at any one time of not less than $10,000,000, and such facility agreement shall be in full force and effect as of the Closing with no principal amounts drawn thereunder; and (iii) GameSquare shall have consummated after the date of the Merger Agreement and prior to closing of the Merger a disposition of non-core assets of GameSquare having a gross sales price of approximately $4,000,000 (subject to certain earnout provisions).

Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2023

Intangible Assets [Abstract]

Schedule of Intangible Assets

Intangible assets as of September 30, 2023 and December 31, 2022 consisted of the following:

		(In thousands)
		Gross				Net
		Carrying		Accumulated		Carrying
As of September 30, 2023	Useful Life	Value		Amortization		Value

Website development	3 years	$	450	$	276	$	174
Talent acquisition	2 – 3 years		1,054		766		288
Intangible assets, net		$	1,504	$	1,042	$	462

		(In thousands)
		Gross				Net
		Carrying		Accumulated		Carrying
As of December 31, 2022	Useful Life	Value		Amortization		Value

Website development	3 years	$	377	$	175	$	202
Talent acquisition	2 – 3 years		1,201		555		646
Intangible assets, net		$	1,578	$	730	$	848

Schedule of Estimated Future Amortization of Intangible Assets

The following table presents the estimated future amortization of intangible assets:

Years ending December 31,	(In thousands)
2023 (remainder)	$	85
2024		310
2025		60
2026		7
Total future amortization of amortizable intangible assets	$	462

Equity (Details) - $ / shares	1 Months Ended	9 Months Ended
Equity (Details) - $ / shares	Oct. 24, 2021	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Mar. 23, 2023	Dec. 31, 2022	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Dec. 31, 2021
Equity [Line Items]
Preferred stock share authorized		1,000,000				1,000,000
Preferred stock per share (in Dollars per share)		$ 0.0001				$ 0.0001
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock share authorized		500,000,000				500,000,000
Common stock per share (in Dollars per share)		$ 0.0001				$ 0.0001
Common stock share issued		75,688,236				71,511,887
Common stock share outstanding		75,688,236				71,511,887
Earn out shares, percentage		6.00%
Sponsor shares	2,156,250
Outstanding public warrants (in Dollars per share)		$ 0.01
Common stock equals per share (in Dollars per share)		$ 18
Public Warrants [Member]
Equity [Line Items]
Public warrants issued		5,750,000
Public warrants outstanding		5,750,000
Exercise price per share (in Dollars per share)		$ 11.5
Public warrants remain outstanding		5,750,000
Preferred Stock [Member]
Equity [Line Items]
Preferred stock share authorized										3,545,529
Preferred stock per share (in Dollars per share)										$ 0.00001
Preferred stock, shares issued										3,237,800
Preferred stock, shares outstanding		3,237,800								3,237,800
Common Stock [Member]
Equity [Line Items]
Common stock share authorized		500,000,000								31,900,878
Common stock per share (in Dollars per share)		$ 0.0001			$ 0.0001					$ 0.00001
Common stock share issued		76,988,356				71,511,887
Common stock share outstanding		76,988,356	75,688,236	74,046,058		71,511,887	70,258,004	18,992,623	18,920,390	18,841,538
Common Stock [Member] \| First Target Earn [Member]
Equity [Line Items]
Common stock per share (in Dollars per share)		$ 12
Common Stock [Member] \| Second Target Earn [Member]
Equity [Line Items]
Common stock per share (in Dollars per share)		14
Common Stock [Member] \| Third Target Earn [Member]
Equity [Line Items]
Common stock per share (in Dollars per share)		$ 16
Sponsor Earn-Out Shares [Member]
Equity [Line Items]
Sponsor shares	2,156,250

Commitments and Contingencies (Details) - Schedule of Lease Assets and Lease Liabilities - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Assets
Right of use asset – long term	$ 1,560	$ 2,693
Total right of use asset	1,560	2,693
Liabilities
Operating lease liabilities – short term	1,488	1,488
Operating lease liabilities – long term	93	1,084
Total lease liability	$ 1,581	$ 2,572

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Income Statement [Abstract]
Revenues	$ 12,510	$ 14,012	$ 36,749	$ 48,621
Cost of revenues	11,659	10,470	33,579	34,647
Gross profit	851	3,542	3,170	13,974
Operating expenses:
General and administrative	9,324	16,928	39,336	39,025
Sales and marketing	148	1,479	503	3,557
Impairment of content asset				1,073
Loss from operations	(8,621)	(14,865)	(36,669)	(29,681)
Other expense:
Interest (income) expense, net	(137)	459	(497)	4,491
Change in fair value of warrant liabilities	(10)	(19)	(23)	(19)
Other, net	(1,273)	1	(552)	17
Loss on debt extinguishment		115,292		115,292
Total other (income)/expense:	(1,420)	115,733	(1,072)	119,781
Net loss	$ (7,201)	$ (130,598)	$ (35,597)	$ (149,462)
Net loss per common share - basic and diluted (in Dollars per share)	$ (0.1)	$ (2.39)	$ (0.54)	$ (4.65)
Weighted-average number of common shares outstanding - basic and diluted (in Shares)	68,234,009	54,590,538	66,315,727	32,144,653